|
The
Small Business Start-Up Guide
by Robert Sullivan
.
. . brought to you by The Small Business Advisor
|
To
be competitive in business, you must be able to utilize the technology
that is available to assist you. This includes computers, FAX machines,
and copiers. This chapter will describe in some detail, the selection,
purchase, and utilization of a personal computer in your business activities
in order to make you more efficient and more profitable. FAX machines
and copiers are briefly addressed.
INTRODUCTION
TO COMPUTERS
Simply
stated, a computer is a MUST for your business. A properly used small
"personal computer," as they have become known, can be an incredible
time saver. Examples of what you can accomplish with a personal computer
include...
- Composing
correspondence from simple letters to complex advertising brochures,
including artwork and fancy print fonts.
- Analyzing
and forecasting business data with easy to use "spread sheet" programs.
- Storing
virtually any kind of information with the ability to quickly retrieve
any specific item(s).
- Maintaining
bookkeeping and tax records.
- Tracking
accounts receivable and accounts payable.
- Payroll
administration.
- Generating
and maintaining mailing lists.
- Keeping
track of customers and their preferences.
- Inventory
control.
- Internet
access and e-mail (See Chapter 14)
The list
could be extended indefinitely since the software that is available for
personal computer systems is amazing in its breadth and scope. Furthermore,
even the most basic personal computer system is incredibly powerful.
If you
are not "computer literate," an excellent way to gain a quick and inexpensive
education is to attend an introductory computer course at your local
community college. As a general rule, these college courses are better
than those given by many local computer dealers, since you will not
be subjected to a sales pitch for the brand of computer being sold by
the dealer, which may or may not be the best for you. Also look through
a few of the computer magazines available at all bookstores and newsstands.
PC World and PC Magazine are two examples of monthly periodicals.
A computer
cannot work magic. It is merely a tool that is only as good as the information
you put into it. A computer is really a simple device and only operates
and modifies data and information it has been given. It cannot correct
your mistakes! There is a well known computer acronym to keep in mind;
GIGO: "Garbage In, Garbage Out."
SELECTING
A COMPUTER
There
are two major (small) computer "platforms" in common use today:
1.
The "PC" or Personal Computer utilizing the Windows operating system.
2. Apple personal computers (Macintosh®).
PC and
Apple users are very opinionated with respect to which platform is best.
I'll simply state here that we prefer the PC platform because of the
vast amount and variety of software that is available and will say no
more about the two systems except to note that the remainder of this
chapter is written based on PC platforms. Keep in mind that for the
most part, software that runs on the PC system will not run on the Apple
system and vice versa. (Note: Some newer versions of the Apple will
run both kinds of software.)
As suggested
previously, purchase a few of the many computer periodicals available.
Review the various advertisements and get a feel for what equipment
is being advertised, the "packages" available, and costs. Reviewing
these periodicals will also introduce you to the terminology used. The
idea is not to become a computer expert, just an informed buyer.
You will
need both "hardware," the computer equipment itself, and "software,"
the programs that make the computer useful to you by allowing it to
perform specific tasks such as word processing. The following short
glossary of computer terminology will be useful in helping you under-stand
the material to follow.
GLOSSARY
OF COMPUTER JARGON
Processor.
This is the brain of the system. These days, nearly all computers use
some form of the Pentium microprocessor. Current processor speed, and
hence the performance of the computer, varies from 400 to over 500 Megahertz.
Memory.
This is the component in which the computer stores information. The
two major types of memory are "volatile" and "non-volatile." Volatile
memory loses its data when the computer's power is turned off whereas
non-volatile memory will retain its data even after power is removed.
The most common type of volatile memory is random access memory (RAM)
and is associated with the processor itself. Non-volatile memory includes
read-only-memory (ROM), which you cannot change, that provides the processor
with basic instructions it needs to operate. The most important memory
parameter is size. Size is measured in bytes of data and normally expressed
in millions of bytes or megabytes. A typical home business computer
may use anywhere between 32Mb and 128Mb (megabytes) of memory.
Byte.
This is the basic unit of information used by the processor. Generally,
since many bytes are required for information to be of use to us, larger
units are utilized. For example, kilobytes (thousands), megabytes (millions),
and gigabytes (thousands of millions). A short letter written using
a word processor might be 3 kilobytes in size; the word processor software
itself is a few megabytes in size; and a large database could be hundreds
of megabytes.
Storage.
These are the computer's "file cabinets." There are a large variety
of storage devices available and the most common are described in the
table below:
| TYPE |
SPEED |
SIZE |
COMMENTS |
| 3.5"
disk |
slow |
1.44M
|
Most
popular removable storage media today. |
| Harddisk |
fast |
100M-
>20G |
Internal
storage necessary for running software efficiently. |
| CD-ROM |
fast |
>600M |
Generally
read only. Read/write CD-ROM devices are also available. |
| Harddisk,
removable |
fast |
100M-1G |
Type
of media that can be removed from the computer. Good for keeping
backups. |
(K = kilobytes, M = megabytes, G = gigabytes)
Operating
System. This is the software that provides the background tasks
required for your computer to run useful software. The most common systems
in use today are Windows 98™ and Windows NT™. The operating system and
interface will be furnished when you purchase the computer. If not,
ask for it and have it installed before you buy. The newest operating
system, Windows 2000, should be available by the time you read this.
Monitor.
This is the video output device (screen) or CRT. The most popular sizes
being 15, 17 or 19 inches (measured diagonally across the screen like
a television set). Virtually all monitors sold with computer systems
are color with 17 inches the most popular size.
Video
Card. This is internal into the computer and "drives" the monitor.
The card required depends on the monitor chosen and how which multimedia
applications you will be using. You must have one for your system.
Keyboard.
The typewriter-like keyboard that you use to enter data into the computer.
The most popular is the "101" key type which includes a separate "number
grouping" and "arrow grouping," both of which are very handy.
Ports.
These comprise the hardware that allows you to connect external devices
to your computer such as printers, mouse, scanners, etc. There are two
types, serial, parallel. Serial ports are more flexible and parallel
ports are faster. Serial ports may be used to connect a mouse or modem
to the computer and most printers will require a parallel port. Virtually
every computer sold today includes at least one of each type.
Mouse.
This popular pointing device is used to move the cursor around the monitor
screen.
Modem.
This device allows your computer to be connected to another computer
via a telephone line (connecting to the Internet for instance). It may
be a small external box or be included inside the computer itself. (For
example, you might transfer financial data to your accountant via a
modem.)
Printer.
There are numerous varieties available with great variations in speed,
accessories, appearance of output (black & white or color), etc. Common
types include the laser and inkjet. Prices range from $100 to the stratosphere.
SOFTWARE
The computer
is of no value without software (programs). Everything the computer
does requires specialized software. Fortunately, the amount of software
that is available today nearly boggles the mind. There are literally
thousands of programs from which to choose. However, you will need only
a few of the following programs to get started (many of these programs
are part of "suites" such as Microsoft Office). Most PC vendors include
a suite of software with a new computer:
- Word
processor. This is the program that allows you to generate different
types of correspondence from a simple memo to long complex documents.
Current word processors are extremely powerful and are mandatory for
business operations today. Your letters and other correspondence take
on a professional look that is simply not attainable any other way.
There are a number of word processors on the market. Features of most
word processors include a variety of text formatting features (underlining,
bold, italics, overstrike, etc.), deletion and insertion of characters,
words, paragraphs, etc., search and replace capability, page numbering,
automatic index and table of contents generation, headers/footers,
and support for all popular printers, to name but a few.
Suggestion:
Microsoft Office which includes Microsoft Word 97.
- Spreadsheet.
The spreadsheet is probably responsible for the very existence of
the personal computer. It is a program that allows you to produce
a matrix of cells each containing text or numbers and for which you
can perform a variety of calculations by "inserting" simple or complex
formulas within each of the cells. The spreadsheet is a powerful tool,
since every time you change the contents of one of the cells, all
the other cells are automatically updated based on your formulas.
In effect, you have a changeable "model." You can use spreadsheets
for performing all types of financial analysis and keeping track of
data. A spreadsheet truly puts the power of a large "mainframe" computer
into your hands through your tabletop personal computer.
Suggestion:
Microsoft Office which includes Microsoft Excel 97.
- Harddisk
maintenance program. Your harddisk will require periodic maintenance
(described below) and this is accomplished by very specialized software,
which is included within the operating system and Windows™.
- Disk
backup software. THIS IS MANDATORY SOFTWARE. You will need a program
for "backing up" your data in the event you have a problem which destroys
the data stored on your harddisk. The marketplace provides plenty
of choices. See the section on computer security later in this chapter.
Suggestion:
Use a removable drive such as the Omega ZIP drive for backups.
- Accounting
package. This is the software that will track your account receivables
and payables, maintain the general ledger (if required), provide inventory
control functions, track capital equipment, generate business reports
and more. It is indispensable! Prices for these packages have dropped
from thousands of dollars to the $50 - $200 range.
Suggestion:
"Quick Books" by Intuit. This software package is perfect for the
small sole proprietorship. It is easy to use and features invoicing,
check writing, report generation, transaction history displays,
customer information lists, 1099 generation, accounts receivable
and payable activities and more. It is well worth the less than
$100 price.
CAUTION: Select accounting software with the help of your accountant.
It is highly desirable to purchase software already being used
by or is familiar to your accountant.
- Utilities.
Utilities are software programs that make your computing life easier.
They are designed to save you time and frustration. Once familiar
with their function, you will wonder how you got along without them.
We will refrain from making specific suggestions (well, maybe a couple)
but what follows is a list of a few of the utility programs that you
will find to be useful or absolutely required:
- Telephone
dialer. These programs allow you to maintain a phone directory
along with numbers and related information with search capability.
With an appropriate modem you can dial a selected number automatically.
Suggestion: Microsoft Windows 98 includes a basic telephone
dialer.
- Disk
optimization. These programs, when run periodically, maximize
the efficiency of your harddisk.
Suggestion: Microsoft Windows 98 includes a maintenance utility.
- Virus
protection. A computer virus is some computer software (code)
that gets into your system and can be a minor irritant or cause
major damage to your system. The computer "catches" the virus
from external software being loaded into the machine, usually
by modem. A virus utility can look for a virus and then clean
it out of your system. The virus utility should be run periodically.
Cost of these utilities is less than $50 ... cheap protection.
Suggestion: Consider McAfee VirusSan.
- File
recovery utility. These allow you to recover files that have been
accidentally erased. The first time you need it, you will agree
that this utility is worth its cost many times over.
Suggestion: Norton Utilities
The suggested
software in the previous paragraphs may be purchased from any local computer
store, mail order vendor, or over the Internet. Always comparison shop
since prices can vary widely. As a start you might visit http://www.isquare.com
and view the links at "Save Your Business Money."
So then,
what do you really need ... at least to start? If you visit ten computer
stores you will get ten opinions, if you ask ten friends with computers
you will get ten more opinions. If you read on, you'll get yet another.
The fact is, that with all the equipment and software that is available
the possible combinations are nearly infinite! At the risk of getting
into all kinds of trouble, we are going to recommend a starter system
that should be adequate for your initial needs regardless of what your
business will be.
At first,
one system should be adequate for the task. Later, when your business
grows, and more than one person needs the use of a computer, you can
add systems as needed and "network" them together with readily available
software and hardware.
The chart
on the following page is my suggestion for a "starter" system. Your
favorite computer expert will no doubt disagree with some items, but
nevertheless, it's still a good place to start.
SUGGESTED
"STARTER" SYSTEM:
| ITEM |
COMMENTS |
| Desktop
system with Pentium III 400Mhz processor |
Should
include at least 3 expansion slots for adding hardware accessories
such as internal modem, additional ports, and multimedia accessories. |
| 64Mb
RAM memory (more, if you can afford it) |
Most
systems include 64Mb of memory as a standard feature. The more
memory, the better. |
| 128K
cache memory |
Normally
included as a standard feature. A larger size cache will increase
the speed of your system for some applications. |
| 1
serial and 1 parallel port |
Normally
included. |
| CD-ROM |
At
least 14X speed. |
| 3.5"
Floppy Drive |
Mandatory |
| 10
gigabyte harddisk (bigger is better) |
Most
systems are being supplied with 10Gb or larger harddisks |
| Color
video card |
Should
include at least 2-Mbyte on-board memory. |
| Color
monitor |
17-inch
recommended. |
| 101-key
keyboard |
Most
convenient to use. |
| Mouse |
Required
for most software. |
| Windows98
or NT |
Generally
included with the computer as a standard feature. |
| Service
Agreement |
If
inexpensive, get one. |
The approximate
cost as this is being written (August, 1997), for our "starter" system
is around $1300-$1700 through a number of reputable mail order firms.
In addition to the hardware and software items in the chart, you will
also need the software suggested previously and a printer to meet your
needs. Printers are discussed later in this chapter.
As a
specific example, for $1450 you could pur-chase a Quantex M400C which
utilizes a 400Mhz processor and includes 128Mb of RAM, 128Kb cache,
13Gb harddrive, DVD/CD player, and 19-inch color monitor. (http://www.quantex.com).
PURCHASING
YOUR COMPUTER
The most
economical and efficient way to purchase your computer system is through
one of the many reputable mail order firms presently engaged in the
sale of IBM clone systems, software, and various peripherals. From time
to time the more popular computer magazines contain reviews of the various
mail order vendors. Review back issues at your local library or visit
the magazines' website.
Select
a vendor that has at least a 30-day money back guarantee (many have
60-day return policies) and PAY BY CREDIT CARD. DO NOT SEND A CHECK
TO ANY MAIL ORDER VENDOR. Payment by credit card gives you recourse
in the event you have problems with the vendor. When ordering do not
be hesitant to negotiate ... there is tremendous competition between
the various mail order houses. If possible, purchase everything you
need as a package since it puts you in a better position to negotiate.
Some
popular and highly rated mail order manufacturers include Dell, Gateway,
and Micron. An example of a reputable mail order vendor that can supply
a variety of systems, software, and accessories is CDW, (800) 631 4239
and on the Internet at http://www.cdw.com.
The major
mail order manufactures also have websites that include online configuration
of their systems and ordering.
Dell:
http://www.dell.com/
Gateway: http://www.gateway.com/
Micron: http://www.micronpc.com/
You can
also purchase a reconditioned computer from these major manufacturers
at considerable savings over a new machine. Buying a reconditioned computer
has few disadvantages but be sure you deal with a reputable company.
Make certain you understand the terms of the warranty and return policy.
CHECKLIST
#13: PURCHASING BY MAIL
- Shop!
Use the Internet. Prices vary widely and there are many companies
from which to choose.
- Do
not be afraid to ask questions ... no one can see who you are!
- Get
the name of your sales person.
- Does
the price include shipping? If it does not, how much extra?
- Do
you have to pay sales tax?
- Is
everything in stock? When will goods be shipped?
- Make
certain your credit card will not be billed until the equipment is
actually shipped.
- Is
there a restocking fee? How much? Who pays return shipping?
- What
is the warranty? Money-back guarantee? For how long?
PURCHASING
YOUR PRINTER
The printer
is normally a separate item and not part of a basic system due to the
variety of features and cost. Because of this, it is difficult to be
very specific with advice but here is a short checklist when considering
the purchase of your printer.
CHECKLIST
#14: PURCHASING YOUR PRINTER
To assist
you in your printer selection, here are a couple of examples with typical
discount prices.
H-P
1100se laser printer, $399
NEC 650C inkjet color printer, $165
H-P 2000Cse inkjet color printer, $499
H-P 882C inkjet color printer, $299
Inkjet
printers are best for inexpensive color printing tasks; laser printers
are best for higher volume, high-quality black and white printing needs.
COMPUTER
OPERATIONS
You will
probably use your computer daily for a variety of tasks and as time
goes by you will come to rely upon the data that it contains as well
you should. However, since the computers available these days are so
reliable and easy to use, it is not difficult to forget that certain
precautions need to be taken to ensure continued proper operation as
well as assurance that your data will always be available to you. These
precautions can be divided into three areas:
1.
Regular maintenance,
2. Backing up data, and
3. Security.
REGULAR
MAINTENANCE
The most
obvious item of maintenance is simply keeping the computer clean. Wipe
the monitor screen from time to time with a soft cloth (special cleaning
pads are available from most computer supply stores); keep foreign material
from falling into the keyboard and don't keep your coffee where an overturned
cup will spill into the keyboard. From time to time, make sure the cooling
fan exit grill (at the rear of the computer cabinet) is clear of any
material that might block airflow.
A not
so obvious maintenance item is the harddisk. If you remember that your
harddisk contains all your data files and software, you might be more
inclined to give it some loving care. This care can be accomplished
with simple and inexpensive software that is designed to read the disk
and repair damaged portions to ensure continued data integrity and maximum
performance. The Window's operating systems include this software. You
simply run the program every few weeks to ensure continued good performance
from your harddisk.
Incidentally,
don't allow smoking around your computers ... they do not like smoke.
The micro-scopic particles in smoke can attach themselves to the surface
of your harddisk and potentially cause many problems.
BACKING
UP DATA
One of
the most heartbreaking events that can occur with your computer is a
"harddisk crash." This means that for any one of a variety of reasons,
you can no longer read and recover any data that was stored on your
harddisk. In other words, all your data is gone. Someone just took all
your filing cabinets! Even with the software maintenance described above,
any number of problems (both operator error and equipment malfunctions)
can cause your harddisk to crash. Furthermore, it is possible to make
a mistake at the keyboard and erase all the data on the disk! This is
more than embarrassing or inconvenient ... it can be a disaster. Think
about losing ALL your files!
The only
way to absolutely ensure you will never lose data is to periodically
make and store extra copies of it. Once again, thanks to readily available
software, this is easy to do. Unfortunately, it is also easy to FORGET
to do it!
TRUISM 26
Sooner or later, when you least expect it, you will lose
some or all of the data stored in your computer.
Here
is a little reminder:
PERFORM A DAILY BACKUP!
It is
not possible to stress this point enough. Loss of data can be a disaster.
You can
easily back up your data by using a software utility to place copies
of your data on diskettes, a removable storage device (like a ZIP disk)
or a tape drive with removable tapes that can be stored away from the
machine. As you might expect, the diskette copy method is inexpensive,
but a bit more trouble, whereas the removable storage or tape drive
approach is quick, easy, and expensive by comparison.
Many
backup utilities are available. One of these inexpensive utilities is
all you will need for making your daily data backups. This software
is available at most computer stores or by mail order. Consider one
of the new high-density removable media such as the Zip Drive by Iomega
that stores up to 100Mb on a single cartridge. Great for backups and
it's very fast!
Whatever
backup method you decide to use, backup utility, tape drive, or removable
media, ensure that you initially make TWO complete backups of your harddisk
and store them in two different locations (one of the locations should
be somewhere other than your office). You just never know what can happen
... theft, fire, and damage. And remember if you lose your data, IT'S
GONE FOREVER. After making this full backup, it is not necessary to
make a complete backup each day, you need only backup any files that
you have changed that day. Software backup utilities make this very
easy by checking each file for a change, and then automatically backing
up only those files
Important
Hint: After making your first backup, test it by attempting to recover
the data that has been backed up. You don't want to find out that the
backup does not work properly when you really need it!
COMPUTER
SECURITY
No, I'm
not going to tell you to lock up each night. You do that anyway. Furthermore,
you better have insurance that covers the loss of your computer. But
physical security is not the issue here ... DATA SECURITY is. Your computer
will contain most, if not all, of your business records; financial,
customer and vendor lists, marketing information, business strategies,
planning documents, and more. It is doubtful that you would want certain
of this data in the wrong hands. To minimize this possibility, we can
again turn to software. Numerous utilities (and some application software)
are available that will allow your computer to be used only by authorized
personnel with passwords that can be updated and changed from time to
time. Furthermore, it is easy to allow certain individuals access to
only selected information. This is important since it is likely that
different people will use the same computer.
Just
like the determined burglar, a determined computer thief can get into
your computer in spite of password protection. Additional levels of
security are available, if necessary, depending on the sensitivity of
your operation. Discussions of these advanced security methods are beyond
the scope of this book but computer security consultants are available
to assist in this area. For most of us, however, a password is more
than adequate.
TRAINING
Part
of your employee-training program should include computer training covering
the various software packages you are using. This training can be done
by you or by sending the employee to a short seminar covering the specific
software package he or she will be using. Many computer retail stores
provide these seminars for the more popular software packages at very
reasonable fees. Don't try to save a nickel by giving the employee the
manual for the software and telling him to get smart. This will extend
the learning curve and you will lose in the long run. Furthermore, it
is highly likely the employee will bring back from the seminar a detail
or two about the software that is new to you.
Recommendation:
The Internet now provides a number of opportunities for interactive
online training. This is effective, convenient and inexpensive. For
example BSCNet University at http://aristotle.bscnet.com/ provides access
to over 180 computer-related courses at a cost of $12.95 per month per
student!
CHECKLIST
#15: COMPUTER OPERATIONS
- Properly
train everyone using the computer.
- Do
not allow anyone to install personal software in your business computer.
- Check
for virus infection with appropriate software on a regular basis (at
least weekly).
- Perform
backups on a daily basis. Always keep a backup copy away from the
business location.
- Limit
computer access to only those necessary.
- Maintain
program files and data files in separate directories.
- Use
password protection.
- Perform
harddisk maintenance on a regular basis. Follow instructions included
with the maintenance software being utilized.
- Clean
and dust the computer monthly. Use a small vacuum to clean air intake
and exhaust locations.
FAX MACHINES
You all
know what these are ... an electronic mail box. They are becoming quite
inexpensive and are becoming nearly indispensable in conducting business.
They allow instant transfer of drawings or text to any other FAX machine
in the world using your telephone line. Current models, and there are
plenty to choose from, produce excellent output. As with all electronic
equipment, shop at the discount stores for heavy discounts from "list
prices."
FAX machines
can be used for regular correspondence and can represent a savings over
regular postal service. You save postage, envelopes, administrative
time, and you get immediate no-delay delivery! FAX during evening and
weekend hours for even more savings by taking advantage of reduced telephone
rates.
Another
approach to the "traditional" FAX machine is the FAX-Modem card used
in conjunction with a personal computer. These cards, along with appropriate
software, enable you to send and receive FAX's with the computer. An
incoming FAX is simply stored in the computer until you are ready to
read it and you send an outgoing FAX by selecting the appropriate file.
The major disadvantages of the FAX-Modem card approach are the inability
to send unless the data can be stored in the computer and the fact that
the computer must be on to receive a FAX.
Caution:
FAX transmissions are no more secure than your telephone line. Keep
this in mind if you are handling sensitive infor-mation. FAX transmissions
may be encrypted with appropriate hardware at both the trans-mitting
and receiving end.
Consider
the following when selecting your FAX machine:
CHECKLIST
#16: PURCHASING YOUR FAX MACHINE
- Does
it use plain paper or thermal paper? Plain paper units are more expensive
but produce output on regular paper that is easier to read and duplicate.
- Does
in have a built-in telephone handset? A handy feature.
- Are
redial and memory functions available?
- Is
there a copy function? Most do and it's a very handy function for
making a quick copy of a few sheets. It is slow, however.
- Physical
size? Will the unit fit where you plan to place it?
- Warranty?
- Would
a FAX-modem card be a better choice?
COPIERS
You will
probably need one. Even with your computer and printer plus the FAX
machine copy function, there will be too many times you will need to
copy multi-page and odd-sized documents. Copiers are a pain ... they
all seem to have problems, so make sure whatever you buy comes with
a good guarantee and that repairs will be easy when required. The best
advice for selecting a copier is to purchase one with only the features
and speed you need ... more speed and features mean more potential problems.
SUMMARY
Using
available technology is a must in order to stay competitive in business
in today's environment. A personal computer is the major example. Get
one and learn to use it! It's fun, fairly easy, and a great time saver.
Heed the earlier warning about backing up your data. Remember Murphy's
law; "If something can go wrong, it will." Your data can be lost in
the blink of an eye. Please remember this.
Shop
carefully for your other technology needs such as FAX machines, copiers,
and telephone systems. Do not buy anything fancier than you need and
understand fully the vendor's return policy and warranty.
|