Startups are different from small businesses in terms of objectives. Founders of start-ups are often visionaries that see their products and services as transformative game-changers. While their ambition goes beyond profits and revenue, the reality is that they need stability in order to keep going.
Data from the Bureau of Labor Statistics shows that almost 50 percent of startups fail in the first four years. In a Harvard Business School study, it concluded that almost 75% of venture capitalist-funded start-ups fail eventually.
Passion and ambition can drive you to start a company but those traits alone cannot sustain your growth. What you need are viable tools like an ERP system to help you stay focused on the big picture.
What are ERPs?
ERPs or Enterprise Resources Planning systems have been around since the 60s. Large multinational companies typically use these software programs to streamline their business processes.
One pioneering ERP software is SAP (Systemanalyse und Programmentwicklung or Systems, Applications, and Products). Its goal is to integrate different software solutions into one comprehensive database. And while it was first developed to cater to the needs of manufacturing industries, the application proved to be robust enough to be implemented in different fields.
In 2002, SAP acquired TopManage Financial Systems, an Israeli business management solution that they re-branded as SAP Business One. It proved to be one of the best ERP systems for small and medium-sized enterprise including start-ups.
How can ERPs help you become the next celebrated unicorn?
Helps Understand Your Market – Cloud-based ERPs such as the SAP Business One gives you real-time analytics, allowing you to gain insights about your target market. It collects data from your various sales channels so you can plan ahead and anticipate the needs of your customers.
Promotes Collaborative Team Work – What’s so exciting about a start-up is that you can implement initiatives quickly without needing approval from a chain of command. ERPs integrate not just your business tools but also teams and departments so they can respond immediately to any business opportunity.
Streamlines Your Operation – The overall goal of the ERP is the streamlining of your different business process, whether it’s in accounting or production. With one fully integrated system, every process is seamless. For example, your order management module triggers the warehouse department to ship products to customers automatically. At the same time, the merchandising team looking at the updated database will gain insight on what products are in demand. In all, the system makes the entire business cycle more efficient.
Lowers Operational Costs – Having an optimized business operation means less redundancy and unnecessary overhead cost. ERPs help automate some of your business functions so you can allocate your precious resources where it makes the most difference.
Simplifies Your Accounting Functions – Instead of outsourcing your company’s accounting functions, ERPs can help your business handle the payroll, bookkeeping, taxes, etc. With a small accounting team, you can take control of your company’s finances and track your cash flow easily.
Provides Structure – One of the reasons why start-ups fail is the lack of a business model. ERPs are essentially a ready-made infrastructure that can support your business wherever you take it. It’s the backbone of your operations and all you need to do customize it according to your business needs.
Develops Customer Relationships – In any business, you need to pay attention to CRM or Customer Relationship Management. With ERP’s, real-time reporting, you can respond quickly and efficiently to customer’s concerns. In doing so, your customer will feel valued and will most likely reward you with their loyalty.
Addresses Bottlenecks in Your Supply Chain – Supply Chain Management is where ERP can really make a difference. From purchasing to shipment and all areas in between, bottlenecks can be isolated and addressed to ensure a smooth and automated operation.
Grows With Your Company – ERPs are built to be scalable. As your company grows and becomes more complex, the system can be upgraded as needed. You don’t have to worry about adding new technology as well as new business processes to the system.
There are countless reasons why start-ups fail. Prevent your company from being another unfortunate statistic and be the unicorn among the horses. Implement ERP solutions such as SAP Business One to give your business the stability it needs to thrive.