Enterprise resource planning (ERP software) specifically built for small businesses gives your company an affordable, easy-to-use, and secure way to manage business processes, financials, and sales in real-time. Software streamlines your work across multiple areas, from back office accounting to front-end customer support. Both small and midsize companies can benefit from using one ERP software solution to cover a variety of business operations.
Running a small business is no easy feat. Depending on your industry and market, there might be a lot of behind-the-scenes tasks you need to complete yourself. Fortunately, ERP systems typically include customizable modules you can choose from based on your company’s specific needs. For smaller businesses and startups, it’s important to only choose the modules you really need to cut down on costs - you can always add more functionality later on as your business grows.
|Human Resources Management||Automate payroll processing, track time and attendance, and manage employee records like performance reviews, payroll benefits, and scheduling. Self-service HR functionalities allow employees to request time off or view their attendance record.|
|Financial Management||Track income and expenses through recorded transactions and account structures in order to forecast profit and loss.|
|Inventory Management||Record information on items you build, store, buy, or sell. Keep up-to-date stock records to avoid running out of items or buying items unnecessarily.|
|Customer Relationship Management (CRM)||Manage customer contact info, order histories, invoices, and quotes.|
|Supply Chain Management||Manage the flow of goods and services from raw material acquisition to delivery of the finished product to the customer.|
|Analytics and Reporting||Measure key performance indicators (KPIs) like income (Accounts Receivable) and expenses (Accounts Payable), top performing products, or open orders over a set period of time.|
The primary benefit of implementing an ERP at your growing company is the ability to streamline many separate business functions into one solution. Both on-premise and cloud-based ERP can help your business in a variety of ways:
Additional benefits vary depending on the exact nature of your work, your industry, and projected growth.
ERP pricing varies greatly due to a variety of cost factors, including the number of concurrent users, add-on modules, implementation fees, maintenance, and employee training. Some plans are available for as low as $20 per month per user while others start at over $5,000 per month. Over the course of ownership, expect to invest between $25,000 to $150,000 on an ERP system for your small business.
Be aware of extra costs which can make ERP software much more expensive. You might think you’ve found a cheap solution only to be hit with hidden fee after hidden fee. The ERP vendor you choose should be able to help you narrow down the functionalities you need to ensure your solution is as cost-effective as possible.
When running a small business, your operating budget is likely small, at least to start. Luckily, there are many cheap and affordable ERP solutions for SMBs. Some are even free, though sometimes this is limited to a short-term trial of services. However, there are usually some costs associated with these systems, such as installation fees, training, maintenance, and any add-on functionality.
Some examples of free and open source small business ERP software include:
While there are a lot of factors to consider when selecting an ERP software, these are the top ERP solutions frequently used by small businesses:
Microsoft Dynamics 365 Business Central helps small to medium-sized businesses (SMBS) with business and financial management. Some features include financial reporting, supply chain management, customer relationship management, and project tracking. Microsoft Dynamics 365 starts at $70 per user per month.
Oracle NetSuite ERP is a developer-hosted, cloud ERP software platform offered on a software-as-a-service (SaaS) basis. Popular with small to mid-sized businesses with 10-99 employees, this customizable solution is used in every industry.
SAP Business One is a popular ERP solution for small to medium-sized businesses that can be deployed on the cloud or on-premise. Some functionalities include financial management, CRM, supply chain management, purchasing and procurement, and reporting and analytics. Pricing for SAP Business One is customized based on the number of users and the functionalities you need.
When evaluating ERP solutions, don’t just rush into implementing a system because it fits at the moment - think about what you’ll need in the coming years. You might bring on more employees, open another location, or expand your professional services. As your business brings in more sales, you’ll need a more comprehensive system for order management, multi-location inventory, and more.
Many small business ERP systems allow you to add and remove modules as needed, as well as provide integration with other management systems. Some standalone software like business intelligence (BI) systems, CRM, and manufacturing execution systems (MES) might not be required for you business now, but could play an important role as you grow in the next few years. You can purchase a standalone system when you’re ready and integrate it with your ERP system without much trouble.
Is a full ERP still too much for your growing business or startup? As mentioned before, there are specific small business ERP alternatives for different business processes:
With the right ERP software, you can help your SMB grow into a medium or even enterprise-level business.
The two most common types of ERP systems for small businesses include:
Some ERP solutions are marketed as being only for small businesses. These solutions can be on-premise or cloud-hosted, with web-based SaaS options being more popular due to the lower upfront cost. ERP software exclusively for small businesses is less complex than more expansive systems, with limited scalability to cut costs and tailor to the needs of smaller companies.
Going with a small business-specific ERP means you’re not paying for features you don’t want or need. For instance, if you operate a local store with no eCommerce capabilities, you won’t need a full-scale ERP to handle multiple currencies and exchange rates. A small solution will cover what you need without charging you more for what you don’t.
Many companies, regardless of size, prefer to use industry-specific ERP solutions to cater to their unique business needs without paying for extra customization. For instance, small business manufacturers should seek ERP with supply chain management functionality while construction contractors would want a solution with project management capabilities.
Examples of some well-known industry-specific ERP software include QuickBooks, Apprise ERP, JustFoodERP, and abas ERP. Just remember, these may be designed for companies of all sizes and may be more expensive as a result.