small business wisdom – ERP software and the art of survival
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 observers offer useless ‘insight’ as to why this happens. I continuosly observe three key reasons why this tragedy happens so often and to so many individuals with different backgrounds, education and skill.
The primary reason is insufficient market understanding.
Refusal to look at the water ahead. For example Individuals dream up the idea, create the product and then expect the market to appear and purchase. In networked age there is no excuse for lack of research before spending any time and cash on building a product until you have firm confirmed there is a market.
The second reason is lack of comprehension of the basics of business.
A significant proportion of people starting a company know their trade, how to offer a service or make a product, but know very little about running a company. Having the ability to read and track the balances in the profit and loss or the balance sheet is an essential skill. The basic knowledge of accounting is rarely imparted coherently by the business manuals, online resources and experts with the knowledge such as accountants and bookkeepers. This whole area is further complicated by software companies and their alliances peddling small business accounting software at fledgling businesses.
Small business accounting software is only half of the solution.
Large enterprises years ago figured out that all of their systems should be fused together to give them a comprehensive picture 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 competitors have seen the gap as well and as a result cheaper easier to use systems have appeared.
The final reason companies fail is because of lack of process and procedures that put in place the essential behaviours and continuity a business must have to operate efficiently.
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