Is My Business Big Enough For An ERP System?

Growth is the big goal for most businesses.

By increasing market share you can drive more turnover and in turn generate more profit. However, as businesses grow they face new challenges, leaving you to find suitable tools and systems to overcome them. 

If you are going through a period of growth or are planning future growth, you may already be considering an Enterprise Resource Planning (ERP) system. However, it can sometimes be tricky to know exactly at which point you should invest in this type of system for your business.

In this guide, we walk you through everything you need to know to make an informed decision on whether now is the right time to invest in an ERP system.

Reasons Your Business Needs an ERP System

Before we dive into how big your business should be before considering an ERP system, it is important to highlight some of the business challenges that an ERP system can help you overcome. Knowing this will help you make an informed decision.

We cover reasons your business needs an ERP system in more detail in one of our other articles. But here is a top-level overview to get you started. An ERP system could help you…

  • If you are using an excessive number of spreadsheets to follow business processes
  • if you often find data inaccuracies
  • If you have multiple teams or employees that work across multiple sites
  • If you need greater functionality to support business growth

How Big Does My Business Need to Be?

As you can see from the earlier sections included in this article, there isn’t a one-size-fits-all answer to how big you need to be as a business in order to benefit from an ERP system. Many factors can come into play.

For example, very small businesses that deal with complex manufacturing processes or multiple suppliers could benefit massively from adopting an ERP system. On the other hand, a business that is similar in size, but deals with significantly simpler processes may not see such a big benefit from the same investment.

However, there are some general rules and approaches you can take when assessing whether an ERP is right for you. Below we outline some of the considerations businesses should make based on their size.

Sole Proprietorship (Single Person Business)

Typically, businesses with just one person in it won’t see a fantastic ROI from adopting an ERP system. This is because one of the biggest benefits of using an ERP system is the fact that it allows you to seamlessly communicate information and data between key business functions.

However, there are some cases where an ERP system would be beneficial to a one-person business. For example, if you contract other business functions, asking those contractors to use your ERP system can help you speed up these business processes. This could be applied to the use of an external accountant, outsourced sales team or manufacturing partners.

Small and Medium-Sized Enterprises (SMEs) (2 to 249 Employees)

SMEs can almost always benefit from adopting an ERP system. However, smaller SMEs (2-10 employees) should refer to the guidance we give above for single-person-run businesses.

In this case, although an ERP system would certainly be beneficial, careful consideration should be taken over whether the benefits will generate enough of an ROI to cover the investment. Luckily, in many cases, ERP systems can be purchased on a cost-per-user basis, making it much more affordable for SMEs with just a handful of employees. 

Businesses with 10+ employees will often start to break their employees into teams which deal with specific business functions (marketing, accounts, sales etc). At this point, an ERP system is certainly a great option as it will ensure the quality and consistency of communication and data use between each team.

It can also be beneficial to take on an ERP system at the earlier stages of business growth. This is because your ERP system will easily grow with you, easing growing pains and challenges as you expand your business.

Large Business (250+ employees)

If your business had 250+ employees and you aren’t already using an ERP system, we have some good and some bad news for you.

The good news is, that if you adopt an ERP system now, you will doubtlessly see a huge improvement in productivity and a reduction in overhead costs. Resulting in greater profits.

Needless to say, an ERP system is an essential part of planning for longevity and success for larger businesses. It allows businesses with multiple teams to centralise all business processes and ensure the level of consistency and quality that all large-scale businesses need in order to thrive.


It is clear that answering this question isn’t as simple as saying something along the lines of:

“Businesses with 50+ employees should have an ERP system”

Many factors come into play, such as how your business is run and the processes you follow. However, it is clear that almost all medium and large businesses can benefit massively from adopting an ERP system.

For smaller businesses, time should be taken in order to consider ROI. However, lower costs for businesses with smaller numbers of employees will often result in a strong case for ERP adoption. Businesses in this scenario should also consider their future growth aspirations as adopting an ERP system during the early days can have a positive impact as your business expands.

Signs That You Need an ERP System