Good news if you've recently taken over the family business. Because your business is family-owned, it is likely to be in good form.

Businesses with strong family influence typically outperform their non-family-owned peers in three ways, according to a Credit Suisse study:

1. Revenues are higher in family businesses.
2. In family businesses, cash flow is better.
3. The relative returns on share price are more than twice for family firms listed in Asia Pacific (excluding Japan).
   

So, what's the secret to their success?

The most appropriate digital initiative. A cloud-based enterprise resource planning (ERP) system.

What is enterprise resource planning, what is its role in family business and what can family business practitioners do to take advantage of ERP? Read more below!

Enterprise Resource Planning

Enterprise Resource Planning can assist you in sustaining the attributes that every successful family business has. And maybe even take it to the next level.

While it may seem much further, a Cloud ERP system can help you optimize back-end operations so that your employees can focus on more value-added duties, such as strategic projects to help your company grow.

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Read: ERP for Manufacturing – How ERP Can Improve Manufacturing Business

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SAP Business One

SAP Business One (also known as SAP B1 or SAP Business 1) is an ERP solution created for any size of business. SAP Business One gives you complete control over your company's activities.

What is SAP Business One, and how does it work? SAP B1 is a single solution that streamlines your major business activities, including accounting, distribution/supply chain management, and purchasing, as well as manufacturing and service management.

Long-Term Growth Priorities vs. Scalability

Family businesses prioritize long-term benefits over short-term gains, as demonstrated by their tendency to reinvest for the long term.

More surprisingly, successful Asian family businesses (excluding Japan) invest significantly more in research and development (R&D) than any other country in the world.

So, how does this apply to your business?

You've just taken over the reins, and it's now up to you to maintain long-term growth.

While it makes sense to invest in the front-end for that goal, paying attention to back-office activities such as accounting might be beneficial.

In fact, it can be difficult to understand the true financial health of your business — and make well-informed strategic decisions — without solid accounting systems and reliable accounting information.

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Read: Is Your Business Ready for an ERP System? 5 Signs to Watch Out For

Example:

You'd want a sales forecast for the upcoming year based on historical trends.

Because all of the important data is stored in silos, your finance team will have to manually gather and reconcile it. And it's a terrible procedure that might take days or even weeks to complete.

Even more time is required to understand and transform the data into useful information.

Because the data isn't real-time and comes from a wide range of sources, you can't be sure it's accurate enough to make confident conclusions.

A Cloud ERP system helps you integrate the most important aspects of your organization, such as finance, inventory, and sales.

This means fewer data re-entry and errors, as well as a single, central data repository. And the peace of mind that comes from knowing you're making crucial business decisions on a single source of truth. 

There's no need to wait days for information on past-due receivables to be compiled.

Lower Cost

In your business, there may be a focus on investing in long-term business growth. 

Your more conservative stakeholders, on the other hand, are unlikely to sponsor a large-scale growth strategy such as an ERP system.

According to the survey, “family-owned businesses' preferred funding of new investments, and by extension, future growth, is largely carried out through conservative channels, mainly internally generated funds.”

The good news is that true SAP come with cheaper upfront expenses. This is due to the fact that you do not need to invest in hardware such as servers or additional people to manage the infrastructure.

SAP "subscription fees" are also paid on a regular basis (i.e. monthly), making your cash outlays far more predictable.

To put it another way, you can invest in growing your business without breaking the bank or jeopardizing what has gotten your company to this point.

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Read: Your 9 Red Flags Need an ERP Upgrade, ASAP

Conclusion

Take your successful family business to the next level by implementing the right system.

a SAP system can be the ideal tool to help you keep the qualities that got your family business to where it is now: a focus on long-term growth and cautious finance.

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