How ERP can help startups improve revenue growth
Today’s global business climate can foster super-sized expansion in a heartbeat. However, rapid expansion makes startup enterprises particularly prone to revenue management issues since, well-funded or not, early-stage firms tend to face unexpected challenges. These can range from a sudden need to refine operational processes, to unexpected investigations into less than sterling sales or marketing programs.
While these problems bubble up in the daily operational rice bowl, each unwanted issue also creates cost that is rarely budgeted for. This can lead to significant cash mismatches between one’s expected net revenue, versus the threat of a company’s practical inability to pay a light bill or worse; sometimes referred to as the “initiation of a business death spiral.”
ERP systems for startups offer numerous ways to avoid this threat by applying clearly identifiable revenue-growth processes. This is particularly true if they use one of today’s reasonably-priced cloud-based systems. Here are three ways to get the job done:
Automate order-to-cash processes
Typical legacy accounting systems require users to execute quote, order, sales fulfillment processing and invoicing manually; then actively monitor and account for received revenue in order to book and close a single deal.
Recommended reading: find ERP software that works for your startup with out ERP selection checklist.
As a general rule the manual model is prone to human error; more importantly, it creates cascades of process lags throughout the transaction chain, and these create a delayed cash recognition condition. On the other hand, today’s integrated ERP systems allow users to automate up to 85% of the entire quote-to-close chain, while also integrating sales, finance, and fulfillment modules, leading to faster and more accurate revenue reporting.
Enhance market analytics
Efficient enterprise growth is typically managed by four doctrinal components including a clear understanding of desired data points, an ability to effectively locate and target growth opportunities, a willingness to make business decisions on a timely basis, and a commitment to constant improvement. The overall efficiency of this sequence of decision milestones is largely-guided by available data, supported and managed by various filter mechanisms that users leverage to create bankable information.
In the past the commercial usefulness of gross data acquision was strictly limited by how much time can be afforded by an enterprise to hunt and peck one’s way through the market. Today, however, automated ERP systems largely driven by mobility-adapt apps and affiliated utilities drive through a particular market segment like vacuum cleaners, picking up data wherever and whenever new data appears within a company’s customer base. These characteristics ultimately end up as Business Intelligence reports that can be used to target, trap, re-sell, and in general compete more efficiently than the other guy.
Equip for future needs
This revenue growth suggestion may appear to be a bit off the beaten path, since using a brand new system in a brand new company may appear counter-intuitive for many. However, to paraphrase an old aviation saying, “If a company is equipped right; it’ll usually work right.”
Therefore, any well-funded startup must include the consideration and purchase of a proper ERP system as a critical capital requirement during any “use of proceeds” discussion. There are two primary reasons for this suggestion:
The day-one use of an ERP system means that a startup will grow in concert with, rather in spite of, a deeply-seated business culture, overcoming a host of costly and time consuming business change challenges that typically plague mature enterprise ERP implementations.
Startup use of an ERP platform will create a flurry of early-stage competitive advantages when compared with competitors.
Each value point accrues to revenue growth in the aggregate. However, in the past such a suggestion was not typically realizable to early-stage firms due to overall cost and systems infrastructure constraints. However, today’s cloud-based ERP platforms have become so reasonably priced, that virtually any well-funded startup would be foolish not to have ERP support from the outset.
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