SEO Friends

small business erp

Managing a business effectively is about organisation, focus and process as a massive 55% of businesses don’t make it to their fifth birthday. The commentators offer shallow explanations as to why this happens. I continuosly observe three key reasons why this tragedy happens so often and to so many individuals with different experience, education and skill.

The first reason is insufficient market understanding.

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 appear and purchase. In information age there is no excuse for lack of research prior to spending any time and cash on designing a product until you have solid confirmed there is a market.

The number two reason is lack of understanding of the basics of business.

A significant proportion of people starting a business know their trade, how to offer a service or build a product, but know very little about running a company.  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 manuals, online resources and those with the knowledge such as CPAs and bookkeepers. The problem is worsened by greedy and short sighted technology companies such as Sage software misleading the market by selling only a portion of the functionality actually needed by small 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 joined together to give them a total view of the business and then along came ERP software solutions and packages. One software developer NetSuite had the foresight to see the gap in the market and began selling its small business ERP software. NetSuite pricing has since increased and put their solution out of the financial reach of small businesses.

The last reason companies don’t survive is a because of the absence of practical management processes and policies to enable a sustainable fabric of disciplines and behaviours.