The list of reasons why SME's fail range from inadequate funds, ability to manage growth, being technical rather than managerial, to a lack of formal planning. Generally, top of this list is good old fashioned record keeping and the need to act on the resultant data. The ability of businesses to track their income, expenses and underlying key numbers coupled with the understanding or lack thereof of the importance that these numbers, is a means to the success of their operations.
Knowledge is king in determining the effects of your enterprising efforts in effectively running your operation with a successful outcome. Without having awareness of your businesses performance you are truly flying blind. Though a few key numbers can successfully measure most operations it is often the awareness of the performance of those key numbers that can bring inevitable downfall. It's a pretty well known western estimate that 80% of small business fail within five years and ever since I can remember there has been no significant movement in that statistic.
So why do SME's neglect this part of the operation? In my experience it's three things; firstly, a lack of priority, they just don't see the need; secondly it's all about cost, it's costly for a small business to engage the services of a bookkeeper or an accountant; and thirdly, the "I can do it myself" mentality, a paradigm that always ends up with nothing being done at all.
It's clear that a business that gives no value to some level of financial accountability is doomed to fail. But there are solutions. "Costs" can be restricted by only using accountants or bookkeepers on an "at needs" basis. And you can change the way you think about Performance Management Systems, they are not limited to accounting software.
You can simply track your Key Performance Numbers (KPIs) wthout using sophisticated accounting solutions. Data produced by bookkeepers or accountants can be weeks or months old before you get a result. KPIs can be produced instantaneously to ensure you are on target, identify emerging trends and even opportunities; and KPIs are not difficult to maintain and report. For a cost effective solution to making the most from your business check out your free trail at www.ezzykpi.com.