How to make an ERP system for small business
Growing a business has been both easier and harder in the 21st century when the world got dominated digitally. When ‘Time is money’ got preached for long term success, that’s where the importance of an ERP system fetched within the world of business. Most of the firms are confused about How to make an ERP System for small business? But what exactly is an ERP system and how can you make an ERP System for your small business?
How to build an ERP System for small Business
There are several ways to build an ERP system for your small business. But following the right strategy is very much needed. In this blog, The perfect way to build the most appropriate ERP system for your small business is written down. Sit back comfortably and read till the end of the article to have all your questions answered. Download the Short Carousel of the blog here in case you need for referance.
What is an ERP system for small businesses?
The term ERP stands for Enterprise Resource Planning but ERP is usually used as a synonym to a ‘software management’ used in the industry to carry out the core processes for making the work easier. An ERP system is more like a process of integrating functions under a single umbrella like Finance and Accounting management, Human resource management, Supply chain management, Sales management, inventory management etc. According to a report from 2020, Over 93% of organizations report their ERP projects as successful or very successful.
Is there a difference in the ERP for large and small businesses?
Yes, There is a difference in the ERP system for large businesses compared to the smaller businesses. Most people assume ERP systems to be expensive and off their budget list. While the bigger companies need an expensive ERP System to be set up, the price range of setting an ERP system for a small business is low as their requirements will be shorter. The functions of the small businesses aren’t complex like larger businesses. The installation methodology is different for both the businesses as well. The price ranges from the different requirements.
Why should a small business have an ERP system?
As you might think, “Why should a small business have an ERP despite having less returns compared to larger companies?” Unlike an MNC or a large business, The small businesses will have few owners or a sole owner. It will be a complexity to manage and have an eye on everything despite the resources small businesses have. ERP systems for small businesses have several importance that boosted the demand at present.
1. Core Processes under an Umbrella: The foremost advantage of having an ERP system for a small business is having the core processes like Accounting and finance management, sales management, human resource management, inventory management etc all at one place to avoid the hassle of working from department to department. This specifically helps the small businesses as the owners will be limited or a sole owner.
2. Access to everything in a single touch: The ERP software will be integrated with all the functions like accounting management, sales management, inventory management etc of a small business using the API (Application programming interface) feature under a dashboard. In this way, The owner or the person working on it will have access to every function and details in a single touch. An ERP system for a small business is necessary under such circumstances.
3. Avoiding Manual Work and Bill keeping: After the introduction of an ERP system in a small business, the workers can be reduced to the limit as most of manual work will be converted digitally to keep under an ERP software. Under an ERP system, All the bills will be kept as a file in the cloud that can be accessible anytime from anywhere for the needs. The Long process of keeping the bills and tallying the account manually can be eradicated that’s proportionate to saving time and money.
4. To Build efficiency: An ERP software being installed in a small business will build the efficiency and effectiveness of the work. This will also improve the production quality. The work gets simpler and easy to follow up simultaneously and helps in the improvement of all the other functions in the small business.
How can ERP systems help small businesses?
ERPs are becoming a priority to every business in the present. Every small business has a thought, “How exactly can an ERP system help the small business in the long run?” There are several ERP systems available but there are 5 ERP softwares that are convenient for every business. Well, there are numerous reasons to consider setting an ERP system for a small business and we are listing them down below.
1. Making the management easier: A business is said to be healthy and in good run when the management is efficient. Having an ERP system for a small business improves the management that helps them in planning. A perfect and well executed plan can be created and budgeted accurately that will help the business in the long run. At the same time, This will help the business to grab opportunities that will push their growth when it comes to the long term.
2. Better Risk Management: Risk is evident in every business but the success is termed regarding how well the risk is handled. An ERP software system in a small business will provide accurate and reliable information in a fraction of minute. This will help the business for a future forecast and avoid errors. Similarly, resulting in better risk management and nearly having low risk.
3. Better relationship among employees: Since the ERP system of a small business integrates all the functions at a single place, the employees have a wider opportunity to interact and brainstorm their ideas. This will initially improve the efficiency of the work. The work will be of better quality and accountability as well. Having an ERP system also reduces the work burden of the employees resulting in a healthy work environment.
4. Tracking Demand and Supply: The ideal goal of the business lies on demand and supply of the product or service. With an ERP system for small business, it is easy to track down the accurate analytics of demand and supply. This helps in strategic planning by studying the demand curve and the supplies that need to be made in order to build the business to success. The future demand depends on the numbers and an ERP software could give you the right value.
5. Better relationship with customers: First impression is always important in a business. With a smooth functioning ERP system in a small business, it will be helpful to communicate and provide what the customer needs in a faster way. This will leave an impression imprinted in the customers. The faster process also depends on the employees of the business but with a greater ERP system, the employees could work thoroughly through the sales process.
6. Appearance in the league of Competitors: Every business keeps an ERP system in the current digital era. Having a well-functioning ERP Software will help you compete boldly with the competitors over technology. It helps you grasp more opportunities and be adaptive over objectives that are more like a hurdle. While building an identity in the market with the help of an ERP system, Simultaneously it helps the business grow integrity and goodwill.
7. The art of Saving cost: Saving an expense is a vital role in the long run of a business. Setting up an ERP system for a small business helps in cutting down the expense in numerous ways. It eradicated the overspending on functions like keeping records of different departments as everything will be available at one place more accurately. ERP software also replaces the employees, the business can focus on maintaining the needful employees required to carry out functions more effectively.
Things to check before choosing the ERP system.
1. The scale of your Business. Understanding the scale of the business is necessary. A small business always has the opportunity to grow, in this manner, the chosen ERP system for the small business should also be able to grow as well. There should always be a space for updates in the ERP software you choose.
2. Integration of the Functions: The small business should be well aware of the functions and departments that need to be integrated together while building the perfectly crafted ERP system. A detailed study should be done in order to avoid the hassle of what should be integrated and what not.
3. User-friendly layout: The foremost goal of setting up an ERP software system in a small business is to make the work easier and friendly for every employee. The business should choose a user-friendly layout while setting up their ERP system that can be handled by any employee of the business. This will avoid the further training or instructions to be given to the employees on how to use the ERP system thus saving time.
4. Cost of the ERP: The cost is always bothered by any business in the industry. It's the value everyone needs for the cost they are ready to spend. The business is required to make a budget plan for setting up an ERP system. The cost of setting up an ERP system in a small business derives variously according to the needs of the business. Listing down the exact objectives to achieve with the help of an ERP system in a business is also important.
5. Tailoring the ERP System: The business firm should have a definite plan on tailoring their ERP system according to their needs. This will make the work smoother and easier. This will also reduce the cost of adding more features into the ERP software that are unnecessary for the business. The features and services provided by the partner on helping to set your ERP system should be considered as well.
When’s the right time to Install ERP?
If you still haven't installed an ERP system for your business, Now is the right time. Most of the people have a dilemma about “When should I install an ERP system?”, “Is my Business big enough to have an ERP system?” and whatnot.
1. When the human capital is huge: A greater system and management is required when the employees are more in a business. A team work and collaborative work environment is what a small business strives for to see a tremendous result. With an ERP system in a small business, it becomes much easier to manage the employees and assign the work. It's even effortless for the employees to work while having an ERP system as it boosts their efficiency and effectiveness. It's high time to install an ERP system and keep some baggage off your shoulders if the business has surpassed more than 20 employees. It will be much easier to delegate the work to the employees and get the updates on a daily basis with the help of an ERP system in the small business.
2. Overflowing demands of the customers: Every business owner wants to see their business grow with enormous demand for their product or service. But what if you cannot come across all these demands of the customers and fail to deliver what exactly the customer needs? It could be quite hectic to catch up with all the demands. Now, it's not. You just need to install a right ERP system for your small business as it makes everything easier.
An ERP system will let you know the exact insights and real-numbers regarding the inventory, thus helping in forecasting plans to keep the inventory under control. An ERP will also enhance the relationship with the customers improving their experience with the business. The icing on the cake is, even the present and potential investors will be satisfied with the system followed in the business to keep the customers feeling like they matter.
3. While Rising Capital: When a small business raises capitals by knocking off the deals with the investors, that's the right time to implement an ERP system. An ERP system definitely makes the work easier in every aspect but it is also a long term investment for the business that’s needed. Choosing the right ERP system for your business after a definite plan will never lose you a single penny but improves the quality of the work in every way.
4. For eradicating Expense: Unwanted expense needs to be cut-down. Unwanted expenses could arise from piling up the bills, maintaining them, more staff in different departments than required, unwanted employees in inventory management and other sectors. All this could be vanished to save the cost with the help of one-time installing an ERP system for the small business.
Checklist of important needs in an ERP system
1. Accounting and Finance Dashboard: One of the prior needs in an ERP system of a small business is integrating the accounting and finance of the business. This will record the accounting and finance of the business accurately in a cloud of the ERP system that can be checked by the owner or those who have access at a finger touch. Even accountants will find it easy as they could get information of any date they want that will help them at the end of the year while closing the book. During the check by an auditor, it becomes effortless to show the data along with the receipts in a more credible way.
2. Human Resource Dashboard: The top priority of an ERP system in a small business is given to the Human resource. With the perfect ERP software system, The management of human capital becomes a piece of cake. The recruitment of the employees gets easier, Attendances and Leave management becomes more systematic, The planning and decision making regarding the human capital becomes more precise and efficient. The payroll also gets smarter and effortless with the help of an ERP system.
3. Sales and Marketing dashboard: The dashboard is a necessity to track the number of sales your small business is making. A perfectly crafted ERP system also helps to understand the depth of marketing that helps in the boosting of sales. You can also have an insight about which marketing plan is actually working out.
4. Supply chain Dashboard: The dashboard is to keep the dates where the supply of the products or the service needs to be done to certain clients. This acts as a reminder and further work on building an impact in the impression made within the customers. This helps the business in keeping a proper real-time number according to the supply done.
5. Inventory management Dashboard: Finding it hard to manage the inventory? Adding a dashboard for inventory management in your ERP system for the small business will definitely help you. An inventory management dashboard will help the business in understanding the demand and supply, thus keeping the inventory under control. It helps to avoid the over or under stocking. It also gives a hand to the inventory supervisor making the work effortless.
6. Customer relationship management dashboard: A dashboard to keep the relationship with the customer is necessary. Building a healthy relationship with the customer will reflect in many ways for your small business in a good way. It increases the value of the business and the existing customers could be the mouth marketer of your own business. In this way, More people will be interested in holding hands with your business and eventually take a leap in your sales.
Current trends followed in ERP System
You must be really serious about grinding in your business if you have read this far. You must be searching for a perfect partner to set an ERP system for your small business. Head here as we Zinfog puts the ‘Z’ touch to make sure our clients get their needs checked. Contact us here. Below are the current trends we come across in the ERP system now.
1. ERP system on mobiles: Everything is available at the fingertip, now. Funnier to say, Almost everything is available at your wrist. The business owners can get their business details and real-time insights on their mobile phones as well. This has been the coolest trend in the ERP field.
2. Integration of Social media in ERPs: Everyone is socially connected with each other. Even the people will know what you had last night for dinner with updates given on social media with cool filters. In this way, Social media can be integrated with the ERP systems as well.
Owning a business is not a big deal at all and you are already a promising champion for putting in the efforts. All the best for all the growth and process in your business. We hope that the blog has helped you like how you needed.