small business erp

Commercial organisations need effective process, the focus of leadership and structure that can stretch to enable the business to grow safely as a massive 55% of businesses fail in their first five years of existence. The experts offer useless ‘insight’ as to why this occurs. I consistently see three key reasons why this tragedy occurs so often and to so many people with different experience, qualifications and skill.

The first reason is lack of market comprehension.

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 buy. In information age there is no excuse for lack of research prior to wasting any time and money on designing a product until you have firm evidence there is a market.

The second reason is lack of comprehension of the basics of business.

A significant proportion of folks 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 read and follow 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 those with the knowledge such as accountants and bookkeepers. This subject is further exacerbated by technology vendors and their alliances thrusting small business accounting software at fledgling businesses.

Small business accounting software isnt a complete answer.

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 picture of the business. One vendor NetSuite had the vision to see the opening in the market and started offering its small business ERP software. NetSuite competitors have seen the opening as well and as a result cheaper easier to use systems have appeared.

The last reason businesses don’t survive is a because of the lack of well thought through management processes and policies to enable a sustainable fabric of disciplines and behaviours.