What sized business are you?
17th February, 2017
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… we have a few ideas on 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).
For example:
- 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.
Complexity of business
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 work don’t work so well anymore.
For example:
- 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
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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, get 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.
Luckily, MYOB offers a range of ERP solutions.
It might surprise you to know that MYOB has been a leader in the ANZ bigger business sector for more than 10 years.
We have on-premise and cloud ERP, Payroll and HRM products specifically designed for medium, larger and even enterprise sized businesses.
MYOB offers a range of solutions perfect for bigger businesses like yours. Contact us to learn more about how we can help.
Information provided in this article is of a general nature and does not consider your personal situation. It does not constitute legal, financial, or other professional advice and should not be relied upon as a statement of law, policy or advice. You should consider whether this information is appropriate to your needs and, if necessary, seek independent advice. This information is only accurate at the time of publication. Although every effort has been made to verify the accuracy of the information contained on this webpage, MYOB disclaims, to the extent permitted by law, all liability for the information contained on this webpage or any loss or damage suffered by any person directly or indirectly through relying on this information.
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