Most small businesses run their business on what is, in effect, consumer software, using Microsoft Excel for accounts and planning and Microsoft Outlook to manage their contacts.

But to grow, small businesses have to use more powerful software. Inevitably this starts with accounting, then extends to customer relationship management, purchase ordering, stock management and more. This is where Enterprise Resource Planning (ERP) software comes into play.

Enterprise Resource Planning is an industry term for the broad set of activities supported by multi-module application software that help a business manage each part of its operations, including accounting, product planning, parts purchasing, maintaining inventories, interacting with suppliers, providing customer service, and tracking orders.

The global ERP market is huge, around $17.8bn (£9bn) a year worldwide, according to consulting firm Gartner, but most of that money is spent by big corporations tying together multiple sprawling operations, with small and medium-sized companies (SMEs) probably account for about a third of the market.

Not surprisingly most of the current ERP solutions (i.e. SAP) are currently aimed at large corporations and the growing SME market is not currently led by any one firm. There’s a great business opportunity here for the right software company.

You have to move fast though as the software giants are moving in with Microsoft having recently relaunched its business software offering under the Dynamics brand and Oracle buying a string of firms that specialise in providing ERP software for the mid-market. But that’s also a good thing as selling out to the likes of Microsoft or Oracle has got to be one of the best possible exit strategies for an entrepreneur and his investors!

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