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How to trim tech costs for small business

                                                                            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

bloody mess.


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

its profits?


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.










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

the position.


Once you've identified someone, provide him or her technology training through

outlets such as online education., 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


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 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.

Experiment for free


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 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.