According to Investopedia, the 5 biggest challenges facing small businesses today are these:

 

1. Client dependence
2. Money management
3. Fatigue and burnout
4. Founder dependence
5. Balancing quality with growth

 

The right ERP system can help a small business tackle each of these issues.  Here’s how to steer yourself straight using an ERP system.

 

• Client Dependence
  Is your income dependent on one client?  In terms of distribution of income by client, it isn’t recommended for a single client to make up more than 50% of your revenue.  Income security is increased by having your revenue spread across many clients.  Basically, don’t put all your eggs in one basket.

  With ERP systems, you can identify each stage of the sales process for your customers and prospects.  You can use pipeline management to understand which customers you are engaged with and how likely you are to convert.  Importantly, the ERP system will also determine how profitable they will become when they are converted.  Customers in the early stages will require more time and money to nurture them to the point of close.  Meanwhile, having a small quantity of customers in the early stages will require more lead generation.

• Money Management
  It goes without saying, cash is vital for any business and having enough of it to pay any overheads is a must.  For a small business owner, the cash is also necessary for their personal life.  Money management is therefore a must for any small business owner.

  ERP systems can automate credit control functions which include identifying overdue payments and can chse payments from customers.  These functions mean that small business owners can spend less time on mundane administrative tasks and spend more time generating income for their business.

  Businesses can review their financial data using real time information and on one screen.  This information is available in the form of reports which can include cash flow projections or inventory management.

• Fatigue and Burnout
  Being a business owner isn’t easy.  Working at a fast pace, keeping your head above the water and ensuring you keep a roof over your head.  If you’re not careful it will burn you out.  Professionals recommend that you work at a pace which is suitable.  This is not always as simple as it sounds, however.

  Cloud-based ERP allows you to access your business software from any location via the internet.  This ensures that you can go home at a reasonable hour, enjoy your downtime with your family and then pick your work back up when everyone has gone to bed if need be.

  You can also set up your ERP system to automate as much as possible to remove manual effort and duplication so that you don’t have to spend time on unnecessary admin.

• Founder Dependence
  We all know a business owner who loves their business so much that they can’t down tools and let go of certain aspects of their business.  A business founder, however, will have to let go of certain tasks, decisions and responsibilities if the business is to succeed.  This is where the ERP system comes in.  This software will facilitate knowledge sharing and learning within the organisation.

  This allows information to be stored in an ERP system, meaning that critical pieces of information do not need to be mentally noted or written on a bit of paper that my be lost.  Use your ERP to define your business processes, collect your data, store your business intelligence.  Your ERP system should be the brain behind the business – the founder and employees add the skill.

• Balancing Quality With Growth
  You cannot continue to offer your best service whilst working flat out.  You will have to consider building a team when you are growing beyond the means of one person.  You may have to consider bigger premises or expanding your product range.  All of this can be painful and take time to balance out.

  An ERP system should be extensible enough to cope with any and all changes which come your way.   Whether you just start with finance and build out CRM as you add sales resource, or whether you need to extend your software to cover inventory management, or project planning.  Your ERP system should have all the functionality waiting to be unlocked.  This saves you going through the pain of “search and select” for complementary business software at every growth juncture.

 

To make life easier for yourself and your business, get in touch today to start your ERP journey.