small business erp,erp for small business
Businesses need efficient process, the focus of leadership and structure that can adapt to enable the business to grow safely as a massive 55% of businesses don’t survive the first five years. The experts 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 knowledge.
The primary reason is insufficient market comprehension.
No foresight. For example People dream up the idea, build the product and then expect the market to appear and buy. In networked age there is no excuse for lack of investigation before wasting any time and money on building a product until you have firm evidence there is a market.
The second reason is lack of comprehension of the basics of business.
The majority of folks starting a business know their trade, how to deliver a service or manufacture a product, but know very little about running a company. Being able to understand and track the numbers in the P&L or the balance sheet is an essential skill. The basic knowledge of accounting is not very often imparted coherently by the business books, online resources and experts in the know such as accountants and bookkeepers. This subject is further complicated by manufacturers and their alliances thrusting 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 fused together to give a comprehensive view of the business. One technology business NetSuite had the foresight to see the opening in the market and started offering its small business ERP software. NetSuite pricing has become restrictive as their product has increased in complexity.
The third reason businesses fail is because of a dirth of process and procedures that provide the essential behaviours and continuity a business must have to operate effectively.
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on Dec 15th, 2009 at 7:31 pm
Your correct that many business do fail because they don’t understand how to run a business. They’re great at selling or manufacturing and designing – but not the organizational skills required to make the business a success.
ERP can help, if implemented correctly – and this is often an opportunity to improve or create those business process , with the help of an experienced consultant, required for success.
Until recently the barrier for the small business to ERP has been the cost. Starting prices for ERP are easily over $75K and very hard to justify. The Sage and Quickbooks solutions don’t offer enough features, have data size limitations and don’t work well for multi-users.
Open source xTuple ERP is a full featured ERP and the entry level is free. Now most small businesses should get some guidance in implementation, but it is a reasonable estimation that a robust scalable ERP can be up and running for under $5000.
OpenSurge http://www.opensurgegroup.com has a cloud hosted offering of xTuple starting at $249/month for 5 users with $500 setup fee and no long term contract. This is a great way for the small business to get all the benefits of ERP with none of the network and installation issues.