p>A database is any businesses most valuable asset. It is far more expensive to get new business than to get your previous customers to buy from you again. Existing customers and clients already know and trust you and if they have been looked after in the past, will happily buy from you again.
The database should as a minimum contain all your customers and their information. The database should contain much more than just their contact information (name, address etc). It should also contain all the products and services that they have bought, when and how often they have been contacted and how they respond to marketing material.
You can get some off the shelf CRM (Customer Relationship Management) software that integrates with your accounting software.
Once you have a database of all your current and past customers, you need to establish a database of your future possible customers.
The database is the mechanism by which you record all your contact with your customers but it also enables you to measure the effectiveness of your marketing campaigns and the effectiveness of your selling.
The database is one of the foundations of your business which when properly implemented enables you to leverage your marketing and sales functions.