This is a question that has been asked over and over again in our industry for many years, and really decades now. For some, this decision making process has become even harder with all the app’s and online programs that seem to be never-ending. While there is no one clear answer that may work best for each type and size of company, we do have some insights on how to approach selecting a system(s) that you can adopt to streamline your small to midsize business.
First off, there are a 3 to 4 core parts that should be the basic elements of any business system:
- Accounting and financials
- Sales and customer management (also called CRM)
- Estimating and bidding
- Operational management
Can one system typically handle all of these elements? The easy answer is yes, but where that system may be strong in one area it may be weak in others. As an example Quickbooks is a great small business accounting system with a few different versions of itself (Pro, Online, Contractors, Enterprise, etc). Some of these versions have some built-in or enhanced capabilities for the other ‘core’ elements beyond just its accounting functions but they can be more difficult to work with or limited in their scope especially compared to a third party program. There are also some industry specific systems or software that are built to handle some of the other core elements and then export (not integrate) into external accounting programs. These industry based programs may have a good estimating element but may be lacking the strengths of an external CRM or operational system plus be limited to institute updates very often or make any customizations for you. Worse yet they may have limited or no capacity to integrate with any other systems or programs down the road. It is this capability for integrating together the strongest core elements into one efficient and powerful system where we want to focus the content of this blog.
What has changed a great deal in the past 3 to 5 years of system capabilities is the development of system integrations. No longer are you stuck buying into one system and having to use only what is available through that system. In the past you bought a specific system or software and then bought additional modules or versions of that system to upgrade its capabilities when you wanted to streamline operations or expand your business. Most of these modules or upgrades may not have been robust enough to gain any measurable efficiencies or were limited to customizing to the way you did business. I believe the most exciting part of being a small to medium-sized business these days is the opportunity to use some very powerful, but easy to use, systems that can truly be game changers in the way you run your business.
I believe the new method to creating the best system to run your small to midsized business is a ‘chassis’ method. Since I live in the Indianapolis area, the racing car analogies are pretty easy for me to use. This is the same way race car companies find a good strong chassis to start building their race car, then by bolting on the strongest components they can find (like the motor, tires, drive train, etc) to build a car that gives them the best chance of winning races. Not one company typically will be the best builder of all the components of a race car, but they are all built to work together. The best part of building a winning system like this is that it has probably never been easier to integrate the different core systems than it is now, all with almost no background or knowledge of IT. How do these systems integrate so much easier now? The answer is API, short for Application Programming Interface, which specifies how software elements should interact with each other. Just about all good systems are built with open API now, so integrating the best CRM system to the best accounting system takes no more than a few keystrokes to make them connect and work together seamlessly.
So back to the core elements of a business system, which one is the ‘chassis’ that everything else will get bolted onto? This really should be the accounting system. Just about any other core element will either link into or out of your accounting and financial system. This also makes sure that any financial numbers and customer data are kept in a consistent format from one part of a system to another. Quickbooks is a good small business accounting system that many of these other core systems are built to integrate with. If you are starting out with a basic version of Quickbooks it is also easy to upgrade your version later and still keep all your past data accessible. I prefer one of the “Pro” versions to start, especially if you have two or more different profit centers or divisions operating within your company. Other good accounting systems available are Peachtree, Wave, and Freshbooks but make sure who you choose is a good fit for your longer term goals and has an open API platform.
If accounting is the ‘chassis’ of your race car, I believe the Sales and Customer Relationship Management (CRM) system is the motor. A race car won’t move without a motor, and either will your business without sales or customers. I have a review of specific CRM’s in another blog you can link to here, but for this article I will touch on their general capabilities. Even for smaller companies where the owner is the entire sales staff, a good CRM is a key tool for managing an efficient sales process. This is where the playing field can be leveled with larger companies and even surpassed if utilized correctly. If you haven’t used a CRM in your business before, this is probably the easiest time to learn one and apply it to your sales process. If you own a smart phone or a tablet, you won’t have many difficulties with the learning curve of basic CRM technology. Most good CRM’s are built with a priority on a mobile/cloud interface which intuitively makes them simple to work with The best CRM’s don’t want you spending time figuring out how to use their systems, they want you spending time on your customers WITH their systems. I actually have a difficult time thinking of a way to successfully manage marketing, sales and customer activities without the structure and processes that current CRM’s are built to help manage.
Estimating and bidding elements are probably the hardest to find ‘off the shelf’, especially if you are operating multiple profit centers. There are some estimating systems specifically built for mowing and maintenance, some for landscape installations, and others for irrigation, lawn care or snow removal. The importance of an accurate and consistent estimating system is imperative to precisely purchase materials, efficiently manage the utilization of labor and equipment, and maximizing gross margins. These are the keys to becoming profitable while still remaining competitive in your market. This is where most companies start off with using Excel or some other spreadsheet program, and they are a great tool to provide consistency and accuracy in your estimating. I have seen some very robust and powerful Excel workbooks developed for this very reason, and because of this power I would not give up your bidding spreadsheets until you find a system that you are 100% confident in. I also don’t believe you have to have only one estimating system if your business has multiple profit center or divisions. Landscape installation or ‘Build’ programs are dramatically different in their structure from programs built for repetitive service such as lawn care or landscape maintenance. Again, using API integrations different bid systems can still be connected to both a CRM system and an accounting system without many issues. The worst mistakes I have seen is when an ‘all in one’ estimating program is strong for one divisional set of operations and very weak in another.
Operational management or production management is the last core element that should be an integral part of an overall business system. Most small companies start out managing their operations ‘all in their heads’, keeping track of schedules, customer requests, and material needs with little more than their memory and a notebook. As your company grows, so does your need for more power to keep track of the details needed to keep your operations and field production running efficiently. Once a project or contract is sold the process of producing the support material needed to install projects or service contract customers is often overlooked or provided inconsistently to operational staff. At times not much will change to improving these systems until some critical field events happen with a run of significant project errors or customer complaints. This also builds up quite a bit of frustration with your operations staff and managers and is often the systemic problem for their poor morale and high turnover. Currently some of the same specific estimating programs also have some capabilities for operational management once a project is sold through their bid system. If they don’t have this capability or if you use Excel for estimating, then programs such as Jobber.com do a great job with routing, time sheets, job costing, purchasing, and it also has a built in API with many accounting systems. As your business grows so will the complexity and size of projects you will need to produce and operationally manage and the reliance on these systems will grow as well. With high efficiencies come strong profits, with low efficiencies your best outcome may be low profits but are more often no profits at all.
In review, don’t feel you need to have to find the perfect all in one system, they tend to be few and far between or a budget buster for small to mid size companies. But it also shouldn’t be a restriction on putting together an efficient and powerful business system that increases your profits and decreases your time trying to manage all the day to day functions of business operations. To do this, evaluate the best core elements you can find, investigate their API and integration capabilities and use the systems to grow your business profitably.