CONTENTS
Home Page
Articles of interest to small business
Small business books for sale
Glossary of small business terms
Business to business services
Tax hints and advice
Doing business with the U.S. Government
Small business information for each U.S. State
Small business FAQ's
Checklists
Book Reviews
Stock Quotes
Small business related newsgroups
Links: Small Biz/Favorites/Searching
Advertising information for this site
Website design services
Who we are
How to contact us

ADVERTISEMENTS

 

 

 

LAST UPDATE: 1/14/2012


The Small Business Start-Up Guide
by Robert Sullivan

. . . brought to you by The Small Business Advisor


PREVIOUS CHAPTER
CHAPTER 13
Get Technology Smart

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

  • What quality and speed do I need? Usually, the better the print quality, the slower the speed. By quality we mean what the output looks like and by speed we mean how fast can a page be printed. The best buy for the money, if high quality is not required, is an inkjet printer and there are numerous models from which to choose. They are quite fast, easy to use, and fairly inexpensive. If you need high quality (text that looks like what you are now reading) and if you will be working with graphics, you should consider a laser printer. By far the most popular are the laser models by Hewlett-Packard.

    Caution: Often overlooked is the cost of owning the printer. Inkjet printers require a periodic ink cartridge replacement at a cost of $15.00 to $30.00. The laser requires a new "toner cartridge" every few thousand pages at a cost of around $60.00 to $90.00.

  • What features are required? Printers are available with a variety of features including provisions for single sheet or continuous form paper feed, various fonts (appearance of the individual characters), ability to print graphics, ability to print in color, ability to feed more than one type of paper, printing envelopes, etc. When considering your selection, make sure you have considered what the use of the printer will be.

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.