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small business erp

Companies need effective process, the focus of leadership and structure that can adapt to enable the company to grow safely as a massive 55% of businesses fail in their first five years of existence. 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, qualifications and skill.

The primary reason is insufficient 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 flock and buy. In networked age there is no excuse for lack of investigation before spending any time and money on designing a product until you have robust 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 know very little about running a company.  Being able to read and follow the balances in the profit and loss or the balance sheet is an essential skill. The basic knowledge of accounting is rarely imparted well by the business publications, internet resources and those in the know such as CPAs and bookkeepers. The problem is maginfied by greedy and short sighted vendors such as Sage software misleading the market by selling only a portion of the functionality actually needed by small businesses.

Small business accounting software isnt a complete answer.

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 joined together to give a complete picture of the business. One technology business NetSuite had the vision to see the opening in the market and started offering its small business ERP software. NetSuite pricing has since increased and put their technology out of the economic reach of small businesses.

The last 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.