Businesses can fail for many reasons. Small businesses, in particular, face a unique set of challenges that can quickly lead to failure if not addressed. Luckily for small businesses many of these challenges can be overcome through sound business practices bolstered by automation tools. Here are five of the most common reasons small businesses fail and how business management tools can help.
1. Out of control growth - Growth is great, but it can create new challenges for a small business. When it comes to technology, if you lack the vision to implement the right tools, it can ruin your business. For example: your software and processes might be able to support 10 customers, but what happens when you have 100? Resource utilization, billing and finances all change dramatically when a company grows. There are many things that can no longer be done using a notebook or Excel.
2. Poor accounting - A number of small businesses are service-oriented, which means everything they do counts toward both the top and bottom lines. Yet services-based accounting can be complex, especially if every single client has its own SLA, billing rate, promotions, etc. Even if the small business has standardized its service levels, the company may still struggle to capture all the time and expenses associated with an account.
When it comes to professional services, accounting for every minute at the proper rate is beyond critical, and not doing so can cost people their jobs and the company its profits. By automating your business operations, you can save thousands and earn thousands. In fact, online calculators will show that - most conservatively - using a business management platform can save the average company tens of thousands of dollars a year. Equally important, these solutions can help ensure a company is getting paid what they are worth and that no money (or service) is left unaccounted for. It's also a great tool for forecasting and business analysis, which brings us to the next point.
3. Operational inefficiencies - A growing company will often have resource utilization troubles and fall victim to operational inefficiencies. Business management tools can help you examine KPIs and make sense of your peaks and valleys concerning employee and time utilization for example. Are your people over- or underutilized? Is it time to hire more staff? Business management solutions can remove the guesswork. Also, consider your billing and invoicing. In many cases, generating complex invoices manually can take hours. Using business management software the process can be done in minutes and with the highest levels of accuracy.
4. Enabling your mobile workforce to work smarter - Mobility is a must in today's business world. Gone are the days of going back to the office to bill the client. Not having access to client information because you're away from your office computer should no longer be an issue. Any small business where employees have the potential to be outside the office doing work must have technology that gives those employees access to the same data and tools as if they were in the office. Business management tools that are mobile friendly enable your workforce to be as effective as if they were in the office.
5. Not addressing regulations - When a small business operates in a market that's heavily regulated with security/privacy rules, technology options are limited and it might be more expensive and complicated to automate. That doesn't mean it shouldn't be done. Mistakes can lead to costly financial penalties and could ruin your reputation in a market. Also, without a business management platform, you probably need someone dedicated, at least part-time, to ensuring things are being done properly. With a business management solution designed to address the unique needs of your markets, you can rest assured that regulations are being met and focus on doing what you do best.
When selecting a business management platform, take all of the above into consideration and be vigilant about bait and switch tactics from a number of vendors. You might get the software at a low cost, but then find out the training costs are exorbitant or there's a lot of time needed for onboarding and migration. While the up-front costs are minimal, you end up having to pay a lot to actually get up and running.
Make sure that you select a business management platform that's not just right-sized for you today, but one that is able to grow with you. On the same note, avoid long-term contracts. Whether you need a new business management solution because you've grown, technologies changed, or you simply made the wrong choice, partner with a friendly company that won't lock you into a long-term deal.
Every small business can be more efficient through automation. By doing a little homework and selecting the right business management tool your business operations can radically improve overnight, as well as your profit margins.