BY GURU (DAVE SMITH )
Tech costs can chew up a small business budget faster than a great white shark
Chomps through seals and sea lions. One minute you're okay, the next you're a
According to a recent survey by Arthur Anderson, nearly 60 percent of small
Businesses say that "affording the cost" is their biggest challenge in dealing with
Information technology (IT).
Managing the price of staying connected, of handling technology in and outside
the business, is a huge headache for small businesses. We need tech -- 88
Percent of small business surveyed by Anderson have computers, nearly 40
Percent have a network, and 85 percent use the Internet -- but we must often
skimp on IT spending. How can a small business stay wired without wiping out
I have six savings strategies that may help. To keep the IT version of "Jaws"
From biting a chunk out of your behind, read on.
Plan, and plan to spend
Whatever you think you'll spend on technology for your small business, plan to
Spend more. The fact is costs almost always exceed expectations. That goes for
Web design, network installation, training, and especially e-commerce
construction. According to BtoB, an advertising newspaper that specializes in
e-commerce, the median cost to produce a small business-style site has climbed
over 46% since the fall of 1999.
Create an annual technology spending plan to account for both year-long
maintenance and expected additions, such as a new Web site or new systems to
replace aged computers. Make sure you line-item a contingency fund so that
there's bucks in the budget for the inevitable crisis. And be generous in your
numbers for the plan; although hardware and software costs continue to decline,
most technology-related service providers -- Web designers, network
consultants, and the like -- will charge more next year.
Planning means more than creating a budget. You also need to plan ahead. One
way: start growing your own IT person, the next strategy in my lineup.
Create home-grown IT (INFORMATION TECHNOLAGY)
One way to bring part of your technology support in-house without breaking the
bank is to train an already-in-place employee to handle the basics. Someone in
the company may already be the designated technology trouble-shooter, but only
on a casual basis. Or you can poll your employees to find someone interested in
Once you've identified someone, provide him or her technology training through
outlets such as online education. SmartPlanet.com, has an extensive selection of online courses, from basic PC technologies to Windows 2000 support. Don't overlook local training opportunities, either. A nearby community college, for instance, probably has computer-related courses . And if your business runs Windows, check out Microsoft's
Training & Services page and the Microsoft Certified Professional Magazine
Online site for resources and leads to upcoming training sessions in advanced
topics such as Windows NT and Windows 2000.
Outsourcing IT chores is not just smart economics: in today's tight labor market,
finding technology expertise for a small business, and at a small business
salary, is nearly impossible.
You can outsource the traditional way of course, by picking up the phone and
calling a local firm. But the Internet, with its always-available access and its
competitive prices, is a better place for many small businesses. Among smart
outsourcing strategies, count:
Web hosting. Why exhaust your limited IT skills keeping a Web server up and
running? You can host a site, even an e-commerce store, for dollars a day with
your ISP, or if you're looking at big fat zero on the budget line, for free through a
hosting portal such as Bigstep.com.
Data backup. Running regular backups to tape or cartridge can be cumbersome
and time-consuming. Online backup lets you literally outsource the job over the
Net by scheduling automatic backups which transfer data to secure servers
off-site. A slew of companies sell such services, but small businesses should
check out Connected Online Backup and eVault.com. The former prices its
unlimited backup at $15/month per machine, suitable for sole proprietors and
small-small shops with just a computer or two. If your biz operates a network,
you'll want a service like eVault that lets you backup your server to its system.
Flat out of money, but still want to try outsourcing? Then move to the next tip.
Dabbling with technology before you know whether it'll work for your business,
or is even necessary, can cost thousands. That's a lesson you can't afford.
Instead, use the Internet and the free tools now available there, to experiment in
small ways with unfamiliar technology. This doesn't work in all cases, of
course, but many tech solutions for small business appear in limited form on the
Web. For instance:
Collaboration. Will your business benefit from collaboration tools that let
groups work together, even if they're not all in the same place? You can try out
this concept at sites such as Visto.com without laying down a dime.
Internet telephony. Although audio quality's still as poor as a Dustbowl family,
phone calls over the Internet are going to put a dent in telecom companies'
profits. Small business, which don't have the clout to negotiate the super-low
rates from phone providers, will be one of the biggest beneficiaries. But will
the process of Net telephony -- headsets for every computer, switching between
Web phone and the real phone -- really work? You can test it out for yourself
with free calling services like the one embedded in the new MSN Messenger
3.0 instant messenger program.
Upgrades and changes to software.
I'm not advocating sticking with over-the-hill hardware and ancient software,
like that primordial PENTIUM 166 mhz PC you buried in a back room or the dinosaur
of WordPerfect for DOS you dumped on an employee, just to save a few dollars,
but you must carefully analyze the value which any upgrade brings your
business. Unless the new technology will pay off in significant improvements in
your ability to deliver services (or products), or substantially boost uptime and
productivity, steer clear.
This goes for everything from PCs and office applications, to e-mail and
operating systems. But that last is particularly iffy, since an OS change generally
has the greatest impact, whether greater hardware requirements or potential for
compatibility problems with existing software.
Sniff for hidden costs
You know the drill: you pay for the hardware and software, and think you're
through dropping money on technology. Then reality hits:. You quickly discover
that the actual physical goods are just the tip of the expense iceberg.
Recognize where hidden costs are likely, and teach yourself how to sniff them
out. Web site design, for instance, can easily go over-budget if you plan one
style of site, then months later discover that you really need an entirely different
kind of site to stay competitive, or deliver on promises you've made to
employees and customers. Implementing new software is another cash bleeder:
training costs can easily outstrip the price of the program, as can reduced
productivity as your workers learn how to handle their new tools.
Cutting-edge technology is in a hidden-cost world all its own, so enter
cautiously. If you're breaking ground by, say, adding wireless Web access to
your company, you'll spend more for the hardware and help getting it up and
running now than if you wait a year or more.