The Ultimate Guide to Selecting an ERP System for Small Business Growth

ERP system for small business

Table of Contents

In today’s market, reliance on technology has become essential regardless of the size of the business, be it small, medium, or large. With the increasing trend of globalization, businesses are no longer restricted to selling within geographical borders. Even small businesses and start-ups are expanding their reach, and for this, they need to stay updated with technological advancements.

To seek organizational efficiency and more profitability, businesses look for new tools and strategies to streamline their processes. One such tool is an Enterprise Resource Planning (ERP) system, which helps consolidate data from different business functions into one place. Besides large enterprises, ERP system for small business has also become popular. Growing businesses and start-ups have realized the importance of integrating ERP, and gradually, ERP is becoming a “must-have” for SMBs.

In this blog, we will look at the factors that small businesses need to consider before selecting ERP. Then we will learn how ERP system for small business can be implemented effectively and which solution providers can help with it.

Understanding ERP systems

The history of ERP dates back to the 1960s when J. I Case, an agricultural machinery and construction manufacturer, worked with IBM to develop the first MRP system. The system tracked and monitored inventory and production, including basic manufacturing, purchasing, and delivery functions.

Later, MRP systems evolved, and more functionalities were added to handle more manufacturing processes. Finally, in the 1990s, the Gartner Group coined the term ERP. The new system went beyond handling manufacturing and catered to different business departments, including accounting, HR, and sales.

With the advent of technology and new tools, ERPs became more advanced, too. Today, ERPs have machine learning technology integrated into them, which allows businesses to get better insights from the data. It automates several parts of the business processes, reducing the chances of human errors and data inconsistencies.

Technological advancements have also given rise to cloud-based ERP. This solution is delivered through the Internet and does not require an on-premises hardware system. Since no infrastructure needs to be maintained, it greatly reduces business costs. This has also provided an opportunity for small and mid-sized businesses that cannot afford expensive equipment to implement a cloud-based ERP system for small business that doesn’t require hardware systems.

Businesses in various industries use ERP today due to its features and benefits. Apart from collecting information from different departments into a single platform, it also helps improve stakeholder communication and their access to the data.

After deploying ERP into the business processes, several companies have improved their supply chain management and strengthened their customer relationships. ERP system for small business has helped multiple SMBs to unite their business processes, resulting in better organization and efficient data management.

5 Reasons Why Small Businesses Need an ERP System

Statistics show that 65% of small businesses use ERP to manage and scale their business operations. This shows that ERP benefits not only large corporations with millions of customers, but an ERP system for small business can also be worthwhile for small and medium-sized businesses (SMBs) in the same way.

Small businesses can achieve several objectives by using ERP. Some of these objectives include:

Increase Market Share:

An ERP system for small business helps streamline operations and integrate siloed data from different functions. When all the operations are streamlined, it helps the business improve efficiency and reduce the hustle and bustle that small businesses usually experience due to a lack of resources. This helps the business increase its market share by meeting customer demands well on time.

Better Customer Service:

It is very challenging for a small business to have a strong positioning in customers’ minds since customers have many options to choose between brands today. However, a business can get a competitive edge by providing enhanced customer service.

This is where ERP can help SMBs. It can help the business identify each customer’s choices and preferences, which can further help the business sell personalized products and improve brand and consumer trust. With a proper system, businesses can respond to customer queries efficiently and achieve customer satisfaction.

Market Expansion:

ERP system for small business can help discover new opportunities and identify market gaps if there are any. The idea of selling in foreign markets might seem too complex for a small business; however, with ERP, businesses can manage cross-border operations, stay compliant with different regulations, and expand their customer base internationally.

Cost Reduction:

ERP can help small businesses reduce operational costs by automating processes and reducing human errors. The financial module of ERP can help manage budgets effectively. By having all the data in front of them, stakeholders can identify areas where they can cut costs and become more profitable. By using ERP, businesses can improve resource allocation and procurement management.

Competitive Advantage:

By implementing advanced technological tools and leveraging all the benefits that an ERP system for small business brings, the business can gain a clear competitive advantage over its competitors in the market. By adopting ERP, small businesses can improve their overall performance and easily outsmart the competition. The insights gained from the data in ERP help the business identify current trends and prepare for any changes that might happen in the future.

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Factors to Consider When Selecting an ERP System for Small Business

Following are some of the factors that SMBs need to consider when they plan to implement an ERP system:


While selecting the best ERP system for small business, you should look for the most cost-effective solution. This does not mean that only subscription costs must be low; rather, the Total Cost of Ownership (TCO), which includes implementation costs, maintenance, and training, must also be affordable for the business.


Even though the current requirements of your business might not be too extensive based on the size of the business, it is still advisable that businesses must look for ERP solutions that are scalable. In the future, when your business grows, the ERP must be capable enough to accommodate increasing data volumes and complex business functions. Opting for a scalable ERP system will benefit you in the long run and help you avoid constant updates and maintenance.


With limited resources available, SMBs usually do not have a large tech team to manage these software systems and help the other employees resolve issues. Hence, the ERP system for small business must be user-friendly and easy to understand so that employees who are not well-equipped with technology can use it easily and effectively.


Before deciding which is the right ERP solution for your small business, it is important to see whether you can tailor that system as per your business requirements. Often, businesses want to have customized data analytics reports based on their own metrics and KPIs. Hence, you should look for a system that allows you to do that so that you are able to explore the full potential of ERP.

Integration with existing systems

SMBs usually don’t have a lot of complicated multiple systems for different business operations. Still, if your business has such systems, you need to look for an ERP solution that integrates well with these software applications. Unifying data in a single platform will reduce data silos and improve data accuracy.

Vendor Reputation and Support

Even after considering all the above factors, you will still get a long list of vendors who can provide you with an ERP system for small business that fits your needs well. In that case, you should research the vendor and its industry track record. Read customer reviews, success stories, and case studies to know the vendor’s market position and reliability.

Top 5 Cloud-Based ERP Systems for SMBs in 2024

The process of choosing the right ERP system for a small business might be quite overwhelming, especially if the business does not have a team of experts who can analyze different solutions and make the decision.

To help SMBs, we have researched and identified the following 05 ERP systems that can be a good option for small to medium-sized businesses.

1. Oracle NetSuite:

Oracle Netsuite provides a cloud-based ERP solution to help companies get a 360° view of their business and identify which areas are performing well and need to be improved. Customers need to pay subscription fees, but the underlying infrastructure and its maintenance are not charged, which makes it a cost-effective solution.


  • Customizable and scalable
  • Strong financial management capability
  • Support integrations


  • Add-on costs
  • Limited customer support
  • Complex customization

2. Acumatica:

Acumatica is a cloud and browser-based ERP solution specifically designed for small to medium-sized businesses. It lets you quickly integrate your current tools and applications and works well on mobile applications. It has several customization features through which businesses can create custom reports according to their needs and requirements.


  • User-friendly interface
  • Workflow management
  • Advanced Reporting


  • Limited industry-specific features
  • Long implementation time

3. Microsoft Dynamics 365

Microsoft Dynamics 365 is a cloud-based suite of integrated business applications that combines ERP and CRM functionalities to help organizations manage multiple different business functions. The solution offers seamless integration with other Microsoft products, such as Office 365, Power BI, and Azure, providing a unified platform for business productivity and analytics.


  • Strong CRM integration
  • Good reporting tools
  • Workflow automation


  • Complexity of Customization
  • Mobile app limitations

4. SAP Business One

SAP Business One is an ERP solution designed for small to medium-sized businesses. It is quite affordable and helps SMBs automate key operations such as finance, sales, inventory, and procurement. AI-driven analytics provide real-time insights that help businesses measure their performance and make timely decisions.


  • User friendly
  • Customization Options
  • Inventory Management


  • Learning curve
  • Add-on costs

5. Odoo

Odoo ERP is an open-source ERP software suite that incorporates various business functions, such as sales, CRM, inventory management, accounting, manufacturing, and more. It offers a modular approach that allows businesses to select and integrate the specific modules they need to meet their requirements.


  • Scalable
  • Highly Customizable
  • Cost-effective


  • Technical Expertise Required
  • Limited Support for Free Version

Implementing an ERP System in a Small Business

ERP implementation is not a short process; it takes months for companies to get the solution up and running. For small businesses, implementation can be even more challenging due to limited resources and expertise. Here are some steps that small businesses should consider while implementing an ERP system:

  1. Discovery: The first step is for the SMB to conduct discovery calls with the ERP provider, allowing it to understand its goals and objectives and determine which requirements it wants to fulfill in an ERP system.
  2. ERP Project Planning: In this step, the tech provider will create a comprehensive project plan outlining the activities, timeline, and resources required for implementing an ERP system.
  3. ERP Development: In this stage, the ERP provider installs and configures the software to meet the SMB’s specific needs.
  4. Quality Assurance and Testing: Once the ERP system is developed, it goes through rigorous testing to ensure that it meets all functional requirements and is bug-free.
  5. Integration: In this step, the ERP system is integrated with existing business systems, and data is migrated to the new platform.
  6. Data Migration: During this stage, the ERP system is populated with data from other systems. This step can be time-consuming and requires careful attention to detail to avoid any data loss or inconsistencies.
  7. Deployment: Once the ERP system is fully tested and integrated, it is ready for deployment. This step involves training employees to use the new system and ironing out any gaps or issues that may arise during the initial implementation.
  8. Training & Support: ERP implementation is not just about installing and configuring the system; it also involves training employees on how to use it effectively. Training ensures that employees are comfortable using the system and can make the most out of its features.

Potential Challenges and How to Overcome Them

ERP implementation comes with its own set of challenges. However, with proper planning and execution, businesses can minimize the risks and benefit from an ERP system. Here are three major challenges that businesses face when implementing an ERP system:

Data Migration:

Migrating data from the current system can be challenging when implementing an ERP system for small business. The data has to be accurate, consistent, and transferred efficiently without any technical glitches.

To overcome this challenge, businesses can start by cleaning their data before migration, investing in automated data migration tools, and having a dedicated team to oversee the process.

System Integration:

Integrating existing software with the new ERP is not easy. It requires standardizing data since data stored in different systems is not in the same format. Also, these systems are managed by different teams, so bringing them all on the same page can be challenging.

To overcome this challenge, businesses should work closely with the ERP provider and ensure that all systems are properly integrated during the implementation process. Setting up a dedicated integration team can also help streamline the process.

User Adoption and Training:

For a successful ERP implementation, it is really important to properly train the employees and ensure that they are comfortable using the new system.

To overcome this challenge, businesses should prioritize training and involve employees in the process from the beginning. This will help them understand the benefits of an ERP system and make it easier for them to adapt to the change.

How Folio3 AgTech Can Help SMBs in Smooth ERP Transition

So far, we have discussed various ERP systems and the challenges involved in implementing them for small businesses. However, it is essential to note that not all ERP providers are created equal when it comes to understanding a business’s specific needs.

If you are running a business in the agriculture industry, Folio3 AgTech can become your reliable tech partner and offer custom ERP solutions tailored to your specific needs and requirements. With over 20 years of experience, Folio3 AgTech excels at providing innovative and scalable tech solutions for agribusinesses of all sizes.

From farm management and inventory control to supply chain optimization and data analytics, Folio3 AgTech offers a comprehensive range of services to improve efficiency, reduce costs, and increase profitability for agricultural businesses.

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Implementing an ERP system for small business is time-consuming. All stakeholders must assess whether they need such a system or if their business can work efficiently without it. That said, businesses of all sizes can significantly benefit from increased efficiency and productivity with the right ERP system and implementation approach.

Folio3 AgTech’s expertise in the agriculture industry can significantly help agriculture SMBs find the right tech solution and successfully implement it for their business. With the right ERP system and implementation plan, small businesses can streamline their processes, improve decision-making, and stay competitive in the ever-evolving market.


Can ERP be Used for Small Business?

Yes, ERP systems can be used for small businesses. In fact, implementing an ERP system can greatly benefit small businesses by streamlining processes, increasing efficiency and productivity, and improving decision-making.

How Much Does ERP Cost for a Small Business?

The cost of an ERP system for a small business can vary depending on the features and services included. Some providers offer affordable monthly subscription plans, while others charge based on the number of users or modules the business requires. The average cost of ERP can fall between $150,000 and $750,000 for SMBs.

How Do I Choose the Best ERP for My Small Business?

The best ERP system for your small business will depend on your specific needs and requirements. It is important to research and compare different options, consider the features and services included, and consult industry experts to find an ERP system that best fits your business.

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