As a small business owner, you are probably wondering whether it is absolutely essential for you to automate your business. Brands globally are switching to business automation to transform the way they operate. A lesson that all businesses have learnt during the Covid-19 pandemic, is that automation is the new normal and the only way to do more with less. Even when businesses are looking to innovate and scale up, automating your business is a requisite for sustainability.
If you are a business owner who is trying to automate, the one thing you need to know is that the size of your business does not depend on the need to automate. In fact, if you are a small business owner, automation can give you the flexibility to adapt to newer trends and stay ahead of your game faster than larger businesses.
While there are a lot of tools available in the market, most are catered towards larger business enterprises. However, we have seen an increasing number of technology companies lately, customizing solutions for SMBs and keeping it affordable. Our arête iQMS solution is catered towards this same objective of helping small businesses to thrive in a highly dynamic environment and become future ready.
So as a small business owner, is investing in any automation tool beneficial to you? In this article, we’ve covered a few basic reasons why and how you can grow your small business through automation.
Can any type of small business automate?
Businesses that comprise less than 10 employees are referred to as micro and small businesses. Some of these may have a smaller team but end up churning large volumes of business, such as trading companies. This is a scenario where an ERP tool comes into play. In order to automate, such businesses must first draw up every element of the business process. For instance, every business in this category, will have basic inventory whether those are products or services or a combination of both.
To elaborate, a manufacturing unit will have an inventory of the products they need to manufacture and the end product. In the same way, a service-based enterprise, such as a spa or salon, or a designing and printing agency, will have its own inventory to maintain, irrespective of whether the business is product or service based. Like in the case of a marketing consultancy, the inventory could be the number of hours of work put in by the agency team for designing, social media management, website/app development and other services. This can then have a fixed rate or service charge for hours per service. Such a company could also charge an hourly consultation fee to enhance a client’s offline or online brand presence. When we look at these processes within all these enterprises, we can see the constant effort that goes into managing the inventory, clock and bill customers, ensure tax bills are raised and records maintained. Hence, automation of some or all of these processes could help the business to save resource cost, effort and accurately calculate and effectively bill the client on a timely basis.
On the other hand, a product based business would invest millions on inventory that would be sitting idle in a store or warehouse. It is imperative for a business to have complete control on such inventory, so as to be able to optimally utilize it in the sales process through proper data and timely analytics. Simple inventory solutions ease this process by giving the business a clear control of inventory, both used and unused, expiring goods, goods that are not saleable or damaged. This helps in making data-driven and informed decisions to manage the business efficiently and have effective cash flow management on inventories.
How does automation benefit your small business? Here are some examples to support your decision making process.
Let’s consider a flower shop. The inventory in the case of this small business, would refer to the different types of flowers in stock to be sold. If the shop keeps repeating orders of the same flower without selling them, it would result in loss of money, since the inventory (flowers) has a limited shelf-life. So managing such inventory with an automation software gives small business owners an anytime, anywhere view of their existing stock and helps in better management of inventory. This results in efficient use of time, resources and money. It helps them order and keep stock of the right type of flowers, and weed out unwanted inventory with real time data rather than managing inventory with papers or receipts or general guess work.
Now let’s assume, where inventory is managed, but a sales process is not. Let’s consider that due to lack of automation a small business is unable to keep track of its existing customer database. You may have flawless inventory management, but what if the transition into the sales process is not seamless? The pandemic times have given a very realistic understanding to most small business owners about how their business was not scalable or sustainable without automation.
Let’s go back to the same example of the flower shop stated above. During the lockdown, the flower shop would have had to suffer with fewer or no walk-in customers. But if an automation system was in place, the flower shop would have been able to innovate by offering Free Home Delivery to existing clients through email or other digital channels. This could have been easily managed through an automation system, helping the flower shop or such small businesses during the crisis. This indicates how a seamless workflow link between inventory, sales and customer management process is a requisite for sustainable business growth in an unpredictable future, such as this.
Let’s consider another example in case of the flower shop. If you just depend on walk-ins, your location might not be feasible enough to get the kind of footfall you are looking for. So the ideal way to scale up your business would be to reach out to corporates, hospitality businesses or home delivery aggregators in many cases. In the same way, as stated in the earlier example, in the absence of walk-ins during the lockdown, the flower shop could have digitally reached out to individual or corporate clients and offered customized delivery services. They could have even opted to take orders online and extend their services. Such a client database is easily accessible when using automation tools to manage your customer oriented processes.
Invoice & Quotation Management
While pitching to B2B, unlike B2C, you will need to provide quotations for your services. In order to be able to align with such customer requirements, an automation software is the easiest way to manage such sales processes, including quotations and invoices. If you are targeting to grow your business within the B2B spectrum, the way ahead of the race is to be more consistent and professional with the way you approach your target audience. Hence, a standardized and professional way of sending your quotations to your potential customers will have a strong impact in the way they view your business approach.
Once you’ve provided the quotations, you may be able to convert these leads into sales after a long period of time. In order to track such clients or even bill repeat clients if any, proper tracking and management of these customers becomes imperative. You could use traditional methods. But in the current corporate environment, using manual or traditional systems only backtracks your progress and deters you from keeping pace with your competition.
Let’s consider another example in case of the flower shop for managing client payments and invoicing. With an invoicing tool in place, the flower shop can easily track delivery status, number of invoices generated, payments received and outstanding against these invoices. With such data being instantly available to the flower shop at the click of a button, the business is then able to utilize their time and resources in business growth, while also being able to keep a constant check on cash flow.
Day-to-day Money Management
Just because a business is small or micro, that does not limit the number of customers you can have. So if you are managing a small business that has a large number of clients, tracking receivables, following up on leads, managing a database of your customers and your cash flow, becomes a tedious task. Cash flow is crucial to every small and micro business. So an automation system could manage the efficiency of your cash flow through proper tracing and tracking of your receivables, seamlessly.
With adaptation to technology, you can also easily track credit notes. So if you are dealing with corporate clients, sometimes, allowing credit periods or issuing credit notes, becomes necessary for client retention. So if you have returns on orders and you cannot replace a returned order, a credit note could always help in customer complaint management, in case of key clients. With a proper system in place, managing such situations and tracking the value of credit notes against each client becomes a simple and time-saving process.
Managing payables is another key process which can be easily managed through business process automation. Whether it is paying your suppliers, vendors or delivery partners, a small business can easily trace what they owe and the payment timeline.
Thus, by using a suitable technology solution and automating your business process, you can know the status of your income and expenses in an instant.
The objective of encouraging small and micro businesses to automate, is to allow them to manage their entire business more efficiently and use the time and resources thus saved, in business planning and growth. It helps manage your entire workflow professionally and quickens your work processes, while minimizing errors. Such overall business management includes inventory, customer, sales and money management all in one place, accessible anywhere, any time. The time spent on these day to day tasks can actually be reduced to a great extent, thereby releasing valuable time to you and your team members to scale up.
As a small business owner, you can make informed decisions when your data and processes are well managed. Such informed decisions will keep you future ready by enabling scalability, innovation and expansion. So from a business that operates out of one location, when you expand to multiple locations, then transitioning and upgrading to an automation system that is more comprehensive like an ERP tool (comprising a detailed management of all other business functions as well), becomes easy.
In conclusion, technology adaptation and automation is not meant only for the big businesses in the corporate world. With the more affordable tools such as arête iQMS solution designed specifically for small businesses, you can be ready for the next jump in the business world.