55% of small business dont survive - how small business erp can make a difference

Running 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 banal opinions as to why this occurs. I continuosly observe three key reasons why this tragedy occurs so often and to so many people with different experience, qualifications and knowledge.

The primary reason is lack of market comprehension.

No foresight. For example People dream up the concept, build the product and then sit back and wait for the market to come and buy. In information age there is no excuse for lack of investigation before spending any time and money on designing a product until you have solid evidence there is a market.

The number two reason is lack of comprehension of fundamental facts about business.

A significant proportion of people starting a business 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 follow the numbers in the P&L or the balance sheet is a vital. The basic knowledge of accounting is not very often imparted well by the business books, online resources and those with the knowledge such as CPAs and bookkeepers. Companies such as Sage software and Intuit callously fool business managers with their marketing that their applications are the cure for all ills.

Small business accounting software isnt a complete answer.

Large corporations years ago deduced that all of their systems should be wired together to give them a total picture of the business and then along came ERP software solutions and packages. One vendor NetSuite had the foresight to see the opening in the market and started selling its small business ERP software. NetSuite competitors have seen the opening as well and as a result lower cost easier to use solutions have emerged.

The final reason businesses fail is because of a dirth of process and procedures that put in place the essential behaviours and consistency a business must have to work efficiently.