What is a Database?

what is a database

What is a database? A database is an organized collection of information. Small businesses can use databases in a number of different ways. A database can help you organize information about your customers and clients. A database can contain information about your product inventory. A database can track sales, expenses and other financial information.

What is a database NOT?

The purpose of a database is to help your business stay organized and keep information easily accessible, so that you can use it. But it isn’t a magic solution to all your data concerns.

First, you need to collect and input the data into a database.

Second, you need to organize and extract information from a database so that it is usable. For that you typically need a software program to help organize data, extract it, move it, and use it.

What is a Database?

Database Versus Spreadsheet

A lot of small businesses are heavy users of Microsoft Excel or Google spreadsheets.  A spreadsheet may seem similar to a database.  But a spreadsheet is not nearly as powerful as a database for large volumes of information.

Also, getting information into and out of spreadsheets can be clunky.  You may have to do a lot of manual data entry, or manually exporting and importing data to other programs. And you can’t easily manipulate spreadsheet data — i.e., analyze it, move it into other applications, or run reports with it.

Databases can make your organization much more efficient and give management valuable insights.  They help make sense of your information. They can help you make your products and services more valuable. They can help you sell more.

For example, if you own an online store, you could use a database for your website to keep track of customer data, purchases, prices, and other information. This can be transferred directly into your accounting system — saving you the time to collect the data, find the corresponding spreadsheet, and input the data yourself.

With sophisticated software, this data could be used on the fly to make suggestions for additional purchases.  The data can also help you manage inventory levels, to know when inventory is getting low or when something is out of stock.

Data HandlingDesigned for large volumes and structured data.Suitable for small to medium datasets.
Data ManipulationOffers advanced data manipulation capabilities.Limited data manipulation features.
Data Import/ExportFacilitates automated data import/export.Often requires manual data entry or manual imports/exports.
Analysis and ReportingSupports in-depth analysis and reporting.Basic analysis and reporting capabilities.
EfficiencyEnhances organizational efficiency.May require more manual effort for data management.
ComplexitySuitable for complex data structures.Typically simpler data structures.
IntegrationIntegrates with other software applications.Limited integration options.
Real-time UpdatesAllows for real-time data updates and access.Limited real-time collaboration and updates.

What is a Database?

Databases for Non-Technical Business People

For small business owners and non-IT staff, databases really need to be wrapped up in a software program to be useful.  Unless we are in technology roles, most of us won’t be coding and tapping directly into a MySQL database.

You use databases all the time and may not realize it.  Online software services we use today have some kind of database built into them. An accounting software program or an ecommerce application, will have a database inside it.

That’s great if you need a standard accounting program or ecommerce business.

But what about the parts of your business with unique workflows?  Or processes that are unique to your business?

That’s where non-technical database applications come in today.  With one of the business-friendly databases (sometimes called desktop databases), you can set up and customize a database specific to your business and your workflow — and you don’t need to be a coder.

Microsoft Access is one.   Quick Base is another that is reasonably friendly for non-IT staff, and you can even use it to create mobile apps.  Filemaker is a third popular choice, and it’s especially popular for Mac, iPhone and iPad.

These kinds of business-friendly databases can be used to house, track and use data that you might not find an off-the-shelf software program to do.  You can use them to create customized executive dashboards.  But you don’t have to hire a software developer.

Using a desktop database application is like developing custom software applications for your business, without the complexity and programming expense.

What is a Database?

Database Management for Small Businesses

Managing a database is essential for small businesses looking to streamline operations and gain insights from their data. Here are some key points to consider:

  • Data Input and Collection: The first step in utilizing a database is to collect and input data. This can involve customer information, inventory details, financial records, and more.
  • Organization and Extraction: To make the most of a database, you need software that can organize and extract information effectively. This software is designed to help you structure your data, retrieve it when needed, and use it for various purposes.
  • Database vs. Spreadsheet: While spreadsheets like Microsoft Excel or Google Sheets are useful for small-scale data management, they have limitations when dealing with large volumes of information. Databases offer more robust capabilities for handling substantial datasets and generating reports.
  • Efficiency and Insights: Databases can significantly improve the efficiency of your organization. They allow you to analyze data, integrate it with other applications, and generate valuable reports. For example, in e-commerce, databases can track customer data, purchases, and inventory levels, providing insights for decision-making.
  • Accessibility for Non-Technical Users: Small business owners and non-technical staff may not have the coding skills to interact directly with a database. However, user-friendly database applications like Microsoft Access, Quick Base, and FileMaker make it possible to set up and customize databases to match specific business needs.
  • Integration with Business Processes: Databases can be integrated into various business workflows and processes. They enable customization to accommodate unique business requirements that might not be met by off-the-shelf software.
  • Database Applications: Many online software services used by businesses incorporate databases in their functionality. Accounting software and e-commerce platforms, for instance, rely on databases to manage financial data and product inventories.
  • Customization Without Coding: Business-friendly databases empower users to create and customize databases without the need for coding expertise. These applications are designed to simplify database management, making it accessible to a wider range of professionals.
  • Executive Dashboards: Databases can be used to create customized executive dashboards that provide a snapshot of critical business metrics and data. This feature allows decision-makers to monitor performance at a glance.
  • Desktop Databases: Microsoft Access, Quick Base, and FileMaker are examples of desktop databases that cater to non-IT staff. They provide a user-friendly interface for building and managing databases, making them suitable for businesses with unique workflows.
  • Mobile Database Applications: Some database applications, like Quick Base, also offer mobile capabilities, allowing users to access and manage data on the go.
Data Input and CollectionThe process of gathering and entering data into the database, including customer information, inventory details, and financial records.
Organization and ExtractionThe role of software in structuring, organizing, retrieving, and utilizing data stored in the database efficiently.
Database vs. SpreadsheetA comparison of the capabilities of databases and spreadsheets in managing data, with a focus on handling large datasets and generating reports.
Efficiency and InsightsHow databases enhance organizational efficiency and provide valuable insights by analyzing data, integrating with other applications, and generating reports.
Accessibility for Non-Technical UsersThe availability of user-friendly database applications that enable non-technical staff and business owners to set up and customize databases to meet specific needs.
Integration with Business ProcessesThe ability to integrate databases into various business workflows and customize them to address unique business requirements not met by off-the-shelf software.
Database ApplicationsExamples of online software services commonly used by businesses that incorporate databases into their functionality, such as accounting software and e-commerce platforms.
Customization Without CodingHow business-friendly databases simplify database management and customization, making it accessible to professionals without coding expertise.
Executive DashboardsThe use of databases to create customized executive dashboards that provide a snapshot of critical business metrics and data for decision-makers.
Desktop DatabasesExamples of desktop database applications like Microsoft Access, Quick Base, and FileMaker, which offer user-friendly interfaces for building and managing databases.
Mobile Database ApplicationsDatabase applications with mobile capabilities, such as Quick Base, that allow users to access and manage data while on the go.

What is a Database?

Frequently Asked Questions

What Is a Database, and Why Does My Small Business Need One?

A database is an organized collection of data that allows you to store, manage, and retrieve information efficiently. Small businesses can benefit from databases in various ways. They provide a structured framework for storing customer data, managing inventory, tracking finances, and much more. Databases make it easier to access and utilize your data for informed decision-making.

Key Takeaways:

  • Databases help you organize and make sense of your business data.
  • They provide a centralized location for storing and managing critical information.
  • Small businesses can use databases for customer relationship management, inventory control, and financial record-keeping.

How Do I Input and Collect Data Into a Database?

Data input and collection involve the process of gathering information and entering it into your database. This can be done manually or automatically, depending on the data source. For customer data, you might input information during interactions, while inventory data can be collected through barcode scanners or point-of-sale systems. Many databases also offer integration with other software and applications, allowing for seamless data import.

Key Takeaways:

  • Data input can be manual or automated, depending on the type of information.
  • Integration with other systems can facilitate data collection and reduce manual entry.
  • Ensure data accuracy and consistency during the input process.

What Makes a Database Different from a Spreadsheet?

While spreadsheets like Microsoft Excel have their place in small businesses, databases offer distinct advantages for handling large volumes of data. Databases provide advanced data structuring, efficient querying, and robust reporting capabilities. Unlike spreadsheets, databases are designed for data storage and retrieval, making them more suitable for managing complex datasets and generating meaningful insights.

Key Takeaways:

  • Databases excel at managing extensive and structured datasets.
  • They offer advanced querying and reporting features that facilitate data analysis.
  • Spreadsheets are better suited for smaller datasets and simpler calculations.

How Can Databases Improve Efficiency and Provide Insights?

Databases contribute to business efficiency by streamlining data management processes. They enable quick access to information, reducing the time spent searching for data manually. Additionally, databases offer reporting and analysis tools that help uncover valuable insights. For example, an e-commerce business can use a database to track customer behavior, optimize inventory management, and offer personalized product recommendations.

Key Takeaways:

  • Databases streamline data retrieval, saving time and effort.
  • Reporting and analysis tools help businesses make informed decisions.
  • Personalization and optimization are achievable through database-driven insights.

Are Databases Accessible for Non-Technical Users?

Yes, databases can be accessible to non-technical users through user-friendly database applications. These applications provide intuitive interfaces for creating and managing databases without coding knowledge. Small business owners and staff can harness the power of databases to customize workflows, track data specific to their needs, and generate reports, all without the need for extensive technical expertise.

Key Takeaways:

  • User-friendly database applications empower non-technical users to create and manage databases.
  • Customization is possible to match unique business requirements.
  • These tools bridge the gap between technical complexity and practical usability.

How Do Databases Integrate with Business Processes?

Databases are versatile tools that can integrate seamlessly into various business processes. They become a part of your workflow, enhancing data-related tasks. For instance, a database can integrate with your accounting software to streamline financial record-keeping or connect with your e-commerce platform to manage inventory levels. The ability to customize databases makes them adaptable to specific business needs.

Key Takeaways:

  • Databases can integrate with existing business processes and software.
  • They enhance efficiency by automating data-related tasks.
  • Customization allows databases to align with unique workflows and requirements.

What Are Executive Dashboards, and How Can Databases Help Create Them?

Executive dashboards are visual displays that provide a snapshot of essential business metrics and data. Databases play a crucial role in creating these dashboards by consolidating data from various sources and presenting it in a user-friendly format. Small businesses can use executive dashboards to monitor performance, track key performance indicators (KPIs), and make informed decisions quickly.

Key Takeaways:

  • Executive dashboards offer a visual representation of critical business data.
  • Databases gather and organize data for dashboard creation.
  • Dashboards help businesses monitor performance and respond effectively to changes.

What Are Desktop Databases, and How Can They Benefit Small Businesses?

Desktop databases like Microsoft Access, Quick Base, and FileMaker are user-friendly applications designed for non-IT staff. They provide accessible interfaces for creating, customizing, and managing databases specific to your business needs. These tools are particularly valuable for small businesses with unique workflows, offering the ability to develop custom solutions without the complexity and cost of traditional software development.

Key Takeaways:

  • Desktop databases are user-friendly applications for creating and managing databases.
  • They cater to small businesses with unique workflows and requirements.
  • Custom solutions can be developed without extensive coding expertise.

How Does Mobile Database Application Access Work?

Some database applications, such as Quick Base, offer mobile capabilities, allowing users to access and manage data from smartphones and tablets. Mobile access typically involves downloading the application from app stores and logging in with your database credentials. It enables on-the-go data management, making it convenient for business professionals who need real-time access to critical information.

Key Takeaways:

  • Mobile database applications provide access to databases from mobile devices.
  • Users can download the app, log in, and manage data while on the move.
  • Mobile access ensures real-time data availability and supports remote work.

Database Photo via Shutterstock

Annie Pilon Annie Pilon is a Senior Staff Writer for Small Business Trends and has been a member of the team for 12 years. Annie covers feature stories, community news and in-depth, expert-based guides. She has a bachelor’s degree from Columbia College Chicago in Journalism and Marketing Communications.