Why Small Businesses Need an ERP System

An Enterprise Resource Planning (ERP) system manages all aspects of a business, including production, planning, purchasing, manufacturing, sales, distribution, accounting, and customer service, from one fully-integrated system.

Small businesses use ERP software to improve communication across departments and optimize business processes by providing easy visibility of all operations. ERP software also helps small businesses integrate both their financial information and customer information into one system.

What Do Small Businesses Stand to Gain from an ERP? 

A common misbelief about ERPs is that they are for large-scale businesses only. ERPs first developed to meet the needs of large scale enterprises — like the name suggests — but ERPs can help businesses, large and small alike, to integrate all of their business processes and data into one place.

No business is too small for an ERP solution — just because you are a small shop doesn’t mean that you can’t operate like an enterprise-scale business — and take advantage of smart business solutions, like ERPs, to streamline your production.

ERPS let small businesses:

1. Share Information

Connect and integrate all departments in your company, so you can easily share data and information between divisions to streamline processes. 

2. Increase Throughput 

Boost throughput without hiring new staff or expanding operations by automating processes, eliminating redundant work, and increasing shop efficiency. 

3. Gain Business Intelligence 

Use accurate data and reporting to track progress, productivity, and performance — giving you improved insight into your business for better decision making.

Why No Amount of Data Is Too Little for an ERP

If you think you are too small for an ERP, think again. Over 75% of small businesses use ERPs to manage their operations.

First off, no matter the size of manufacturer you are, you will have lots of data  — manufacturing is one of the most data-intensive industries out there. Even if you aren’t a large scale business, you will have plenty of data that an ERP can help you make sense of.

Second off, no matter how much data you do or do not have, you need a system that can organize it, and help you effectively communicate and collaborate across your business.

To run a profitable manufacturing business you need to have a handle on your business resources — i.e. what your business has in terms of cash, raw materials, personnel, and production capacity—to operate at full capacity and maximize your throughput.

With no overarching system that collects data, reports on your processes and systems, and sees the big picture, how can you accurately know where you stand?

Your business resources are what you use to keep your business running, and you should be aware of where you stand at all times.

One of the greatest advantages of an ERP system is its ability to provide complete visibility of your entire operation, giving you insights into how your operation is performing. With an ERP, what used to take hours of meticulous data collection and report creation can be done automatically, providing you with a sweeping overview of your operation, allowing you to measure critical performance metrics through real-time dashboards. You can use this information to always know where you stand, to optimize production schedules, and to maximize capacity and increase your throughput.

And not only will you have visibility into your organization, you will also be able to easily share information and collaborate between departments, letting you increase operational efficiency.

How Can ERP Pricing Flex to Accommodate Smaller Budgets?

The right ERP for your small business is all about fit, and it will vary depending on your business, your industry, your size, your budget, and your needs. What may be the best solution for a multinational organization will not meet the needs of an SME that is just starting out.

To find the best ERP for you, you need to take a hard look at your business, your strengths, your weaknesses, and your needs, and then do a little research to find an ERP that was built for your unique situation.

Not so long ago there were only a few ERP providers in the marketplace, but today there are ERP vendors for every industry, size, and speciality. The best ERP for you will be one that specializes in your business line, and has the features you need to improve your business.

ERP providers also offer flexible pricing models, meaning you can buy the right-sized system for the right price. The ERP best suited for your small business will let you choose from the right modules and features for you, providing you with an ERP that fits your business and budget.

How ERPs Can Facilitate and Accommodate Growth

ERPs let you:

1. Deliver more jobs on time

2. Reduce inventory costs

3. Eliminate purchasing errors

4. Improve production efficiency

5. Lower operational costs

The reality of running a small shop is that employees wear multiple hats. Everyone pitches in wherever and whenever the need arises (which, as you know, is often). With so much going on, who on your staff has the time to manually process multiple spreadsheets and separate mountains of data?

ERP systems geared towards small businesses are able to automate key business functions such as order processing, production, and finances, freeing up your staff to focus on more important tasks than data entry. In fact your small business will get many benefits from having an ERP:

• Increased Efficiency 

All your job information in one place — accessible in real-time — means quicker decision-making, less miscommunication, and greater coordination.

• Simplified, Error-Free Accounting 

An accounting system fully integrated with inventory, purchasing, manufacturing, and sales makes accounting tasks and financial reporting easier.

• Smarter Cash Flow 

Organize how you source, track, and manage orders to reduce inventory costs and enable smarter purchasing.

• A More Effective Sales Team 

With all the information they need at their fingertips, Your sales department can more effectively interact with prospects and customers, as well as make faster and more accurate quotes and estimates.

Ultimately, ERPs will help you increase your throughput and grow your business.

From the minute a potential job comes through your front door, to loading the final shipment at the dock, small manufacturers need a system that helps them move jobs quickly, efficiently, and effectively through their shop. ERPs are just that tool: a fully integrated system that will help you manage every aspect of your business.

To see how Genius ERP can help you grow your  business check out how we helped one of our customers: Raglan Industries. Raglan’s existing ERP system wasn’t growing with the company, so they turned to Genius ERP for a solution that would centralize operations, from order placement to delivery.