Why small businesses should not use enterprise software

It’s tempting for small companies to think that they should copy the conventional wisdom set by larger competitors when in fact the opposite is normally true.
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A while back I wrote about the difference between enterprise and small business software. If you didn’t read it, the basic summary is that enterprise software is meant for large organizations, so it’s powerful but complicated. Small business software is meant for smaller groups, and it’s focused on simplicity. In this post, I want to dive a bit deeper into a specific type of behavior I see a lot with small businesses, and talk about how it relates to software selection.

Just because a business is small right now doesn’t mean it will be small forever. If you’re a business owner with large ambitions, it makes sense to think ahead and make sure that your business is prepared for eventual growth, and that means putting systems in place that will be able to scale.

However, a common pitfall I’ve noticed in my dealings with business owners is that they become so focused on what they’ll need when they’re big that they forget to think about what they’ll need to do in order to become big. More specifically, it’s tempting for small businesses to look at how the more established companies operate and mimic those best practices. In my opinion this is a mistake.

In a world where technology and automation are increasingly ubiquitous, large companies have several advantages over smaller companies. Larger companies benefit more from economies of scale. They have more data which means they’re better at optimizations. They have a workforce that allows for automating absolutely every process. But small businesses have a big advantage too: they don’t have to do all of those things.

A small business can treat each customer as an individual rather than running them through a pre-designed customer service assembly line. They can treat sales like an art rather than a science. Their prices might not be as low and their logistics might not be as efficient, but many customers prefer buying from small businesses because of the personal touch that they’re able to offer.

I strongly encourage you to keep this in mind when choosing software for your small business. Large companies are trying to automate everything and turn their customer interactions into an assembly line. By using enterprise software, you’re basically removing one of the main advantages you have. It’s natural to plan for the future, but you also need to take care of the present, and that means embracing your small size and staying nimble and lean for as long as you can.

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