What does a “medium” business look like? Sometimes it may be easier to ask how long a piece of string is. However, as a business how do you know when you’re ready to go to the next level? Businesses, just like people are all different shapes and sizes. So here are some ways how you can tell whether you’re close to being “medium” sized.
Annual Turnover and Headcount
One of the easiest ways to classify a business is by annual turnover and headcount (staff numbers).
A Micro Business typically has one to five employees and an annual turnover of less than $2 million
A Small Business you may have six to 10 employees and a turnover of between $1 million to $3 million
A Medium Business may have more than 11 employees and more than $3 million in turnover.
If your business is in the latter category, you may start to find a few headaches starting to creep into your operations.
We call this complexity; it’s when things that used to work don’t work so well anymore.
You lack insight into how your business is performing as you can’t get a single view of business performance
You could own multiple businesses, managing these entities requires a lot of processes and systems that are hard to maintain
Your management processes are becoming more complicated as you have to contend with more and more information
Many of your business processes are manual and your staff are using multiple spreadsheets to manage these processes
So … why does size matter?
Understanding your size (and growth trajectory) will enable you to plan accordingly and avoid pitfalls. Micro, small and medium businesses often use accounting solutions to manage their business. For instance, activities like tracking debtors and creditors, generating invoices, reporting BAS, or running reports. As businesses grow and become bigger and more complex, accounting software no longer has the tools your business needs. While accounting software can be expanded through add-ons in the short term, they often create new issues. It’s usually at this point businesses start thinking there must be a better way and wondering whether a single business management solution could better meet their needs. Luckily, Enterprise Resource Planning (ERP) software can help bring your business to the next level.
Need to start thinking bigger?
An ERP solution is a business management solution designed for bigger businesses which pull in information from different silos into the one dashboard. For example, information from HR, inventory, sales, and other areas of the business can be unified so you can look at your whole business from the one place.
At Momentum we provide on-premise and cloud ERP products specifically designed for medium, larger and even enterprise sized businesses. Contact us to learn more about how we can help.