Wisdom from a small business owner – Why small business ERP is key to your survival
October 24th, 2009
Commercial organisations need efficient process, the focus of leadership and structure that can adapt to enable the company to grow safely as a massive 55% of businesses fail in their first five years of existence. The commentators offer useless ‘insight’ as to why this happens. I continuosly observe three key reasons why this tragedy occurs so often and to so many individuals with different backgrounds, qualifications and knowledge.
The first reason is lack of market comprehension.
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Refusal to look at the water ahead. For example Individuals have the concept, build the product and then sit back and wait for the market to come and purchase. In this connected age there is no excuse for lack of investigation before wasting any time and money on designing a product until you have robust evidence there is a market.
The second reason is lack of comprehension of the basics of business.
A significant proportion of people starting a company know their trade, how to offer a service or make a product, but know very little about running a company. Being able to understand and follow the balances in the profit and loss or the balance sheet is an essential skill. The basic knowledge of accounting is not very often imparted well by the business books, internet resources and those with the knowledge such as CPAs and bookkeepers. Vendors such as Sage software and Intuit callously fool business owners with their marketing that their software are the holy grail.
Small business accounting software isnt a complete answer.
Until recently ERP software solutions and packages were the privilege of corporations who had figured out that the back and front office systems need to be wired together to give a complete picture of the business. One technology business NetSuite had the foresight to see the gap in the market and began offering its small business ERP software. NetSuite competitors have since emerged.
The third reason companies don’t survive is because of lack of process and procedures that provide the essential disciplines and consistency a business must have to work effectively.
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