erp for small business

Managing a company effectively is about organisation, focus and process as a massive 55% of businesses fail in their first five years of existence. The commentators offer banal opinions as to why this happens. I continuosly observe three key reasons why this tragedy occurs so often and to so many people with different experience, qualifications and skill.

The primary reason is lack of market understanding.

No foresight. For example Individuals have the concept, build the product and then expect the market to come and buy. In information age there is no excuse for lack of research before wasting any time and cash on building a product until you have firm evidence there is a market.

The second reason is lack of understanding of fundamental facts about business.

The majority of people starting a business know their trade, how to offer a service or make a product, but not how to run a business.  Having the ability to understand and follow the balances in the P&L or the balance sheet is a vital. The basic knowledge of accounting is not very often imparted well by the business publications, online resources and those with the knowledge such as CPAs and bookkeepers. Companies such as Sage software and Intuit aggressively fool business managers with their marketing that their applications 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 deduced that the back and front office systems need to be joined together to give a complete view of the business. One technology business NetSuite had the vision to see the gap in the market and started offering its small business ERP software. NetSuite pricing has since increased and put their technology out of the financial reach of small businesses.

The final reason businesses don’t survive is a because of the lack of good management processes and policies to enable a cohesive fabric of disciplines and behaviours.