The parameters defining small businesses can differ from country to country. While in Europe, a small business must contain employees less than 100, in the USA this number shoots up to 500. In the Indian scenario, a small business is defined as the one in which the financial turnaround and commitments engaged in the business is not more than 1 crore. Doctor chambers, tattoo studio =, stationary shops, pharmacy, etc can all be examples of small business.
Although the factors determining if the business can be categorized as small differ from the country there are certain inherent features that are intrinsic to all small business. The first of these features is that these organizations operate on a shoe string budget. With most of their money stuck in the market, these businesses are operated by a single person or a small group of people.
Secondly, these businesses are labour intensive in nature. They rely heavily on manual labour. There are little entrepreneurial innovations and the flow of the business lacks automation. Moreover, these businesses cater to the needs of a small community both in terms of products and service. Lastly, the state of technology in these businesses is grim. As mentioned above, there is no automation and overall condition of technology is obsolete.
Enterprise resource planning for small business
Enterprise Resource Planning or ERP Software for Small Business in India is a software as a service program. Such a software can be outsourced from a number of vendors who charge for the service they provide. Though the heart and soul of most ERP software is the same, they can vary greatly in their iteration. A comprehensive iteration of ERP software can solve the problems which are common to all small businesses and improve the state of profitability.
In its most empirical form, ERP software acts as a medium of integration and vigilance for all important business procedures such as outsourcing, buying, selling, accounting, documentation, etc. Effective implementation of ERP software will serve the following purposes.
1. The ERP software acts as the central conduit for all passage of information. Details of purchases, sales, credit, and debt can be accessed from within the software. There is no need to go through piles of paperwork in order to gather that small but significant information. One click and every detail regarding your small business can be at your fingertips. Every nook of business including inventory, store condition, customer behaviour can be identified through the vigilant eyes of the ERP software.
2. ERP software results in productivity enhancements. It achieves this by streamlining the entire business operations. Think of ERP as a connecting rod between all processes which are important for the proper functioning of the business. Since the ERP software acts as the central conduit for all information flow, owners can get access to information readily. This allows them to take decisions on the go and at a brisker pace. The result is a reduction in time wastage. The surplus time dedicated to business development activities and improving productivity on the whole.
3. ERP software considerably reduces the cost of operations. Under manual operation, most of the business is controlled by manual labour. Huge trail of spreadsheets and hours of toiling with the accounts is the norm. With ERP, the complexion changes. Automated accounts reduce the dependency on spreadsheets and can save 30% of the time. It also helps in drafting automated inventory bills and invoices of purchase. Thus, ERP software serves as an end to end software and eliminates the need to have multiple vendors. This reduced costs in operations mean greater profitability for the business.
4. ERP iterations can also be used to analyze customer behaviour. It is important for small businesses to grasp new customers and retain existing ones. For this reason, they are required to maintain an aggressive system of customer grievance removal. The data gathered by ERP software can be analyzed to reveal trends in customer behaviour and how it changes with market, seasons and competition. It can also be used to identify products which demand customer attention and gauge implementations related to product placements.
5. Small businesses often operate under dynamic marketing conditions. The challenges keep on evolving and there no sets of rules that will guarantee success. ERP is a flexible software which can be changed to suit the condition of any market. This allows the owners of small businesses to respond to the viscosity of the market and make subtle changes to their business model.
6. Data analysis in ERP software is a game changer for many business owners. They have been documented agreeing to the fact that ERP has allowed them to take strong decisions quickly by using the feature of data manifestation built into the app. It is widely accepted that such decisions are free of risks and are based on proven facts observed over a period of time.
Therefore, it will not be wrong to say that ERP can transform the entire outlook of a small business enterprise. By propelling a business towards automation, ERP ensures that a business survives the test of time in this era of cutthroat competition.