Why ERP for small businesses can make a real difference to survival rates
Running a company efficiently is about organisation, focus and process as a massive 55% of businesses don’t make it to their fifth birthday. The observers offer shallow explanations as to why this occurs. I consistently see three key reasons why this tragedy occurs so often and to so many people with different experience, education and knowledge.
The primary reason is insufficient market comprehension.
Refusal to look at the water ahead. For example Individuals have the concept, create the product and then expect the market to flock and buy. In networked age there is no excuse for lack of investigation prior to spending any time and money on building a product until you have firm evidence there is a market.
The number two reason is lack of comprehension of the basics of business.
The majority of folks starting a business know their trade, how to offer a service or build a product, but not how to run a business. Having the ability to understand and follow the balances in the Income statement or the balance sheet is a vital. The basic knowledge of accounting is not very often imparted coherently by the business books, online resources and experts in the know such as CPAs and bookkeepers. This subject is further complicated by manufacturers and their alliances peddling small business accounting software at fledgling businesses.
Sage software and other vendors as usual are underserving small businesses.
Large corporations way back figured out that all of their Information systems should be wired together to give them a total view of the business and then along came ERP software solutions and packages. One technology business NetSuite had the foresight to see the gap in the market and started offering its small business ERP software. NetSuite pricing has since increased and put their solution out of the financial reach of small businesses.
The final reason businesses don’t survive is a because of the lack of practical management processes and policies to enable a sustainable fabric of disciplines and behaviours.