In the last 10 years, the most often stated characteristic of the small business owner by bankers and accountants is the lack of awareness and sophistication. Being a serial entrepreneur who prided himself on understanding my company’s financial position and using technology to help me in that process, I usually felt slighted by this comment. What I didn’t understand was that I was part of the “early adopter” group of entrepreneurs.
An article on Capterra.com presented the results of a survey of over 500 businesses who use accounting software. One results stood out in particular. It stated that over 52% of users saw a decrease in financial errors by adopting accounting software. Over half is significant. I thought about the financial wake that’s bound to occur when small business owners are presenting higher-quality accounting information to lenders. Heck, think about the operational efficiency of managers within small business when they have a cleaner set of numbers to make decisions from. 52% means that the early majority of software adopters were experiencing positive results.
Imagine the origins of the belief by bankers and accountants, where the business owner brings in a shoebox full of receipts and asks them to sort it out. Today it’s hard to imagine anyone being able to understand what’s happening in their business if the information is confined to a container of crumpled receipts. By the time it’s sorted, the company’s ability to react is greatly diminished. Believe it or not, I still hear stories like this, but not as much as I used to.
In the past 20 years there have been dozens of accounting software programs that give the average “non-accountant” an opportunity to organize their daily transactions into a higher-quality reporting system. The time previously used in sorting receipts is now creating an environment where financial improvement is unavoidable. The results of this survey are evidence that small business owners are starting to “get it.” Even if their main reason is to save accounting fee expense, other benefits of clean financial reporting are derived.
The tipping point is near. I can feel it. The point in time where most or all small business owners are using technology to manage their businesses by metrics. The race to efficiency will begin. Profitability will soar. And the expansion of the economy will see its greatest positive shift ever. Our economy lives in the shops of the small business owner. Sure, Wall Street gets all of the attention, but Main Street keeps us free and financially healthy. Look at any small town’s downtown. As the mom and pop shops were shuttered the town itself withered. Big business may bring people to a town, but the supplemental businesses we count on for daily life keep them there.
I view this survey as one of the initial signs of what I am calling, “The Great Awakening of The Small Business Owner.” It’s an era where the small business owner has access and understands the dynamics of their business. They’re employing the concepts applied by the Fortune 500 and created a wake of benefits for the entire society. The first to witness the transformation will be the bankers and accountants who no longer need to sort receipts.