Poor Planning Hits SMBs Very Hard During Recession

According to U.S Small Business Administration, half the total number of SMBs are closing down their businesses due to recession. It is a well known fact that, 99.9% of total 30 million companies present in U.S are SMBs. These constitute about 40% of employment and 44% of all private payrolls. As per the recent reports, 6,27,000 new SMBs were created in the year 2008 and also 5,95,600 already existing SMBs have closed their businesses.

When researched about the reasons for closure, it was found that many businesses failed due to poor planning of financials, productions, schedules and inventory. Businesses also lack foresight and resources to invest in backend planning. But this scenario is changing as many of the business software creators who have mainly catered to the needs of large companies, now have realized the potential of small companies and have started creating new and scaled-down versions of SAP and ERP pacakages to cater to the needs of small businesses.