Small business advice – ERP software
Managing a business effectively is about organisation, focus and process as a massive 55% of businesses fail in their first five years of existence. The experts offer banal opinions as to why this occurs. I continuosly observe three key reasons why this tragedy occurs so often and to so many people with different experience, education and skill.
The first reason is lack of market understanding.
No foresight. 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 research prior to wasting any time and money on building a product until you have robust evidence there is a market.
The second reason is lack of understanding of fundamental facts about business.
The majority of people starting a company 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 numbers in the profit and loss or the balance sheet is an essential skill. The basic knowledge of accounting is not very often imparted coherently by the business publications, online resources and experts in the know such as CPAs and bookkeepers. This problem is further exacerbated by software companies and their partners pushing small business accounting software at fledgling businesses.
Small business accounting software is only half of the solution.
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 wired together to give a comprehensive view of the business. One technology business NetSuite had the vision to see the opening in the market and began selling its small business ERP software. NetSuite competitors have seen the opening as well and as a result lower cost easier to use solutions have appeared.
The final reason companies don’t make it is a because of the absence of practical management processes and policies to enable a sustainable fabric of disciplines and behaviours.
