Small businesses and ERP software
Managing a business effectively is about organisation, focus and process as a massive 55% of businesses don’t survive the first five years. The commentators offer banal opinions as to why this happens. I continuosly observe three key reasons why this tragedy happens so often and to so many people with different backgrounds, qualifications and knowledge.
The primary reason is insufficient market understanding.
No foresight. For example People have the concept, create the product and then sit back and wait for the market to come and purchase. In networked age there is no excuse for lack of investigation prior to spending any time and cash on building a product until you have solid evidence there is a market.
The second reason is lack of understanding of the basics of business.
A significant proportion 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 read and track the balances in the profit and loss or the balance sheet is a vital. The basic knowledge of accounting is rarely imparted coherently by the business manuals, online resources and experts with the knowledge such as CPAs and bookkeepers. Companies such as Sage software and Intuit aggressively hoodwink business managers with their messaging that their systems are the holy grail.
Sage software and other vendors as usual are underserving small businesses.
Until recently ERP software solutions and packages were only affordable by corporations who had deduced that the back and front office systems need to be fused together to give a comprehensive view of the business. One technology business NetSuite had the vision to see the opening in the market and started selling its small business ERP software. NetSuite competitors have seen the gap as well and as a result cheaper easier to use solutions have appeared.
The final reason companies don’t survive is a because of the lack of practical management processes and policies to enable a cohesive fabric of disciplines and behaviours.
