Why SAP B1 for SMBs??

Any company looking for integrated and real-time solution with a secure future should consider SAP Business One seriously. As it is supported by SAP, it benefits from the commitment and experience of the world's largest and most successful ERP software company.

The SAP Business One Vanilla Model is structured of 13 Modules which are designed to meet the core business processes. The Modules are as mentioned below
1) Administration Module which is for configuration
2) Financials Module which is for the accounting and financial activities
3) Sales Opportunities Module which is for tracking the existing customers and potential amounts
4) Sales Module which is for entry of orders, shipping and invoicing
5) Purchasing Module which is for issuing of the purchase orders are issuing and receving goods into inventory
6) Business Partners Module which is for maintaining and contacting the Business Partners (customers, vendors, and leads)
7) Banking Module which is for cash receipts and payouts
8) Inventory Module which is for Inventory control, valuation and management
9) Production Module which is for defining the bill of materials and tracking the manufacturing process
10) MRP Module which is for purchase and production planning
11) Service Module which is for managing the after-service products
12) HR Module which is for maintaining the employee information
13) Reports Module which is for generation of the system-default and user- defined reports on-screen tables or as printouts

While Business One is quick to implement and is affordable, because it is designed for small to medium sized businesses, it does not offer the same level of functionality of the high-end SAP products or even many tier-2 products. In most cases, though, the inherent flexibility of Business One allows a more acceptable work-around than may be expected if you are prepared to invest a bit more in customizing the product.
As an example, the standard Business One Financial module does not provide a ready-to-use approval process for supplier payments i.e. a user who has access to creating a payment does not need to get another's approval before paying a supplier. Using SQL scripts and the built-in Alerts function, though, it is possible to provide a measure of control for this process.
Another example is that the Purchasing module of Business One does not formally support prior stages to a purchase order e.g. purchase indent, nor tracking. It starts directly from "Purchase Order". However the approval process provided for purchase orders means that an unapproved "purchase order" can be created. This can function as a "requisition" until it has been approved. Changes made to the "Purchase Order" during the process are fully tracked. Further work can be also be done with MRP and the Planning Data in the Inventory module to manage purchasing requirements.
You can define a catalogue that matches item codes to part numbers used by suppliers and customers but there is no link between Items and Business partners directly out of the box. Again such links can be defined using the customization tools.
Integration with third party applications requires considerable effort utilizing the SDK and the DI_API. Stability is as good as or better than for comparable, new generation, offerings. A good general policy for any product is not to be the first to upgrade to the new version - leave this to others. With SAP Business One 2006, things seem to have settled down considerably.
Third party add-ons should be added carefully. Apart from the cost, they will require additional system resources to maintain an acceptable performance level.
In short, don't expect Business One to do everything. But speak to a SAP Business Partner before ruling it out and you may be pleasantly surprised to find there is a workable solution to your perceived gaps.