Sources of data

Identifying the data you need for a financial model is just the first step. You also need to actually go out there and gather that data from various sources. Fortunately, this is easier than it once was. Thanks to some great tools and databases that are available online. 

Traditionally, one big issue for firms in complex financial models was the lack of external data. You usually had to pay for that data that could be very expensive. Today, there's a variety of great sources for free external data. Three top sources you'll wanna consider, depending on what you're trying to model, are the BLS or Bureau of Labor Statistics, The Fed or Federal Reserve, and the U.S. Census Bureau. Each of these has different data sets that you could use depending on the financial model that you're trying to build. For something like in the model of how your company's labor costs will change over time and as a result how your profits will change over time, BLS data might be more helpful. For conditions related to the financial system as a whole and perhaps the economy, Federal Reserve data is more likely to be more helpful. And for issues related to your customers and your market share, and your ability to raise prices, data on those customers from the U.S. Census Bureau might be key. 

In addition you can also gather data on non traditional metrics that you might care about. Google Trends has a variety of different kinds of data related to searches that are done through its search engines. This is great data to use in a variety of different scenarios. Now, in addition to external data that you could gather, if you want data on specific industries or competitors, there's a good chance that you're gonna have to buy it. In particular, buying that data is most realistic if we're talking about gathering data specific to a particular industry and the competition we face in that industry. Be aware, though, that it can be very expensive to buy this kind of data. So make sure that it's data that you really and truly need for the project in question. An alternative to buying data can be surveys. There's a variety of new online tools for conducting surveys. And this gives you the ability to get data on OPCs, other people's customers. Understand what it is your competitors are doing that you're not doing and then how that will influence your market share over time. The key, though, is to understand what kind of biases you introduce by using a survey. Remember, any survey that you do needs to be representative of the rest of the world. So if you're trying to figure out how to sell to other customers or new customers you need to ask yourself if the existing customers you're surveying are representative of your target customers. Now you should have a handle on where to go to get data in general for a financial model you might wanna construct.