Practical Tech for Your Business: Using Today's Technology to Make Your Business More Efficient, Creative and Flexible

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Practical Tech for Your Business

Using Today’s Technology to Make Your Business More Efficient, Creative and Flexible

Michael J. Martinez

Practical Tech for Your Business

KIPLINGER’S BUSINESS MANAGEMENT LIBRARY

Business 2010 Cash Rules Customer Once, Client Forever Fast-Track Business Growth Hunting Heads Parting Company Raising Capital Taming the Paper Tiger at Work You Can’t Fire Me, I’m Your Father OTHER KIPLINGER BOOKS

But Which Mutual Funds? Buying & Selling a Home The Consumer’s Guide to the Experts Dollars & Sense for Kids Financing College Home•ology Kiplinger’s Practical Guide to Investing Kiplinger’s Practical Guide to Your Money Know Your Legal Rights Making Money in Real Estate Next Step: The Real World Retire & Thrive Retire Worry-Free Switching Careers Taming the Paper Tiger at Home Kiplinger offers excerpts and tables of contents for all of our books on our Web site (www.kiplinger.com). For information about volume discounts contact: Cindy Greene Kiplinger Books & Tapes 1729 H Street, N.W. Washington, DC 20006 e-mail: [email protected] 202-887-6431 [email protected]

Practical Tech for Your Business Using Today’s Technology to Make Your Business More Efficient, Creative and Flexible

Michael J. Martinez Associate Editor, Kiplinger’s Personal Finance

Kiplinger Books Washington, D.C.

Published by The Kiplinger Washington Editors, Inc. 1729 H Street, N.W. Washington, D.C. 20006 Library of Congress Cataloging-in-Publication Data

Martinez, Michael, 1972– Practical tech for your business : using today’s technology to make your business more efﬁcient, creative and ﬂexible / by Michael Martinez. p. cm. Includes index. ISBN 0-938721-96-8 (pbk.) 1. New business enterprises. 2. Information technology. 3. Business planning. 4. Internet marketing. I. Title. HD62.5 .M3655 2002 658.5’14--dc21 2002023592

© 2002 by The Kiplinger Washington Editors, Inc. All rights reserved. No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording or by an information storage and retrieval system, without the written permission of the Publisher, except where permitted by law. This publication is intended to provide guidance in regard to the subject matter covered. It is sold with the understanding that the author and publisher are not herein engaged in rendering legal, accounting, tax or other professional services. If such services are required, professional assistance should be sought. First edition. Printed in the United States of America. 987654321

Contents

Author’s Preface Introduction

ix xiii

CHAPTER 1: In the Beginning Your First Ofﬁce • Buying Your Computer • Your Business Powered By Software • Getting Plugged In • Thinking About Peripherals • Cost Breakdowns (The Budget Ofﬁce; The Expandable Ofﬁce)

1

CHAPTER 2: Your Business on the Web Homesteading on the Internet • Getting Your URL • How to Register Your Business Name • Finding a Host for Your Web Site • What Will Your Web Site Do? • Some Good Examples • Hiring a Web Designer • Do You Need a Webmaster? • Do-It-Yourself on the Web • Seeding Your Business on the Web • Keep Your Web Site Fresh • Cost Breakdowns (Basic Do-It-Yourself Package; Professionally Designed, Hosted Site; Professionally Designed, Hosted, and Webmastered Site)

33

CHAPTER 3: The Networked Workplace Welcome to the Networked Business • What’s a Network? • A Computer for Every Desk • Choosing Server Hardware and Software • Putting the Pieces Together • Getting Your Network Online • Picking the Right Computer Consultant • Cost Breakdowns (The Small Ofﬁce Network; The Large Ofﬁce Network; The Large, Hosting Ofﬁce Network)

57

PRACTICAL TECH FOR YOUR BUSINESS CHAPTER 4: Your Business Runs on Software 87 I Have a Network—Now What? • Databases: The Workhorses of Business • Using Databases in Your Business • Inventory • Personnel • Sales • Management of Customer Relations • Your Hardware Options • Getting Everything Installed • Some Thoughts on Security • A Final Word on Databases • Cost Breakdowns (The Basic Network; The Retail Network; The Manufacturing Network) CHAPTER 5: A Cautious Look at e-Commerce 111 How to View e-Commerce in Your Business • The eBay Way • Managing and Expanding Your Auction Business • eBay Alternatives • Selling via Both Auction and Store • Move Your eBay Auction Home • Piggybacking Onto Amazon.com via zShops • Yahoo! Stores: A Flexible Hosting Option • Branching Out Beyond Amazon and Yahoo • You Have Online Orders, Now What? • Managing Fast Growth • A Last Word on e-Commerce, For Now • Cost Breakdowns (The eBay Seller; the zShops Seller; The Yahoo! Store Owner) CHAPTER 6: Mobile Technologies 139 Rethinking the Pager • Don’t Overindulge in Cell Phones • Life on a Laptop • Personal Digital Assistants • Options for Mobile Internet Access • Integrating Mobility Into Your Existing Framework • Identifying Mobility Opportunities • Cost Breakdowns (Emergency Pagers and Cell Phones; The Fully Equipped Sales Force) CHAPTER 7: Better Business Intelligence 161 Your Business Is Data • Know Your Customers • Looking Inside Your Business • Financial Intelligence • Network Intelligence • Communicating Your Company’s Policy • Managing Inventory • Data Mining: Weaving Disparate Threads of Information • A Final Word on Business Intelligence

Contents CHAPTER 8: How to Scale Your Technology 187 Managing Hardware Growth • Replacement Schedules • Managing Software Upgrades • When to Bring in the Experts • Hiring Your First IT Specialist • Scaling Down • Cost Breakdowns (Years 1 through 5) Index

213

Preface

M

y grandfather never sat down in front of a computer. He never sent an e-mail, surfed the Web, or, to the best of my recollection, played a video game—even when, as a kid, I’d thrust an Atari 2600 joystick in his hands. Yet his imprint is all over this book. Pop was an extremely smart guy who worked with his hands his entire life, beginning as a Pennsylvania coal miner in the 1930s and ending his career as director of the physical plant at a private school. He retired in 1976. He knew tools, and always picked the right tool for the job. He was innovative and ﬂexible in his work, and rarely either hesitated too much before tackling a task or rushed into it. “Sit and think a minute,” he used to tell me. “Then get what you need and do it right. Work smarter, not harder.” He loved that phrase. I like it too, especially in the context of technology—mostly because so many people aren’t doing it. This book is called Practical Tech for Your Business for a reason. Practical technology is only a tool—nothing more. Practical technology helps you do your job faster, better, and easier. It doesn’t break the bank, it doesn’t monopolize your time, and it deﬁnitely doesn’t create more stress in your work life. Who needs more stress? When Pop sat and thought about the task at hand, he was drawing on his experience and knowledge of tools, and applying both to the requirements of the task. Applying the lessons of experience and your knowledge of tools is easy. Gaining the experience and mastering the tools are harder. You may have had very little experience working with technology. You’re an accountant, a landscaper, a restaurateur, an architect, a retailer, or a consultant, not an information technology specialist. ix

PRACTICAL TECH FOR YOUR BUSINESS

That’s where Practical Tech for Your Business comes in. Contrary to what other books may tell you, you’re neither an Idiot nor a Dummy. It takes more than the brain of a chimpanzee to start a business, after all, so you’ve obviously got some smarts—you just need information. You may not have had much experience with technology, but many other business owners have, and I’ve interviewed a great many of them and recorded their experiences and their hard-won lessons. You probably don’t know what a variety of tools are out there for you to use, or even where to look. These subjects are covered here, too.

Your Technological Evolution This book is laid out more or less in chronological order, starting in your home ofﬁce, where most businesses take ﬂight. Chapter 1 discusses the basics of getting your ﬁrst computer, loading it with the business software you need, and getting hooked up to the Internet— everything you’ll need to start your business off on the right foot. Chapter 2 takes you to the World Wide Web, where you can quickly and inexpensively promote your business. We discuss how to obtain a Web address, create Web pages, and ﬁnd a home for your Web site. If you get nothing else from this book, I hope that at least you stake your claim on the Web—establishing a Web address is too easy and too effective not to. Chapters 3 and 4 discuss expanding your business from your home and into an ofﬁce—or into a retail or manufacturing environment, depending on what your business is all about. Chapter 3 talks about the computers and hardware you’ll need, while Chapter 4 introduces you to powerful software tools that can make it easy to expand your business, create new sales, and improve efﬁciency. Chapter 5 returns to the World Wide Web to discuss electronic commerce, cautiously. After all, a lot of x

Preface people have lost a lot of money trying to bring their bricks-and-mortar businesses to the Web. We’ve learned from their mistakes, however, and you can, too. Chapter 6 is all about mobility—the ability to use mobile technologies to make life on the road easier, from cell phones and pagers to laptops and handhelds. Finally, Chapters 7 and 8 look at ways to use your technologies to best advantage. Chapter 7 deals with business intelligence, using your computers and all the data your business generates to ﬁnd out more about your customers, your spending, your inventory, and your workers. Chapter 8 tackles the biggest question of all: How does a business improve its technology without breaking the bank as the business grows from point A to point B. We discuss managing your growth, your spending, and your technology as your equipment ages and new products are introduced. Throughout this book, you’ll ﬁnd boxes with more information to help you make sense of it all. We deﬁne “Tech Terms” to help you translate techie-talk into plain English, and we provide a number of resources on the World Wide Web for you to explore further. All in all, the idea here is to make this book part of your “sit down and think” stage. I’m not going to tell you what to do—I don’t think you’d really appreciate that. Instead, I’m giving you the information you need to make informed decisions about using these amazing tools in your business. You may decide to use all of them, or only a few, but at least you’ll know what technology is available and understand how it might help you. It is all about ﬁnding the right tool for the job, after all. Enjoy and use this book, and remember: Work smarter, not harder.

Acknowledgments For a writer, there’s nothing quite like seeing your book ﬁrst offered for sale. This being the Internet age, I saw it for sale before I had ﬁnished the ﬁnal draft, thanks to pre-sales on Amazon.com. Talk about an incentive to ﬁnish on deadline! But the feeling was a thrill, and it xi

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made me reﬂect on the people who helped make this book possible. My ﬁrst thank-you goes to Pat Esswein, probably one of the most patient and good-natured editors I’ve ever worked with in my writing career. Every time I got overly techie or made too many assumptions, her gentle questions and good humor reeled me back to reality. Thanks also to David Harrison, director of Kiplinger Books, who helped transform a rough idea into a feasible project, and whose enthusiasm was contagious. Cindy Greene provided editorial assistance; Priscilla Taylor copyedited the text; Allison Leopold proofread the ﬁnal pages; and Heather Waugh designed the interior and exterior of the book. I offer my thanks to them. Dozens of business people and entrepreneurs around the country opened their doors and computer ﬁles to me as I researched my subject, and their experiences and lessons are reﬂected in this book. Some of them appear in the pages ahead, but whether or not they’re speciﬁcally mentioned here, their contributions have been invaluable. I’m also grateful to the editors of Kiplinger’s Personal Finance magazine and Kiplinger.com for their support during the writing of this book, as well as their continuing help in bringing excellent technology coverage to the magazine’s readers. I particularly wish to thank Bob Frick, senior editor of the magazine and my boss, for his patience and counsel, and for his friendship. I’d also like to acknowledge Kim Lankford and Kevin McCormally, colleagues at Kiplinger, who contributed to the coverage of insurance and taxes in Chapter 1. Nobody can function without friends, and I’ve been blessed with the best. For all their professional and personal support, Karl Isselhardt, Drew Montgomery, Nancy Trott, and many others have earned my gratitude. Family, too, is a very important support when one is tackling a book like this. My mother has always encouraged me and given me great love, for which I am grateful. And my wife, Kate, has given so much to me over the last ﬁve years that I cannot begin to thank her. This book is dedicated to her. xii

Introduction

I

f you’re at all like me, your knowledge of ofﬁce technology probably falls into three categories: a lot of things you’ve grasped pretty well, some subjects you’re still a little shaky about, and a few aspects you ﬁnd totally bafﬂing. If so, this book is made for you. Unless you are one of the rare techies who lives and breathes these subjects and also has responsibility for running a business—an unusual combination in one person— I’m pretty sure you will learn a lot from this book. Even if you’re an executive who really doesn’t care much about technology, but is content to leave it to your subordinates, you need this book. Why? Because it will enable you to understand what they are telling you—and what they’re asking for in their budgets. It will enable you to challenge their assumptions and ask them about things they may have overlooked. Now, that’s empowering! Frankly, most of us managers and business owners have a lot on our minds these days—like trying to understand our core business and where it is headed. We absorb what we can about new technology—from reading, talking with others in our ﬁeld, and generally keeping aware. But there seems to be too much to learn, and it’s all changing rapidly. As a result, most business executives have been embarrassed at least once by a technology crisis…the over-budget installation that didn’t work right, the system that became obsolete too quickly, the system that took much more labor to manage than anyone had anticipated. That’s where my colleague Michael Martinez can help. It’s his daily business to follow technology—for the home and for the ofﬁce—and write about it in a clear, practical way for the readers of Kiplinger’s Personal Finance magazine and Kiplinger.com, for which he writes the very popuxiii

PRACTICAL TECH FOR YOUR BUSINESS

lar column, “Practical Tech.” Mike loves technology, but when it comes to recommending what your business really needs—and doesn’t need—his feet are ﬁrmly on the ground, his head well below the clouds. He knows that your budget is limited, your managerial time is valuable, and that you don’t buy technology to impress anyone, but to enhance your bottom line. This amazingly comprehensive new book can be your roadmap to the dizzying world of tech choices in the workplace. All the important aspects of ofﬁce technology are covered here: How to buy hardware. The key software you’ll need. How to edge your ﬁrm into ecommerce. How to use technology to learn more about your customers and their buying preferences. Programs for monitoring your employees’ performance—and Web usage, if you wish. How to harness the wireless revolution to your sales goals. And with each discussion, Mike offers his impartial judgement on all of today’s popular business tech products. Sure, there are entire books on subjects that he covers in only a single chapter—such as e-commerce, selecting hardware and software, and using databases for your marketing. And perhaps after reading what Mike says, you’ll want to buy a shelfful of such books. But then again, maybe you won’t have to, because Mike has distilled the essence of these topics so clearly. Most of us have a love-hate relationship with ofﬁce technology. We are seduced by its potential to improve our productivity and boost our earnings, but we are often frustrated by its undue complexity, cost and unreliability. Mike Martinez understands this. Prior to joining us at Kiplinger, he covered technology for ABCNews.com and for The Associated Press in Seattle, the home of Microsoft and Amazon.com. Writing for a general, non-techie audience, he developed a keen understanding of what’s important and what’s not, what his readers really need to know and what’s unnecessary detail. That’s the skill that he brings to this book. Mike Martinez takes the side of the tech consumer, telling you when you should save your money and when xiv

Introduction you should splurge. He writes especially for the small and medium-size business, but businesses of virtually every size will ﬁnd useful information here. I hope you ﬁnd this book as useful as I did. My best wishes to you and your business as you come to grips with the exciting possibilities—and pitfalls—of today’s technology.

Knight Kiplinger Editor in Chief Kiplinger’s Personal Finance The Kiplinger Letter and KiplingerForecasts.com Washington, D.C.

xv

Practical Tech for Your Business

CHAPTER

1

In the Beginning

riving through the tree-lined streets of this suburban housing development in Springﬁeld, Virginia, you might notice the plastic toys in front of a certain brown-and-tan house and infer that a toddler was inside. You wouldn’t know that the house is also sheltering a burgeoning business. Yet between ﬁlling requests for another cookie and making trips to the pediatrician, Megan O’Reilly has turned her part-time freelance job as a copy editor and publishing production editor into a rapidly expanding home-based business. One year into her new lifestyle, she’s now at the point where she’s turning down work— and she will make far more money than she did when she worked full-time in an ofﬁce in Washington, D.C. “This is the best thing I’ve ever done,” O’Reilly says as her daughter mashes Play-Doh between her ﬁngers a scant six feet away from her basement ofﬁce. “I can spend a lot more time with her, and my commute is much easier now.” O’Reilly didn’t necessarily mind the office life, where she was an assistant director of publications for a nonproﬁt medical association. But with her daughter’s birth and her husband’s desire to start taking graduate courses part-time, she felt that freelancing from home would help her offset child-care costs, become closer to her family, and provide a second income in the process. When she decided to work from home in 2000, O’Reilly had to invest in new equipment for her home ofﬁce. She and her husband, Tim, had an older Windowsbased computer—but the vast majority of the publishing industry uses Apple’s Macintosh operating system for the

D

Summary ■ ■ ■ ■ ■ ■

Your First Ofﬁce Buying Your Computer Software Getting Plugged In Peripherals Cost Breakdowns

1

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms operating system: the software that comes with your computer that manages basic functions, such as accessing programs, managing memory, and saving ﬁles to disk. Today’s computers have numerous additional features, such as Web browsers, e-mail programs, and multimedia players. These features are not critical to the computer’s function, and are thus not part of the operating system. Windows: a computer operating system designed by Microsoft Corp., named for the multiple frames the computer uses to visually separate different computing tasks. First introduced in the 1980s, Windows didn’t take off until version 3.1 was introduced in 1993. It became the

dominant operating system for home computers and business work-stations with the introduction of Windows 95 in 1995. The latest version, Windows XP, was introduced in October 2001. Mac OS: a computer operating system designed by Apple Computer Inc., named after the company’s ﬁrst runaway hit, 1984’s Macintosh Classic. Mac OS was the dominant computing platform in the 1980s, although the departure of founder Steve Jobs and subsequent business decisions allowed Microsoft to compete, and subsequently monopolize, the operating system market. Today, Mac OS has about 10% of the market for operating systems. The latest version, Mac OS 10.1, was introduced in July 2001.

kind of editing and production work that O’Reilly does. Furthermore, the America Online dial-up Internet service just wasn’t fast enough to send bulky text and graphics ﬁles via e-mail. O’Reilly limped along with her older computer system for the ﬁrst few months, until she made enough money to invest in a new computer and Internet setup. She did her homework, consulting knowledgeable friends, reading reviews, and comparing prices via the Internet. She eventually spent over $5,000 on both hardware and software. She decided against getting a new Windows computer. “This old thing works well enough for e-mail and the Web, and that’s all we really use it for,” she says. She did, however, decide to get high-speed Internet access via her cable television company. She pays about $40 per month and can access the Web many times faster than with her old dial-up line—while keeping 2

CHAPTER 1

In the Beginning

her telephone free to talk with clients. She spent the vast majority of her money on a new Apple computer. While the iMac was all the rage at the time, O’Reilly felt that it wasn’t expandable enough. “If I’m going to spend this kind of money, I want to be able to upgrade this computer and get as much life out of it as I can,” O’Reilly says. Because of the iMac’s all-in-one shape, upgrading beyond adding a little memory is difﬁcult. Instead, she purchased a PowerMac G4 tower, one of Apple’s most powerful and ﬂexible computers. Expandability is simple: the side of the tower drops down, neatly revealing the innards of the computer for easy care and upgrade. However, the $2,500 G4 didn’t come with a monitor, which cost another $400. And O’Reilly wanted a Zip drive, a storage device that uses special disks that can handle up to 250 megabytes of data, as opposed to the 1.44-megabyte capacity of a standard ﬂoppy disk. The Zip drive cost another $250. She spent yet another $250 on an extended warranty for her computer. Next, O’Reilly had to purchase all the software she needed for copyediting and, most important, for formatting and laying out pages. She ended up choosing Microsoft Ofﬁce for the Mac as well as the professional version of QuarkXPress. She also purchased a conversion tool that makes it possible for Macs to read Windowsonly ﬁles and vice versa, so that she could easily swap ﬁles between her Macintosh and the far more prevalent Windows-based computers that some of her clients used. The software cost about as much as her hardware. The cost of what she bought was a little daunting, but today O’Reilly views it as a wise investment and is glad she didn’t skimp. “I’m going to have and use this stuff for years. It’s already paid for itself,” she says. “And the time I have at home is priceless. I don’t think I’d ever go back to the ofﬁce life.”

Tech Terms tech terms: a feature of this book designed to help you understand the jargon of computer and business technology. On ﬁrst reference, a technical term appears in bold face, which means that it will be deﬁned in a “Tech Terms” box on the same page or within a page or two of it. Occasionally, a Tech Terms box includes a word that doesn’t appear in the text, but will lend to your broader understanding.

Your First Ofﬁce Entrepreneurs love to tell the tale of their ﬁrst day “on the job” in their businesses and the transforming mo3

PRACTICAL TECH FOR YOUR BUSINESS

ments they typically share: At-home businesspeople realize that their commute is now a 30-second walk from the coffee maker to the spare room that they’ve set up as an ofﬁce. Business owners who have leased a building or ofﬁce walk in and get a chill up their spine when they realize that it’s all theirs. Then they realize that they had best get cracking, because otherwise there won’t be a paycheck at the end of the month. Getting to that point takes more than cleaning out the spare room, ﬁnding some inexpensive ofﬁce space, or even saving up enough money to live on until your business gets off the ground. You will need phones, computers, a copier—you name it. And this stuff is expensive! So before you buy, sit down and consider what your initial needs will be. A good way to do this is to think about how you’re working now. In your soon-tobe-old job, do you use e-mail a lot? How about faxes? Do you push a lot of paper or are you already doing the bulk of your work on the computer? What kind of software do you use? These questions are fairly straightforward to answer, but clarifying your needs—and keeping your conclusions in mind when you buy—will save you a lot of time and money down the road.

Buying Your Computer Chances are, you already have a computer. According to the various research groups that focus on technology, more than 50% of Americans have a computer at home. More than 65% have access to a machine at home, school, or work. And according to the Small Business Administration, approximately 75% of American small businesses use computer technology for some aspect of their business. As later chapters of this book show, you can use a personal computer for nearly every aspect of your business. Although you may already have a machine, let’s backtrack a minute and talk about buying one. After all, if you’ll be depending on this computer as an essential tool for all or part your business, you had better be sure you have the right one. 4

CHAPTER 1

In the Beginning

LAPTOP OR DESKTOP? When advising the readers of Kiplinger’s Personal Finance magazine on computer purchases, the ﬁrst question I usually ask is, “Laptop or desktop?” Each one has advantages and disadvantages, but the biggest difference is price—you will pay for portability. Expect to pay a 50% premium to get the same power in a laptop that you’d get in a comparable desktop computer. Ask yourself some serious questions: ■ In my workplace, is space at a premium? ■ While in the office, do I often need access to data when I’m away from my desk, say, for meetings or consultation? ■ Do I work away from the office any more than once every few months?

If you’ve answered a deﬁnite yes to any of those questions, you may want to consider a laptop. Even so, however, you may want to wait until you can afford a laptop to go along with your desktop machine. Auction Web sites such as eBay, Amazon.com Auctions, and uBid are a great source of inexpensive laptops that will sufﬁce on the road. WINDOWS OR MAC? Once you have made a decision and you know what form your machine will take, the next question is generally, “Windows or Mac?” I know I am going to alienate many Apple fans out there, but there are very few cases in which a small-business person will need to incur the added expense of purchasing an Apple computer instead of a PC. And yes, we’re talking expensive— Apple’s line of iMacs, iBooks, and PowerMacs tend to cost anywhere from 25% to 50% more than a comparable Windows machine. That said, Apple’s Mac operating system is the standard for a number of specialized, professional businesses, such as those involved in education, publishing, graphics design, video production, and photography. You probably already know whether your profession is Mac-centric. Of course, if you’ve been an Apple user for 5

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms microprocessor: a microchip that performs all the necessary equations to make your computer run programs. Each program, at its root, is a series of binary mathematical equations—a bunch of ones and zeros. The microprocessor performs these equations millions of times per second, translating them back into data, which the rest of the computer reads and reacts to in order to give you the results of your program. In the human brain, the microprocessor would be the equivalent of higher reasoning. RAM: an acronym that stands for Random Access Memory. RAM serves as a computer’s short-term memory, allowing it to deal with multiple equations, tasks, and queries all at once. RAM stores the ﬁnished equations from the microprocessor and helps translate them into images and words on the screen. hard drive: a mechanism inside a computer, made of magnetic disks, where data and programs are stored. All of the software and ﬁles on a computer are stored on the hard drive, not unlike the

long-term memory in the human brain. motherboard: the ﬂat circuit board inside your computer that connects the processor, RAM, hard drive, and other pieces of hardware. All communications and data within the computer go through the motherboard. card: a piece of hardware that you add to your computer. On desktop machines, cards go inside the computer box and plug into the motherboard. Laptops have special cards that plug into special slots on the sides. Cards can have many functions, such as extra graphics processing, modem or broadband communications, and extra storage. graphics card: a card, found on many desktop and a few laptop computers, that gives the computer extra processing power and memory when displaying highresolution graphics. With the card’s help, the computer can process these graphics while still reserving power for the computer’s other functions.

quite a while, you may choose not to sacriﬁce your comfort and expertise on the Mac in the name of price. There are also some compelling reasons not to go with a Mac, especially if you’re not in any of the aforementioned professions: ■ Most of the business community has standardized on Windows. That means it’ll be easier to trade information between computers if you have a Windowspowered machine. Although there’s plenty of business 6

CHAPTER 1

In the Beginning

software available for Macs, there’s a great deal more available for Windows. ■ Software makers also tend to release their newest products for the Windows platform ﬁrst, and worry about Mac second, which can sometimes mean that the Mac version is second best. Avid Mac users may note the exceptions to these generalizations, but even they can’t deny the truth of them. If you do choose to go for a Windows computer, you should be able to get a very good desktop computer for about $1,000, and a very good laptop for $1,500. The prices for each category of computer—high-end, lowend, mid-range, small business, and enterprise—have remained relatively stable over time. Thus, if you spend $800, you’ll get a basic ofﬁce computer, while if you spend $1,800, you’ll get the perfect workstation for complex tasks like graphics work. It’s difﬁcult to comment here on the exact speciﬁcations you should look for, such as the speed of your microprocessor, as these seem to change every week in the fast-moving computer industry. At the bare minimum, you should at least get a processor with a speed of one gigahertz (1 GHz). Processors aren’t everything, however, and you should look for a computer with no less than 256 megabytes of RAM and a 20-gigabyte hard drive. That amount of memory will run the current Windows XP operating system at a very high, productive level, and the 20-GB hard drive is more than enough for most business documents. So look for those prices and those basic specs, and of course, feel free to consult the annual Kiplinger’s Personal Finance magazine’s guide for PC buyers, issued every summer. BELLS OR WHISTLES? Don’t be fooled by add-ons when purchasing your computer. Whether you buy at the store or online, you’ll ﬁnd a dizzying array of internal cards, (including sound and graphics cards), monitors, and speakers to choose from. These are great for your home computer, but the demands of your business workstation are actually far 7

PRACTICAL TECH FOR YOUR BUSINESS

STORAGE: How Much Is That? Is a megabyte a lot? What about gigabytes? Let’s give you an idea of how much data we’re talking about here when it comes to memory and storage. Programs and ﬁles are stored in bits—the ones and zeros of binary language. Each bit is either a one or a zero. Eight bits make up a byte on most computers. A byte, generally, is enough for one letter or symbol in a Word ﬁle, or one small dot of color in an image. A kilobyte (KB) consists of 1,024 bytes. For example, this chapter, as a Word document, is about 113 kilobytes.

Put 1,024 kilobytes together and you have a megabyte (MB). A standard 3.5-inch ﬂoppy disk can hold 1.44 megabytes, or nearly this entire book in Word format. If you have 256 MB of RAM, that means your computer can keep that much information in short-term memory, ready to be used at a millisecond’s notice. A gigabyte—the standard measurement for hard drives—consists of 1,024 megabytes. A gigabyte is equal to about 711 ﬂoppy disks—or, 711 books the size of this one. A computer with an 80-GB hard drive could thus hold 56,880 books this size.

less than those of the typical home user. After all, you probably won’t (or shouldn’t) be playing video games on your business workstation, or listening to music. So unless you’re creating advanced graphics as part of your business, forget about graphics cards. And although it’s good to have a pair of basic speakers (otherwise you won’t hear a sound your computer makes), you won’t need Dolby Digital Surround Sound and a 128-bit sound card to tell you “You’ve Got Mail.” If you’re buying at the store, ask about models without these extra features. If you’re buying online, you’ll be able to pick and choose the components. As far as monitors go, the standard 15-inch monitor, measured diagonally, should do nicely. If you’re doing graphics work, lots of reading and editing, or just hate squinting, a 17-inch is a nice little perk. Anything more, however, is an extravagance. The same goes for ﬂatpanel monitors, similar to the screens on laptops. Although flat-panel monitors certainly save space, the additional $400 (minimum) is tough to justify. Unfortunately, the price of ﬂat-screen monitors isn’t going to come down any time soon, either. 8

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JOE’S GENERIC OR A BRAND-NAME MAKER? Whom should you buy from? For home computer users, or people who are very familiar with the workings of their computer, I normally suggest getting the most bang for your buck, even if it means choosing a custombuilt, generic computer from Joe’s Computer Shop over a well-marketed workstation from Compaq. However, as an entrepreneur, you’re going to depend on this computer to handle important aspects of your business. When it comes to computers, there’s still a great deal of art included in all the science, and imperfections can sometimes result. A name-brand computer gives you far more warranty protection for literally just a few dollars more than your local computer shop would do. At a minimum, no matter whom you buy from, insist on at least a one-year warranty on every element of your machine, one year of parts and service, and one year of toll-free, 24-hour telephone technical support. This much support should come free from most major PC manufacturers, although smaller PC makers will charge. You should pay no more than $100 extra on your price tag for warranties. I recommend purchasing three years on each of those warranties, however, which will cost you $99 to $299 more, depending on the manufacturer. This may seem like an unnecessary expense, especially as you’re starting out, but if your plan will get you a replacement machine and rapid service when your computer crashes in the middle of a project, you’ll be grateful for it.

Your Business, Powered by Software The kind of software you have on your computer is far more important than the hardware you run it on. American business is powered by computer, and for certain tasks and functions, over the past decade, particular types and brands of software have become the de facto standard, despite the ideal of competition. Sending around word-processed ﬁles that no one can open can be the 9

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms upgrade: (n.) a new version of previously existing software, designed for people who have the older version; (v.) to replace old software with newer version of said software.

professional kiss of death for a small business. Thus, you use alternatives to the standard at your own risk. You may be tempted to simply make copies of the software you used at your old job and use them in your new home business. This is not, however, like copying a song from a friend’s CD to your new mix tape. Making copies of software when you don’t have a license to do so from the creator of the program is illegal and, depending on the value of the software, is at least a misdemeanor offense if you’re caught. FIRST, UPGRADE YOUR OPERATING SYSTEM? A lot of software programs that you will use in your business rely heavily on a particular operating system, and many of the newest versions of these programs won’t work on older operating systems. Thus, let’s quickly get the subject of operating systems out of the way. If you’re a Mac user, your job here is fairly simple—if you already own a Mac, then you’re probably comfortable with whatever version of the Mac OS you have, because Apple has always made sure that its software programs run well on its operating systems. If any of the software programs described here require an upgrade of your operating system, grab it. If you’re getting a new Apple, you should do just ﬁne with Mac OS X or better, as it’s simply the best operating system that Apple has developed to date. Windows is a different story. As of this writing, the Windows XP operating system comes in two ﬂavors— Home and Professional. Both run on the same underlying computer code and have many of the same features. The Home version has a brighter, sunnier look, and the software that’s featured up front tends to be media-based, such as Internet, music, and video. Professional, meanwhile, looks more austere, and keeps your business-oriented software programs at your ﬁngertips. However, you can customize Home to feature your most-used software, and Home comes with some basic security software. Professional, in contrast, assumes that you’re using heftier security software from another source and substitutes easier

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management tools for hooking up your computer to other machines in a network. That’s a very basic rundown of two highly complex operating systems, though we should mention that Professional can cost up to $100 more than Home on a new computer. In short, if you’re not planning to add many more computers to your business—if you’re a freelancer or have a handful of computers in a small ofﬁce—go with XP Home and pocket the change. If, however, your business is highly computer-centric and you plan to eventually have a network of a half-dozen machines or more, invest in Professional. If you already have a computer running a past version of Windows and all the other software you need runs well on it, don’t bother upgrading for now—unless you’re running Windows 95 or earlier. Frankly, you should probably just get a new computer, because Windows 95-era computers generally don’t have the power or memory need to run most of today’s programs.

Tech Terms computer virus: a computer program that, once introduced into a computer, impairs the computer’s operation. Some viruses merely create nuisance messages and then erase themselves. Others can erase entire hard drives and cause massive system failures. Most viruses are sent via e-mail attachments and are activated when the recipient clicks on the attachment.

YOU NEED SECURITY Now it’s time to talk about computer security software. In short, you need it. Even if you’re just using your computer to write business letters and respond to e-mail, some sort of security is a good idea. If you’re running your books or designing your latest products on your computer, security is essential. Without security precautions, you could be vulnerable to having critical business information stolen or destroyed. A few years ago I had the pleasure of giving a speech at the DefCon hacker conference in Las Vegas (DefCon is a hacker adaptation of military language for a threatening situation—“defense condition”—although in hacker-speak, “def ” means “cool” and “con” is short for conference). Hackers are interesting people, to say the least, and the conference was memorable. What I came away with, however, was simple: The vast majority of people get hacked or succumb to computer viruses for one reason—they had absolutely no security. In fact, experts say that just over 60% of computer users, home or business, use no security software. Yet even the most 11

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms download: to bring data from an outside source into your computer. Accessing a Web page, opening e-mail, or installing new software from a CD-ROM are all examples of downloading. upload: to send data from your computer to an outside source. Sending e-mail, ﬁlling out a purchase form on Amazon.com, or placing a picture on your Web site are all examples of uploading. Trojan horse: named for the historical reference, a small software program that seems normal and may be innocuous or useful, but is designed to inﬁltrate your computer to cause harm.

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basic protection will send malicious hackers scurrying away for greener pastures. Computer security comes in two common forms: antivirus and ﬁrewall. Antivirus software analyzes anything that you download from e-mail or the World Wide Web, as well as anything you upload to outside sources. Most antivirus software today combines two different forms of detection. First, the software compares ﬁle names and other identifying material to a database of virus profiles—rather like checking for a fingerprint match. If a ﬁle matches a proﬁle, the software will prevent you from downloading the ﬁle in question. Second, the antivirus software looks for patterns in newly downloaded or installed ﬁles that haven’t been immediately detected. If the ﬁle in question misbehaves—by starting to ship off information to a third party or by erasing your hard drive—the antivirus software will try to shut it down. ANTIVIRUS SOFTWARE.

The second piece of the security puzzle is the ﬁrewall. If you have any kind of high-speed connection to the Internet (discussed later in this chapter), you should get a ﬁrewall, especially if you leave your computer on and connected to the Internet for long periods of time. A ﬁrewall prevents unauthorized users from accessing your computer. Every computer that is on the Internet can theoretically be accessed by any other computer that’s also online through what’s called an IP address—a 12-digit number that lets the Internet know where you are so that it can send you e-mail and Web pages. Hackers have created tools that will allow them to randomly search IP addresses to see which ones are currently online. This tactic, called “pinging,” works somewhat like a radar echo. If your computer is on, it’ll send a ping back to the hacker. That’s normal, indeed critical, for the way the Internet works. But if you’re pinged, the hackers can target and invade your computer via your Internet connection. FIREWALLS.

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SECURITY: Mike’s Pillars of Safe Computing

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■ Never put a ﬂoppy disk, a CD-ROM, or any other kind of storage card or device into your computer unless you know exactly where the item came from. If you get an e-mail attachment from an unfamiliar source, don’t open it. Similarly, if you get an attachment you weren’t expecting from a familiar source, don’t open it until you check with the person who sent it. Do not open any ﬁles with the extension “.exe” when they are unexpectedly sent to you via e-mail or made available to you for download from an unfamiliar Web site. These ﬁles launch programs, and you won’t have any idea what kind of program until

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you click and it’s too late. If you don’t use macros—that is, programmable shortcuts within Microsoft Word and Excel that can perform multiple functions with a single click—disable those functions. (Your software manuals will show you how.) Malicious hackers can hijack and use them to send commands to your computer. Use an antivirus program, and make sure to update it at least once a year, preferably every three months. If you read about a new virus on the loose, update your protection yet again. If you have a high-speed connection to the Internet, get a basic ﬁrewall program.

A ﬁrewall blocks any interaction between your machine and any other computer, keeping hackers from sending any data, such as a virus or Trojan horse, to your computer unannounced. Some security products also cloak your computer’s IP address or otherwise make it invisible to pings. All this sounds fairly complex, but the solution is very simple: buy an antivirus program and a ﬁrewall. You can get most combination products for as low as $75. Stronger protections can cost $100 or more for each piece, but can be worth it if you’re in a high-proﬁle business or any computer-oriented ﬁeld of work. When your security software encourages you to update your programs, courtesy of those pop-up reminders on-screen, be sure that you do so as soon as possible. Updating will ensure that you have the latest virus profiles and hacker tricks, and can adequately defend against them.

SHOPPING.

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PRACTICAL TECH FOR YOUR BUSINESS

SECURITY: Where’s My File?! When I ﬁrst turned in the rough draft of this book, Chapters 7 and 8 proved to be garbled beyond all recognition. Once my heart started beating again, I checked my workstation at Kiplinger’s Personal Finance magazine, my laptop, and the backup disk plugged into the PCMCIA card slot (see the deﬁnition on page 152 of Chapter 6) on the laptop. Unfortunately, they all carried the same garble. It took a data recovery service to recover the information from my disk, and I still ended up having to rewrite about 40% of the two chapters. There are a number of technical reasons why such a disaster might happen— inadequate RAM, too many Windows open at once, even a few misplaced keystrokes while you’re saving the ﬁle. Sometimes, the reason simply isn’t apparent. The fact is, as everybody knows, computers lose or corrupt ﬁles on occasion. It’s a fact of computing life. Thus, you need to be sure that your ﬁles are properly saved and properly backed up. Your business depends on it.

In my case, I had a number of backups, but I actually saved the ﬁle after it was corrupted. Thus, for really important work, I recommend closing the ﬁle and reopening it to double-check for errors before saving it to your backup disk. And yes, you should always have a backup copy of your work. You’ll have to decide how frequent a back up is frequent enough, although the more critical the work or the closer you are to its completion, the more frequently you will want to save your work to another medium. It may be desirable to keep one version of the work off site. You can copy your ﬁles to a ﬂoppy or Zip disk— or perhaps your client will allow you to copy back your work to its on-site server each day. As your business and computer systems grow, you may need more complex backup systems for reconstructing your business’s entire body of data. You’ll probably need the help of an information technology expert to accomplish this task (see Chapter 8).

PASSWORD PROTECTION. Finally, let’s take a moment to consider some basic protections that few of us seem to bother with—passwords and backups. Mac OS and most versions of the Windows operating system come with the option of creating passwords for logging onto your computer when you start it up. Most of us don’t bother with them, but if you’re running your business from a computer, it’s a good idea to use this option and make sure that your computer is password-protected. Passwords are no replacement for other security measures, but they will create an extra 14

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hurdle for intruders to overcome. Also, be sure that the passwords available for various programs, such as Outlook or Quicken, also are up and running. And, although I know it’s hard to avoid doing it, don’t use the same password for all of your programs and services! If you use “bunnyslippers” as your password for everything, it becomes altogether too easy for a hacker to tackle the rest of your programs once he or she has access to your computer. AN OFFICE SUITE The most common suite of software after operating systems and security is the ofﬁce (lowercase) suite. For basic word processing, spreadsheets, e-mail, and electronic slideshow presentations—the real basics of the business world—Microsoft’s popular Ofﬁce software is, hands down, the standard for both Windows and Mac. Ofﬁce consists of Word for word processing; the Excel spreadsheet program; Outlook for e-mail; scheduling and keeping track of addresses and contacts; and PowerPoint for graphics-enhanced slide-show presentations. Most think tanks estimate that Ofﬁce is on at least 85% of the world’s computers, and it had better be on yours as well if you want to do business. Some different versions and options are available in Ofﬁce, and you need to have at least one of them: Most new home computers come with Microsoft Works, a slimmed-down, cobbled-together version of Ofﬁce for basic home use. Works comes with the latest version of Word, which is helpful, as well as a basic spreadsheet program compatible with Excel and the stripped-down Outlook Express, which lacks a database for managing information about your business contacts. Business users, quite frankly, should avoid Works like the plague. For $50 to $100 more on a new computer, you can upgrade to the latest version of Ofﬁce XP, which has the full-ﬂedged versions of each product. For another $100 or so, you can get Ofﬁce XP Professional, Small Business Edition, which includes the Access database program for storing and mining data about your company—highly recommended for busi15

PRACTICAL TECH FOR YOUR BUSINESS

TAXES: Breaks on Technology All the costs of tools and equipment required in your work can qualify as tax-deductible business expenses on your Schedule C ﬁling. However, if an item is likely to last for more than a year, you must depreciate it by one of two methods. This means that you can deduct replacement toner cartridges for your printer as a business expense, but the cost of your computer will have to be depreciated. Computers have a ﬁve-year tax life, but the percentage of your computer’s value that you will qualify to deduct each year (actually six years because of accounting procedures) depends on whether your business use of your computer exceeds 50%: If it does, you will use an accelerated schedule that allows you to deduct about half the value of the machine in the ﬁrst two years. If your business use is 50% or less, then you can deduct only about a third in the ﬁrst two years.

The rules for depreciating business software differ depending on whether it is bought as part of a package with computer hardware or purchased separately. In the ﬁrst case, the value of the software is depreciated at the same rate as the hardware—six years. When purchased separately, however, the cost is usually written off over three years. However, if you can show that the software has a useful life of one year or less, you can deduct the full cost in the year you buy it. A super accelerated depreciation schedule, called expensing (or the Section 179 deduction), is available to business owners whose use of a computer exceeds 50%. This lets you immediately write off in one year business costs (proportional to your business use of the machine) that would otherwise be depreciated over ﬁve or more years. This strategy will give you the biggest tax-saving boost when applied to property that otherwise would have the

nesses that have to keep track of inventories, employees, and other data-intensive processes (see Chapter 4). Some versions of Office also include Microsoft’s FrontPage software, used to design Web sites. If you get it, ﬁne; if not, don’t worry—there are better Web site creation tools out there anyway (see Chapter 2). A few alternatives to Ofﬁce exist, such as IBM’s Lotus Notes software, but these are not standard in the industry and are not truly compatible with Ofﬁce. As much as the tech world loves to rail against Microsoft products, Ofﬁce is the one to go with. If you already have a computer with Ofﬁce 97 or Ofﬁce 2000, you’re in luck because there’s no reason to upgrade right now—they’re still compatible with the lat16

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longest depreciable life. So, applying expensing to seven-year property, such as ofﬁce furniture, rather than ﬁve-year property, such as your computer, will maximize your write-offs. Remember that you will need to keep records establishing the cost of the property that you depreciate, and if there’s a split between your business and personal use, you’ll need evidence to support the business percentage that you claim. (Include any sales tax paid in the depreciable business cost.) You might, for example, keep a log book near the computer, and have every user sign in, noting the date, the time use begins and ends, and the reason for using the computer. If the reason is not personal, cite the speciﬁc project. When you ﬁle your return, you’ll be asked whether you have written evidence to support your write-off. Other ofﬁce equipment, like copy or fax machines, have the same ﬁve-year tax

life as computers. The 50% business-use rule doesn’t apply here. If you use a cell phone in your business, it has a seven-year tax life but is covered by the 50% business-use test. If your business use of the phone doesn’t exceed 50%, you’re stuck with a slower 10-year depreciation schedule and you will miss out on the opportunity to “expense it.” We can’t get into the intricacies of the tax code here, so if you aren’t familiar with your obligations, you should see a tax planner or accountant as soon as possible. You can also go to www.irs.gov and download Pub. 946: How to Depreciate Property (use the publications and forms search engine on the home page). Finally, keep in mind that once you replace your old computer, you can get another write-off by donating the old machine to a nonproﬁt organization, which will likely be grateful for the assistance.

est Ofﬁce XP software. If your machine has Works but you don’t want to spend hundreds of dollars on Ofﬁce XP, consider checking eBay or other auction or discount sites for a copy of Ofﬁce 2000 or 97. MANAGING THE MONEY Next, let’s think about ﬁnances. Just as most entrepreneurs have little knowledge of business technology when they start out, everyone can use a little help when it comes to business ﬁnancial management and bookkeeping. Fortunately, some superior programs are available to help small-businesspersons keep the books. The two biggest competitors in this space are Intuit’s Quicken and Microsoft’s Money programs. Quicken, which 17

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INSURANCE: Is Your Technology Covered? If you’re running a business from your home, you should double-check your homeowners policy to be sure your technology is adequately covered—the odds are it won’t be. Although your homeowners policy may cover tens of thousands of dollars of personal property, the limit for business property frequently drops to a skimpy $2,500. That low ceiling may still apply even if you have a rider on your policy that raises the coverage for personal computers, because the rider’s higher ceiling may not apply if you use those machines for a business. Worse, most homeowners policies cover just $250 of business property that is stolen or destroyed when you’re away from home—try replacing a stolen laptop for that amount. You can also run into problems if: ■ You do most of your work at outside job sites but maintain an ofﬁce in your home, as many kinds of contractors do.

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You telecommute from home using your employer’s equipment. Check ﬁrst with your employer: Does its insurance cover you if the equipment is damaged or destroyed in your home or stolen? You employ others working remotely from their homes using your equipment.

ON A RELATED, BUT NONTECHNOLOGY ISSUE: Don’t forget to check your liability,

too. A $1-million limit on your homeowners policy might fall to zero for liability related to your business, if, say, a client were to fall down your stairs. For a modest home ofﬁce, the cheapest way to increase your business coverage is to add a home-business endorsement to your homeowners insurance policy. Typically, for less than $100 a year you can raise your business-property and liability limits to the same level as the rest of your homeowners coverage.

has concentrated entirely on personal and business ﬁnancial software for 18 years, deﬁnitely has a leg up on far-ﬂung Microsoft, but Money has steadily improved through the years. INTUIT’S QUICKEN AND MORE. Quicken has a number of software titles available for small business, and you can upgrade as your business grows. The ﬁrst, Quicken 2002 Home & Business, allows you to keep track of both personal and professional ﬁnances in one program—which is handy, considering that the two are invariably intertwined when you’re starting out. Of course, the two records are as separate as you 18

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If you are running a more complicated home ofﬁce, you will probably want to purchase a business-owners policy. One designed for home-based businesses may cost from $150 to $300 annually. Other policies that cover any kind of business—in your home or in a separate space—usually cost $200 to $2,000, depending on what’s covered. The best place to start shopping for a policy is the company that issues your homeowners or renters policy, for two reasons: You may get a discount if your business policy is with the same ﬁrm, and you may eliminate any argument over distinguishing between home and business property—and who is responsible for what—when you make a claim. Business-owners policies cover business property and liability—just as an extension on your homeowners policy would. But the business-owners policies also cover such contingencies as damage

to your equipment caused by power surges and loss of income if you can’t do your job because your equipment breaks down or your ofﬁce is destroyed. Computer riders in business policies may cover damage to a computer and lost business caused by a hacker attack or virus, as well as the cost of buying new software, reprogramming your computer, and re-creating data. (Such a rider is often more cost-effective than standalone hacker insurance, which may cost $30 to $40 per year for just that limited coverage.) Even the most-comprehensive business policies don’t cover two important risks: worker’s compensation and business liability (often known as errors and omissions or malpractice). Finally, as your business and your investment in technology grow, don’t forget to increase the limits of your coverage as necessary.

want them to be. You can even pay yourself, and the Home part of the program will automatically update your personal accounts from the Business part. Quicken 2000 Home & Business easily handles all the routine business bookkeeping chores, including checking, invoicing, and even basic payroll and Schedule C tax functions. You can examine your business’s spending habits, pay your bills online, and even accept payments for online invoices via a deal with online payment company PayPal, which provides a secure method for sellers to send invoices and collect payment online, while giving buyers credit-card security and the ability to use a single account to pay multiple online vendors. So instead of waiting weeks for 19

PRACTICAL TECH FOR YOUR BUSINESS

the check, you could have your money in a matter of hours (depending, of course, on how fast the other person decides to respond to your online invoice). The Quicken product also includes links to Web sites that discuss various small-business issues, such as the nolo.com legal site. These handy links provide basic but critical information on employee relations, contracts, and other potential hazards for small businesses. Intuit’s other two products are QuickBooks and QuickBooks Pro, which do away with the personal ﬁnancial software but are far more able to keep up with your growing business than the Quicken 2000 product. Intuit recommends that Quicken 2002 Home & Business be used for businesses with no more than four to six employees. After that, you’ll need QuickBooks or QuickBooks Pro (described in Chapter 4). For now, the Quicken product will be enough to get you up and running, and all the data will transfer easily to QuickBooks when the time comes. Microsoft Money 2002 Deluxe & Business approaches personal ﬁnance from the same philosophy as Quicken. The Money product has better customer contact and management tools and better employee tracking and payroll information—even to the point of tracking your employees’ stock options, if you offer them. However, invoicing, tax preparation, project tracking, and estimates preparation are better in Quicken, as is the upgrade path for when your business grows beyond your ﬁrst computer. Both products offer extensive customer contact and databases, which are essential for maintaining the kind of relationships necessary to your business, and are far superior to anything you could do with Outlook’s contacts management. Both products also offer Web sites and subscription rates for continual updates of the software, as well as newsletters and other business information. For the nominal monthly fees—no more than $10 a month—these subscriptions are worth the price. Overall, I recommend the Quicken product, but the ﬁnal decision is ultimately yours. Because bookkeeping

THE ADVANTAGES OF MICROSOFT MONEY.

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is critical to the health of your business, it’s worth your time to ask around, test-drive these products, and decide which piece of software suits you better. THE VISUAL SIDE OF BUSINESS Two more pieces of software, although not essential, can save you time and effort when it comes to marketing your new business. The ﬁrst software program I recommend is a page-layout product, either Adobe’s PageMaker or Quark’s XPress. Both are fairly simple to use, and both can be used to create attractive ﬂyers and advertisements that you can save to disk for shipment to your favorite copy store or newspaper, or print out and mail yourself. You can also translate your new advertisement into a ready-made Web page with just a few clicks. QuarkXPress has a slight lead as the industry’s standard, especially on the Mac, but both products are widely used. The basic versions of these products cost about $850 for XPress and $450 for PageMaker, and come with a vast array of fonts, graphics, and templates that are probably sufﬁcient for most businesspeople. Finally, if you want to use a lot of photos or images with your business—product shots, customer testimonials, and icons—you’ll need Adobe’s PhotoShop. Sure, you can import an image directly from a digital camera into XPress or PageMaker, but PhotoShop makes the process much easier. And you’ll be able to easily manipulate your photos—cropping them, changing the contrast, enlarging and saving them onto your computer. The basic version of PhotoShop costs about $600. Keep in mind that these last two products are unnecessary for any business other than those involved in design or publishing. However, between XPress or PageMaker and PhotoShop, you can save hundreds or even thousands of dollars in professional design fees, and ensure that the ﬁrst marketing efforts of your business are exactly what you’re looking for. If you have doubts about your ability to design your own marketing materials, you might want to outsource that task, at least initially. You could employ a designer to create a logo and other marketing materials and pro21

PRACTICAL TECH FOR YOUR BUSINESS

SPEED: The Limits Like storage capacity, a computer’s connection speed has its own measurements. The rate of data ﬂowing through a network—either between computers or from a computer to the Internet—is measured in bits per second. Remember, bits are the ones and zeros of binary code. Transmission speeds are ﬁrst measured in kilobits—1,024 bits. Cell phones manage around 14.4 kilobits per second (kbps)—a little less than a

kilobyte of data—while a dial-up modem handles 56 kilobits per second, or roughly 7 kilobytes—enough for a couple of paragraphs of text every second. An average DSL line can handle 256 kbps. At the T-1 level, we start measuring in megabits per second—1,024 kilobits per second. A 5-megabit line, one of the fastest lines commercially available, can download the text of this entire book in about two seconds.

vide you with appropriate ﬁles that you could then tweak as necessary, with the appropriate software, until a major design overhaul is required. You’ll still save money over the long run. And one last piece of advice on software: Delete or hide all the games that came with your computer, such as Solitaire or Minesweeper. You’ll thank me later.

Getting Plugged In Now that you have all this software, you’ve turned your computer into a valuable business tool. By getting online and hooked up to the Internet, however, you can increase that value exponentially. How? With information and communication. The small-business resources available on the World Wide Web are impressive—everything from tax information and legal help to professional contacts and research assistance can be had online (see page 24 for a list of sites that are of particular interest to entrepreneurs). You can also use the Internet to see what other small businesses in your ﬁeld offer—or even check up on the local competition. Then there’s communication. E-mail can be immensely valuable to your business. Your e-mail address 22

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will make it easier for not only your suppliers and partners to reach you, but also your customers—the most important people in your business. Not having an e-mail address is, not to be melodramatic, unthinkable in today’s business world. YOUR OPTIONS To get online, you’ll need an Internet connection. There are three basic ways to connect:

This is now the old-fashioned way to get online. You plug your everyday phone line into your computer and, with a few mouse clicks and perhaps a minute’s worth of dialing, you’re online—and unless you have a second phone line, people trying to phone you get busy signals or voice mail every time you go online. Dial-up speeds have peaked at 56 kilobits per second (kbps).

DIAL-UP MODEM.

Tech Terms Internet service provider: a company that, quite simply, provides Internet service to homes and businesses. In addition to independent ISPs, phone and cable television companies have started ISP branches to better serve residences and businesses.

DIGITAL SUBSCRIBER LINE (DSL). This is a special line that the phone company or Internet service provider installs in your home or ofﬁce. With a single DSL line, you can simultaneously use multiple phone lines and be online. You can get speeds of up to 512 kbps with a DSL line, but the rate at which your data will ﬂow is slowed down if you’re also on the phone or if multiple users in the ofﬁce share the same DSL line.

The same cable lines that give you 500 boring cable channels can also give you impressively fast Internet service. Speeds can top 2 megabits per second (mbps), but only if you’re the only one using that line— and I do mean the only one. Your entire building or entire residential block could be hooked up to the same cable, and you all have to share—that’s just the way the cable company has things set up.

CABLE MODEM.

DEDICATED LINES (T-1). If your ﬁrst ofﬁce is in a dense commercial area, you should probably talk to your phone company about setting up a dedicated high-speed line, especially if you envisage expansion within six 23

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RESOURCES: Online Entrepreneurial Aids The Internet can be an immense resource as you set up your business. Here are some popular Web sites designed to help you get off the ground and ﬁnd the information and services you need. ■ Small Business Administration (www.sba.gov) ■ The SBA’s Online Women’s Business Center (www.onlinewbc.gov)

■ ■ ■ ■ ■ ■

Microsoft’s bCentral (www.bcentral.com) Oracle’s small business suite (www.oraclesmallbusiness.com) Quicken’s small-business page (www.quicken.com/small_business) Brint (a business information site; www.brint.com) Entrepreneur.com Smallbusinesscomputing.com

months to a year. Dedicated high-speed Internet service is covered in more detail in Chapter 3. If you need service for yourself but have no other employees, I recommend either a DSL or cable modem. If you’re constantly checking e-mail or Web sites as part of your job, dial-up modems don’t give you the immediate connectivity you’ll need. For example, if you have a bid out on eBay or another auction Web site, dialing up to view it each time may drive you batty. Choosing between DSL and cable depends not only on your expansion plans but also on the availability of various services in your neighborhood or ofﬁce building. My wife works from home as a freelance health journalist, and within a few months of starting out on her own, she got the dial-up blues. We checked to see whether DSL was available in our residential neighborhood and, to my surprise, it wasn’t. However, a cable provider did offer high-speed Internet access, so we switched our TV service as well as our ISP. If you do have both services available, here are a few hints on choosing. Cable is faster, to be sure, and works well if you work during the day from your home, because most other users are then at their ofﬁces. At night, however, you may experience slower service; you may at times even feel as if you have a dial-up modem again. DSL, while somewhat slower than cable, doesn’t get nearly as bogged down during busy hours and it 24

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provides far more consistent service. If you’re in a commercial ofﬁce building or even at home, DSL is probably the better initial option. Prices between the two services shouldn’t vary much. In major cities and suburban areas, you should be able to get either cable or DSL Internet service for no more than $50 a month. Any higher than that is a rip-off. Because most neighborhoods have multiple high-speed providers, not just the phone or cable company, it’s a good idea to do your homework—both online and off— in order to get the best deal. Remember, though, that signing on with another company could mean that you’d have to switch either your phone service or cable TV provider to it. Competition for your business is ﬁerce, so don’t be afraid to haggle a bit. Your sales representative should have enough leeway to give a little. One more note about cable. Cable high-speed Internet service is generally a poor choice for the rapidly expanding business because there’s no upgrade path. Once the cable is hooked up to a computer, that’s it. You can split off the cable to add more computers, but with each addition you’re progressively degrading the service. If 20 computers use the same cable service, you’re better off just getting 20 dial-up lines installed—getting online could be that slow (depending, of course, on how often those 20 users are accessing the Internet). Many DSL providers, however, also sell dedicated lines—that is, one line to one computer—and if you’re already a customer of theirs, they can provide discounts for additional lines or a DSL line with higher bandwidth. All this is something to think about as you plot the course of your expansion. Your phone company, cable company, or other service providers may try to sell you various other services. In theory, a single company could handle your entire telecommunications needs, and all you’d need to worry about is one bill. In practice, that’s not a good idea. In particular, you should be careful about allowing your cable company to sell you telephone service. Although it’s technologically possible for you to receive phone service through your TV and Internet cable system, cable 25

PRACTICAL TECH FOR YOUR BUSINESS

lines are too easily overwhelmed in peak-usage times, and if your cable goes out, you’ve just lost your entire contact with the outside world. And remember that no single company currently can provide cable television, high-speed Internet service, phone service, and wireless phone service. You will have multiple bills no matter what you do. In general, it’s a good idea to leave the cable line attached to your TV, and, if you’re on your own without a strong DSL alternative, to your computer as well. Otherwise, you should aggressively compare prices among the various companies and never put all your eggs in one basket.

Thinking About Peripherals Of course, a single computer does not an ofﬁce make. After your business begins to grow, the trips to Kinko’s will probably become more and more frequent. If you can afford them all right off the bat, individual machines that print, copy, scan, and fax will give you a lot of ﬂexibility and efﬁciency. In the discussion here, I’ve highlighted the critical considerations in choosing the equipment. When you go shopping, however, you’ll have to decide which other bells and whistles are worth your money. Multipurpose machines are discussed after the single-purpose ones. PRINTER If you do a minimal amount of printing or only occasionally need high-quality printing, you can probably get away with the $49.95 printers found at your local Radio Shack or Circuit City. (You might even get a deal for a free printer wherever you purchase your computer.) These printers tend to print an average of only ﬁve to six pages per minute, however, and the print quality hovers between 300 and 600 dpi. (By way of comparison, this book is printed with a degree of precision equivalent to about 600 dpi.) These printers are perfectly acceptable 26

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for letters, invoices, and other straightforward, day-today use. For the high-quality stuff, however, you’ll still be heading to Kinko’s. On the other hand, if you’re going to do a lot of high-quality printing, including your marketing work, as described earlier, you will need a better printer. A printer that can do 12 to 20 pages per minute at resolutions of 1,200 to 2,400 dpi will cost between $200 and $400, depending on the brand you choose and the speed, capacity (the size of the paper tray and the number of pages the printer can hold in memory at one time), and quality you need. I highly recommend a faster, ﬁner printer for artistic or scientiﬁc users, who need the highest quality in their everyday work. COPIER When it comes to pages per minute and resolution, a copier has much the same output as a printer. You can get a small personal copier for $150 or less, but don’t count on more than six pages per minute. Midrange desktop-size copiers will cost $350 to $500 and give you copy speeds of up to 30 pages per minute—not very fast compared with the big, stand-alone copiers but good enough for home. Anything more advanced will require a visit from your Canon or Xerox sales representative, and is beyond the scope of this chapter.

Tech Terms dpi: stands for dots per inch. This is a measure of resolution—that is, clarity or crispness—in any image. The more dots per inch, the higher the resolution. Laser printers commonly produce 600 dots per inch, or a total of 360,000 dots per square inch. For manipulating photos, 1,200 to 2,400 dpi is preferable, especially if you plan to zoom in on the image without loss of resolution.

SCANNERS Scanners are devices that take documents and images and transfer them to digital files on your computer. Many small businesses won’t even need scanners, although they’re becoming increasingly popular with home users, many of whom put almost anything they can get their hands on (vacation photos, for example) into their scanners. Still, a scanner could be important for the occasional logo, chart, or image to go along with your business documents. Low-cost scanners—those that have 300 dpi resolution and minimal color, and take a long time to transfer images—can cost as little as $75, while a top-of-the-line unit with 2,400 dpi, thousands of colors and shades, and a four-second image-to-computer 27

PRACTICAL TECH FOR YOUR BUSINESS

time can cost $500 or more. Again, weigh your usage pattern, your needs, and your cash carefully. (The typical copy shop also has scanners, by the way.) FAX Faxes have become fairly standardized and straightforward over the years. Even small home-ofﬁce faxes now use plain paper instead of that atrocious waxy thermal paper. A simple plain-paper fax can be had for as little as $79 or as much as $300. When buying a fax machine, you should consider its transmission speed as well as its memory capacity. Most faxes transmit at 9.6 kilobits per second—enough to send a page every 15 to 20 seconds. Newer, more expensive faxes transmit at 14.4 kilobits per second, while the most expensive machines send pages at 33.6 kilobits per second—enough to send a page every four seconds or so. Unfortunately, models featuring even the 14.4 kbps speeds start at about $400. Thus, unless faxing is absolutely critical to your business, you can easily settle for 9.6 kbps. The other important function is memory. You should make sure that your fax machine has enough memory to store at least 20 pages of faxes—around 512 kilobytes of storage. An “out-of-paper reception” feature—which lets the machine store faxes in memory when you run out of paper—is handy as well, although a fax that has such a feature will cost $250 to $300. Fax use has steadily declined as e-mail has taken over many of the functions of the fax. Thus, for now, your small ofﬁce probably just needs a fairly inexpensive model. Of course, there are always alternatives. A number of Web sites, such as eFax.com, offer fax services that you can take advantage of without needing a fax machine. For a monthly fee, around $10 or so, these sites will give you a fax number and an ID code to permit you to receive faxes, view them online, and download a copy to your own computer, which you can then print out. You can also upload a copy to the Web site, which will send the fax on to the appropriate fax number for a perpage or per-minute phone charge. 28

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Some businesses prefer to have separate fax telephone lines, even during the at-home or in-garage phase of business life, especially if they wish to avoid annoying clients with a frequent busy signal or the automatic pick-up feature on their fax machines. That’s ﬁne—they run about $50 for installation and around $15 to $30 a month for service, depending on your carrier. But again, keep in mind that e-mail can accomplish far more than faxes can these days. Whenever you need to send or receive a fax, you can simply switch out your regular phone line into the fax machine. Or, if you have DSL, you can keep both your phone and fax plugged into the same line, and program your fax machine to pick up if it receives a fax transmission. MULTIPURPOSE (ALL-IN-ONE) MACHINES If you don’t plan to expand your computing environment signiﬁcantly—we’re talking no more than a halfdozen computer users through the life of your business—you might want to consider a multipurpose device, which will combine your printer, fax, scanner, and copier. These devices can start as low as $150 and range up to $600, depending on print/scan/copy quality, faxing memory, pages per minute, and dpi resolution. Keep in mind that even the more expensive multipurpose machines will copy at only 12 pages per minute. It may be tempting to automatically snap up the multipurpose machine, and for the single-person ofﬁce, it’s not a bad idea. Any more workers than that, though, and you’ll end up junking your investment relatively soon. HANDHELD COMPUTER One addition to your high-tech ofﬁce that you may want to consider is a handheld computer like the Palm, Handspring, or Pocket PC. When these little wonders were introduced in 1995, they took the world by storm. Ask any handheld users about their devices, and chances are you’ll get high praise, maybe even a few rhapsodic odes. These devices, which measure about four inches long, three inches wide, and half an inch thick, weigh about four ounces. Using a stylus and a touch-sensitive 29

PRACTICAL TECH FOR YOUR BUSINESS

screen, you can access phone numbers and addresses, schedules, to-do lists, notes and memos, and even your e-mail—and all this is synchronized with your desktop computer. For example, if you log a new business contact into Microsoft Outlook, that information will be sent to your handheld device the next time you connect it to your PC. Similarly, if you make a note to yourself on your device about a future appointment, the data will appear on the calendar on your PC after synchronization. The handheld is a great way to take a piece of your ofﬁce with you when you can’t be there. More advanced models also include wireless services, checkbook registers, and even e-book readers. Handheld devices usually cost $149 to $249 for the basic Palm and Handspring models, and up to $500 and $600 for the advanced Microsoft Pocket PCs. Most beginners are happy with the Palm or Handspring, even though both still require learning the Grafﬁti shorthand writing technique (fortunately, it is easy to learn). Besides, it’s a good idea to get used to using the device before spending big bucks on the more advanced models. Again, when it comes to peripherals, think seriously about what you’ll use and, even more important, what you won’t. Think also about how your business might expand and how your potential purchases will ﬁt in. A $49.95 printer won’t be able to handle more than one user—two if you’re lucky and don’t print much. But a $300 printer may still be around when you have a dozen people using it.

Cost Breakdowns THE BUDGET OFFICE This is enough to get you started, though expansion beyond this initial setup will be tough. Recommended for the freelancer or other solo operations. Computer (with Ofﬁce XP and antivirus) All-in-one printer/fax/copier/scanner Handspring Visor Quicken or Money software 30

$999 $180 $250 $80

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Paper, ink cartridges DSL service Software subscriptions Total Initial Cost Monthly Costs

$20/month $50/month $10/month $1,589 $80/month

THE EXPANDABLE OFFICE This is the top-of-the-line setup, probably necessary only for people with rapid expansion plans and a taste for creating their own marketing materials. Even for ambitious and well-funded entrepreneurs, this is probably a bit much—but if you spend any more than this, you’re working in a Mac environment, running a research lab, or spending too much. Computer (with Ofﬁce XP and antivirus) Fax Scanner InkJet printer Personal copier iPaq Pocket PC Quicken or Money software Adobe PageMaker software Adobe PhotoShop software Paper, ink cartridges DSL service Software subscriptions Total Initial Cost Monthly Cost

$1,300 $200 $200 $250 $300 $600 $80 $200 $250 $40/month $50/month $20/month $3,490 $110/month

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2

Your Business on the Web ob LeGrow had his ﬁrst job as a wedding photographer in 1980. It was never meant to be a full-time job, but rather an extension of his passion for photography that, as he put it, “let me buy the big-screen TV and the other little things in life.” He and the three other photographers working with him put in 35 to 40 weekends a year in northern New York, New Hampshire, and LeGrow’s home state of Vermont, one of the most popular places in the U.S. to get married. The business purred along nicely for many years, but LeGrow became increasingly frustrated by having to repeat the same information to every single customer who phoned him. Finally, in 1998, he decided that he needed to place all the pertinent information on a Web site. “I liked the name weddingphotographs.com, but dot-com was gone,” LeGrow said. “Dot-net was available, though, so I grabbed it.” With the help of his son, who works at a Web-hosting company in Arizona, LeGrow purchased weddingphotographs.net and immediately found he had a whole new outlet for business. “I had really wanted to use the site as a tool. It’s a fairly static site, but everything you want to know is right there. When people call, I can just send them to weddingphotographs.net. “But it really brought a whole new set of customers to us. If you go to any search engine and type the words ‘wedding,’ ‘photographs’ and ‘Vermont,’ we’ll probably be at least in the top ﬁve results, if not number one,” he added. For the record, it’s more like the top ten, but it’s there—an important outreach to Web users who might

B

Summary ■ ■ ■ ■ ■ ■ ■ ■ ■ ■ ■

Homesteading on the Internet Getting Your URL How to Register Finding a Host What Will Your Web Site Do? A Web Designer? A Web Master? Do-It-Yourself Seeding Your Business Keep It Fresh Cost Breakdowns

33

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms portal: a large Web site that offers many services in one place. Yahoo!, for example, offers Web searching, news and information, e-mail, stock quotes, auctions, classiﬁeds, and more. Other examples are Excite, Lycos, and Netscape.com. MSN and AOL also have Web portals, though more for their own dial-up service customers than for the typical Web surfer. Web address: simply put, a Web address is where your Web site is located on the Internet. A Web address is commonly known as a URL, which is short for Universal Resource Locator; a URL is what your customers will type into their browser to access your Web page. However, the actual address that the linked computers of the Internet use to ﬁnd your Web site is a series of 12 numbers, set apart in groups of three. Typing in that series of numbers in their browsers would also allow customers to access your site, much like dial-

ing a phone number. URLs were created to make that process easier for everyday Internet users. search engine: a special Web site, or part of a larger Web site, that customers will use to ﬁnd your Web page and others that provide similar products or services or discuss similar topics. (To use a search engine, type the subject or a key word of the topics you’re seeking and hit the return key. A list of pages with possible relevance to your search will then appear.) Popular search engines for the World Wide Web include Google and MSN Search—typing “search engine” into a search engine should give you a list of the most popular ones currently in use. You can also add an internal search engine to your Web site, such as the one used on Amazon.com, so that customers can search for speciﬁc information. (For more on this, see page 126.)

not otherwise even ﬁnd LeGrow’s business ofﬂine. LeGrow also makes judicious use of links to and from other Web sites. He’ll cross-link with any weddingor Vermont-related Web site as long as there isn’t a fee for doing so. (Some larger sites require smaller ones to pay in order for the larger site to promote them.) “We have plenty of business to go around, and I just don’t think fees for links are that useful, considering the trickle of trafﬁc you get from them,” he said. A look at LeGrow’s Web site shows a very simple design, but there are internal links to all kinds of information about his business: his experience, rates, packages, album information, sample photos taken by LeGrow’s photographers, and a wealth of wedding infor34

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mation and local Vermont links. There’s also a link to LeGrow’s e-mail. He used to have an e-mail form (a Web page with ﬁll-in-the-blank spaces for names, addresses, and a message), but he took it off the site when the amount of e-mail dropped—people found it easier to send questions through a simple address link. “I think forms can be a little confusing for ﬁrst-time users. Plus, some people don’t like putting their contact information in there,” he said. “I have no interest in calling people up and trying to sell to them, anyway.” LeGrow pays $20 a month for the Web-site hosting and another $50 or so a year to reregister the name. Moreover, LeGrow said he has greatly reduced his postage costs. “I think every business needs at least a page up there on the Web, even if it just lists a mailing or e-mail address or a phone number,” LeGrow said. “If you can get all of your basic information out there, you’ll really help the customer out.”

Homesteading on the Internet So far in this book, I’ve tried to stay away from telling you what to do—the idea here is to provide information so that you can make sound decisions on your own. Well, that’s about to change: Get a Web site. Now. The cost-benefit ratio here is as close to a nobrainer as you can get in business. A basic Web site through a major portal like Geocities or Angelﬁre.com is free, and a Web address (also called a URL) with your business name on it, such as mikesbarandgrill.com, can cost as little as $35 a year. Moreover, creating a Web site can be almost as easy as creating a document in Microsoft Word. The marketing beneﬁts are immense. Your site can turn up in major Web search engines, such as Yahoo! or Google, giving people around the globe access to information about who you are and what you can do. I cannot imagine a business that would not beneﬁt from this kind 35

PRACTICAL TECH FOR YOUR BUSINESS

of exposure. By including an e-mail address on the Web site, potential customers are just a few clicks away from talking directly to you. Through images, they can see your establishment and determine whether it’s a place they’d like to go, or view your product line quickly and easily. You can quickly inform people about special offers, answer many frequently asked questions all at once, and draw people to your door. The combination of price and content ﬂexibility is unbeatable. Compared with static newspaper advertising or expensive radio and television spots, the World Wide Web will be your business’s best friend. But keep in mind that for most businesses for the foreseeable future, the Internet won’t be the sum total of your business—that’s where all the failed dot-coms of the 1990s went wrong. A Web site is a complement to your business, but it cannot and will not provide a crutch if your real-world venture isn’t doing as well as you’d like. If you sell through your Web site and ﬁnd that your Internet sales are starting to surpass your storefront sales, consider yourself lucky—and then think hard about why that’s happened and work to translate your successes back into your bricks-and-mortar business. The Internet is far too ﬁckle to be relied on for consistent growth and revenue. However, as a companion to your main business—as a marketing tool and outreach to customers—it is unsurpassed.

Getting Your URL One of the ﬁrst things you should do when you start your business is to pay for the rights to your name on the Internet. As some companies and individuals have found out the hard way, there are plenty of so-called cybersquatters who will buy up preferred and popular names, like plumber.com or weddingplanner.com, and then sell them to others at highly inﬂated prices. It’s also good to link your Web pages to that URL as soon as possible. The alternative to having your own URL—a Web address at Geocities or Angelﬁre.com— just appears less professional than having your very own 36

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name. In addition, a name that closely mirrors that of your business is far easier to remember than a Geocities name full of subdirectories and backslashes. When it comes to getting your own Web address, however, be prepared for disappointment—odds are, you won’t get your ﬁrst choice. Wedding photographers, for example, are probably quite disappointed by Bob LeGrow’s quick action in securing his URL. Unless you’re in a unique business or have a unique business name, you’ll ﬁnd that getting the URL you want is going to be a tedious process. Be ﬂexible and creative, and keep in mind that the name should be intuitive and easy to remember—and to spell!

Tech Terms domain: a domain is represented by the ﬁnal extension on a URL. For example, .com and .net are top-level domains. Individual countries have secondary domain names; Britain’s domain, for example, is .co.uk.

How to Register Your Business Name Registering the name itself is easy. You simply go online to one of the many authorized registrars that handle new Web addresses for the Internet. Some of the more popular registrars are Network Solutions/Verisign (www .nsi.com), America Online, and Registrar.com. A Web search will turn up a number of these services, and the Internet Corporation for Assigned Names and Numbers (ICANN), a nonproﬁt group that oversees the electronic address system, maintains a list—at www.internic.net— of all the registrars it has accredited. On average, you can expect to pay $35 to $70 a year for the rights to your Web address. These prices may include various offers for page holders and redirect services—basic pages that give you a place to promote your business while you build the rest of your site, or that redirect Internet users to the rest of your Web site, which may or may not be within the same domain as your URL. For example, you could register mikesbarandgrill.com, but have that site redirect customers to your old Geocities site, or link to pages on the previous site while you work on the new one. There are a number of available Web address extensions—the three letters that follow the actual name 37

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms source code: the computer code that generates the Web page you see online. Your Web browser serves as a kind of translator, turning the source code into text and images. Web host: a computer connected to the Internet that holds the information needed to generate a speciﬁc Web site. The computer is usually a server (see page 62 of Chapter 3), although some people host their Web sites on their personal computers. The computer, server or not, must have a constant connection to the Internet as well as a static IP address. static (and dynamic) IP address: the series of Internet Protocol numbers that lets the major hubs of the Internet know where a speciﬁc computer is located. A static address is for computers constantly connected to the Internet; such addresses are reserved for servers as well as for per-

sonal computers using DSL, cable, or faster high-speed connections. (A dynamic IP address is commonly used for dialup customers—the series of numbers changes each time the computer is connected to the Internet.) hits: Each mouse click that a user makes on a given Web site, whether to move elsewhere within the Web site or to request a function of the Web site, is called a “hit,” because it stands for a separate request from the server hosting the Web site. When compared with the number of visitors to a site in any given day, week, or month, the average number of hits indicates to the Web owner how many clicks each visitor makes on a Web site. By looking at the number of hits on each page of your site, you can determine which pages are popular and which pages might need updating to be more useful to the reader.

and the “dot.” The most popular is the .com extension; the others are .org, .net, .gov, .mil, and .biz. The .org extension is generally accepted as a nonproﬁt extension, while the .net extension is more widely accepted as one for businesses. The .gov and .mil extensions are for U.S. government and military Web sites, and thus are off limits—you can’t even register for one of these names. The .biz extension was introduced in 2001, and could well be an interesting alternative to .com. However, .com is the best-known extension in the world, and people trying to ﬁnd your Web site are likely to simply type your business’s name, followed by .com. (This, by the way, is the reason why one of the most-accessed pornography Web sites is whitehouse.com. This Web address 38

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was purchased by a particularly shrewd entrepreneur who ﬁgured that at least some of the people who reach the site by mistake will be sufﬁciently intrigued to surf through the rest of the site. The real White House Web site is whitehouse.gov.) You should be very wary about buying a certain Web address if the .com version of it is already taken. Even if you buy .biz, .org, or .net, you’ll still ﬁnd that many people will look for you at .com. It’s better to change your initial URL idea than to end up sending prospective customers to another business across the country—or worse, across town. Your best bet is to ﬁnd a unique name, and then, at the very least, register the .com version of it. If you can afford it, you should also register the .net, .org, and .biz versions as well. That will not only protect your URL from cybersquatters, but will also alleviate any confusion in the marketplace. You can set up redirects from the other URLs to your .com address.

Tech Terms e-commerce: short for electronic commerce. Generally applied to sales transactions conducted via Web sites, the deﬁnition is slowly expanding to include business conducted via mobile phones and handheld computers as well.

Finding a Host for Your Web Site Let’s get ahead of ourselves and assume you have a design and possibly even the source code necessary to create Web pages (these necessities will be covered shortly), and you have your Web address. Now you have to ﬁnd a host, a computer where you can store your Web pages. This computer needs to be connected to the Internet, and needs to have a static IP address. It sounds complex, but really isn’t. You can choose from the following ways to acquire a Web host: Your current ISP probably has Web hosting services, and for the beginning Web site, the cost for those services is relatively inexpensive. For as low as $20 a month, most ISPs will host about a half-dozen Web pages per subscriber, allow you access to edit the contents any time you like, and handle a decent amount of hits. As you grow, you can work with your ISP on larger packages that include e-commerce capabilities. (Chapter 5 discusses the 39

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms spam: a term used to described bulk e-mail advertisements sent to thousands, even millions, of e-mail addresses at the same time, especially if those e-mails weren’t requested by the individual users. Because such e-mails can often clog inboxes, spam is despised as an invasion of privacy and a general pain in the neck.

star-crossed notion of e-commerce.) Many registrars also host Web sites, in exchange for the same fees. Yet there’s a way around even these fees. DotEasy.com will register your domain name for you for a few dollars less than the usual fees (from $15 to $25), and then host your site and an unlimited amount of e-mail at no charge. The catch? Unlike other services, such as those of Register.com, which place unsightly banner ads right on your business’s Web page, DotEasy.com will simply e-mail you offers from its advertisers once a day, most likely regarding products for use in your small business. Is it a good business plan? Hard to say: Targeted e-mails have been proven to be more effective than banner ads at making sales, but for you as a DotEasy.com customer, it’s quite easy to simply delete your daily spam and get on with the rest of your relevant e-mail. Services like DotEasy.com are a great way to get your business up and running on the Web without much hassle. But whether you’re paying $40 a month or nothing, there are a few things you need to look out for. Make sure that the Web hosting plan you sign up for is ﬂexible—if you’re allowed only 10 gigabytes of trafﬁc per month, that may be enough for your first few months on the Web, but could be limiting as your site gains popularity. You should be able to easily upgrade your plan with minimal additional costs and fees. You should also have regular access to your Web site in order to make changes to the content. Some hosts allow only limited changes, measured either in megabytes or in speciﬁc times you can access your site. Settle for nothing less than 24/7 access.

What Will Your Web Site Do? Now that questions of name and location are settled, you need to think about what you want your Web page to say and do. 40

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RESOURCES: All-In-One Web Hosts Doteasy.com is only one of a number of Web hosts that also handle URL registration. A recent survey by CNET.com proﬁled four other all-in-one hosts: 1. 2. 3. 4.

www. Catalog.com www. DirectNIC.com www.NameZero.com www.Stargate.com

OFFER THE ESSENTIAL ELEMENTS While the content on your site depends largely on what kind of business you operate, there are a few things that every good Web page has: AN INTRODUCTORY PAGE. This should describe your business—what you do, whom you serve, and what you can do for the reader.

Let your customers know exactly what you can do for them and what it will cost. For a handful of goods or services, you can devote a page to each. A broader offering will probably require groupings of products by category onto a single page, or you’ll have too many pages to manage and could use up the amount of storage you’re allowed by your Web host. Images are important here; customers will expect to see what they’re getting. DETAILS ABOUT YOUR GOODS AND SERVICES.

FREQUENTLY ASKED QUESTIONS (FAQS). If you ﬁnd that your bricks-and-mortar customers are asking the same questions whenever they visit or call, a FAQ on your Web site can be informative for them and save time for you. CONTACT INFORMATION AND LOCATION. Be sure to include your address, phone numbers, and e-mail address; you want to ensure that customers can reach you however they prefer. Rather than adding you to their Rolodex, they may just bookmark your Web page to save your 41

PRACTICAL TECH FOR YOUR BUSINESS

Tech Terms HTML: stands for Hyper Text Markup Language; this is the programming language used to create Web pages. As far as programming languages go, HTML is one of the easiest to learn.

contact information on their Internet browser. How do you want your customers to interact with you? If you’re comfortable with managing multiple email addresses, you can create a number of different addresses, so that, for instance, sales questions will go to [email protected], and customer service questions will go to [email protected]. It’s a pretty good way of organizing your correspondence—as long as you remember to check each address frequently. If you want, you can include an e-mail form on your Web site instead of simply choosing an e-mail address link. The form offers ﬁll-in blanks for the user’s questions, and often asks for the user’s name, e-mail address, and other information. Such a form is very easy for novice Web surfers to use, but as Bob LeGrow’s example shows, some people don’t like the regimentation or some of the privacy-reducing requirements of e-mail forms. In the end, it’s up to you. A good compromise would be to include the form, but make all the blanks optional except for a return e-mail address. OFFER SMART DESIGN Another element to keep in mind as you build your Web site is consistency of design. If you are already using a logo, business cards, and signs in your business, your Web presence should reﬂect or at least complement these preexisting designs. If your business card, for example, has green script, a light blue background, and a picture of a leaf, your Web site should have those same elements. If you don’t have a consistent brand scheme, creating a Web site will provide a good opportunity to seriously consider how you want your business to look, both online and off. Once you have your branding scheme in mind, it’s time to sit down and design your Web site. Do not do this on the computer! Professional Web designers do not simply sit down and start coding HTML right off the bat, and neither should you. Get a pencil and paper and block out your pages. Write your introduction. Then gather your photographs, pricing data, marketing info, and everything else into a pile, and then put the pieces

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together on paper to see what ﬁts best where. How many pages should you have? That depends on how much information you want to give people who stop to view your Web site. The natural inclination is to post everything, but that’s not necessarily the best thing for you to do. The more information you post, the more you’ll likely have to update your Web site; updating will cost additional time or money, depending on whether you or someone else does it. It pays to keep things simple. In addition, numerous studies have found that the typical Web surfer has a pretty short attention span. It’s best to keep things concise or your visitor may move on before thoroughly investigating your product or service. On a plumber’s Web site, a full-page essay on a drain snake will probably be nothing more than a waste of bandwidth for all involved. In addition, you’ll want to keep your pages relatively “light”—that is, in Web-speak, you don’t want them cluttered with all kinds of pictures and graphics. Those pages take a long time to download on dial-up Internet connections, which many people still use. Also, some features may not be supported (that is, viewable) depending on what Internet browser a visitor is using. Of course, there’s no one answer for how best to design a Web site. I suggest that you surf a great deal to familiarize yourself with what the Web can and cannot do. A look at small businesses similar to yours, as well as those in your local area, would also be helpful as you prepare to create your own Web presence.

Some Good Examples Let’s take a look at some small-business Web sites to give you an idea of how a basic, informative Web site is structured. All the companies mentioned, which have found the Web to be a good tool for advancing their business, happen to be based in the Buffalo, N.Y., area. CAR DEALERSHIP Mullane Motors, www.mullane.com: This Web site is for a dealership group that sells Chrysler, Plymouth, Dodge, 43

PRACTICAL TECH FOR YOUR BUSINESS

Jeep, and Chevrolet vehicles. Each new model of car gets a page describing its general features, while numerous used cars appear with pictures, stock numbers, general data, and prices. Note that the dealership doesn’t post prices for the new cars—probably a smart move that preserves its room for incentives or haggling. The parts page includes a quick parts-request form—an online e-mail form sent to the parts department—as well as contact information, while the service page contains a phone number, department hours, payment methods, and details about the auto services provided. A ﬁnancing page describes the various local and national banks that the dealership works with, along with an Internet Credit Form (another specialized, secure e-mail that is then fed into Mullane’s credit computers on-site for preapproval) and contact information. Finally, the “about” page gives addresses, hours, and maps for the group’s two dealerships in western New York, along with phone numbers and e-mail addresses. The site is very informative. I know exactly what kinds of new cars Mullane can sell me, as well as the exact speciﬁcations of the used cars on its lot. Yet all these pages are fairly run-of-the-mill, with no extra-special bells and whistles. Navigation is easy, and the company’s Five Star Award for Excellence graphic is tastefully yet prominently displayed on every page— a nice touch. FUNERAL HOME Brian K. Lewis Funeral Home, www.blewisfuneralhome.com: The URL is a bit long and the Web design basic, but the Web site for this funeral home is informative and helpful. The main page features the address and contact information for the business, as well as an e-mail address for owner Brian Lewis. The next page provides a list of services available, including funeral services, consultations, ﬁnancing, and other arrangements. The third page describes how the business helps customers on a personal level, which is an important addition, given the nature of the business. The fourth page is a link to Mapquest, an online map service, so 44

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that the user can see where the funeral home is located. This site has only four pages, but it’s a great example of what a basic Web site is, and what it can do. If you were looking for such services in advance of need and using the Internet to gather information, this Web site would probably pop up in a search engine, thus putting the funeral home’s name out there in an appropriate and subtle way. PET STORE Markheim Tropical Fish & Pet Store, www.wnybiz .com/markheim: You’ll note that this company decided not to get its own URL, but is instead part of the Western New York Internet Business Directory. Obviously, the pet store saved some money, yet it still has a decent URL and is part of a larger directory. The site itself is basically a one-pager, with location and hours at the top, a bit of company history, then a description of its specialties in birds, ferrets, tropical ﬁsh, and…ugh…snakes and other reptiles. Near the top, you also get links to a discount coupon for $5 off of any purchase of $30 or more, a map, a photo gallery of the various denizens of the shop, and a list of links to various animal care sites on the Internet. At the bottom are a number of links to unusual and amusing photos of animals. This simple site is slightly tongue-in-cheek—and slightly out of date—but very illustrative of what Markheim’s sells. The coupon is a nice touch, as it drives trafﬁc from the Web site to the front door. The links are also good in case the kids want a pet snake, because you can surf over to see just how to take care of the damn thing. ACCOUNTANT Arcara & Borczynski LLP Certiﬁed Public Accountants, www.abllpcpa.com: A great Web site, although the URL is confusing until you put the company name next to it and spell it out. It doesn’t exactly lodge itself in one’s memory and lends itself to typos. However, the site itself contains much information about the services this Buffa45

PRACTICAL TECH FOR YOUR BUSINESS

PRIVACY: What Will Your Policy Be? Most commercial Web sites have privacy policies. These began to spring up in 1998, as Web surfers started to receive more spam and to question how their personal information was being used. Privacy policies can be as simple as a single statement or a full Web page of caveats. My advice is to keep yours very

simple. A good privacy policy promises not to sell any information gathered on the Web to a third party, promises to send e-mail only when requested, and promises to delete any information on request of the customer. Check out your favorite Web sites to see what their policies are like, and then craft one that suits your business.

lo accounting ﬁrm provides, from audits and reviews to tax work and even new business start-up consulting. It also provides links to tax forms, charitable organizations, tax and accountancy organizations, and even some local Buffalo links, such as the newspaper and the Buffalo Sabres hockey team. There’s also a page for user comments, a Frequently Asked Questions page, and a news page that links to a password-protected bimonthly newsletter for the ﬁrm’s clients. This Web site is extremely thorough and informative, done with the Spartan precision one comes to expect from accountants. Seriously, though, it gave me an excellent idea of what this ﬁrm provides.

Hiring a Web Designer Building your own Web site is not for everyone. The easiest way to create your presence on the Web is to simply hire someone to build your Web site for you. Once you’ve drafted your ideas on paper, it’s a simple matter to hit the Yellow Pages and ﬁnd a qualiﬁed Web designer or ﬁrm to do the work for you. If you see a site you admire on the Internet, don’t hesitate to contact the design ﬁrm that created it; the Web site will probably credit the design ﬁrm. Web designers will work with you on the ﬁne points of your design, come up with alternatives, show you preliminary designs, and generally become the interior dec46

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orator of your site. Many Web design ﬁrms will even work with you on registering your Web address and ﬁnding a host for your site. Because learning HTML is fairly easy, there are plenty of Web designers out there—some good, others not. A background in graphic design, marketing, or advertising can help, but plenty of Web designers who lack these qualiﬁcations are still excellent at what they do. The best way to judge designers is to look at the sites they’ve already done. Any designer should be ready to show you a number of examples of his or her work on the spot. If you see a site that’s close to what you envision, that designer may be the one for you. You should also ask any and all designers you work with for customer references. If they’re any good, they’ll have a number of customers willing to brag about them. Some designers will help you with writing and editing the content of your Web site, while others will expect you to provide fully edited, ready-to-go copy. Work out this arrangement beforehand, and make sure that if you want help with your words, you can get it. Also, larger ﬁrms and some individuals are willing to help you come up with logos, business cards, and other marketing tools for your business. Accepting such a service may be very convenient, but be wary about Web designers who offer this service without a background in marketing and advertising, and make sure you see a number of proposals, plans, and cost packages before you sign off on anything. Before you make a deal with an outside Web designer, you need to keep a few things in mind: ■

■

Don’t let anyone sell you more bells and whistles than you need. At this stage, you’re doing nothing more

than taking out a complex advertisement and providing some e-mail addresses for potential customers to reach you. Unless your business requires it, you don’t need a special link to Weather.com to display the temperature in your particular city, nor do you need a stock ticker. Stick to your basic plan and don’t clutter up your site with useless stuff. Be sure to agree on a ﬁnal price tag for the project. If 47

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the Web designer charges by the hour (some do, some don’t), be sure to ask him or her to clear any overtime or additional charges with you beforehand.

Tech Terms webmaster: whoever maintains a Web site, regardless of whether he or she designed it. The webmaster updates information on the site, ﬁxes bugs, and responds to technical questions from Web surfers.

■

Be sure that the designer provides you with tools and the know-how necessary to make changes to your Web

site without having to contract with the designer again. By the same token, you should be able to call your hired Web designer at any time if there’s a problem with the site.

Do You Need a Webmaster? The Web designer can, if you so desire, also act as the webmaster, handling any customer complaints about the site’s design and updating the site as appropriate. This service, however, will require an additional contract that can, depending on the amount of updating you want to do, cost up to $100 a month. Thus, if you hire a Web design ﬁrm, it’s better to take over the webmaster duties yourself once the designers’ work is ﬁnished. Your Web design ﬁrm should be perfectly willing to show you the basics of updating the content of your site. Webmasters are also responsible for keeping the site up-to-date with regard to technical matters. The Internet and the tools used to access it are being constantly updated. As Microsoft and Netscape produce new versions of their Web-browsing software, some Web sites may need tweaking to enable new browsers to view them properly. Older browsers and new Web programming languages like ActiveX and JavaScript also may pose problems. If you contract with your designer or someone else to act as webmaster, that person will update these things automatically. If you don’t contract with anyone, chances are you won’t notice the difference—but a small percentage of Web surfers may have problems that they won’t bother to e-mail you about. Instead, they may just not visit again. If you keep your site relatively simple, however, you should easily avoid most of these pitfalls.

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Do-It-Yourself on the Web Perhaps you’re conﬁdent in your own abilities—or simply don’t want to hire someone to design your site. What follows is a quick primer on how to design and publish your Web site without going through a designer. Keep in mind, however, that unless you’re a practiced hand at HTML, your site simply won’t look as clean and professional as one designed by a pro. STARTING OUT WITH A FREE HOST As discussed earlier, portal sites such as GeoCities and Angelﬁre.com allow you to create your own Web page at no charge, either on your own or using their Webbased tools, and they will store the pages for you. These are little more than stopgap measures, however, because your Web address will be a very difﬁcult amalgamation of your business’s identity with your host’s URL—for example, www.geocities.com/mybusiness /index.html. That address is neither clean nor easy to remember. In addition, GeoCities and other free Web page services will litter your Web site with their own advertising. So why even bother with these services? Because for a ﬁrst-time webmaster, these sites provide some very good, easy-to-use tools for Web-site creation. You can choose from different fonts (styles of lettering), and various ways to create links and to display photos. If you have only a half-dozen pages of material, you can be up and running with just a day’s work. Granted, you won’t have topnotch, professionally designed Web pages, but they’ll be better than as if you tried to code HTML all by yourself, and the prompts and tools provided are fairly easy to work with. TRANSFERRING TO YOUR UNIQUE URL Once you have your Web site up and running at GeoCities or another site, it’s a simple matter to transfer the code to a different Web site—one with your own distinct URL. There are three steps:

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1. While viewing your Web site, simply go to the top of

your browser and click on the “view” menu, then on “view source.” A text window will pop up, displaying the source code for your Web page. Don’t panic—you don’t need to know what all this means. Just copy the entire text and save it to a ﬁle in your favorite word-processing program. 2. From there, you’ll need to make a few easy modiﬁca-

tions. You’ll likely have a number of links to the various pages within your site. In the word-processing ﬁle, these will look like the following: rates

In that example, you have a link on your page that points to your “Rates” page. Now, let’s say you purchased the URL www.mybusiness.com and want to transfer the code for your Web site to that address. Simply switch out the GeoCities link to your new URL, like this: rates

Essentially, just substitute your URL for the GeoCities’ or other services’ URL in all references—otherwise you’ll be sending your customers back to GeoCities instead of to your new site. It’s a good idea, however, to keep the subdirectories (the end of the URL after the last slash, and before the .html)—in this case, “rates”— the same. That way, you won’t have to completely reorganize your HTML ﬁles. 3. From there, just save your changes in your wordprocessing program, and then, in the reverse of step 1, copy the revised text, return to your Web page, and replace the old code with the new by pasting over it. Of course, this is a fairly cursory overview of HTML authoring, and should only be done if you’ve at least had 50

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some basic experience with personal homepages on the World Wide Web. SOFTWARE FOR DO-IT-YOURSELFERS There are a number of commercially available programs for people who want to maintain complete control over their Web pages, ostensibly without having to learn HTML. Microsoft FrontPage, Macromedia’s Dreamweaver, Jasc Software’s NAMO Web Editor, NetObjects Fusion MX, and Adobe GoLife 5.0 are ﬁve of the better-known programs for putting together your own Web sites. FrontPage and NetObjects are the easiest to use, while Dreamweaver deﬁnitely takes the prize for most advanced tool—your hired Web designer probably uses it for at least part of his or her work. These tools aren’t cheap; prices start at about $100 for NAMO Web Editor and NetObjects Fusion MX, rise to$169 for FrontPage, and go up to $299 for Dreamweaver. If you’re not inclined to get too complex, NetObjects and FrontPage are the clear front-runners. They have a WYSIWYG interface with drag-and-drop elements, so that what you see in your toolkit and your Window is what you’ll get on your ﬁnal Web page. These tools will work on any site, whether it’s a unique, hosted URL or a GeoCities site. Using the other programs, however, may require some basic HTML knowledge. There are plenty of decent books on the subject, and community colleges around the nation offer inexpensive classes on the subject for people interested in taking a hands-on approach.

Tech Terms WYSIWYG: techie shorthand for What You See Is What You Get. Connotes ease of use.

Seeding Your Business on the Web Congratulations. You’ve purchased your URL, designed and built your Web site, and found a host. When you type http://www.mybusiness.com, up pops your Web site, with all the information your potential customers need to make their spending decision—we 51

PRACTICAL TECH FOR YOUR BUSINESS

RESOURCES: Top Search Engines Perhaps the most popular way for Web surfers to ﬁnd your site is through a search engine. Here’s a list of the top search sites on the Internet—make sure your site appears here on a relevant search! ■ ■ ■ ■ ■

Yahoo.com Google.com MSN.com Lycos.com Netscape.com

hope in your favor. All they have to do is ﬁnd it. You are now faced with the task of letting people know this resource is available. BUSINESS CORRESPONDENCE AND COLLATERAL MATERIALS. The obvious method is to simply include your

URL and e-mail on all your business documentation: bills, forms, letterhead, business cards, pamphlets— anywhere that you already put your phone number and address. That goes for advertising, too, whether it’s the Yellow Pages, the Pennysaver paper, magazine ads, radio, or television. A two-by-three-inch ad in the paper can tell a reader only so much, but if your URL is there, you’ve just increased the reader’s access to information about your business by a hundredfold. The Internet itself is a great way of drawing attention to your Web site. Once your site is up and running, you should immediately register it with as many search engines and portals as possible. That way, when consumers type “plumbing” in a search engine on Yahoo.com, your plumbing business will pop up as one of their options. Registering with sites is generally free, but timeconsuming. There are services online that will register your Web site with a broad array of directories and search en-

INTERNET SEARCH ENGINES AND PORTALS.

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E-MAIL: Its Beneﬁts and Pitfalls It can be very tempting to blanket the Internet with e-mails to call attention to your Web site. However, although junk mail may have been effective back when e-mail was still a novelty, it’s generally perceived today by recipients as a nuisance or worse. Sending bulk e-mail, also known as spamming, is very easy and inexpensive to do—you can have a million e-mails sent out for less than $100. A place that will, for $150, send and manage bulk e-mail—and give you 33 million e-mail addresses on top of that—can be found at www.marketing-2000.net. A search on bulk e-mail software on Google.com will

turn up scores of similar products—none of which are made by large, well-known software companies. However, bulk e-mail is extremely intrusive and not easily targeted. Out of those million e-mails, you might be lucky to get 500 nibbles. And you’d probably anger many more people than that. Instead, you can have visitors to your Web site voluntarily sign up for e-mail newsletters about your business. That way, you create and mail to a base of customers who are already interested in your business and will be receptive to your e-mails, especially if you keep them informative.

gines for a fee of $20 to $50, depending on how many sites they register for you. See the accompanying box for a list of several Web sites that offer this service and tutorials for the do-it-yourselfer. Don’t forget your local phone service directories. Your phone company, for example, will probably include links to your Web site in its online phone directories as part of a package deal. You may even be able to pay your phone company for preferential placement in search results for your area and business category—a search on plumbing, for example, would thus put your business at the top of the search pile instead of in alphabetical order. THE PHONE COMPANY.

YOUR LOCAL NEWSPAPER’S WEB SITE. Many major city newspapers have turned their Web sites into local portals for all kinds of information, including business directories. Your newspaper’s ad representative will have information on pricing for advertising or listings on the paper’s Web site. 53

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ONLINE CITY GUIDES. In addition, sites like Sidewalk.com and AOL’s Digitalcity.com are popular with people who are looking for services in your city. These sites review everything from restaurants and nightspots to, in some cases, auto repair shops and computer outlets. They tend to attract both local users and potential visitors, and are a great way to target your advertising dollar.

Keep Your Web Site Fresh Now that you’re up and running and everybody knows you’re out there, you need to be sure that you keep your Web site as relevant as possible. Any changes in your business need to be reflected online as well— whether you’re introducing a new product or service, running a special, or changing addresses. Frequent and periodic updates will keep customers coming back to the site to see what else you’re doing or offering, and will ultimately drive more business to your doorstep— online and off. On the other hand, an obviously stagnant Web site—one featuring a special event that happened two months ago, for example—will cause people to question whether you’re even still in business. Keep your Web site informative, easy to surf, and fresh, and you’ll ﬁnd yourself with an inexpensive and vastly useful tool to gain customers.

Cost Breakdowns BASIC DO-IT-YOURSELF PACKAGE The following ﬁgures represent the cheapest possible way to get your Web site up and running. It’s also the most time-consuming, but ultimately worthwhile if your bottom line is a concern. Web registration fee (at DotEasy.com; one .com URL)

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$25/year

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Web hosting (at DotEasy.com; with 5 gigabytes of trafﬁc and unlimited e-mail) Web site creation (at GeoCities.com) Webmastering (done yourself) Web seeding (done yourself with search engines, newspaper and local directory sites) Total Initial Cost Annual Fee

free free free free $25 $25

PROFESSIONALLY DESIGNED, HOSTED SITE If you don’t trust your Web design skills—and it’s quite all right if you don’t!—the ﬁgures below show what you can expect to spend to get your site up and keep it running. This assumes, however, that you are comfortable making your own changes to the site and can seed it on your own as well. Web registration fee (your URL with .com, .net and .org extensions at Register.com) Web hosting fee (with 10 GB of trafﬁc and up to 10 e-mail addresses; through your ISP) Web creation fee (through design ﬁrm) Webmastering fee (done yourself) Web seeding fee Total Initial Cost Monthly Hosting Fee Annual Registration Fee

$90/year

$30/month $500 free free $620 $30 $90

PROFESSIONALLY DESIGNED, HOSTED, AND WEBMASTERED SITE This is the hands-off approach to your Web site. Once you have a basic idea, the designers, webmasters, hosts, and seeders take over for as long as you are willing to pay them. Even at this level, however, your Web site remains a very cost-effective tool for attracting customers. Web registration fee (at Network Solutions; includes .com, .org, .net, .biz and .us) Web design fee

$175/year $600

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Web hosting fee (includes 20 GB of trafﬁc and unlimited e-mail) Webmastering fee (through design ﬁrm) Web seeding fee Total Initial Cost Monthly Hosting and Webmastering Fees Annual Registration Fee

56

$50/month $40/month $100 $965 $90 $175

CHAPTER

3

The Networked Workplace owadays, the billboard hanging over the intersection of 24th St. and Broadway in Manhattan is rather anachronistic, and even during its best days it was somewhat braggadocio. It reads “You Are Now Entering Silicon Alley.” Silicon Alley was once a burgeoning dot-com locale, centered in the Chelsea and Flatiron neighborhoods in lower Manhattan. It was populated by dozens of dotcom sites, mostly copycat Web portals trying to beat out America Online, Yahoo!, and Excite, as well as artsy “content” sites that attempted to make money selling subscriptions and those banner ads—that show up on most commercial Web pages. But by the summer of 2001, the Alley was a ghost town, with plenty of cheap ofﬁce space and very little hope for what was supposed to be New York City’s new technology hub. The Silicon Alley sign is just out of sight from Michael Kaminer’s window, which is just as well because, as he puts it, “it’s a little depressing when you stare at it too long.” Nevertheless, Kaminer and his business, Michael Kaminer Public Relations, are an Alley survival story, a dot-com hanger-on turned into a thriving business. Kaminer started MKPR in 1992 after realizing he was better at writing freelance press releases than magazine articles. He now has seven employees and works out of a modern ofﬁce on the eighth ﬂoor of a Broadway ofﬁce building. Seated at a metal conference table in a glassenclosed meeting room at his ofﬁces, Kaminer is the picture of a successful small-businessman. He’s dressed in the uniform of New York business casual, a look that’s

N

Summary ■ ■ ■ ■ ■ ■ ■ ■

The Networked Business What’s a Network? A Computer for Every Desk Server Hardware and Software Putting the Pieces Together Getting Your Network Online Hiring Good Help Cost Breakdowns

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popular among people who work in media, public relations, and the once-mighty dot-coms. The ofﬁce dog wanders in and, after sniffing the newcomer, settles down on the ﬂoor by the entrepreneur. “For a long while,” Kaminer says, “PR was something that I was just going to do until my other writing caught on. But I began to realize that if I picked my deals and my clients carefully, PR wouldn’t be so bad.” Kaminer launched MKPR from his apartment, using his home computer and a fax machine. For the ﬁrst two years, most of his clients were gay and lesbian organizations—nonproﬁts that he now serves as a board member or volunteer. By 1994, however, he had branched out to serve small magazines and media outlets, which New York has in abundance. He also brought on another person to help with the backlog of work. At ﬁrst they shared the computer, but by the time Kaminer moved into his ﬁrst ofﬁce and hired a third person, the advent of e-mail made him decide to purchase two more computers. “We were one of the ﬁrst PR ﬁrms out there to use e-mail, and more important, we were the ﬁrst to give the people on our press list the option of receiving our press releases solely by e-mail,” Kaminer says. “We’ve got thousands of e-mail addresses on our list today, and they all opted in—we’re not spamming anyone. We take a lot of pride in that.” At ﬁrst, Kaminer managed the database of e-mails on his press list. Today, a part-time contractor does it. Kaminer originally signed on with America Online for its ofﬁce e-mail and Internet service, but as use of the World Wide Web grew in the mid 1990s, Kaminer says, it was no longer “cool” to use AOL for business. So, in 1997 Kaminer purchased the “mkpr.com” domain. By this time, Silicon Alley was beginning to blossom with companies that would later go public with billion-dollar initial offerings (and ﬁle for bankruptcy two years later). MKPR was already in demand for its understanding of dot-com public relations, and Kaminer was in the enviable position of turning away work. MKPR’s Web site then was only a single page with contact information. “I liked the minimalist approach,” 58

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Kaminer says. “At the time, we really didn’t have any need to drum up business online. We spoke through our clients, and that was that.” Soon, MKPR had moved on to yet another ofﬁce and had grown to a staff of ﬁve, all working on computers that Kaminer bought direct from Gateway or Dell, depending on which had the better deal. And they were all connected to the Internet—through dial-up modems on a bunch of dedicated phone lines. That arrangement became untenable as more clients—and journalists— went online themselves. “We needed to do research, and some of our computers still had 28.8 (kilobits per second) modems, very old stuff,” Kaminer says. “So I tried to ﬁx that and ended up making the biggest business mistake of my life.” Kaminer’s mistake came about when he decided he wanted to get a T1 line installed in his ofﬁce. “I didn’t know where to start,” he says. “I should’ve stuck with the company that had handled my phones and my other lines. Instead, I went with the first salesman who showed up at the door.” The experience became a nightmare. The salesman said he represented an up-and-coming telecommunications ﬁrm in New York, but the ﬁrm turned out to be three guys working out of an apartment. Nevertheless, the salesman promised to get MKPR up on the Internet in a matter of days—which turned into a week. And things got worse once the service was installed. The tech support “hotline” was located in the salesman’s apartment, and it certainly wasn’t manned on a 24-hour basis. “We would have these outages all the time, and we could never get anybody on the phone,” Kaminer says. “It was an expensive lesson.” MKPR eventually switched its service to DTI, a much larger, more stable Internet service provider. “If there’s a problem, they’ll call us ﬁrst to let us know before we even notice anything. I could have spent less, but the reliability of both the service and the company were really important,” Kaminer says. At its highest point in 1999, MKPR employed 11 people. Today, with the loss of dot-com clients, MKPR is

Tech Terms T1 line: a dedicated telecommunications connection that supports data transfer rates of 1.54 megabits per second. A typical T1 line consists of 24 separate and individual channels, each of which can carry voice or data trafﬁc. A user who purchases only some of these channels can have fractional or shared T1 service.

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down to eight employees, counting Kaminer, each with a computer networked to the other computers in the ofﬁce and the T1 line. Although the dot-com-ers are gone, MKPR has adapted by going back to more traditional media, recently signing deals with the Bloomberg family of companies and soundportraits.org, the Web home of the popular NPR radio documentaries. In March the company’s utilitarian Web site was replaced with a marketing package that features information about the company’s clients, latest press releases, contact information, and testimonials. “I never used to have to hustle for clients until things went to hell,” he says. “Only this year did it become clear that we’d need the site to actually help us.” In nearly a decade of entrepreneurship, Kaminer says he’s learned a few important things about technology. “One, don’t be penny-wise and pound-foolish. It’s a cliché, but if you get the best you can up front, you’ll save later,” he says. “Two, don’t over-buy, either. Sure, it might be nice to have Quark on these machines, but we don’t need it or use it. So many of these dot-coms went under because back in their heyday, they spent their money so extravagantly on technology—and on Aeron chairs, too. “And three, never make decisions in a vacuum,” Kaminer says with a rueful smile. “Find good consultants, do your homework, and don’t settle for the ﬁrst guy who comes along.”

Welcome to the Networked Business As your business grows, you will ﬁnd, as Kaminer did, that a single computer just won’t sufﬁce anymore. If you’re a white-collar entrepreneur for whom the computer is the primary tool of business, you’ll reach that point as soon as you hire a second person. Nobody likes sharing a computer, and sharing is inefﬁcient. There are bound to be usage conﬂicts. If you’re engaged in a service or retail business, you’ll probably have a bit more 60

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time before buying more equipment, but as soon as you hire a bookkeeper, an administrative assistant, or any other kind of manager, you’re going to need another computer, software, Internet access—the works. This chapter deals with the task of expanding from a single-computer business to a networked business. Unfortunately, it’s not as easy as simply buying more computers and plugging them in. You’re going to need to connect them all; give them access to printers, other peripheral equipment within your ofﬁce, and the Internet; and give them all the software that users need to do their jobs. It’s a pretty big undertaking, but still fairly manageable if you do your homework and plan carefully. Nearly any kind of business can beneﬁt from networked computerization. Although the most obvious application is for a professional style of ofﬁce, you don’t have to be a lawyer, an architect, or a banker to make your business more efﬁcient and responsive. More and more restaurants, for example, have computerized ordering and payment systems—dedicated computers, also called thin clients, that can be networked together to enhance communication and gather important data about how the business works (see Chapter 4). Starting with this chapter, you’ll probably encounter some technology that you haven’t thought about before, or perhaps haven’t even heard of. The idea here is not to make you a network administrator (see page 82), but rather to make you an informed technology consumer.

Tech Terms thin clients: a computer workstation that can handle only a handful of tasks and is connected to a server where the bulk of the data processing is done. Computerized cash registers and inventory barcode scanners are good examples of thin clients (discussed in Chapter 4). Most thin clients don’t even have hard drives for resident memory.

What’s a Network? Whenever two or more computers are linked together and can share data, they form a network. The Internet is simply a massive computer network. Your business will have an internal network as well as a connection to the larger Internet network. The internal network is what we’ll consider here. Why network your computers together? First, it takes far less time to send e-mails or ﬁles between your 61

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Tech Terms print-and-ﬁle sharing: a basic network setup in which multiple computers can easily swap ﬁles by accessing each other’s hard drives, and can share a printer or other peripheral. server: a computer, attached to a network, which manages network resources. A typical ofﬁce server not only manages the data that moves between individual computers and the Internet, but also manages printers and ﬁles stored on the server and on its client computers. network protocols: an agreed-upon format for transmitting data between two devices. The protocols allow for error checking as well as acknowledgment between computers that data was success-

fully sent and received. These functions take place in fractions of a second. peer-to-peer networking: a computer network in which individual computer workstations are linked together without a central coordinating computer. Each computer can be linked directly to the network’s Internet connection, or a single computer that is linked to both the network and the Internet can funnel Internet data through to all the others. client-server: a computer network in which individual workstations are linked together, with a server at the center of the network. The server coordinates all activity among those computers, and between the network and the Internet.

employees than to swap ﬂoppy disks or to use your Internet connection. Second, you’ll be able to share printers and other peripherals within the ofﬁce—an easily accommodated cost-saving choice that usually doesn’t impair efﬁciency. (These two functions are known as print-and-ﬁle sharing.) And you’ll be able to share the Internet connection to your ofﬁce, which is far more efﬁcient than providing everyone with an individual dial-up line or digital-subscriber line (DSL). Novice networkers may hold a number of misconceptions about ofﬁce networks that need to be dispelled right away: YOU NEED A SERVER FOR YOUR NETWORK. Michael Kaminer’s example shows that statement to be false. A server is really necessary only for relatively large organizations, or ones that handle e-mail and Web services inhouse instead of outsourcing the task. 62

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WINDOWS MACHINES CAN’T BE NETWORKED TO MACS OR ANY OTHER KIND OF COMPUTER. Network protocols are

used to link computers to each other and to servers. A kind of universal language, these protocols are used by just about every kind of networking hardware and software out there, giving Macs, Windows computers, and other devices a way to work together. Although you may need some extra software to assist in the overall translation, you can link any kind of machine to your business network. BUSINESS NETWORKS ARE EXPENSIVE. They don’t have to be. You can network a dozen or more computers together with very little additional cost. However, getting them all connected to the Internet is another, more expensive matter (it’s discussed later in this chapter, beginning on page 76). But if you don’t use the Internet a lot in your business, you can dramatically reduce your costs by not providing or limiting Internet access. At the same time, it’s unwise to keep such an immense resource from your employees if they’ll use it well.

Two kinds of networks are discussed here. A SMALL NETWORK: PEER-TO-PEER The most common type of network in small businesses, ones with, say, ten or fewer computers, is called peerto-peer. Basically, the computers are linked together with no intermediaries, using the networking software already provided within the Windows or Mac operating systems to link together the computers, your office printer, and your Internet connection. Setting up a network among three or four computers that share a printer and a Net connection can probably be accomplished with a trip to Circuit City for networking cables and a day of work—if you’re fairly comfortable with computing in general. If you aren’t, get some help, either from a knowledgeable employee or friend, or from a consultant (see page 78). Networks that involve more than ten computers will probably require professional assistance. 63

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FOR LARGER NETWORKS: CLIENT-SERVER In the client-server network (see deﬁnition on page 62), each person has one computer, called a client, but the network uses another computer to manage interactions among clients. Introducing a server into your network adds a lot of complexity as well as beneﬁt. Chances are, if you’re in an ofﬁce with no more than ten other people, you won’t have to worry about having a server in-house. You’re probably not generating enough data to warrant storing it on a server, and you can have your Internet-service provider (ISP) handle things like e-mail and your Web site. However, as organizations grow, in-house servers become a necessity. For example, at somewhere between eight and 20 workstations, depending on the company, you’ll want to begin handling e-mail internally, so that interofﬁce e-mail is both faster and more secure. At that point also it will begin to make sense to store group projects on the server, where everyone involved can access the pertinent data, instead of having it channeled through a handful of people. These advantages are offset, of course, by the cost. You may also ﬁnd a client-server network a necessity if you decide to handle Web hosting in-house, rather than outsourcing it through your Internet service provider or other service. Such an arrangement would give you direct control over your Web presence and, down the road, will save money on hosting, especially as your Web site grows. Which of these two network types is right for you? Read on. By the end of this chapter, you should have a pretty good idea.

A Computer for Every Desk Before you can create a network for your thriving business, however, you must purchase the machines you’ll be connecting. Here are some things to consider before you rush out to Best Buy and slap a dozen Compaqs on your credit card. 64

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RESOURCES: Small-Business Offerings The majority of top computer manufacturers and software makers offer special deals and packages for small businesses. If you’re just starting out, you may be too small to take advantage of these deals, but the sites below can still be valuable resources. ■ ■ ■ ■ ■ ■

Dell: www.dell.com/us/en/bsd/default.htm IBM: ww1.ibm.com/businesscenter Hewlett-Packard: www.hp.com/sbso Compaq: www.smb.compaq.com Gateway: www.gateway.com/work/smb/index.shtml Apple: www.apple.com/smallbusiness

WHERE TO BUY? Like any good businessperson, you should comparison shop. However, odds are you won’t be heading to the mall to pick up your computers. Because computer makers offer a number of incentives and discounts to make buying computers in bulk attractive, businesses tend to buy directly from the manufacturer. It’s a good idea at this stage to ﬁnd a computer maker with which you’re comfortable. For example, if you’ve used Dell machines and really like them, stick with Dell for your future purchases. If, however, you’re unhappy with Dell’s products or service, it’s time to visit Gateway, Compaq, or IBM and see what they can do for you. Most major manufacturers have contact information for businesses right on their Web sites. (Chapter 4 discusses hardware for specialized businesses—such as retail shops or restaurants—which tends to be sold in speciﬁcally focused hardware-software packages.) IMPROVE EFFICIENCY THROUGH UNIFORMITY When you’re purchasing computers, it’s a good idea to make them as similar as possible, because they’ll be far easier to maintain and ﬁx. If you buy a 2-GHz Pentium 4 for yourself, a slower Pentium III for your assistant, and a clunker for your accountant, it’ll cost more to ﬁx them individually than if you have a contract for the same 65

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model throughout your business. In essence, if each computer has different parts and different software, it takes more time to repair and upgrade each machine. To figure out what features and hardware you’ll need for your computers, use the guidelines presented in Chapter 1, making sure that each computer you buy has the power necessary to run the most complex software program used in your business. Even if only one employee is doing serious number crunching, it’s best to maintain a high level of performance throughout the company’s computers so that you can lengthen the time needed between upgrades. As is true throughout your business, get the best equipment you can afford. Don’t skimp on RAM to save $50, for example, when more memory could give your computer an additional three to six months of effective life. PREPARE NOW TO UPGRADE LATER You should also plan to regularly upgrade your system, because your budget can more easily accommodate buying some equipment every year, rather than facing crunch-time every few years. Also, such a plan means that you’ll always have top-notch computers in your ofﬁce for running the latest software.

The average lifespan of a computer is down to about three years, although some businesses can stretch that to ﬁve or six years, depending on what the computers are used for. After three years, you’ll ﬁnd that most of the new software programs won’t run on your old computers; software makers love to take advantage of hardware advances to make their programs easier to use and pack them with features. If you’re using specialized software, such as graphics modeling programs or complex databases, you’ll find that you need new machines sooner than if you were just using Microsoft Word and an e-mail program. To minimize the ﬁnancial impact, most businesses stagger such purchases. For example, let’s say you have a network of 20 computers, and because you don’t use a lot of complex software, you can get four years of use out REPLACEMENT WORK STATIONS.

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of them. Starting in year three, you should buy seven new computers; in year four, buy another seven; and in year ﬁve, buy the last six. Your key employees—the people who have jobs that directly rely on computers and who produce the bulk of the business’s work—should be ﬁrst to get the new machines. Those who play supporting roles can be upgraded in the second and third years. If you’re using a server in your network, you need to ﬁt server upgrades into your plan, in order to keep your network and the computers connected to it running as efﬁciently as possible. Without upgrading the server, you’ll probably notice a steady and appreciable decline in your server’s performance, especially if you’ve added much data or a number of new workstations in the intervening years. One business owner I talked to had failed to upgrade his server since 1998, and it took network users almost a full minute to download spreadsheet data from the server. Each year, you can add components to your server to make it more powerful, so that your network can keep up with more users and more data. For example, one year you add extra RAM so that the machine can better handle the multiple hits from individual network computers. The year after, you can add another hard drive to better manage everyone’s ﬁles. And in year three, you’re probably ready to upgrade the microprocessor— or just get a new server.

SERVER UPGRADES.

SOFTWARE UPGRADES AND LICENSE RENEWAL. You will also need to budget for software upgrades and license renewals. For workstations, you generally purchase the software you need, install it, and you’re good to go until the software maker issues the new, improved version. However, companies that make server software handle the purchasing process in different ways. In addition to the up-front purchase price, you pay a yearly license fee to the software manufacturer. And in exchange, it provides a steady supply of upgrades, security patches, and bug ﬁxes. For example, Windows NT—Microsoft’s operating 67

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Tech Terms IT: acronym, stands for information technology. This is a catchall term for computers, servers, networks, printers, and, in some cases, phones and copiers. IT manager: the person in your organization responsible for all information technology decisions. In many small businesses, that person will be you, ably assisted by consultants and a great deal of homework. As your business gets larger, you may wish to hire a full-time IT manager who can serve as the point of contact for all your technology needs, make intelligent IT decisions, and serve as your network and server administrator.

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system for servers and networked workstations—ﬁrst came out in 1993. Soon after it was released, Microsoft issued a number of service packs containing security patches and other tweaks. A year later, NT 2.0 came out. By paying your license fee, you could receive these packs, and, if you paid enough each year, the 2.0, 3.0, and 4.0 upgrades. However, major releases may not always be covered under your license agreement. For example, a business that was running NT 4.0 on its server could get service packs but would have to buy a new license to run Microsoft’s Windows 2000 Server software, which the company positioned as a completely new product. If you do have a server, you probably have a consultant or IT manager (see also discussion beginning on page 78) who will make the appropriate recommendations for both hardware and software. Most servers have a lifespan of three or four years, after which time the upgraded software becomes too complex for the hardware to handle.

Choosing Server Hardware and Software You now need to decide what kind of software and hardware you want running your network. If you’re using a peer-to-peer network, this decision is pretty easy: You set it up on your own computer and let it go. E-mail and Web hosting can be taken care of via your ISP. As far as computer networks go, the setting up is fairly easy but, again, if you’re not comfortable doing it yourself, pay someone to do it for you. It’s also a good idea to pay for additional tech support, through a service contract with your computers’ manufacturer or a consultant. If you need a client-server network, you or your consultant will need to choose server hardware and a server operating system. Because some server hardware manufacturers design their products for use with only one or two operating systems, your choice of server operating system basically determines what kind of

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hardware you’ll end up with. These operating systems mainly handle permissions—literally, who’s allowed to access which data—and network management and printand-ﬁle sharing. You’ll be able to store ﬁles on the server and allow anyone in your office access to them—provided they have the appropriate permissions, of course. Because you are a business client and not a home user, your hardware vendor or consultant may have to include seat licenses with your server software package. The manufacturer will enable your server software for the number of client computers in your network. In some cases, server-related software must be installed in each client computer. Hence, you’ll be paying extra on a monthly or yearly basis to increase the number of your clients or upgrade them along with your server software. This arrangement sounds onerous, but it’s standard industry practice, and you’re guaranteed software patches and upgrades as soon as they are available. Your consultant will have his or her preference of operating system, but you should have a good idea about the beneﬁts of each. SERVER OPERATING SYSTEMS Here are the pros and cons of some of the major players in server operating systems.

Tech Terms network management: organizing the network, managing the number of people who have access to it, providing security and ensuring smooth operation. seat licenses: the way software companies charge for server software, in line with the number of workstations, or “seats,” that the server will be connected to. In addition to licensing the server, you must buy a number of seat licenses equal to the number of workstations connected to it.

WINDOWS 2000 SERVER. This is Microsoft’s basic server product, and naturally, it works really well with the Windows XP Professional operating on the client side. It’s middle-of-the-road in both price and performance, handling data and working well in print-and-ﬁle sharing situations as well as handling basic e-mail and Web hosting. The vast majority of specialized software programs are written for Windows, making it a rising star in server operating systems, as businesses go for an allWindows computing network. Windows 2000 Server sells for $850 to $900 if bought separately from a server, and it comes with ﬁve free seat licenses. The software with ten seat licenses costs about $1,050, and that with 25 seat licenses, about $1,500. 69

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Tech Terms UNIX: an operating system developed by Bell Labs in the 1970s. This operating system can be installed on many different kinds of computers, and its reliability and low incidence of crashing make it popular on the more expensive and powerful servers that handle e-commerce and larger networks. Linux: a variant of UNIX ﬁrst developed by programmer Linus Torvalds in 1991.

This operating system, which can run both servers and workstations, was later released free of charge via the Internet, and has been altered and improved upon by thousands of programmers from around the world who share their improvements freely. Torvalds still has ﬁnal say about what goes into Linux, thus keeping some control over Linux’s course of development.

SUN SOLARIS. This brand of UNIX server operating system is made by Sun Microsystems, and it’s one of the best available. It scales very well—meaning that it can easily handle new software programs and more workstations—and it is the operating system of choice for large Web operations. Sun prices Solaris software accordingly—it’s expensive. Still, Sun continues to have the highest market share of any server operating system on the market in the U.S., especially since creating a version of the Solaris operating system that will work on servers that use the popular microprocessors made by Intel Corp. Previously, Solaris worked only on Sun’s own hardware. With the introduction of Sun Solaris 8, the company decided to follow the lead of Linux, which doesn’t charge for the actual software code itself. Sun charges $75 for the server software, to cover expenses, but telephone tech support from Sun costs $450 annually for the server and $200 for each workstation. So unless you have a Solaris expert on staff, you’ll still end up paying.

Novell’s server operating system was recently revamped and is now greatly improved. The new operating system comes with a small directory server for handling e-mail and a number of Web server tools as well. This good, solid operating system for

NOVELL NETWARE 5.1.

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small networks costs around $750 to $800, and comes with ﬁve seat licenses. Ten licenses cost around $1,150, and 25 licenses about $2,300. The prices include the original server software as well, so you aren’t making two purchases. OTHER “FLAVORS” OF UNIX. IBM, Hewlett-Packard, and other companies offer their own versions of the UNIX server operating system. These systems are fairly easy to manage and seldom crash. Priced between Solaris and Windows, they are generally available only preloaded in the server hardware purchased from these companies. Depending on the “ﬂavor” you go with, the original server software will cost $750 to $1,000, and $2,000 to $3,000 for server software with 25 seat licenses.

This homegrown operating system is a variant of UNIX, but Linux is much more efﬁcient. It also takes up less memory and requires less power than Windows, both on the server and on clients. It’s also the cheapest operating system available, because you can download the entire operating system from the Web free of charge. Most Linux vendors charge merely for providing tech support and handling the maintenance and upgrading chores, so using it could save you a lot of money. It makes a ﬁne Web server as well. However, Linux is said not to scale well when serving thousands of clients—probably not a problem for your small business, at least not yet. And, because fewer programs are written for Linux, it may be difﬁcult to ﬁnd specialized software for it. Linux server software packages range from $400 to $800, depending on the software included for making network management easier, and on the tech support and warranty plan. And because of the open-source licensing method, you don’t need to worry about seat licenses. However, if you opt to go with your software vendor for tech support, your costs for support may rise with the number of clients connected to the server. For your small business, I recommend either Windows or Linux, depending on what your budget is and

LINUX.

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what your local consultants support. Finding tech support and software for a Windows system will never be a problem, and the prices are relatively reasonable. Linux is an excellent choice for the budget conscious, as long as you restrict your server usage to simple print-and-ﬁle sharing, e-mail, and Web hosting. Solaris is a wonderful operating system, but it takes an experienced hand to run a Solaris network—an expensive proposition for a small business. A ﬂavor of UNIX may work for you, but ﬁnding immediate support could be difﬁcult, as some consultants or outsourced tech support companies work with only speciﬁc ﬂavors of UNIX and not with others, and UNIX tends to be more expensive than Windows. OTHER PROGRAMS Besides the operating system, you can house other programs on your ﬁrst servers, and many small businesses do. Microsoft Exchange Server or FreeMail, for example, can manage your company’s internal e-mail, if you don’t want your ISP to handle the chore for you. Exchange Server works best with Windows networks, of course, while FreeMail is the preferred e-mail server software for Linux. You can also house databases and other programs (these are discussed in Chapter 4). For now, though, an operating system and, if you so choose, an e-mail server program will be enough to get you started. ALL-IN-ONE SERVERS A number of companies, including Systemax and Toshiba, have recently introduced user-friendly, all-in-one servers, which come with software that combines printand-ﬁle sharing, e-mail, Internet access, and Web serving. Using an all-in-one server makes setting up a client-server network surprisingly easy. Systemax’s iMASS servers, for example, automatically conﬁgure your network once all the computers are connected via Ethernet (discussed in the following section) and turned on. The server detects each computer and matches it to the resources, such as printers 72

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and different files, available on the network. The iMASS server, which runs on the Linux operating system, can handle your Internet connection and serve as an e-mail and Website server. You can be your own server and network administrator by using a fairly simple point-and-click interface to assign permissions. While these machines aren’t really suitable for more than 30 or 40 clients, they are an easy way of setting up an ofﬁce network. All-in-one servers range in price from $2,000 to $7,000, depending on the hardware inside and the amount of service and tech support you desire from the companies in question. Some service packages are so comprehensive that they may do away with the need for a consultant. However, you should have a fair amount of conﬁdence in your skills—and actually see these products in action—before you decide to purchase an all-in-one. Again, this discussion provides just an overview, and these aren’t exactly items that you’ll see on store shelves. You’ll need to work with your hardware vendor or your computer consultant to see which operating system is available and appropriate for your business. We’ll discuss choosing network consultants later in this chapter.

Tech Terms Ethernet: a network protocol developed by Xerox Corp., DEC, and Intel in 1976 to standardize the way computers share information. Ethernet supports data transfer rates of 10 megabits per second. port: an interface on a computer through which you can connect it to another device. An Ethernet port, for example, is the jack on the back of your computer that lets you connect it to a network.

Putting the Pieces Together So now we’ll assume that you have your computers and possibly a server, and it’s time to connect them all and make them work with one another and with your printers and scanners in the ofﬁce. With respect to the hardware needed, you have a couple of options. First, make sure when you purchase your computers that they come with network cards, also called Ethernet cards or Ethernet ports. These cards, which are plugged into slots on a computer’s motherboard (deﬁned on page 6 of Chapter 1), work somewhat like modems to transfer data. You’ll notice that the actual connection points are slightly larger than a phone jack. That’s be73

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Tech Terms server administrator: the person in your organization who can make changes to the server. This could be you, your IT manager, your consultant, or several people. A server administrator can change the way data is managed on that server, allowing some users access to ﬁles or to the Internet, while not allowing others.

permissions: the rules that each user on a network is assigned by the network administrator. Each person who has computer access in your organization can be assigned resources to use, and can likewise be blocked from viewing or deleting important ﬁles, such as your bookkeeping or personnel ﬁles.

cause Ethernet lines aren’t like normal phone cords— they can handle a lot more data. A 100-megabit Ethernet line can transfer data at the rate of 10 megabits per second—or about 175 times faster than a standard dialup modem. This speed is very important when you’re sending a large ﬁle, like a schematic drawing or marketing plan, around the ofﬁce. PEER-TO-PEER In a peer-to-peer network, you simply plug in Ethernet lines to connect all the client computers to a central Ethernet hub, which serves as a kind of switchboard operator between them as well as your main Internet connection. Then, on each computer, you run the built-in Windows Networking Wizard (or AppleTalk, depending on which operating system you’re using) to let the computers “ﬁnd” each other in the network. It will also ﬁnd any peripherals connected to the network, such as printers. From there, you’re ready to go, although you should carefully read the Windows and/or Mac OS manuals for more details about your speciﬁc system and any bugs or other issues that you might encounter. CLIENT-SERVER In a client-server network, the Ethernet lines are plugged into the server, of course, as are the printers and any other peripherals in your ofﬁce. The server administrator then logs onto the server, either directly or 74

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from a client workstation, and “maps out” each computer and printer—that is, identiﬁes each of the machines to be connected within the network. This process is much longer, and more exacting, than setting up a peer-to-peer network. As we mentioned earlier, the server administrator develops profiles for each client computer, handing out permissions to each machine to give it and its user access to the network’s resources. If you use a consultant to install your computer network, he or she will work with you to determine who gets which permissions. WIRELESS NETWORKING Another networking option that’s worth mentioning is wireless networking. Instead of stringing cables all over your ofﬁce space, you can purchase equipment that will let your computers and other devices connect to the local network and the Internet from anywhere in your ofﬁce—even outside on a porch, if you or your employees so choose. Obviously, you get the maximum advantage of portability, and wirelessness, if you’re using laptops instead of desktop computers. If you already have a server, you can mix wired and wireless networks. If your building’s infrastructure is somewhat inadequate, wireless networking can be a real lifesaver. Many older buildings pose problems with wiring, for example, because the walls are too thick or otherwise too difﬁcult to send wires through. The current standard in wireless networking is based on the so-called 802.11 protocol, as developed by academics around the world and used by the vast majority of computer makers. Also called WiFi, 802.11 transfers data at speeds up to 6 megabits per second— not so fast as Ethernet lines, but certainly fast enough for most users. Wireless networking cards, whether for a desktop or laptop, cost $125 to $175 each. You can create a peer-to-peer network with just the cards, too; simply choose one computer to serve as the main connection point for your Internet connection, and plug the cards into the other machines. For networks of six or more machines, you’ll also need a wireless hub, 75

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which costs from $250 to $700, depending on how many cards it can support. The price also increases with the strength of network security software loaded onto the hub. Some have firewalls rivaling those of most major servers. The hub plugs into your server. The 802.11 networking protocol can be used in a number of innovative ways to make nearly any business more efficient. (Chapter 6 describes specific 802.11 applications.)

Getting Your Network Online One piece remains to our task: getting access to the Internet for all these computers. Depending on the nature of your business, you might laugh at that notion. After all, why would employees of a construction contractor, ﬂower shop, or restaurant need Internet access? Well, for lots of reasons. Most important, your employees will have e-mail addresses. That’s critical for any sales, customer support, or other necessary contact with the outside world. E-mail is the preferred method of business communications around the world, and you, the boss, aren’t the only one who needs it. Everyone in your company can beneﬁt from e-mail, even if the employees don’t have their own computers set up for their private use. Imagine how much easier it would be to let workers know about policy changes, customer complaints, or good news if they regularly logged into an email account, even just once a day. It just makes good business sense. The same goes for access to the World Wide Web. In a professional setting, your employees can glean substantial research from the Web. Indeed, they might surprise you with the information they can dig up that can give your business an edge. Not everyone needs constant Web access—but identifying those employees who will make the most of it will give you a great deal of research and market intelligence, empowering your workers on many levels. 76

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YOUR CHOICE OF IMPROVED INTERNET CONNECTION Unless you’re adding only a handful of computers in a peer-to-peer network, your old DSL line won’t cut it any more. Again, you have options. HIGHER SPEEDS ON DSL. Your phone company or Internet service provider can increase the amount of bandwidth you receive on your DSL, thus increasing the amount of data your network can receive from the Internet in the same amount of time. You can receive up to 1.5 megabits per second via DSL, and you can split that line off to individual workstations in your network. Installation of a new DSL line for businesses costs $200 to $400, and service another $300 to $500 per month. This is much costlier than home DSL service because of the complexities of installing the line in an ofﬁce building, as well as the number of users and the higher speeds. DSL lines can reasonably handle the demands of up to 20 Internet surfers with little degradation in speed and performance, even with multiple users surﬁng at once. But DSL service can be spotty; it can fail as frequently as your phone service, especially because of construction or bad weather.

Tech Terms bandwidth: a measurement of the amount of data that can be transmitted in a given period of time. The measure is usually expressed in kilobits per second or megabits per second.

A T1 line is the next step in the highspeed Internet hierarchy. A T1 line can send and receive data at speeds of 1.54 megabits per second—24 times faster than a dial-up modem. A shared T1 line means that your business is sharing this bandwidth with other businesses. In general, you’re guaranteed from 512 kilobits per second to 1,000 kilobits per second. T1 lines are far more reliable than DSL in general. Installation can range from $750 to $1,000, while service costs $500 to $1,000 a month, depending on how fast you want your lines to be.

SHARED T1 LINE.

A dedicated T1 line means that you get all of the bandwidth all of the time, and you don’t have to share with any other business. In addition, if you somehow fill that data-transmission

DEDICATED “BURSTABLE” T1 LINE.

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Tech Terms burstable: to manage multiple transmissions more efﬁciently, a burstable T-1 line gathers data and sends it off in a burst, rather than in a constant stream. router: a device that connects a number of networks in an ofﬁce. If your business expands so much that, say, you decide that your administrative staff should operate on an entirely different network from your professional staff, you’ll need a router so that the two groups can correspond by e-mail and share a single Internet connection.

“pipe” with massive downloads, your Internet service provider can help you manage the data so that it doesn’t overwhelm your server. You can get the full transmission speed of 1.54 megabits per second, but it will cost $1,500 to $2,500 per month, plus the same installation fee as the shared T1. If you’re hosting your own Web site as well, you’ll need a T1 router to manage the ﬂow of traffic into and out of your Web site at these high speeds, which will cost another $500 to $1,000. CONSIDER YOUR BUDGET Obviously, budget considerations will play a huge role in what kind of Internet service your business can afford. A handful of computers can subsist quite nicely on a regular commercial DSL line, although if you have an ofﬁce of heavy e-mail and Web users, I suggest linking no more than ten computers to DSL; otherwise, you’ll start to see some lagging downloads and irritated employees. A shared T1 line, however, is great for many businesses. For example, the Kiplinger Washington Editors building, in Washington, D.C., uses a shared T1 line for up to 300 computers—although editors sometimes ﬁnd access to the Internet somewhat slow around the time the markets close. Still, if you have a network of 20 to 50 machines and a server, a shared T1 should be enough for your needs. A dedicated T1 line can handle hundreds of computers and multiple servers without breaking a sweat, and is especially necessary if you plan to host your company’s Web site on an in-house server.

Picking the Right Computer Consultant Setting up your own ofﬁce is one thing—setting up an entire computer system for your employees is something else entirely. As I’ve shown previously, you’ll face a multitude of decisions about hardware, software, networking, peripherals, and Internet connections—and you probably won’t be able to do it all yourself. Unless you’re a true computer geek, in which case you don’t need this 78

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SECURITY: Network Security You might have felt that you could get away without a lot of extra security while working from your home, despite my advice to the contrary in Chapter 1, but that deﬁnitely won’t be the case here. At the very least, you will need both a ﬁrewall and good antivirus software. The ﬁrewall can be easily obtained from your Internet service provider—some ISPs, in fact, won’t install business-class Internet service without a ﬁrewall obtained from them or on your own.

Most workstation computers you purchase come with some form of antivirus software. Be sure to register every machine for antivirus updates, however, so that you’ll get all appropriate defenses against the latest viruses. And ﬁnally, register your computers with the operating system manufacturer, most likely Microsoft, to get the latest security patches as soon as possible. Be sure to run Windows Update, Microsoft’s do-it-yourself online upgrade service, regularly—at least once a month.

book, you will probably have to call on someone else to help you get things set up. And that’s all right—you’ve got a business to run, after all. At this point, you’ll also have to make a decision about your role in your company’s technological future. While you’ll still have the ﬁnal decision, you’ll ﬁnd yourself leaning on others for their advice and support. You have a couple of options here: Computer consultants, sometimes called system designers or network consultants, will probably be your ﬁrst point of contact as you begin to look at a full-scale business network. Consultants will discuss your options with you, purchase and install everything, and, for a monthly or yearly fee, perform the routine maintenance and occasional odd job for you. A good consultant (as opposed to a full-time IT or systems manager) can be invaluable for a small to midsize business, saving the entrepreneur a lot of time and headaches. Keep in mind, however, that a consultant is also a salesperson, and probably wants to sell you expensive systems and equipment that, although not entirely unnecessary, could be more advanced than what you need. Most consultants also have business agreements in place with many different hardware and software vendors. Although 79

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an exclusive arrangement between a consulting ﬁrm and a single manufacturer could give you a good price on that manufacturer’s products, it could also limit your access to the newest and best technologies. You should ask a potential consultant about any relationships he or she might have with hardware and software manufacturers. So how do you choose a consultant? Pretty much the way you choose any other service that you outsource in your business. A good place to start is by asking other small businesses and entrepreneurs in your area about their experiences with the companies they used. Go to the Internet and do a search on the companies that you’ve heard about, or discovered in the Yellow Pages. A good Web search will usually ﬁnd not only the consultant’s Web site, but also customers’ praise for and complaints about the consultant. When contacting potential consultants, tell them what you want to do and ask about the brands and technologies they use and sell. If you have come across a particularly attractive technology in this book or elsewhere in your research, ask whether the consultants can provide it, and if not, why not. Also, ask for references. Most computer consultants should be happy to give you contact information for customers who have agreed to say good things about them. Similarly, those customers, when called by a fellow businessperson, may be more honest than the consultant intended, so you may hear the downside, too. Call the references and ask about the consultant’s track record in keeping costs down, the ease and efﬁciency of the installation, the performance of the system, and responsiveness in emergencies. Ask about fees, as well, to be sure you’re not getting a raw deal on the ﬁnancial end of things. It’s a good sign if a consultant is a member of the Better Business Bureau. The local agency will keep track of any complaints registered with it about the consultant. The Better Business Bureau’s national ofﬁce recently ranked computer sales just above car sales in a customer complaint survey. (Go to www.bbb.org to locate and link to the Web site of the BBB ofﬁce nearest you. The local 80

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site may allow you to obtain a member report online.) Finally, meet with each of the ﬁnalists and explain your needs. The consultants may not be able to give you a dollar-amount estimate on the spot, but they should be able to at least get you in the ballpark. Within a short time, they should be able to give you a detailed estimate that outlines the expected costs of individual pieces of hardware and software with exact speciﬁcations, installation, and a projected upgrade plan. Although prices vary widely in this ﬁeld, the estimate should spell out how the consultant will charge you and for what. Don’t be afraid to ask for more details—it’s your investment. Also make sure you carefully review any service component in the proposed contracts. If your network goes down for some reason, you don’t want to get hit with a big fee that you didn’t expect to repair the damage. You might imagine that the service contracts and support offered by some hardware and software vendors would be a viable alternative to that of a consultant. However, unless you get the most expensive contracts that these companies offer—too expensive for most small businesses—chances are you’ll be on the phone with tech support a lot more often than you’d like. If you’ve ever had to call tech support for your home computer and have someone walk you through a complex problem, multiply that frustration by a hundred when it comes to business systems. It’s always better to have someone local who can come to you in an emergency, knows the systems, and can ﬁx the problem quickly and efﬁciently. If the estimate appears to be clear and speciﬁc, reﬂects the needs that you have discussed with the consultant, and fits your budget, make sure that you set appropriate timetables for completion of the work you’re contracting for, and make sure those are written into the contract. You don’t want your consultant to leave you hanging for a week while he or she goes off and does something else. Above all, use common business sense here. While hiring a consultant is a fairly expensive undertaking, it’s quite similar to any other outsourcing project. Ask smart questions, read the ﬁne print, and do your homework— 81

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Tech Terms network administrator: the person in your organization responsible for keeping a computer network up and running. This person—whether it’s you, your consultant, or an IT manager— nearly always has administrative permissions on all your company’s servers and workstations. He or she can also manage your network’s Internet connection.

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the last of which is what this book is all about. Of course, the other alternative is to simply hire someone to take care of all technology decisions. You may be tempted to appoint someone from within your organization as a de facto IT manager. I strongly recommend against this course—technology is a major investment, and handing it off to someone with little or no training is a big mistake. As you’ve probably already gathered, setting up a full business network can be both time-consuming and expensive, not to mention complex. Would you invest in a private jet, only to have one of the flight attendants also handle the mechanical maintenance? Unless you have an employee who’s extremely technically knowledgeable, it’s best to let the pros handle it. Hiring a qualiﬁed IT manager from the outside will provide you with an experienced hand who presumably has the company’s best interests at heart—but the cost will be steep. Despite the technology implosion in 2000–01, IT salaries are still pretty high, certainly higher than any service contract you would sign with a consultant. In addition, you will still have to purchase all your hardware, as well as your software licenses. Unless your business has a distinct technological bent—perhaps you’re still trying to sell stuff over the Internet or you want to wire multiple branch ofﬁces—or unless you plan on quickly scaling up to several dozen computers in your network, you should get along ﬁne with a consultant and service contract. If you do ﬁnd yourself struggling with growth and calling on your contractor above and beyond your service contract, you may then want to consider hiring someone for your staff. Indeed, if you’re calling on your consultant too much, the consultant may very well suggest it! If that’s the case, be sure to get a good one. Your consultant will certainly be able to give you an idea of whom to hire. You can also check the classiﬁed ads—in your local newspaper or on Web sites like Monster.com or HotJobs.com—to see what other companies require and pay. At a minimum, you should get someone with at least three years as a network administrator or IT manager.

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Cost Breakdowns There is quite a bit to consider when breaking down the cost of a fully networked ofﬁce. Here are three detailed examples that will give you an idea of the different kinds of networks, as well as the balance between size and price. None of these examples includes software, which is discussed in Chapter 4. The computers in each of these examples are assumed to have the following conﬁguration: 1.2-GHz processor, 128-MB of RAM, 20-GB hard drive, network card, three-year warranty, and Windows XP and Office XP preinstalled. The estimated $1,300 per computer assumes that you’re not buying laptops—if you are, add at least another $500 each. We’re also assuming in all these cases that you’ll be using a fairly costly operating system for your servers and computers—Windows XP Server, a ﬂavor of UNIX, or Sun’s Solaris, because these have the largest market shares among server operating systems at the moment. THE SMALL OFFICE NETWORK This is, essentially, the same kind of network that the business in our earlier example of peer-to-peer networking uses. Let’s say you have six computer users (you can have many more employees, but you may only need six of them to work on computers). This is a peer-to-peer network with a sizable DSL Internet connection. Six computers LaserJet printer Scanner Small copier Paper and peripheral upkeep Software upkeep (business upgrades and tech support) 768k DSL high-speed Internet installation 768k DSL high-speed Internet subscription Consultant installation fees (if necessary) Total Initial Cost Monthly Cost

$7,800 $400 $400 $500 $100/month $50/month $300 $350/month $1,000 $10,900 $500/month 83

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THE LARGE OFFICE NETWORK The ﬁrst of two client-server networks we’ll proﬁle is the large ofﬁce network, which consists of an ofﬁce of 12 computers and a small server used merely for print-andfile sharing and as an Internet connection hub. For about $500 more in server costs, you can get one of the aforementioned all-in-one servers and do away with the consultant costs, saving $2,500 on your initial outlay and nearly the entire monthly service contract. 12 computers Small server LaserJet printer Scanner Small copier Paper and peripheral upkeep 12 client operating-system licenses Server operating-system license 1,024k T1 high-speed Internet installation 1,024k T1 high-speed Internet subscription Consultant installation fees Consultant service contract fee Total Initial Cost Monthly Cost

$15,600 $1,500 $400 $400 $500 $100/month $100/month $50/month $750 $1,400/month $3,000 $1,000/month $24,800 $2,650/month

THE LARGE, HOSTING OFFICE NETWORK This is about as big a computer network as you’re going to need while still calling yourself a small business. We’re assuming a network of 24 computers and a pair of servers—one for print-and-ﬁle sharing and permissions, and the other to handle Internet service, internal and external e-mail, and a fairly well-trafﬁcked Web site. This does not assume use of an all-in-one server, given that the Web trafﬁc or internal server use could be too much for an all-in-one. 24 computers Print-and-ﬁle server Web server Two LaserJet printers Scanner 84

$31,200 $1,500 $2,000 $800 $400

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Large copier Paper and peripheral upkeep 24 client operating-system licenses Two server operating-system licenses 1,536k T1 high-speed Internet installation T1 router 1,536k T1 high-speed Internet subscription Consultant installation fees Consultant service contract fee Total Initial Cost Monthly Cost

$2,000 $300/month $200/month $100/month $1,000 $1,000 $2,000/month $10,000 $2,000/month $54,500 $5,600/month

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4

Your Business Runs on Software he second-level Terrace Club seats at Seattle’s SAFECO Field are undoubtedly some of the best in baseball. The view from that perch, slightly to the right of home plate, is outstanding. So is the service. The wait staff actually come down to take your order for the usual baseball fare— domestic beer, peanuts, and the jumbo Mariners dog— as well as a few distinctly Paciﬁc Northwest items, such as fresh sushi and lattes from Tully’s Coffee. The exciting part is that the wait staff comes back with your food in mere minutes, quicker than you’d get it if you traipsed off to a concession stand yourself. When I asked my waitress how she did it, she took the answer off her belt for me to see—a small handheld computer with an antenna. Given that Seattle is such a high-tech incubator, this wasn’t too surprising. Nevertheless, the order-taking process itself is impressive, and the database software behind it even more so. In talking with SAFECO Field ofﬁcials, I was able to get a good idea of how it works. The waitress’s handheld computer is about as complex as a Palm Pilot, circa 1997. She ﬁlls in the row and seat number and the order using a pen-based system, much like Palm’s Graffiti text-recognition software. Once the order is completed, she hits “Send.” The antenna on the device is connected to a short-distance wireless network, and the device sends the order over the network to a centralized computer bank in the depths of the ballpark. That computer analyzes and logs the order and sends it to the nearest concession stand to be ﬁlled. The waitress goes to that stand, picks

T

Summary ■ ■

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I Have a Network— Now What? Databases: The Workhorses of Business Using Databases in Your Business Hardware Options Installation Security Cost Breakdowns

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up the order, and delivers it to the customer, who pays for the food and chows down. But there’s more to the system than that. The servers in the computer bank are tracking all kinds of information at once. The sales that my waitress made, for example, are tabulated on the go, so that when she checks out for the day, the computer knows exactly how much money she should have to turn over. The same goes for the concession-stand workers, who log onto their registers, which are computers tied to the servers. In addition to tracking the money, the computers track every soft drink and french fry sold, for several reasons. The computers track inventory, notifying workers when they appear to be getting low on Red Hook beer in the Hit It Here Café or sprinkles at the upperdeck ice cream shop. Workers can restock as needed, before the various stands run out. The computer also tracks the popularity of items so that inventories for future events can be adjusted as needed. At the end of the day, workers dutifully log wasted items, so that the computers can further tweak inventory. And when overall inventory gets low, managers for the food service at the ballpark can place the necessary orders to suppliers. New inventory is also logged in so that the computer can make an accurate count. Stadium managers can also use the system to analyze the productivity of individual service workers. If, God forbid, my waitress happened to be slacking off, her managers would know by comparing the number of orders she ﬁlled during the game with the performance of other wait staff members. On the other hand, if she was hustling and doing her job exceptionally well, her manager would know that, too. Of course, the system isn’t perfect. A worker may forget to log in an order of fries that hit the ﬂoor before it hit the counter, and concession stands can sometimes run out of food items before replacement supplies arrive. But these systems certainly come a lot closer to painting a timely and realistic picture of sales and inventory at the SAFECO stadium than other methods might. The whole system is designed, of course, to make 88

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going to a Mariners game as fun and easy as possible. Its computer servers churn away at these numbers so that if you decide to stretch your legs and buy a beer and a dog between innings, you still have a decent shot at getting back to your seat before Edgar Martinez (no relation, unfortunately) hits a home run off of some poor, unsuspecting pitcher.

I Have a Network— Now What? Chapter 3 discussed establishing your computer network. With that simple task now accomplished, your employees can write documents, keep records, access the World Wide Web, trade information via e-mail, and share ﬁles over your server. All those chores are practically built into each PC on your network. But the whole idea of this chapter is to enable you to create something bigger than the sum of its parts, and for that you need software that will allow you to accumulate, access, manipulate, and use your data. The array of software available to businesses of all kinds is almost too vast to contemplate, and certainly too vast to cover in a single book. So let’s look at the basic kinds of software that people use in business, along with a few examples of practical applications. The idea is to demonstrate the power and ﬂexibility of network and server software.

Tech Terms database: a collection of information organized so that a computer program can quickly select and view parts or all of that information. The term can also refer to database management programs, such as customer relationship management programs, that are used to view, compile, sort, and analyze information on a database. We use the terms interchangeably here.

The Workhorses of Business Databases are ubiquitous and extremely flexible. No

matter what business you’re in, if you share data of any kind, you might beneﬁt from a database program that accumulates data in a consistent, centralized, and accessible format. Indeed, in many cases, databases are nearly mandatory, and you should become familiar with what they can do on a computer network. 89

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TREND: Microsoft Ofﬁce Is Here to Stay Say what you will about Microsoft—known in some circles as “the Beast of Redmond” and by other, less kind names—it knows how to build software and, perhaps more important, market the heck out of it. Ofﬁce XP (and its predecessors, Ofﬁce 2000, 97 and 95) is the dominant productivity suite—the basic tools of ofﬁce life like word processing and spreadsheets—on the market today. When is the last time you wrote a wordprocessing document in something other than Microsoft Word? Even on the Apple Mac OS platform, Ofﬁce remains king. Depending on which think tank is doing the study, some 85% to 90% of American businesses use Microsoft Ofﬁce in one form or another.

Ofﬁce XP Professional is a suite of ﬁve separate programs optimized for business—Word, Excel, PowerPoint, Outlook, and Access. This suite was introduced in Chapter 1 (see page 15), but here I want to emphasize the importance of Access, a database program for storing and organizing data. With Ofﬁce XP installed on all your computers, Access can become an important—and inexpensive— tool your workers can use to share data. Furthermore, it’s an important tool for you to use in sharing information with anyone who contacts your business. After all, if the vast majority of people use Ofﬁce, a cheaper alternative might save you money in the short term, but could cause problems when your big client can’t read that report you sent via e-mail.

Some ﬁrms simply use databases for storing information about clients or contacts. For example, throughout my career as a technology writer, I have had extensive working relationships with a certain public relations ﬁrm, which keeps records of my interactions with it, along with information about my articles on their client company. Because this ﬁrm is fairly large and its staff turns over frequently, I deal with new account executives all the time, but a new person can enter my name into the company’s contact database and pull up my entire history with the ﬁrm. The ﬁrm keeps entries on literally hundreds of journalists, along with notes on their areas of interest, fairness, trustworthiness, and, probably, gullibility. That’s an example of a simple “grab and go” database. Instead of keeping duplicate records, a worker can simply call up the jointly accessible record and, if appropriate, add to it as needed. In that way, all workers can beneﬁt from their colleagues’ experiences. 90

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Similarly, whole projects may be kept on databases. PowerPoint presentations, blueprints, reports—you name it—can all be put on a database for many people to access and work with. The latest version of Microsoft’s Ofﬁce XP contains fairly simple tools for creating collaborative-work databases like this, using a variety of technologies to let people communicate via messaging as they work on the same database entry. For example, two people working on a construction blueprint can “instantmessage” each other as they work, to ensure that changes aren’t deleted or overwritten, and to more easily divide up the work. The biggest database maker in the world is Oracle Corp., with Microsoft Corp. and IBM tied for second and gaining steadily. Each of these companies offers various database products designed for businesses of different sizes, along with various tools that can be used to make the best possible use of them. For smaller businesses, database programs come with a number of templates for customizing, along with fairly easy-to-use tools for managing the technical end of things, such as the number of users who have access to particular pieces of data. For larger businesses, the databases are far more complex, but still immensely ﬂexible when it comes to permissions, types of data, and overall management. Prices reﬂect the number of users or workstations expected to access the database. It’s worth noting that a cash register, timecard system, or bar-code scanner acts and counts as a user, just as a PC does. Let’s consider the products you’re most likely to use in your business. Remember that although these databases can be used by anyone in your company, installing and managing them will require professional help. MICROSOFT SQL SERVER Microsoft’s answer to Oracle’s dominance relies heavily on Microsoft’s history of being simple and easy to use. SQL Server makes it easy to create individual databases with a variety of input methods and forms—a task that usually takes much longer on any other database program. From a simple desktop window, you essentially 91

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Tech Terms embedded systems: a specialized computer system that is part of a larger machine or network. Typically, embedded systems are computing devices with only one or two functions. A handheld bar-code scanner or networked cash register are both examples of embedded systems.

create not only the database but also the forms that your employees will use to enter data into the system. Of course, the drawback is that you must be running Windows on nearly every part of your network— not only on your personal computers, but also on your embedded systems, such as cash registers—as well as use Microsoft’s Internet Explorer browser. If you use a Netscape browser, for example, you may ﬁnd that some database functions won’t work, or will take far too much time to process. SQL also hogs a space on your server’s hard drive, perhaps requiring an additional hard drive to store data. SQL Server prices are generally fair, and scale down nicely as you add more users to the network. A ﬁve-seat license is $298 per user, or $1,490, while a 10-seat license drops to $225 per user, or $2,250. IBM DB2 UNIVERSAL DATABASE IBM’s database entry adapts to many operating systems and devices, and it’s capable of growing nicely as more data and users are added. It also has a variety of tools you can use to draw out different analyses from your data. Another nice feature is the built-in messaging program—anyone using DB2 can send messages to other people currently using it—an advantage for ﬁnancial service companies that are required to check in regularly with supervisors around the country while making trades. It also has built-in encryption for security. Other database makers require additional payment for encryption, or require a third-party encryption program. You’ll pay $999 for the IBM server software, plus $249 per user, putting the cost of the DB2 right between the costs of SQL Server and Oracle’s offerings. ORACLE 9i STANDARD DATABASE Oracle is considered the king of databases: Its database software is fast and easy to use, and it doesn’t take up an inordinate amount of hard-drive space. Administration is easy, based on a simple browser, and 9i can be run with any operating system and any device. As your network and databases grow, 9i will handle them with ease.

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Unfortunately, 9i is expensive. Oracle charges a minimum of $300 per user or device, and some of the better diagnostic tools cost extra.

Using Databases in Your Business The ways that databases can be used in the business environment are probably close to inﬁnite, and I encourage you to think creatively. Here are some of the most common uses. INVENTORY Many businesses need to keep an inventory of something as part of their processes. Granted, keeping a database of office supplies and usage is probably counterproductive and a waste of money. But for retailers, manufacturers, food service, and many other businesses, inventory management is critical. The most inexpensive, though labor-intensive, way to maintain an inventory database is to physically type into the computer a record of each piece of inventory as it comes in the door and again as it is used or sold. For that task, though, you might as well use an Excel spreadsheet. A database comes into its own when you tie your receiving and sales programs into the inventory database. In the SAFECO Field example earlier in this chapter, databases were used to track where inventory— in this case, food—was being used throughout the ballpark via the sales system. Bar-code scanners can be used to log in shipments from your supplier; tying in your sales systems will give you an accurate picture of what’s going out the door as well. We’ve seen this system at work in a food service environment, and its use in retail isn’t hard to imagine either. But the system also works well for manufacturing. As orders come in, it’s easy to break down each one into the parts needed, compare the list to the database of supplies on hand, and place an order with your suppliers before the assembly lines even realize they have orders to ﬁll.

Tech Terms encryption: the translation of data into, in essence, a secret code. Using complex mathematics, computers can encrypt your data so that only users who have the necessary password or key can read it. Breaking through encryption is very difﬁcult—it could literally take a highpowered network of computers years to break through a single piece of encrypted data, and most security systems change encryption regularly to confound even those efforts.

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PERSONNEL Handling personnel ﬁles can be a sensitive issue, but you may have reasons for sharing them among your managers or other select workers. A database with password protection can be a good means of maintaining these ﬁles. If you use an electronic timecard system, you can tie it into both the personnel database and your accounting system to generate paychecks. Also, you may be able to monitor efﬁciency by comparing the timecard data to the data generated from the worker’s station on the assembly line or retail station. SALES You may be familiar with the way some Radio Shack outlets ask you for your name and address whenever you make a purchase. All that information goes into the store’s database. If you consider how the databases of every Radio Shack store in the country are combined, you’ll realize that Radio Shack has a massive amount of information on its customers, where they live and what they buy. You’ve probably had a similar experience with other retailers who ask only for your phone number or for your Zip code—similar means of identifying where their client base comes from. Retailers can use this information to target their advertising and ﬁne-tune their inventory choices. (Chapter 7 gives examples of what can be done with this information.) Because consumers have become more protective of their personal information these days, some may choose to withhold the information for which you ask. But even basic information, such as the item purchased and the time and date of purchase, can be helpful. Perhaps your blue widgets sell well on weekends, while your white doodads seem to sell best on Tuesdays, and you can stock up or plan your promotions accordingly. What about use of customer records by service and other nonretail ﬁrms? When doing business with repeat clients, think of the advantage of having all of their previous transactions on record. You and your employees will be able to ask them about past service and learn what their current needs may be. 94

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And think of promotions! Whether you gain information from credit-card data or from direct interaction with clients, you can, for example, design a system that will identify credit card users who should get a 10% discount on their next purchase after they spend $300 over a given period of time, and you can send e-mails or regular mail to your client list to publicize promotions or to remind them that it may be time to patronize your business again. For example, fuel oil companies in the Northeast often send cards in the mail to their past customers in late summer, when sales are slow, to remind them that they’ll need to purchase more fuel for the winter. Once the data is in the database, you have to ﬁgure out how to make it answer your questions. Fortunately, most standard database programs come with the tools you need to manipulate the data for analysis. MANAGEMENT OF CUSTOMER RELATIONS One of the most popular tools for mining information in business databases is called customer relationship management (CRM) software. The idea here is to meld your various databases—customers, transactions, inventory, etc.—into a coherent whole, using CRM software to connect them all. If you ask 50 companies what their CRM offerings are, however, you’ll get 50 different sets of products and rationales for using them. CRM is, in many ways, simply a buzzword to describe a suite of business software products. What that suite consists of is up to the company marketing it. Nevertheless, there are a few things that every suite of CRM software should have.

All CRM suites should have a strong customer component; that is, they should be able to match the information you have on your customers to their transactions, providing a meaningful analysis for your sales force to use in retaining those customers in the future. With a simple click, you should be able to see the entire history of your transactions with a given customer.

SALES MANAGEMENT.

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DIAGRAM 4.1: How Your System Software Works This diagram shows you how different software programs work together within a computer system. At the bottom, the operating system tells the computer’s hardware what to do, and also serves as an interface between the user, the other software programs, and the computer. On top of that lie the databases, which store and manage the data input by users. And ﬁnally, the applications layer rests on top of it all. These applications, or programs, rely on the databases for information and call upon the computer’s hardware via the operating system to process that information.

Customer Relationship Management

Contacts

Personnel

Databases

Operating System

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RESOURCES: Network Security Unfortunately, securing an entire network against intruders is not as simple as ordering 20 sets of Norton's AntiVirus. Here's a list of computer security companies with products and services that can help you lock down your network. ■ ■ ■ ■ ■ ■

@Stake Inc.: www.atstake.com Digital Security Co.: www.digitalsecurity.com GFI Software Ltd.: www.gﬁ.com Internet Security Systems: www.iss.net TruSecure Corp.: www.trusecure.com Zone Labs: www.zonelabs.com

Good CRM software suites should also quickly update your inventory or project databases so that each customer’s latest orders can be fulﬁlled and shipped (if applicable) quickly and easily. After making a sale, your sales professional should be able, through CRM software, to place an order and have those products in the works within seconds.

FULFILLMENT.

Good CRM software will be able to record service calls, customer comments, and other service notes. That way you can quickly respond to a customer who calls with a problem.

CUSTOMER SERVICE.

MISCELLANEOUS ADD-ONS. Software companies also provide a number of “add-on” services and features to their CRM suites. For example, in the legal or accounting ﬁelds, some CRM software suites include conﬁdentiality features so that only those persons with appropriate passwords and access can see speciﬁc information about a client’s case or ﬁnances. Other CRM suites tie into your accounting software, providing billing and payment services for the customer as soon as the sale is made.

How do you decide which CRM suite is right for you? The choice can be difﬁcult, given the number of options that often accompany this software. The current leaders in this area are: 97

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RESOURCES: Advanced Financial Software Although databases deﬁnitely do the heavy lifting in computerized businesses, you will also need other ﬁnancial software programs to round out your system. For at least a while you may be able to get away with using Microsoft Money or Intuit’s Quicken Home & Business (discussed in Chapter 1), but as your business gets bigger and more complex, you’ll need to move up to software that can handle larger tasks and manage more data. ■ ■ ■ ■

Intuit’s QuickBooks Pro and QuickBooks Premier represent the next steps in accounting. You’ll be able to do billing, payments, taxes, and payroll on a large scale, all from the QuickBooks program. Your sales database and timecard system can also be fed into QuickBooks with a little extra effort. The Pro version costs $179.95, while the Premier version—which includes report generation and better integration with the rest of your business—costs $379.95.

Siebel Systems (www.siebel.com), which is mostly for midsize to larger businesses, Pivotal (www.pivotal.com), Oracle (www.oraclesmallbusiness.com), and Onyx Software (www.onyx.com).

Microsoft, through its Great Plains small-business software company, is expected to introduce CRM software in the last quarter of 2002. Each of these companies offers, or will offer, a basic suite of software functions that includes all of the aforementioned features—sales, fulfillment, and support. Anything else is extra, and no matter who’s selling, make sure you look closely at what you’re buying, and get the advice of your IT professional or consultant as needed. CRM software, unfortunately, doesn’t come cheap. Most CRM makers assume you’re already using not only a number of databases, but also a contact-management and e-mail system on the desktop, such as Microsoft Outlook. Once these pieces are installed, the CRM software sits on top of all of the other software on each workstation that requires it in your business. Without all the other pieces of software, you can expect to pay, at minimum, $200 per workstation for good CRM software. In addition, software vendors may charge up to $1,000 a day 98

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for training on these systems, depending on the number of people who are to be trained. In some cases, it’ll pay to simply read the manuals instead, or to include training as part of your consultant’s duties, for a lower fee.

Your Hardware Options Getting the most out of your databases may require more than just establishing a network of PCs and a server. Manufacturing and retail environments will probably require specialized hardware for access to the database. However, buying this hardware is generally cheaper than putting full-ﬂedged PCs on your assembly line or using them as gloriﬁed cash registers. Look into buying used specialized hardware. Businesses shut down all the time, often leaving behind good equipment that you can get cheaply. Take a look on Overstock.com, POSMicro.com, and auction sites like eBay for deals. Local classiﬁed ads and bankruptcy auctions are also great sources of equipment. HANDHELD SCANNERS Most warehouses, large and small, use bar codes to track inventory, and you can too. You’ll need to check with your suppliers to ensure that they use bar codes, but the vast majority do. So every time you order, the people responsible for unloading and storing your inventory can scan the boxes and log them into the database on your network. Handheld scanners cost $250 to $350 apiece, store information in an onboard memory chip, and synchronize with your computer network through a docking system. To achieve close to real-time inventory management, you can use wireless enabled scanners, which will log the new inventory to your network within a second of scanning it. Now, let’s say that your production line or retail store needs more materials from your inventory. Your warehouse worker scans the materials again, alerting the database that these materials are now in use. When enough materials are taken out of inventory, your management software will send you or your manager a mes-

Tech Terms synchronize: To share data between two devices or pieces of software. When you synchronize a handheld scanner with a computerized database, for example, the data from the scanner updates the database, and, if necessary, the scanner can take updated data from the database. docking system: a piece of hardware that plugs into your computer and allows a handheld or mobile device to connect with the computer. For example, handheld organizers use a docking system to recharge their batteries and to trade information with the PC they’re connected to.

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Tech Terms point-of-sale system: a specialized thin client that is used literally at the place where the transaction between customer and business occurs. These thin clients usually come in the form of computerized cash registers.

sage to let you know that, at the current rate of use, you’ll run out soon and should order more production materials. In some cases, you can even have your software place that order for you, ensuring that you’ll always have enough materials in your inventory. CASH REGISTERS If you’re a retailer, you can use your cash registers to feed all kinds of data directly to any database you have up and running. Many of these registers are thin clients and thus are fairly inexpensive. Essentially, they are stripped-down computers, some with keyboards for entering customer data, plus bar-code scanners and magnetic-strip readers for credit cards. The more expensive point-of-sale system will not only pop open the cash register when a sale is logged, but will also automatically enter details of the transaction into a customer database, a sales information database, and an inventory database. A new, fully functional, network-ready, computerized cash register with a barcode scanner can cost about $3,000. ANOTHER SERVER To house this complex database you may need additional storage, and perhaps even another server. Storage systems, which are essentially a couple of extra hard drives lashed to an existing server, can cost between $300 and $1,000, depending on the amount of storage you need to house the data generated from your sales. An additional server will cost $1,500 to $2,000, depending again on the amount of storage and RAM needed. ELECTRONIC TIMECARDS I ﬁrst saw an electronic timecard system was when I was a 16-year-old worker at McDonald’s after school. One day, the old clock and our paper timecards were replaced with a magnetic card scanner and plastic timecards with our names on them. Our manager was thrilled because ﬁguring out everyone’s hours, a formerly onerous job, now took about two minutes—the time it took for the machine to print out a daily report.

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Today, these systems are smaller and more efficient. They can be connected with the rest of your computer network. Employees punch in and out as usual, and the time data is either kept onboard the timeclock system or, in some cases, sent to personnel and payroll programs on other computers in the network. Figuring out someone’s hours for the day, week, month, or year takes only a few seconds. When the electronic timecard system is tied in with the payroll program, hours can be compiled, taxes removed, and checks printed in a matter of minutes. You can expect to pay $500 to $1,000 for the hardware, including timecards, and another $100 to $300 for the necessary software. Full-blown systems, including installation, cost $1,200 to $2,000, depending on the reseller and the complexity of the existing computer systems. Leaders in this technology include Time Clock Plus (www.timeclockplus.com) and TimePilot Corp. (www.timepilot.com).

Tech Terms systems integrator: A computer technician who can bring disparate pieces of hardware and software together into a functioning network. Systems integrators often work with databases and other complex pieces of software. Hiring one for your staff would be prohibitively expensive, so chances are you’d hire one as a consultant.

Getting Everything Installed Even if you are a very technologically adept person, who perhaps set up your own PC network and created your own Web page, I strongly caution against setting up all but the most basic databases on your own. The job is exceedingly complex, and it requires a great deal of effort to get all the hardware and software functioning together. You’ll have to create physical links—using Ethernet cable, most likely—between your various computers and servers, and you’ll have to set up the network so that the software running your business knows where to send data. That means you’ll need a consultant, oftentimes a systems integrator. Such people specialize in getting databases up and running within your business. The same people who helped set up your computer network can sometimes handle database installation—if they 101

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have the appropriate expertise and certiﬁcation—but given the complexity, ﬂexibility, and variety of the different kinds of software, hardware, and uses involved, one size seldom ﬁts all; specialization is almost imperative for people in this ﬁeld. Again, the key to success is to do your homework. The information provided here on the leading database software should give you a good idea about “parts.” Chapter 8 discusses the process of ﬁnding a consultant. Expect a consultant fee of at least $3,000 to set up a simple retail system that logs into a database, in addition to fees for installing the server and computers (as described in Chapter 3). Fees to install and conﬁgure larger retail or manufacturing systems can amount to $10,000. Getting a service contract is critical. Don’t merely go for an “emergency” plan. If you’re using databases to their utmost, you will probably need daily, on-call help. You need a service plan that permits you to call your consultants or integrators whenever you might need them. These plans can be purchased on a monthly or yearly basis, depending on the consultant involved. You may also think about hiring someone speciﬁcally to manage your databases. In smaller businesses, if your system administrator has database experience and certiﬁcation—a very important piece of paper that means the consultant has studied and passed tests with regard to the speciﬁc brand of database software—you can combine the two jobs instead of hiring a network manager and a database administrator. But in larger or more complex businesses, in which you have, say, a computer network for your managers and salespeople, plus a retail or manufacturing operation that uses databases, you’ll probably need to employ a database administrator on your staff in addition to your network administrator.

Some Thoughts on Security Whatever the size or type of your business, the information in your database is often among the most sensitive that you have, and you should treat it with appropriate 102

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caution. If you don’t, you’ll be vulnerable not only to outside hackers but, more likely, employees who ﬁgure out how to access computer systems that they shouldn’t. Computer experts say that most of the hacking and damage done to business computer networks comes from the inside—either by accident or by disgruntled employees. REGULATING ACCESS One of the simplest precautions you can take is to determine which of your employees needs to see database data, who merely needs to feed data into the database, and who doesn’t need to take part at all. For example, in a small manufacturing outﬁt, you and your top managers will need access to all the databases, whereas your sales chief really needs to see only the sales database, and your manufacturing head needs only the inventory database. In a retail operation, a salesperson may have restricted access to the sales database, while the stock boy can only add to the inventory database without accessing any information from it. This system works the same way as basic network access does—through a system of permissions set up by your database administrator or systems integrator.

Tech Terms remote access: literally, accessing a computer system remotely, via the Internet or a direct dial-up to the server. Many workers who travel frequently or telecommute use remote access to read their company e-mail or manage important data.

A SEPARATE SERVER Another precaution is to eliminate the possibility that anyone can access your database via the Internet without your authorization. The best preventive strategy is to house your database on a separate server—one that’s connected to PCs throughout the ofﬁce but has no direct connection to the Internet. Because servers aren’t cheap, you’ll have to factor cost into that decision. If your network has remote access, however, you may want to give your workers direct access to the database via the Internet, especially if they often generate sales or other kinds of data on the road or from home. To do that, you’d set up a series of passwords and ﬁrewalls, just as you would for access to your main computer network. (See Chapter 6 for a discussion on mobile-access options.) I’ve included the diagrams beginning on page 105 103

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Tech Terms ﬁrewall: a piece of hardware or software designed to prevent unauthorized access to or from a private network. The most common ﬁrewalls are software-based and installed on your server; they are used mainly to prevent any unauthorized user from accessing the company network via the Internet. Hardware ﬁrewalls are far more expensive and far more effective, because

they have independent processing power to more thoroughly analyze incoming and outgoing data. Firewalls can also prevent employees from downloading large ﬁles or sending certain types of data through the Internet. For example, some instant messaging services are blocked by ﬁrewalls because they can also transfer sensitive data.

to give you an idea of how databases interact within three kinds of networks. You’ll see these networks again at the end of the chapter, when we give you the cost breakdowns for this chapter. You’ll note that each diagram has a ﬁrewall (see the following page) between the Internet and the network server (or, in the second example, a PC) providing the company’s Internet connection. Security is critical for any business, and you’ll need to have a strong ﬁrewall installed on your server—the choke point between the Internet and your network—as well as antivirus protection for both the server and every computer on your network. Despite the fact that the database server in the second example isn’t directly connected to the Internet, hackers do have tools that can give them control of a PC. If that PC has access to a database server, the hacker has access to it too. Unless you use an entirely closed system, in which no PC with Internet access has access to the database server, there’s always a risk, and you should act cautiously. (A closed system basically means that there’s no outside connection to the Internet. You set it up like any other network but without the Net connection, and the cost is reduced accordingly.) Keep in mind, though, that there are compelling business reasons for you and your managers to have access to both the database server and the Internet on the same machine, the biggest of which is efﬁciency. 104

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DIAGRAM 4.2: The Basic Network This diagram represents the computer network of a white-collar professional ﬁrm that has a pair of databases, one for client information and one for projects under development. Both databases reside on a server separate from the one that provides Internet access and print-and-ﬁle sharing. The database server, however, is connected to the network server so that employees can access databases remotely.

KEY TO NETWORK ACCESSIBILITY External Access via the Internet

INTERNET

Internal Access Only

Firewall

Network Server

Database Server

Internet Access

Client Information

Print-and-File Sharing

Projects Under Development

Remote Users

Workstations

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DIAGRAM 4.3: The Retail Network This diagram shows how the sales and inventory databases of a retail network are separated from the Internet by a single PC, probably the owner’s, to which they are connected. KEY TO NETWORK ACCESSIBILITY External Access via the Internet

INTERNET

Internal Access Only Database Input Only

Firewall

PC

Database Server Sales

Inventory

Point-Of-Sale Cash Registers

Inventory Scanners

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DIAGRAM 4.4: The Manufacturing Network This diagram shows the most complex network a small business can install and still call itself a small business. There are two servers—one for the Internet connection and print-and-ﬁle sharing function, and another for sales, inventory, and personnel databases. Only the sales database is accessible via the Internet; access to the others is restricted to onsite computers only—that is, work stations, bar-code scanners for inventory, and the electronic timecard system for personnel.

KEY TO NETWORK ACCESSIBILITY External Access via the Internet

INTERNET

Internal Access Only Database Input Only

Firewall

Inventory Scanners

Database Server Sales Network Server

Inventory Personnel

Electronic Timecard System

Workstations

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So, healthy paranoia means that you put up ﬁrewalls and make sure that your database server is heavily protected with passwords and other software. Some security software can even detect whether a violating command originates internally, from a PC on your organization’s network, or externally, via the Internet. It works by simply looking at the log-ins on your network to see whether any of those machines sent the command in question. Unhealthy paranoia, of course, keeps you from getting the job done.

A Final Word on Databases Databases are only as good as the people who maintain them, so no matter what you use your database for, everyone in your business needs to be sure to update the database as a matter of course. You can simply make this requirement a part of the description and training for each position. Of course, if you’re using specialized software for various functions, that software may very well update the database for you. But if your workers clock in to an electronic timecard machine, or are required to input data into the database regularly, you must require strict compliance.

Cost Breakdowns THE BASIC NETWORK The following ﬁgures relate to a small ofﬁce of ten people. They do not include the cost of the PCs and network server because that subject was covered in Chapter 3. Thus, these ﬁgures represent only the database costs, including integrating the database software with appropriate software on each workstation in your business. Microsoft SQL Server (ten licenses) Server hardware Installation and integration Service contract Total Start-up Cost Total Monthly Cost 108

$2,249 $1,500 $3,000 $500/month $7,249 $500

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THE RETAIL NETWORK The following ﬁgures apply to a fairly advanced retail network, with two bar-code scanners and two point-ofsale machines. Many small retailers can get away with one of each. The installation and service costs are smaller because the network itself, despite using specialized equipment, is fairly simple. Microsoft SQL Server (ﬁve licenses) Server hardware Installation and systems integration Service contract Two new Posiﬂex Windows-based point-of-sale systems Two new Symbol bar-code scanners Total Start-up Cost Total Monthly Cost

$1,489 $1,500 $2,000 $250/month $6,580 $500 $12,319 $250

THE MANUFACTURING NETWORK This network deﬁnitely belongs to an ambitious small business. Again, the ﬁgures assume a managerial, sales, and support staff of ten people, and a manufacturing staff of ten to 25 additional people. A three-scanner inventory system as well as a timecard management system are also assumed. Oracle 9i Database Standard Edition (14 named users) Server hardware Installation and systems integration Service contract Three new Symbol bar-code scanners TimePilot electronic timecard system Total Start-up Cost Total Monthly Cost

$4,200 $2,000 $10,000 $2,000/month $750 $870 $19,820 $2,000

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5

A Cautious Look at e-Commerce he bedroom community of Red Bank, N.J., has been immortalized in ﬁlm by one of its most famous sons, ﬁlm director Kevin Smith, whose “Jersey Chronicles” include the movies Clerks, Mallrats, Chasing Amy, Dogma and the latest memorial to his two amazingly stupid and funny signature characters, Jay & Silent Bob Strike Back. But Smith is far more than just a screenwriter and movie director. He has written storylines for a number of comic book lines, including D.C. Comics’ Daredevil and Green Arrow, and he owns his own comic book and movie memorabilia store on Broad Street, the town’s main drag. His store, appropriately called Jay & Silent Bob’s Secret Stash, is a magnet for fans of Smith’s movies and home to his production company, View Askew Productions—the movie industry’s version of a small business. In the movies, Jay (played by childhood Smith friend Jason Mewes) is a foul-mouthed, moronic marijuana dealer, while Silent Bob (played by Smith) is his literally silent partner whose quiet wisdom, such as it is, keeps them both alive, if not well. In real life, however, Smith is a shrewd businessman, using the World Wide Web to promote his all his enterprises. The main entry into the “ViewAskewniverse” is through the production company’s Web site, www.viewaskew.com. Smith uses this front page to promote his latest movies, post articles and reviews about his production company, and plug his latest comic book projects. In order to try for a bigger opening weekend for Jay & Silent Bob Strike Back, Smith used his site to

T

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How to View e-Commerce The eBay Way Managing and Expanding Your Auction Business eBay Alternatives Selling Via Both Auction and Store Move Your eBay Auction Home Amazon.com, Yahoo and Beyond Fulﬁlling Online Orders Fast Growth Cost Breakdowns

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Tech Terms portal: an Internet term, circa 1997, for a Web site that offers a number of useful features, designed to attract many people and to serve as their access point to the rest of the Internet. These sites tend to offer search engines, Web-site directories organized by subject and subcategories, e-mail, chat, classiﬁed ads, news and weather, and even shopping. Examples of portals are Yahoo!, MSN, Netscape.com, Excite, Lycos, and the failed Go.com and Infoseek sites. splash page: a Web page, usually the ﬁrst page a customer encounters on a Web site or subsection of a site, that simply provides the name of the site,

some graphics, and a link to the main index page. In other words, it causes a “splash,” then turns the reader over to the meat of the site. Good splash pages encourage users to read more, while boring splash pages can send users surﬁng off to another site. shopping cart: online, this is where e-commerce customers store their tentative purchases. A shopping cart lets users refer back to descriptions of the items they’ve chosen and wish to buy. Once users have ﬁnished shopping on the Web site, they proceed to the “checkout,” where they provide payment information and shipping information, and the transaction is processed.

promote a giveaway of signed movie merchandise to anyone who sent in movie stubs from two consecutive showings of the ﬁlm. A companion site, www.newsaskew.com, is a bulletin board where fans and Smith can communicate with one another. Ever since the Internet became an important part of culture, Smith has been right there with it, even spooﬁng his fans’ occasional jibes in Jay & Silent Bob Strike Back by having his two main characters travel across the country to stop a ﬁlm based on their lives because Internet users panned it. (In the end, perhaps fulfilling one of Smith’s secret fantasies, the two travel across the country to pummel every single person who has ever posted a negative review about them.) You would think, however, that a director whose last two movies pulled in more than $30 million apiece in the U.S. would have a massive e-commerce presence online as well, with servers in the back of the Secret Stash churning out orders to a well-oiled distribution 112

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and fulﬁllment machine. Instead, the online Stash is a good example of how to easily integrate e-commerce into your existing business. Smith’s Web site is hosted by the Web portal Yahoo!. A link from the ViewAskew Productions’ home page takes you to a splash page featuring a business card from Jay & Silent Bob’s Secret Stash, which has a link to the online store at Yahoo!. The online store has its own look and feel, but borrows heavily from the design elements of both the ViewAskew site and Smith’s movies, providing a sense of visual continuity even though the URL has changed to http://store.yahoo.com /jsbstash/. Links along the side take you to merchandise from each of Smith’s ﬁlms, as well as from the production company and Smith’s comics. Other links return you to ViewAskew at any time—a critical feature that assures users that they’re not getting lost on someone else’s Web site. Each movie link features about a dozen items. Clicking on an item reveals more details, including whether Smith himself has signed it. The Yahoo! site provides all the tools necessary to run a large e-commerce site. Users can put their purchases in a shopping cart and proceed to the checkout page found on virtually every e-commerce site, where they enter their credit card and shipping information. Yahoo! also provides the merchant with authorization of credit card purchases, aids in the transfer of funds to the store’s accounts via simple wire transfer or credit card crediting, and e-mails the order information to the store, where a member of Smith’s staff reads the order off the screen, puts the items in a box, and ships it. Sure, the online Stash handles no more than a few dozen orders a day except for when one of Smith’s movies comes out, but Smith’s bricks-and-mortar store does a brisk business. And considering that his Yahoo! store costs him only about $60 a month to maintain, plus the 0.5% cut Yahoo! gets on each sale, Smith is able to maintain an important link to his fans and make a few bucks in the process, without having to invest in expensive servers and software or pay for their care and maintenance. 113

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How to View e-Commerce in Your Business In the late 1990s e-commerce was the hottest thing going. Remember the obscene amounts of money made by the initial public offerings of companies like Pets.com and eToys? Venture capitalists threw literally billions of dollars at nearly any e-commerce company they could ﬁnd, even though none of them, including giants like Amazon.com, had a clear and well-deﬁned vision of how they would make a proﬁt. These companies and the venture capitalists that backed them up assumed that all would be revealed eventually in the learning process of the New Economy. Today, we can look back and share a grim chuckle at these companies’ expense. An e-commerce Web site does not a business make. Billions of dollars were lost, and thousands of people ultimately lost their jobs because of the “irrational exuberance” surrounding ecommerce. However, we did learn a few things out of this failed e-commerce experiment: ■

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e-Commerce works best as an extension of your realworld business, a way for you to reach new customers

and, eventually, bring them in the store. One of the most successful retailers online today is Wal-Mart, and a large part of that success comes from the company’s taking advantage of its numerous distribution centers already located throughout the country. WalMart didn’t need to build expensive infrastructure to go online; companies that did got burned. The fewer real-world, bricks-and-mortar resources—and the less money—you must devote to e-commerce, the better off you’ll be. Toys ‘R’ Us and Target stores both spent millions on e-commerce, and in the end, decided that a partnership with Amazon.com was far more proﬁtable than trying to reinvent the wheel for their own online businesses. The more you can piggyback your business onto existing e-commerce infrastructures, the better off your bottom

line will be. Again, large businesses are now piggy114

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TIPS: What to Sell Online One of the biggest survivors of the 1990s dot-bust was BlueNile.com, the online jewelry store. The margins on diamonds and jewelry are inordinately high: 10% to 20% for some items, up to 50% for diamonds and gemstones. Shipping is also easy—the products weigh only a few ounces, though the shipping insurance does add up. Like BlueNile, the survivors of the dot-com bust were book and music stores, computer and software retailers, highticket retailers like jewelers, or boutiques with unique items. In general, items that are relatively expensive and have a relatively high margin of proﬁt make for better e-commerce products, as do products that are easy to ship through the mail. And no matter what you sell, it’s important to provide your would-be customers with as much information as you can, including photos! After all, unlike in

a real-world shop, the online buyer can’t handle the merchandise. When it comes to price, check other Web sites to see what similar items sell for and price yours accordingly. Since you’ll have less overhead on Web sales than in your real-world store, you may wish to pass these savings along to your online customer. At the same time, you don’t want your best customers going to the Web instead of stopping by your shop. Offering a 5% to 10% discount off real-world retail prices has worked well for many online retailers, while charging full retail price seems to work for retailers who attract customers for whom the convenience of shopping online overcomes any price resistance. Unfortunately, there’s no exact science for e-commerce pricing. Experiment with price in the early stages of your Web site to ﬁnd out what seems to attract buyers and what seems to hurt your sales.

backing on Amazon.com or eBay’s infrastructure, while small businesses, like Jay & Silent Bob’s Secret Stash, are using turn-key online operations provided by Yahoo!, eBay, and other sites. Obviously, e-commerce is not for every business— it’s hard to sell home-cooked meals or legal advice via the Internet. Only a handful of service-oriented businesses translate well to the Internet, and trying to integrate online functions into your daily work could distract you from serving your real-world customers. The online environment is best for goods or services that you can deliver to the customer quickly and easily, using your existing infrastructure—items you can easily box and send or intangibles such as reports or information. 115

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Tech Terms bidding price: in an auction, online or off, the price at which a seller starts the bidding on an item reserve price: this is the minimum price the bidding must reach for the seller to actually agree to sell the item. If the bidding on an item does not reach the reserve price, the seller is not obliged to part with the item and no money changes hands. Reserve prices are not initially revealed to prospective buyers, in order to protect sellers against bids that come in right at the reserve price and to keep interested parties bidding higher. However, on eBay and other auction sites, after

prospective buyers bid, they are told whether they have met the reserve price and whether other bidders have already met it. Reserve prices are optional on most sites, and “no reserve” auctions can create some interesting bidding scenarios as well. Dutch auction: an auction in which two or more identical items are up for bid. The top bidders, in order, receive the items, as long as they have met the reserve price on each item. If only four bids for ﬁve identical items meet the reserve price, the ﬁfth item is not sold to the ﬁfth-highest bidder.

With those cautions in mind, however, e-commerce can be a solid addition to your existing business, and, done right, can even be proﬁtable. Let’s look at the different ways you can open up your online storefront.

The eBay Way In 2001 the online auction site eBay launched an initiative to attract more businesses to its auctions. Via “eBay Stores,” businesses of any size not only could auction off their wares online, but also could use the existing eBay infrastructure to place auctions directly onto their individual Web sites or develop stores where the businesses could charge ﬁxed prices for items instead of auctioning them off. This is a brilliant idea for small businesses looking to get into e-commerce. There are approximately 30 million registered users on eBay—a massive audience for any potential seller—and the site gets literally millions of visitors every day. It stands to reason that at least a few of these teeming millions might be interested in what 116

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you have to sell. You can test the waters with any number of different products from your business and see what the online market will bear. Getting started on eBay is simple: You ﬁll out a few online forms to provide contact and billing information, read the service agreement carefully, post a few items to get started, and pay eBay an upfront fee of 30 cents to $3.30 per item, depending on its value. It’s important to include ample information in your auction listing, such as size, weight, and technical speciﬁcations where appropriate. A picture of the item gives would-be bidders a much better sense of what’s being offered. A .jpeg formatted photo—like the ones from digital cameras or those found on other Web sites— is perfect for this. In addition, eBay charges a percentage of the sale as its service fee: ■ 5% for the ﬁrst $25 of the sale, ■ 2.5% on the next $25 to $1,000, and ■ 1.25% for every dollar of the sale above $1,000. You must also choose a payment service so that your buyers can safely send you money, while ensuring that they’ll receive the item sent to them. Services such as eBay’s proprietary service, eBay Payments, and the independent PayPal let people pay quickly via credit card. Through any of these, your proceeds go directly to your checking or credit card account. Unless you have a corporate credit account that you use heavily and account for regularly, I suggest moving the funds through your business’s normal bank accounts for ease of accounting. In exchange for verifying the customer’s credit information and transferring the funds to your account, the payment service will also skim a percentage point off the top of each sale. If your items don’t sell, you’ve lost only the original posting fee. Auctions can last three, ﬁve, seven or ten days, with most business users, according to eBay, opting for the ﬁve-day run. To ensure that you’ll make at least a few bucks off the deal, I suggest that you set your reserve 117

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Tech Terms Web-based software or services: software programs that are accessible via the Internet, where Web surfers can access and use them via their Web browsers. For example, Microsoft Outlook is a standard, computerbased software program, while Yahoo! Mail is Web-based.

price somewhere above your total auction and payment

costs if you sell the item, as well as between your wholesale cost and your in-store price. Checking out similar items on eBay can give you a reasonable idea of where to place this reserve price. You can also sell multiple items via a Dutch auction (see page 116). For example, if you have ﬁve identical items, the Dutch auction will sell them to the top ﬁve bidders in your auction, as long as they’ve all met the reserve price. Once your auction of an item is complete, the buyer pays you via the payment service and sends you an address; you are responsible for packing up and shipping your items to the buyer. By the way, you can specify in your listing of an item that shipping and handling costs are extra, and even consult with buyers to determine the shipping method, so that they don’t feel they’re paying too much. Get a few auctions under your belt and see how the system works for you. First, of course, ensure that you’re making money. If, after the service payments, you’re clearing only cents, you may have to jack up the reserve price. If the reserves aren’t being met, perhaps the online demand for your item is less than the real-world demand, or perhaps other items in your inventory would be better suited for online marketing. Try again with new auctions, using different items, reserves, and methods. For a novice seller to establish a reputation as a reliable businessperson, it’s important to rack up a number of sales. Many veteran eBay buyers won’t purchase anything from unproven sellers. Once you’ve sold ten, 20, 50, or even 100 items on eBay, you may ﬁnd that your sales come faster, and your ﬁnal sales prices are higher, because more bidders can drive the price upward quickly. Patience is a virtue, especially on eBay.

Managing and Expanding Your Auction Business Once auctions seem to be proﬁtable for you, it’s time to expand. It can be a pain to manage dozens of online 118

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RESOURCES: Auction Management Dozens of software programs are available to help you manage your auctions. Here are the top ones. ■ ■ ■ ■ ■ ■ ■ ■ ■

www.myauctionmate.com www.auctionwatch.com www.auctionbroadcaster.com www.purchasepro.com www.auctionworks.com www.channeladvisor.com www.collectoronline.com www.commerceﬂow.com www.fairmarket.com

auctions, especially if you have a business to run in the real world. Fortunately, eBay and a number of other companies offer additional software that lets sellers automate their auction processes to make it easier to post items, design attractive listings and deal with buyers. The Seller’s Assistant Pro is eBay’s Web-based management tool that lets business sellers create dozens of listings at a time, manage e-mails from prospective buyers and winning buyers who will send you shipping information, keep track of multiple auctions, and help with fulﬁllment after the sales are made by consolidating shipping information into spreadsheets. The Pro version of this service, which is accessible from any Web browser, costs $15.99 a month, and offers a great way to safely bulk up your sales without committing yourself to lengthy contracts. A number of companies also provide software and support for further integrating auctions into your business. Companies such as AuctionWatch, AuctionWorks.com, Channel Advisor Corp., and FairMarket Inc. provide management tools much like eBay’s Auction Assistant Pro (see the box above for Web-site addresses), while allowing you to integrate your auction sales into your existing databases. For example: ■ You can add your auction sales into your general in119

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RESOURCES: Niche Auction Sites Believe it or not, eBay and Amazon.com have yet to corner the market on online auctions. Granted, both sites have the critical mass necessary to practically guarantee a buyer for every seller, but other sites have explored certain niches. Here’s a sample of smaller auction sites that you can ﬁnd online. Chances are, there’s one for your products, too. ■ ■ ■ ■ ■

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www.skyauction.com for travel deals www.stockandbondauction.com for old stock and bond certiﬁcates www.auctionjunkyard.com for furniture and automotive items www.limoges-auction.com for specialized porcelain www.labx.com for used and excess scientiﬁc equipment

ventory database in order to ensure that you don’t run out of product. You can add the names and addresses of buyers to your promotional database for mass mailings or e-mails. You can integrate the sales from your auctions into your ﬁnancial programs, so that they’re automatically accounted for as you run your spreadsheets. You can even completely outsource the entire sales and fulfillment process, letting one of these companies

handle everything for you in exchange for a percentage cut, typically in the low double digits, depending on the type of products you’re selling and their cost. All you have to do is ensure that the company has the inventory on hand. The cost of these services varies with the company. Some, such as eBay’s services, are Web-based and thus are run on the subscription model. Others are software programs that must be installed on your servers and run in conjunction with your existing database programs; 120

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these can run into hundreds of dollars each. A full, Webbased auction fulﬁllment package can cost hundreds of dollars each month, but the monthly fee is a percentage of your auction sales.

eBay Alternatives If your eBay auctions are going well, it’s a good idea to investigate auction listings on other Web sites to reach an even broader base of buyers. In an attempt to compete with eBay’s business, Amazon.com, Yahoo!, and other portals offer auction opportunities. A number of smaller auction Web sites also try to approach eBay’s scope, while others focus on smaller business niches (see the box on page 120). AuctionWatch’s software was initially designed for use with multiple auction sites, and it can help you expand in this way. Again, start small at ﬁrst, then scale upward if you think the sales will be worth it. However, eBay is the clear winner in online auctions, so don’t let your experiment with other sites distract you from eBay ventures.

Selling via Both Auction and Store As mentioned earlier, eBay recently began offering “stores” to its sellers. For a small monthly fee, sellers like you can have links on all your various auctions to a single “store” page on eBay. Your store not only lists all your various auctions throughout the site, but also allows you to use the eBay sales infrastructure to sell other merchandise for a ﬁxed price. For instance, you can list your battery-powered widget online via the auctions, and then sell batteries and accessories in your store for a ﬁxed, and proﬁtable, price. You can even simultaneously sell your main products via auction and for a ﬁxed price, although it’s a good idea to sell the ﬁxed-price items in your store for more than your auction items are generally bid for. Otherwise, you won’t get any traction on your auctions. The idea is to let the auctions seem like a deal, 121

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but give buyers the option of paying more to ensure that they’ll get the item as soon as they click, without having to wait to see if they’re outbid.

Move Your eBay Auction Home Taking the eBay store concept one step further, you can now place your eBay auctions on your own Web site. This free service, which was formally introduced in early 2002, has two options: ■

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You can simply create a listing of links from your Web site to each of your eBay auctions for information on

each offering. Creating such a listing is simple to do, but it robs your business of some of its online identity by taking everything to eBay’s site with a single click. The second option lets you create a unique page that houses all the auction information on your Web site, as opposed to eBay’s, so that visitors to your Web site link to eBay only if they decide to place a bid.

For now, either option is free, and requires you to simply cut and paste the HTML code onto your Web site, but eBay executives say that they plan to charge sellers a fee for this service once the bugs have been worked out. Placing your auctions on your Web site by either of these methods is a good idea, because you’re driving trafﬁc to your Web site and providing a convenient, centralized place for your customers to bid on your wares. (The ﬁrst option takes less of a toll on your Web server because it requires fewer pages.)

Piggybacking Onto Amazon.com via zShops As is probably apparent, I’m a big fan of auctions as an entry point into e-commerce, and even if you expand 122

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into your own e-commerce storefront, auctions remain easy-to-handle moneymakers. However, you may decide to forgo the vagaries of auctions altogether in exchange for a more traditional, ﬁxed-price e-commerce presence. If you do it right, you can build an online store of your own that’s affordable and proﬁtable. If you do it wrong, you could waste a great deal of money. As with auctions, the best idea is to start small and see what happens. For this to work, you should have already built your Web page (see Chapter 2), complete with your own unique URL. You have to start somewhere, after all, and it’s best to start where people already know to ﬁnd you. Next, as with auctions, you need to determine whether an online market exists for your goods. The place to start, believe it or not, is Amazon.com, because it has already done the research and, in some cases, made the mistakes to determine what sells online and what doesn’t. Chances are, if Amazon.com sells it, you can too. If a market appears to exist online for your widgets or service, you can even sell your wares right on Amazon.com, taking advantage of its technology and its customers. The company’s zShops program lets you create a storefront page on Amazon.com itself. Your products are listed in search results alongside Amazon’s, you use Amazon’s payments system, and you can list as many items as you have in stock. (Don’t confuse the zShops program with Amazon.com’s Marketplace Seller program, which charges exorbitant fees for you to sell the very same items that Amazon sells, except in used condition.) The zShops system works like this: You pay $39.95 a month to Amazon.com for it to maintain and host a Web page for each of up to 40,000 items. Chances are, you won’t even come close to selling 40,000 different items, but if you do, Amazon will charge you 10 cents per item sold after that. You can also opt for featured placement in the various store categories in zShops. Thus, if you sell razors, you can pay ﬁve cents per day to have your razors featured higher up on the page than those of your online zShop competitors. For $2 per item listed you can also have your listings appear in boldface in search 123

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results. And ﬁnally, Amazon will, at no cost, cross-link your zShop items to related items in its stores and on other pages throughout the site. When a transaction is made, Amazon takes a cut of 5% for items that cost $25 and under, $1.25 plus 2.5% for each item priced from $25 to $1,000, and $25.63 plus 1.25% for items over $1,000. Proceeds from your sales are deposited directly into your checking account, or credited to a credit card, using the same techniques used by eBay and, indeed, by most other online auction and store sites. This system offers you some beneﬁts, such as easeof-use and manageability, but there are also some drawbacks. The zShop pages are definitely Amazon.com pages, and look nothing like your Web site or other company branding. Although you can link from your homepage to your zShop, linking back from the zShop to your Web page is more difﬁcult; zShops are designed to funnel trafﬁc into Amazon.com, not away from it. Moreover, the fees are somewhat high, although the cost may be offset somewhat by volume of sales, given that Amazon.com users tend to be much more ready to purchase than a Web surfer who happens upon an independent Web site. Research done by a variety of technology think tanks shows that Amazon.com is one of the most trusted online names around. A listing on zShops will certainly provide your business with some exposure and let you get an idea of what it’s like to conduct online transactions. However, I see zShops as little more than steppingstones to greater ecommerce possibilities. Despite Amazon’s reach and its audience, there are better ways to make money online once you get the hang of things.

Yahoo! Stores: A Flexible Hosting Option Your next step will be to create an online storefront of your own, one that can stand as an independent store, 124

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without feeding into or off of another site. However, you may still need assistance with building your online store. Kevin Smith, whom we talked about at the beginning of the chapter, uses one of my favorites sources, Yahoo! Stores, for his comic book store. Yahoo! has been coming on strong with its paid services for online businesspeople, and its stores are no exception. Yahoo! will help you build your storefront, link it to your existing Web site, apply for a merchant account to accept credit card transactions, and process orders by listing them on a Web page viewable through your Internet browser, sending them to you via e-mail, or inputting them directly into whichever database program you happen to use so you can fulﬁll them. You can also process credit cards through your bricks-and-mortar store’s system if you wish. And the price… that’s the best part. Yahoo! Stores have the most reasonable hosting and transaction prices on the Web. ■ The primary hosting fee is $49.95 per month for a nearly unlimited amount of Web pages. ■ The listing fee for each product listed will cost an additional 10 cents per month, so a store with 100 items will pay an extra $10 monthly. ■ The transaction fee. Yahoo! also takes a cut of 0.5% on every transaction, one of the lowest transaction fees on the Internet today. ■ Revenue share. Finally, if you decide to participate in Yahoo! Shopping, the portal’s own directory of ecommerce sites, Yahoo! will take 3.5% of sales that originate from the Yahoo! network of sites. In other words, if a customer comes to your site through a link from Yahoo! Shopping or from a search of the Yahoo! Directory, Yahoo! gets the bigger cut. But if the user “enters” your Store from your company’s own Web site, for example, Yahoo! gets only 0.5%. The larger cut is in exchange for driving trafﬁc to your Store from Yahoo!, which has millions of users every day, so it’s a good idea to opt in for those Yahoo! listings. Besides, 3.5% is less than what Amazon.com charges on certain transactions. 125

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TIPS: e-Commerce Web Design The principles of Web design, as discussed in Chapter 2, apply doubly to your e-commerce site. You should make sure that every page has the same look and feel as all others, that navigation between pages is easy, and that customers have a place to turn to for help. Furthermore, you should post a privacy policy (see page 46 of Chapter 2) to ensure that customers know how you will use their personal information. Also, you should make sure that your product line up is organized sensibly, much like the aisles of your retail store. Nuts go with nuts, bolts with bolts. You might also consider cross-listing items under their individual brands or under various uses. For example, in a tool shop, you could list a Brand X hammer under hand tools, hammers, carpentry, and Brand X.

If your product listing is extensive— at least 100 items or more—you might consider purchasing some search software for your site. For no more than a couple of hundred dollars and some time spent going through your Web pages, you can create your own search engine that will let customers ﬁnd exactly what they’re looking for by typing a keyword into a search ﬁeld. Your webmaster or consultant will have the latest information on which search applications are currently available and which will ﬁt in your budget—new ones are being introduced every day. They consist basically of HTML and database code that you plug into your Web server. However, stay away from including a search function if you’re offering relatively few items— it just highlights what you don’t have.

Unlike Amazon, which shoehorns everyone into its Web design and branding, Yahoo! is extremely ﬂexible when it comes to the design of your Web site. The company offers free Web-building tools, or you can upload the HTML code that you or your Web designer has created. Indeed, your Yahoo! Store can look exactly like your own proprietary Web site, with the only difference being the URL. If you have an inventory database, you can use Yahoo!’s tools to link it to your store, creating your storefront directly from your database ﬁles and logging transactions so that you can get an accurate count of your sales and inventory on the ﬂy. If you’ve registered your domain name through Yahoo! GeoCities and are hosting your Web site on the company’s servers, your Yahoo! Store can be seamlessly added to your current URL (e.g., www.mikesgizmos 126

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.com/store), unlike Kevin Smith’s store, which has a somewhat clumsy URL—http://store.yahoo.com /jsbstash/—because the rest of his View Askew site does not reside on Yahoo’s servers. Finally, Yahoo! offers tracking tools that enable you to see not only where your customers surf within your store, but also where they come from and where they surf off to next, allowing you learn more about your online competition. The company also offers tools to help with registering your store, as well as your main company Web site, with search engines across the Web. Yahoo! Stores represents one of the better deals out there, and can grow with your e-commerce effort.

Branching Out Beyond Amazon and Yahoo There are literally dozens of other companies that can help you establish your e-commerce efforts, with various strategies on how to do so. They tend to fall into the categories described below. In all categories, you can generally expect to pay more than at either the Amazon.com zShops or the Yahoo! Stores, with varying degrees of additional control in return. THE WE’LL-DO-IT-FOR-YOU PLAN Many companies will build your site, list and illustrate your goods, provide credit-card authorization, link to your database and fulﬁllment functions, provide the necessary customer service, and basically do everything except put your products in a box and ship them. A We’ll-Do-It-for-You company could charge several hundred dollars to set up your Web site and create the necessary links to your inventory, sales, and financial databases, plus perhaps $100 to $200 per month in fees, including per-item transaction fees. All you’ll have to do is fulﬁll orders once or twice a day. Some companies will even dynamically update your Web site whenever you get new inventory or run out of a particular item. 127

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THE WE’LL-DO-SOME-OF-IT-FOR-YOU PLAN The most popular companies provide Web site hosting, shopping carts, and checkout software. But it’s up to you to build your Web site, have contact with the customer, fulfill orders, and, in some cases, keep your databases up to speed. Amazon.com’s zShops and Yahoo! Stores work like this, but aren’t hosted on the same server as the rest of your Web site and thus won’t have your unique URL. For companies that do some of it for you, you can expect to pay less. The Yahoo! Store is a good example, as it requires your attention to build the site, add new items, and otherwise maintain the storefront. Yahoo! Stores remains a solid baseline on price, with other companies generally more expensive. Many Web-hosting companies (see Chapter 2) offer those kinds of e-commerce services as well, with the additional benefit of having your store housed directly inside your domain. On top of normal Webhosting costs, expect to pay another $50 to $100 a month for such services, plus any transaction fees. (Transaction fees, by the way, can be fairly sticky. You may be able to get 2% or under, but 3% to 4% is acceptable; 5% or higher is a rip-off, so buyer beware.) Some sites offer much cheaper hosting—as low as $20 a month for a dozen items—but charge higher transaction fees from the get-go or more per item after a certain threshold is reached. Presenting an extensive list of these companies and their services and prices is nearly impossible. For starters, the technology shake-out of 2001 put many of these companies out of business, and the prices and services of the survivors seem to change every four to six months. Some of the winners, however, are: ■ ■ ■

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Openyourstore.com Freemerchant.com FedEx eCommerce Builder (from Federal Express;

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http://mybiz.mainstreet-stores) N e t o p i a (www.netopia.com/en-us/solutions/sb /index.html)

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Earthstores.com

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THE DO-IT-YOURSELF PLAN Some companies merely offer the tools and software necessary to create your storefront, requiring you to pay for their tools up front and host your e-commerce efforts yourself. Frankly, bringing your e-commerce enterprise to your own servers isn’t appropriate for most small businesses. The investment is equal to opening up another real-world storefront, assembly-line, or distribution center, and can be just as risky. Indeed, hosting your own ecommerce enterprise could spell the difference between being a small business and becoming a midsize or large business, and you should consider such a step carefully. There are beneﬁts, to be sure. If you’re already processing hundreds of transactions per day, you’re probably losing hundreds of dollars a day in fees to Amazon.com, Yahoo!, or eBay. In addition, doing it all yourself means there are no limits to customizing your storefront and no roadblocks to full integration between your existing databases and your Web site. Absolutely every aspect of your e-commerce enterprise is under your control, and you get a bigger chunk of the proﬁts.

Now for the disadvantages, which, for a growing business, can be huge. ■ What you’ll spend. First, the up-front investment is nothing to sneeze at. Expect hardware costs to begin at $5,000, and they could rise to $10,000. You’ll need servers, after all, to handle these transactions and store all the records. Also, you’ll need extra hard drives to store customer histories and transactions through time, which add around $1,000 yearly to your price tag. And if your e-commerce enterprise is successful, you may find yourself having to add even more servers. Even if you’re pulling in hundreds of transactions per day, it’ll take quite a while to make up the cost of adding new servers. ■ Then there’s software. Microsoft, AOL’s Netscape Communications, Oracle Corp., and other companies make a variety of e-commerce-server software products. The software needed to run e-commerce transTHE DISADVANTAGES.

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TIPS: Accepting Credit Cards When I sell my old stuff on eBay, I can easily and readily accept Visa and MasterCard—and I don’t even own a business. Both eBay and Amazon.com have proprietary services that make it easy to accept credit card payments. All you do is set up a seller’s account, and once you’re approved—the vast majority of people are—eBay or Amazon.com will process your credit card payments for you in exchange for a cut of the sale, usually no more than 2% to 3%. The proceeds of the sale can either be deposited in your checking account via wire transfer or credited to a credit card of your choice, thus reducing your overall balance. Let’s say your business already has a credit card acceptance system in place. For the vast majority of small businesses, that simply means you have a veriﬁcation device, obtained from the bank or broker where you have your merchant account, which dials into the bank network to verify that your customer has enough available credit to cover the transaction. Many banks offer online credit card veriﬁcation on top of the service they provide to your bricks-and-mortar store. In that case, as part of your overall credit card

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merchant account setup, you’ll receive desktop software that will link up to your e-commerce Web site. Some software programs require you to manually send off credit card numbers for veriﬁcation; this time-consuming process must be done at least once a day. Another type of program, called a gateway service, plugs right into your Web-hosting server—either your onsite server or your host’s—and sends credit card numbers automatically for veriﬁcation in real time, as well as e-mails to conﬁrm purchases with your customers. How much does all this cost? Of course, if you already accept credit cards, you’re already paying a lease on your store’s card-swipe veriﬁcation device (unless you bought it outright), as well a discount rate of 1.5% to 5% to the bank on each purchase. For the very simple desktop software—the kind that requires you to input numbers manually—you’ll spend about $100, plus the discount rate on each transaction. If, however, your ecommerce site is growing rapidly, consider the gateway service. Prices for the hardware and software range from $350 to $1,000, depending on the extra equipment needed and installation costs.

actions, by itself, costs at least $1,000. You’ll also have to beef up your hardware and software for your existing business systems, the ones we looked at in Chapter 4, because you’ll be rapidly adding data to your databases. Thus, you’ll need more complex database programs and more storage. You’ll need design help. You’ll want to lean on your current Web-site designer or IT people for the design

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of your storefront. You simply should not design it yourself, as it should look good and work efﬁciently. Your online success rides on it. More staff. And ﬁnally, you’ll need to add at least one person—more likely two people—to handle your ecommerce Web site. Your current system administrator will probably walk out if you propose to add e-commerce to his or her current workload.

In case you haven’t gotten the point, hosting your own e-commerce site is difﬁcult. (There’s a reason that Pets.com is remembered only for the dog puppet with the microphone interviewing pets, after all.) Yet companies make the leap all the time. When is the best time to do it? After polling a number of experts who watched the dot-coms fail a few years ago, I’ve come to the following conclusions:

REACH CRITICAL MASS FIRST.

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You have to be sure that you’re making enough money in transactions to warrant the move. The daily transac-

tions on your site should be in the high hundreds to the thousands before you consider making the move to self-hosting. ■

The transaction fees you’re paying to your Web-hosting and e-commerce providers should outweigh the cost of a long-term investment in your own Web storefront. The

math on this should be fairly simple: If your revenues from e-commerce are $500 a day ($130,000 a year) and you’re giving $20 a day of that away in transaction fees (about $7,300 a year), investing $20,000 in equipment and $80,000 in two employees (not including taxes and beneﬁts) hardly makes sense. Think of hosting and transaction fees as your “lease” for space on the Internet, and keep in mind that, aside from the hosting fee, you aren’t paying unless you’re making money. When your business outgrows your lease, it’s time to invest in your own turf. ■

You have to make sure that your transactions are steady over time; you need to know that a couple of months of strong sales aren’t a ﬂuke. If your sales remain high

and strong for a year—perhaps for even two years, to take into account seasonal fluctuations—then you 131

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have a clear picture of what your e-commerce efforts are doing for you, and whether your own hosting is right for you.

You Have Online Orders, Now What? Naturally, e-commerce involves far more than simply throwing up a Web site and making sure you can accept credit cards. Once the orders come in, you have to fulﬁll them, which means having product on hand, packing it, and sending it off. Although discussing fulﬁllment is really beyond the focus of this book, let’s cover a few basics here. After all, if you can’t deliver on your orders, you won’t be engaged in e-commerce for long. KEEPING INVENTORY ON HAND First, you should make sure you have sufﬁcient inventory on hand—and acquiring inventory means an additional cost to you up front. It’ll take time for Web surfers around the country to catch on to the fact that your storefront is out there, but once they do, you may be in for a surprise. Jeff Bezos, the CEO of Amazon.com, recalled that when he ﬁrst started his bookstore, business was fairly slow for a while; then suddenly everything took off, the numbers climbed, and he was struggling to restock. Ideally, you want to lay in a typical couple of weeks’ to a month’s worth of inventory beyond what you already have. Think of your Web site as a new branch store, and keep it stocked accordingly. Once the orders come in and begin to stabilize a bit, you can see what sells and what doesn’t, and order accordingly from your supplier. The inventory management tools discussed in Chapter 4 could make life easier when you plug in your e-commerce site. Of course, if you start out with auctions, you won’t have to anticipate inventory needs. Auctions let you control the amount of product you have available and therefore your inventory costs—another reason to con132

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RESOURCES: Shipping Deals All the big shipping companies want a piece of your business, especially if you start shipping product regularly because of your Web site. The deals themselves constantly change in response to market forces, although once you get one, you’re locked in until you can renegotiate with your sales representative. Here are the URLs for the biggest U.S. shipping companies and their software and small-business offerings: ■ ■ ■ ■

United States Post Ofﬁce: www.usps.com/ smallbiz United Parcel Service: www.ups.com/using/ sw-index.html Federal Express: www.fedex.com/us/ ebusiness/smallbusiness Airborne Express: sbw.airborne.com

sider eBay before you get into your own e-commerce storefront. SHIPPING AND HANDLING Next, you’ll have to think about shipping. The national players, such as United Parcel Service, Federal Express, and the U.S. Postal Service—have local business agents with whom you can discuss opening an account for bulk shipping. Be sure to pass along the cost of shipping to your customers by charging a blanket fee per order or on a sliding scale, depending on the dollar amount or number of items ordered, or by incorporating the cost of shipping into the price of each item on your Web site. To make a separate cost for shipping seem less onerous to the buyer, you can, if you wish, increase the prices of your items slightly and decrease the charges for shipping. Don’t forget to factor in the cost of any packing materials that you need; banana boxes from the grocery store probably don’t represent the branding you want. Next, you’ll have to ﬁnd a place within your ofﬁce, 133

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store, or building to actually fulﬁll these orders. When you accumulate a handful of orders—or up to a couple of dozen—a day, clear off a table in your storeroom and take the time to box everything up. If you work by yourself, you might set aside time after normal business hours for this task. If you have help, you can delegate the task. Once you start to get 40, 50, or 60 orders a day, you’ll probably need to hire someone speciﬁcally to handle fulﬁllment. You can (1) hire someone to simply ﬁll boxes, get them ready for pickup, and then do other jobs around the store or (2) hire someone to handle the ecommerce operation entirely, including fulﬁlling and shipping orders, interacting with customers, and updating the Web site. Obviously, hiring someone to do more will cost more, but will free up your time considerably.

Managing Fast Growth The steps I’ve outlined here—moving from auctions, to zShops or Yahoo! Stores, to your own hosted site— should help you manage your e-commerce growth, enabling you to handle whatever ﬂow of orders you receive. But every now and then, you’re going to be hit with a spike in sales. How can you tell whether it represents a serious upswing in the growth curve of your business? You really won’t be able to tell for at least a few months. Again, auctions are far more manageable than other kinds of e-commerce in this regard, because you control the ﬂow of product. If each of your products is getting a dozen bids, you’ve got the right amount of product out there. If each one is getting 20 to 30 bids or more, you can put more items up for auction until demand backs down to around a dozen bids per item again. This strategy will help you anticipate sales, and let you structure your fulﬁllment operation accordingly, maybe by hiring your neighbor’s kid to pack boxes for a few hours during a time of peak demand. For an online store, demand is unpredictable because the customer base is so large. You might get 60 orders one day, and then no more than three orders for a week. Or you might get 50 orders a day for a month, 134

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only to see sales drop off for some inexplicable reason. The tools you use to gauge sales in your real-world business are a good place to start to estimate your online sales, but they don’t account for the reach of the Internet. For example, if your best sales come during the back-to-school season, that demand may very well be mirrored on the Internet. However, you may also see an online upswing in January, when college students go back to school, even if your town doesn’t have a college. A sporting goods store needs to keep in mind that it’s always warm somewhere in America, and that the market for ski equipment may extend far later in the year than you would anticipate on the basis of your local weather. But let’s say that you’ve got something hot on your hands, you’ve had booming sales for three or four months, and you’re having trouble keeping up with growth. First, you need to invest the money you have been making on these additional sales into your infrastructure—hire more help, bring in more inventory— so that you can make the e-commerce portion of your business manageable again and pay attention to the real-world part of your business. Orders mean money, after all, so while you have it, go ahead and invest in your business. Even a three- or four-month sales spurt can fall off after a while, but online customers tend to be loyal; if they have a good experience with your business online, they’re likely to come back. Thus, your numbers will still be higher than they were before the spurt, and the investment will serve you in good stead down the road.

The Last Word on e-Commerce, For Now In an ideal world, e-commerce will bring new customers to your business in a manageable, proﬁtable way. Engaging in e-commerce is a lot of work and certainly entails risks, but it can be a great way to expand your business beyond your hometown, your region, your state—all 135

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around the world. Just keep a tight rein on growth, and control the pace as much as you can. And always look to that poor Pets.com puppet as an object lesson on how you should never put growth before proﬁtability when it comes to e-commerce.

Cost Breakdowns This section presents three e-commerce cost scenarios based on eBay, Amazon.com zShops, and Yahoo! Stores. I’ve chosen not to price out the costs of installing a full e-commerce server because such an expensive move, involving many different pieces of software and hardware, is too complicated to estimate. In the end, I stand by my earlier statements: Unless your online business is getting out of hand and you just can’t keep up, getting your own e-commerce server is cost-effective for only the largest privately owned businesses. Remember that the following costs are for the technology and computer-based services only. No shipping and handling costs are included because at least some of those will be passed onto the consumer. THE eBAY SELLER Here’s a cost breakdown for a professional eBay seller who has approximately ten ﬁve-day auctions going on at any given time. For argument’s sake, let’s assume that the average reserve price of the 60 items on offer is $35, and that, on average, they sell for $45 each, for total sales of $2,700 per month. Insertion fees for 60 items per month Highlighted auctions for four items per month (the listing is highlighted in search results with a yellow band) Bolded auctions for eight items per month (the listing is highlighted in search results with boldface type) Average ﬁnal sale fee for a $45 item at $1.75 per item 136

$66/month

$20/month

$16/month $105/month

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Credit card acceptance fees Subscription to eBay Seller’s Assistant Pro subscription Total Monthly eBay Fees

$27/month $16/month $250/month

THE zSHOPS SELLER The breakdown for an Amazon.com zShops seller is a little more difﬁcult to do because there’s no way to control the amount of product that sells each month. For argument’s sake, however, let’s assume the same number of transactions per month at the same selling price as in the eBay example: 60 items sold per month at $45 each for a total sale of $2,700. (This is somewhat optimistic, because zShops are rarely so well frequented as eBay’s auctions.) By using Amazon.com Payments, the company’s own payment system, you incur no additional fees, and the buyer is covered under Amazon’s own guarantees. Listing fees Boldfaced listings on the search and browsing pages of eight items per month Average ﬁnal sale fees Total Monthly zShop Fees

$40/month $16/month $105/month $161/month

THE YAHOO! STORE OWNER In the full e-commerce storefront experience, we make some of the same assumptions as in the preceding scenarios, including the same 60 items sold monthly for an average of $45 each, for sales of $2,700 a month. Given the integration with your own Web site, which should already be attracting regular traffic, 60 transactions a month is somewhat low, but again, this estimate is only for the sake of comparison. However, we need more detail, so let’s assume: ■ ■

You’ve listed 15 different items within your Yahoo! Store, as this amount is factored into the fee structure. Because you accept credit cards in your bricks-andmortar business, you don’t need to pay for a separate

merchant account for your online store. ■

You’ll need a little outside help to integrate your current inventory, credit card sales and ﬁnancial databases 137

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with your online store, and a little more design assistance to make your store look exactly like the rest of your Web presence. Web-design fees (this is low, because you’re building on design work previously done to create your Web site) $200 Database integration work $500 Hosting fee $50/month Product insertion fee (for 15 products) $1.50/month Transaction fee (60 items at $45 each) $13.50/month Yahoo! revenue share (ﬁve items at $45 each, assuming that ﬁve of your sales came from people coming to your site from Yahoo! instead of your own site) $7.88/month Total Start-up Fees $772.88 Total Monthly Yahoo! Store Fees $72.88/month

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Mobile Technologies illett’s Auto Repair in Topeka, Kan., handles a few dozen cars every day, thanks to four repair bays and six mechanics on staff. The shop will ﬁx just about everything on wheels, from classic muscle cars to any kind of import, sport utility vehicles, and mail trucks, to commuter cars and motorcycles. Paul Willett makes sure that his mechanics remain well trained—seeing that their certiﬁcations and exams are up to date and providing all the latest manuals and reference tools they need to ﬁx a variety of cars. Some mechanics in the shop specialize in certain vehicles— American trucks, Japanese compacts, etc.—but all employees are able to step in and help when the shop needs them. Thus, schematics and manuals of all kinds used to line the walls of Willett’s ofﬁce. No more, however. An auto repair shop isn’t a particularly likely place for mobile technologies, but in late 2001, Willett purchased six Handspring Visor handheld computers for his mechanics. Each Visor came with two Springboard modules—hardware add-ons that slip neatly into a slot on the back of the Visor. One of the modules contains maintenance manuals for every domestic and imported vehicle from 1983 to the present—a series of books that would take up an entire six-foot shelf— made more useful because the manuals are also searchable through a keyword entry right on the Visor. The second module contains a program to help mechanics keep track of their work, such as an inventory database for repair tools and supplies, a labor management program to keep track of hours spent on each vehicle, and a daily calendar for scheduling assignments.

W

Summary ■ ■ ■ ■ ■ ■ ■

■

Pagers Cell Phones Service Plans Life on a Laptop PDAs Mobile Internet Access Integrating Mobility Into Your Existing Framework Cost Breakdowns

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Just for fun, the modules also keep track of popular auto-racing events around the country. When the Visors are synchronized with Willett’s personal computer, he can obtain overall estimates of the hours his mechanics are working and a fully-compiled inventory database. The Visor and module packages, which cost around $500 each, are sold by Mitchell Repair Information Company, a subsidiary of Snap-On Tools. “I can’t say enough about these handhelds,” Willett said. “Sure, there was some griping when we ﬁrst brought them in, but now every one of our guys uses them every single day. The pages on the handhelds are just like the ones in the books, right down to the diagrams.” In addition, Willett said, the handhelds are becoming popular for other reasons, because the mechanics are allowed—and encouraged—to take the devices home for personal use. “I think each guy has something different on his. Games, different programs, you name it. One guy has his checkbook register on there.” Wisely, Willett still keeps his manuals around, but he is ordering them on CD-ROM for use on his own computer. Slowly, he’s been getting rid of his paper manuals. “Nobody comes in to look anything up anymore. They’re doing it right there on the ﬂoor, which means they’re saving time and saving our customers a bit of money. Plus, we can get more cars in here every day.” Willett said that since the handhelds were introduced, his workers now average an additional one to two repair jobs per week. “The handhelds have already pretty much paid for themselves.” I, too, have enjoyed the beneﬁts of mobile technology. I wrote this book mostly at home thanks to a Dell ultralight Inspiron 2100 laptop computer. But I also wrote it on airplanes, in the ofﬁce, in a Las Vegas hotel, and at my mother’s home on Martha’s Vineyard. Twenty-ﬁve years ago, being a mobile writer meant lugging around a 15-pound portable typewriter, reams of paper, and a single copy of your precious, unﬁnished manuscript. Fortunately, those days are over. Although laptops and other forms of mobile technology have certainly freed workers from the tyranny of 140

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their desks and cubicles, however, you should be very cautious when approaching the whole concept of “mobility.” Computer companies, cell phone providers, consultants, and your own IT guys will all try to sell you on the latest in mobility, promising greater efﬁciency, more productive hours worked, and a great deal of convenience. Well, mobility, for most businesses, isn’t all it’s cracked up to be. Sure, you can be linked to e-mail 24-7, have access to nearly every piece of software on your network from anywhere on the planet, and convene a video conference with people scattered around the globe. You can send quick messages to your sales force on a variety of devices, from pagers to cell phones to personal digital assistants (PDAs). But do you need to do any of these things? Probably not. Practical technology isn’t just about reducing the amount of time spent accessing data; people have always found a way to get their data when and where they need it, at speeds that are at least appropriate to their needs, if not always the most rapid. Rather, practical technology is about creating more time, allowing us to do more. For example, if your sales people, equipped with the latest e-mail pagers, spend far too much time using their tiny keyboards to check e-mail after every meeting, that technology isn’t helping to create time, even though it has reduced the amount of time it takes to respond to e-mail. Of course, adding mobile technology to your business has beneﬁts, which is why I’ve included a chapter on it. So as you review your options here, keep practicality in mind and ask yourself whether these technologies will actually create more time for you and your workers or just create more opportunities to waste time.

Rethinking the Pager The ﬁrst piece of your mobile puzzle is the ubiquitous pager, that little black box that hangs on your belt and ﬂashes telephone numbers when someone is trying to reach you. At a time when most people have cell phones, some readers may question why you need pagers at all. 141

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However, pager coverage is much better than cell phone coverage, even in major cities, so there’s a better chance your pager will get through. Also, pagers are lighter and smaller than most cell phones, and thus are easier to live with. Although I strongly believe in using a piece of technology for its original purpose (cell phones, for example, are atrocious when it comes to accessing e-mail), for pagers I can make an exception, because some of the latest alphanumeric and e-mail-capable pagers offer useful features that can be a healthy addition to your business. NUMERIC PAGERS The standard pager is both cheap and limited, but it gets the job done. If you want to give pagers to your key employees in case of emergency, by all means do it. A basic numeric pager—the smallest and cheapest pager that displays numbers only—can cost as little as $19.95 for the pager itself, with monthly service rates ranging from $5.95 to $10.95, depending on which plan you subscribe to and whether you choose a voicemail option. ALPHANUMERIC PAGERS Alphanumeric pagers, in contrast—pagers that can send both text and numbers—can give the person you’re paging a head start in responding to your business’s needs, especially in an emergency. The “on-call” person who has the pager may delay in calling back if all he or she sees is a number. But if the paged message also includes the message “SHOWROOM FLOODED, PRODUCT DESTROYED”—well, you get the idea. Many alphanumeric pagers also have the advantage of being accessible by e-mail. In addition to having its own phone number, the pager may—depending on your service plan—have its own e-mail address, so that your callers can page you via e-mail by typing in the pager number and your service’s e-mail address, such as [email protected]. This feature is especially important when, God forbid, the phones go down. You can buy an alphanumeric pager for as little as $40, or less if you’re willing to hunt around; paging plans cost $10 to $20 per month. 142

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TWO-WAY, ALPHANUMERIC PAGERS Two-way pagers allow you to send short messages back to your callers using pre-programmed responses or, preferably, a tiny keyboard. Thus, if you’re on call, not only will you be aware of an emergency, but also you can send stopgap instructions or information that will sufﬁce until you can get to a phone. With a two-way pager, you can receive pages sent by e-mail and send your replies via e-mail, as well as telephone back to a computer user or even another pager user. You can ﬁnd alphanumeric pagers for under $100; service plans cost about $20 a month for up to 500 short messages sent to and from the pager. BETTER DEALS ON MULTIPLE PAGERS Businesses can often get better paging deals when buying multiple pagers. Buy ﬁve pagers, for example, and pay just $20 a month for unlimited one-way paging. Your local paging companies, easily found in the Yellow Pages or online, will have more information, but remember that buying in bulk and putting it all on one bill is far easier to manage.

Don’t Overindulge in Cell Phones Many businesspeople manage to overspend when it comes to mobile phones, also commonly known as cell phones. That’s not surprising, however, when you consider all the pricing pitfalls that surround these purchases. THE HARDWARE First, there are the phones themselves. Contrary to popular belief, smaller isn’t always better, and a sleek, gimmicky phone does not reflect well on you or your employees. Yet people manage to spend upwards of $200 per phone for tiny, feature-laden phones that have terrible battery life, squint-inducing screens, and keypads more appropriate for toddlers’ ﬁngers than yours. I carry a basic Nokia 5185i phone, the one you see 143

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Tech Terms analog/digital: a type of mobile phone that can use older analog networks as well as newer digital networks. Analog networks basically send sound waves in a very tight pattern, which is deconstructed to create sound. Digital networks and phones deconstruct sound into actual pieces of data—ones and zeros, the basic digits of binary language—transmit it, then reconstruct it on the other end. Digital is clearer, generally, but a weak signal creates that infamous dropout effect, when whole chunks of data are garbled or lost. Analog networks, conversely, can sound faint or staticky when coverage drops off.

dual-band: a mobile phone that can use two different kinds of digital networks GSM: short for Global System for Mobile Communications, a kind of digital mobile phone network. GSM is most commonly found in Europe and Asia, where it has become the standard. In the U.S., GSM is largely conﬁned to major cities. CDMA: short for Code Division Multiple Access, another digital network standard for mobile phones. CDMA is the most common network in the U.S., but it is nearly unheard of elsewhere.

in most Nokia and AT&T Wireless commercials. It has a readable screen, good-size buttons, and a battery that lasts all day long when I’m on the road. It does not access the World Wide Web, play music, or show pictures of my wife on the screen. And it cost only $19.95 at the Verizon Wireless store in Washington, D.C. It’s…useful. And that’s enough. Unlike pagers, a cell phone can simply be a cell phone. You don’t necessarily need one with paging capabilities because you have the options of simply picking up and talking and of purchasing a service plan with voicemail. You probably don’t need wireless Web access or email services on your phones either, because a quick phone call can probably ﬁnd you the information you want just as fast, if not faster. In addition, wireless Web access can eat up your minutes of service very quickly, because you’re essentially making a cell phone call to the Internet. And have you ever tried to enter in a URL or an e-mail message using only the numbers 0 to 9 plus the symbols # and *? It takes forever. 144

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You should, however, keep an eye out for inexpensive analog/digital or dual-band phones. Any city in the United States has many kinds of cellular service, including the digital standards GSM and CDMA as well as analog service. Don’t worry so much about the alphabet soup (the box at left provides definitions of these terms). Ideally, you want to be sure that your phone can handle, at the very least, both analog and digital calls. If you can get a dual-band phone—one that runs, for example, on both GSM and CDMA—then do so. Smaller towns in the U.S. have only one band available for service, so if your phone doesn’t match up, you could be left without cell service. The same goes for overseas, because Europe and Asia are primarily GSM. However, even if you have a GSM phone in the U.S., you’ll need to enter into a global-roaming contract with your cellphone carrier in order for your phone to work outside North America. My aforementioned Nokia phone, for example, is a tri-mode digital phone. That means it runs on the two different kinds of CDMA digital service available around the country, along with the older analog receivers in more rural areas. So no matter where I go, I get reception. Make sure your dealer sells you at least an analog/digital phone, or a dual-band phone if you can get one. Which brands of phones meet my requirements? That’s hard to say—between the time this book is completed and the time it comes into your hands, most mobile phone makers will have already revamped their offerings. But if you spend more than $150 on a phone—the high-end, dual-band phones cost about this much—you’ve spent too much.

Tech Terms roaming: in mobile phone parlance, when a phone user moves beyond the area designated by the service provider as the user’s “home.” Using your phone while roaming nearly always results in higher charges per use. Many plans, however, expand that home base to include entire regions. There are also many no-roaming plans for the U.S. market.

THE SERVICE PLAN There are basically two kinds of service plans—those that assume you won’t leave your home city much, and those that assume you’re a traveler and will visit different cities and states regularly. If you or your employees really don’t leave your home city, don’t get a big roaming plan. However, if you often send your people to sales 145

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meetings, trade shows, and other out-of-town events, make sure that your roaming plan is appropriate. And don’t get a nationwide roaming plan if your employees are really only traveling up and down the West Coast. Calling plans are further distinguished by the number of minutes you’re allowed. A simple plan will give you 60 minutes of talk time per month for a very low price—as low as $14.95 in some cases—but will charge you 25 cents or more per minute if you go over that amount. The more minutes you want, the higher your monthly fee, but the per-minute overﬂow rate will be much lower. It’s tough to know how many minutes you’ll need, but you can make an educated guess, and after a few months of experience, adjust your plan accordingly. It will probably behoove you to guess a little high on the minutes, though, so that you don’t incur whopping per-minute charges because of an overly cheap plan. Some of the better business-service plans allow you to purchase multiple phones for a discounted price, and then give you a block of minutes for the whole company to use. If your business requires more than one cell phone and your local carriers offer this service (most do), this is deﬁnitely the way to go. You’ll avoid paying a higher price for individual service plans for people who just need phones for emergencies or high per-minute costs for your traveling sales force.

Life on a Laptop Laptops, in case you haven’t noticed, are expensive. You can get a perfectly serviceable desktop computer, complete with monitor, for $900. A laptop with the same processor, RAM, hard drive, and other goodies will cost about $1,200—at least $300 of which is accounted for by the screen. Why are laptops and ﬂat-screen monitors so expensive? Contrary to popular belief, laptops aren’t expensive simply because they’re portable—squeezing all those components into a small case is tricky, but not too costly. The big expense comes from the screen. Liquid146

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crystal displays (LCDs) and other kinds of ﬂat-panel monitors and laptop screens require costly components and very difﬁcult manufacturing processes. Nevertheless, if you or some of your employees will need to work outside the ofﬁce now and then, purchasing a laptop for those occasions may be in order. And if you have account executives or sales people on the road, laptops will probably be essential. Why? Studies show that the most common use of laptops on the road is dialing into the corporate network to check e-mail. Yes, $1,200 is somewhat expensive for a portable e-mail machine, but there’s more involved than just e-mail. Road warriors also tend to work on whatever projects they would otherwise have left behind at the ofﬁce; road trips can be disruptive, after all, and the less you have to catch up with after returning home, the better. Also, most PowerPoint presentations are done via laptop. If you’re in the market for laptops, here are a few things to consider: First, think about which employees might need a laptop, how often those people are out of the ofﬁce, and whether they travel at the same time. If only one person is out at a time, you’ll probably need only one machine that can be “checked out.” If several people are likely to be traveling simultaneously, you may need multiple machines. Experience will ultimately tell you how many you need, although you could think in terms of one machine per a certain number of staff members who travel. Let’s say that you need a couple of laptops. That’s an additional $2,400, and you’ve already blown $900 per person on desktop machines as well. Some companies—especially those with numerous frequent travelers—have decided to give each mobile worker a laptop, along with a monitor, docking station (see the following page), keyboard, and mouse in lieu of a conventional desktop set-up. A laptop docking station for the ofﬁce can cost around $500. This approach is still more expensive than simply buying desktop computers for everyone and a couple of laptops, but there are some beneﬁts in efﬁciency that aren’t easily quantiﬁed. Hav147

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Tech Terms docking station: a stationary platform on which you can install a laptop. When the laptop is in the ofﬁce, it usually rests on top of the docking station, which contains connections for Ethernet networks and slots for CDROM, DVD, or CD-RW (RW stands for rewriteable) drives and a ﬂoppy disk drive. Docking stations are made speciﬁcally for each brand and model of

computer—one size does not ﬁt all. synchronize: to transfer and duplicate data between a computer and another device, either a handheld computer or a cell phone. When you “synch” your handheld, for instance, any changes you’ve made to that data are downloaded and changed on your PC, and vice versa.

ing your own computer on the road, complete with passwords and all the necessary software, increases efﬁciency. Employees with laptops are also more likely to take them home and squeeze in an extra hour’s work in the evening or during the weekend. Avoid buying laptops loaded with expensive extras such as CD-RW drives, extra-large screens, and video cards. Most mobile users are doing word processing and e-mail—they’re not creating digital works of art and you’re not outﬁtting the machines so that your employees can play video games. Keep it simple and you’ll save money.

Personal Digital Assistants Every morning, before I leave for work, I synchronize my Hewlett-Packard Pocket PC with my computer to download the day’s news. During my ride, I plug a set of headphones into the PDA and listen to downloaded music while reading CNET News.com, CNN, and The New York Times. By the time I turn on my computer at work, I’m already up on the day’s news, technological and otherwise. I pass the ride home the same way, with the addition of some Microsoft Word documents that I have to review or edit. Although handhelds are expensive and probably nonessential in your business, a handheld makes it easy 148

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to carry large amounts of text and graphics in a very small form, as my example and the one at the beginning of the chapter illustrate. Handhelds have become quite popular in the medical ﬁeld, for they allow doctors and nurses to consult, alter patients’ charts, and search medical texts for speciﬁc keywords on their devices. Some auto sales people, who often wander far from their desks, keep data on handhelds. Although you could do the same thing with a laptop, laptops are woefully inefﬁcient to carry around, especially if all you’re doing is accessing text ﬁles, because laptops are bigger, heavier, and equipped to handle far more than that simple task. Some handhelds can even take the place of laptops altogether. With the addition of a collapsible keyboard (which folds into a package about the size of the handheld), a PDA can be used for basic word processing and e-mail. When a task is ﬁnished, the user can synchronize the PDA with a computer to transfer the data, or even use a specially made dial-up modem that attaches to the handheld, or a regular cell phone with a cable that plugs into the PDA, to call in the ﬁle to the network. A colleague of mine from Reuters wrote and ﬁled his stories with such a set-up, giving me a run for my money a few times. (I took the decidedly low-tech approach of phoning my stories in, giving me the advantage of having my editor tweak the story as I dictated—a good lesson on using whichever method, high-tech or low-, works best.) Most handhelds also come with features such as calendar/scheduler programs, address books, clocks, reminders, memo pads, or word processing, and the ability to download your e-mail, write your responses, upload your e-mail back to your company’s servers, and send it when you’re done. Most can also download Web pages from the Internet, via synchronization with your computer, through a free service called AvantGo (www.avantgo.com). THE PALM The company that invented the handheld computer, Palm Computing Inc. (once a part of U.S. Robotics, then 3Com), still makes the most popular handheld comput149

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ers around. The company’s basic handhelds usually sell for $125 to $150, while higher-end versions can cost $400 or more—the only difference being a color screen and additional memory for storing more data. These devices also come with slots for Secure Digital memory cards— postage-stamp-size storage cards for keeping additional ﬁles or programs, such as songs, maps, or documents. They can also accept certain attachments, such as modems—wireless (see deﬁnition of wireless modems on page 152) or otherwise—and keyboards. THE HANDSPRING VISOR Rival Handspring Corp. uses Palm’s operating system but makes cheaper and, frankly, better devices than Palm. Handspring’s low- and high-end models usually cost $50 to $100 less than similar Palm devices, but all Handspring Visors, as the handhelds are called, come with a “Springboard” slot—a large slot on the back of the device that can be used for a variety of hardware add-ons, called modules. Some of the Springboard modules most appropriate for business use are memory back-up modules for keeping extra copies of your important data, digital voice recorders so that you can use your handheld like a tape recorder, and even remote controls for major home electronics. The prices run from $30 for memory modules to $150 and up for complex hardware like music players that take advantage of the PDA’s processing power and wireless modems for checking e-mail and viewing Web pages in real time, without the need for a telephone line. THE POCKET PC Microsoft Corp. and its hardware manufacturing partners teamed up to create the Pocket PC. These devices, for their size, have powerful processors and plenty of memory for storing ﬁles and music. The software on board makes it easy to work with other Microsoft products, such as Word and Excel, and the device includes a music player. There are slots for memory cards and hardware add-ons, although the type and number depend on the manufacturer. Com150

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paq and Hewlett-Packard make handhelds that accept Compact Flash cards, while Casio’s handheld accepts only Secure Digital cards. The problem, however, is the price. When these devices were introduced in late 2001, they sold for more than $600 each—there is no low end when it comes to Pocket PCs. Prices will surely go down in 2002 and beyond, at least until Microsoft comes out with a new version of the software. Many people who own handhelds swear by them—I certainly do. I ﬁnd mine very helpful in keeping track of appointments and my checkbook, and it’s good to have your entire database of contacts on hand wherever you happen to be. But these are personal devices, not necessarily business tools. Whereas anyone in the working world would probably ﬁnd a handheld valuable, most businesses believe they’re more of an extravagance—if they have to pay for them. Chances are, if your workers ﬁnd them useful, they’ve already bought one for themselves, and unless you can make an outstanding argument for adding the device to your workers’ arsenal, there’s no real need to make them standard equipment. Well, maybe for the boss.

Options for Mobile Internet Access Getting online on the road is difﬁcult at best, so much so that many road warriors leave the laptop in the hotel room, where they can at least have a phone line handy and incur a few bucks more in phone charges from the hotel. Using a pay phone is worse—ﬁnding one with a data jack (see the following page) outside an airport is a quest on the scale of seeking the Holy Grail. But there are other options. A SIMPLE WIRE Many frequent travelers have purchased the necessary equipment—essentially, a $20 wire—to connect their cell phone to their laptop’s modem. From there, all you need to do is turn on your cell phone and dial normally 151

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Tech Terms data jack: The telephone plug in your laptop computer. PCMCIA cards: special cards designed for portable computers that make it easy to add functionality on the go. PCMCIA cards, also simply called PC cards, can function as modems, network ports, hard drives, and other memory storage

devices. PCMCIA stands for the Personal Computer Memory Card International Association, which created a standard for these devices. wireless modem: a modem (see Chapter 1) that uses mobile phone networks instead of a regular telephone line to transmit data.

into your corporate network or Internet service provider. Unfortunately, cell phone coverage is often spotty, even within the same building. Furthermore, the top data-transmission speeds you can achieve on a cell phone are about 14 kilobits per second—which is four times slower than a standard dial-up connection via a land line. This solution may be ﬁne for checking e-mail, but trying to do anything else can be a real test of patience. And that’s before the cell phone bill comes due. PCMCIA CARDS PCMCIA cards also are available to serve as wireless modems, complete with antennae. These cards cost $200 a pop, however, and you get only the same data transmission rates as your cell phone. Wireless Web companies, such as OmniSky (acquired by EarthLink; http://earthlink.omnisky.com) and GoAmerica (www.goamerica.com), sell these cards, as well as $40 monthly service for your cellular-system use, which is about the same as you would spend for 400 to 500 minutes of regular cell phone talk time. This service is aimed primarily at PDA users, who slip the cards into their handhelds to create a wireless, handheld Webbrowsing device, although these can also be used in laptops. It’s not bad, but again, it’s working at 14 kbps. SHORT-DISTANCE WIRELESS NETWORKS A handful of public places, such as airports, hotels, and 152

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some Starbucks coffee shops, have installed shortdistance wireless networks. These networks are incredibly fast—you can send or receive at least one gigabit per second from your laptop or PDA—but they are also extremely limited in range. Walk out the door of Starbucks, and halfway down the block you’ll lose service entirely—not something you’d need to worry about on a laptop. (I’ve used such a network with a PDA, and have forgotten about the limited range when I started to walk off.) Some networks charge for use. When the network detects a new client, it shoots an e-mail message to your laptop or PDA, giving you rate information and asking for your credit card via an online form. The rates are usually no more than the rates for a longdistance voice call, but you still need a PCMCIA wireless networking card—different from a wireless modem on cellular networks—which costs $125 to $175. PROPRIETARY CITYWIDE SYSTEMS Until the summer of 2001, an excellent service called Ricochet provided wireless Web service in a number of U.S. cities. The Ricochet system didn’t use the mobile phone networks. Instead, the company built its own more powerful system, which provided outstanding service at rates ranging from 28 kbps in its ﬁrst cities to 128 kbps in later locations. Specialized modems, which attached to the back of a laptop, cost $100 to $200, and service cost around $50 a month for unlimited use. Connections were made quickly and the service was very responsive, but for many years the system was available only in Washington, D.C., and San Francisco. Ricochet’s parent company went belly up trying to expand and improve service to other U.S. cities. The company’s assets, including its wireless infrastructure, were sold off to creditors and other interested parties. At this writing, various companies are trying to resurrect the Ricochet service, but aside from a trial effort by the city of Denver, nobody has yet done so. THE FUTURE And that, unfortunately, is a full accounting of your 153

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Tech Terms Web-based interface: a way of accessing a program via the Internet, usually inside a Web browser instead of through the program’s own separate window. encryption: the translation of everyday data into a secret and, it is hoped, unbreakable code to preserve the security and privacy of the data being transmitted. With today’s computers, this code can be extremely complex, using numbers that are dozens of digits long to create and unlock encrypted ﬁles. virtual private network: a connection that

uses the Internet to connect two computers but also uses encryption and other security technologies to ensure that the link between the two computers remains private. VPNs, as they are known, are far more secure than standard dial-up connections, and are thus preferred by major companies. terminal server: despite its name, a piece of software installed on two different computers that allows one computer to virtually take over the other. Some frequent business travelers use this software to log in and use their ofﬁce computers from a laptop or, in some cases, a PDA.

wireless mobile options. Wireless companies are working on building next-generation networks that will provide 128 kbps service—and more—but they are at least two to three years away from achieving their goal, maybe longer as a result of the 2001–02 recession. Until the next generation of technology appears, wireless access from the road is probably a waste of money unless it’s critical to your business. At least you have the option of wasting only $20 on a wire, far less than the cost of other methods.

Integrating Mobility Into Your Existing Framework If you have traveling or telecommuting employees who will want to access your company’s servers from remote locations, you’ll need to pursue one of two options: ■ You can create a dial-up account that turns your network server into a mini-Internet service provider, or 154

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You can create Web-based interfaces (see box at left) for your critical applications, such as e-mail.

SET UP THE DIAL-UP OPTION The dial-up option requires that you acquire additional phone numbers, which your mobile workers will use for dialing into your company’s servers. You’ll also need connections between the phone network and your Internet or other servers, which your consultant, IT people, or phone service provider will be happy to hook up for you, for a fee, unless you do it in house. Likewise, you’ll need additional software on the server, though nothing too complex. Most dial-up systems allow users to have access to the Internet and e-mail only via your network’s highspeed connection. Still, you’ll need to adjust your security regimen for your network to account for dial-up users. You can limit dial-up users’ access to system resources by blocking them from shared ﬁles and databases. Use this capability! A hacker may simply stumble across your dial-up numbers in the course of hacking (there are hacker tools that speciﬁcally look for these numbers). For the same reason, you should make sure that the dial-up process itself is password-protected. CREATE A WEB-BASED INTERFACE You can also use the Internet itself, creating a passwordprotected Web-based interface to access your e-mail, even shared ﬁles on your server, from a remote location. This approach is a little riskier, however, because anyone who comes across the Web site can try to break into your larger system. It’s difﬁcult to break in, to be sure, but it’s far easier than trying to ﬁnd your dial-up number and get past a password and ﬁrewall. However, some companies regularly allow their employees such access, and with enough precautions and security, you can, too. I only recommend this, though, if you constantly have people on the road who need very fast access to e-mail. And you shouldn’t make anything other than e-mail or Word ﬁles available online; providing access to anything more could pro155

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vide additional entry points for hackers. TWO GENERALLY LESS DESIRABLE OPTIONS Virtual private networks (see page 154 for deﬁnitions), in effect, create a secure tunnel through the Internet to link a laptop or other computer in a remote location to the rest of your ofﬁce’s network. Unlike simply dialing into a server to recover e-mail and surf the Web, VPNs use encryption technology to ensure that nobody can hack into the data on either end, as well as while the data is in transit between the two machines. VPNs have the beneﬁt of providing full access to the ofﬁce network’s resources. Thus, if you have a project stored on a company server, someone logging on to your ofﬁce network via VPN can have access to that, just as if he or she were working on a computer right in your ofﬁce. As noted earlier, VPNs aren’t for everyone. Even if you have a mobile element in your company, the vast majority of work can be done without exposing your network to this kind of access. If an employee’s laptop is stolen or lost, the thief could conceivably ﬁnd the key to the VPN software on that laptop, then log in and have access not only to the data stored on that particular laptop but also to everything on your network. Also, VPNs can be expensive to set up and run, and some larger VPN setups require extensive network and server work, which can cost thousands of dollars. Unless you and a number of your employees positively have to be on the road for the bulk of your work, don’t worry about VPNs. The same goes for terminal server software, which can be used within a VPN to virtually take over your workstation at your desk from another computer— whether that computer is on your network inside your office or remotely located and logging in via VPN. Granted, you may enjoy pulling ﬁles right off your hard drive at work in this way, but it’s far cheaper and more secure to simply e-mail those ﬁles back and forth or, in a decidedly low-tech move, just put them on a ﬂoppy disk. Again, most of these expenses can be avoided with 156

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common sense. If a number of your workers travel a lot, you can give them desktop-replacement laptops, allowing them to have their ﬁles on hand at all times, and let them dial into the network normally to pick up e-mail and surf the Web. In essence, there’s really no need to expose your networks to VPN and terminal server products. IDENTIFYING MOBILITY OPPORTUNITIES So who in your organization needs to be mobile? Certainly not everyone. While possibly apocryphal, tales of the West Coast technology start-ups that equipped every worker with RIM Blackberry e-mail pagers—the top of the line in e-mail-capable pagers—or expensive laptop computers provide good lessons in the waste of venture dollars. You need to carefully distinguish between employees in your company who really need these tools, and those who would merely enjoy them as a convenience. As a ﬁrst rule of thumb, if work rarely, if ever, takes your employees outside your building or demands their attention in off hours, you need not buy them any mobile technology. Sure, your personnel guy or accountant might gain some convenience from a companyprovided cell phone or pager, but unless you’re anticipating an accounting emergency in the wee hours, there’s simply no need. On the other hand, workers who are necessary in an emergency, any time of day, are likely candidates for pagers or cell phones. And that includes you as the owner and proprietor. It also includes the top managers of your key products, processes, and services. If your production line breaks down, you want the person in charge of it to be in touch as quickly as possible. Think of three potential crises that would really hurt your business, and then think of the people who could best handle each of those situations. Those are your candidates for emergency pagers or cell phones. Generally, people who interact frequently with clients or other outside vendors will need mobile communications, especially if they’re expected to provide 157

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TREND: First e-Commerce, Now M-Commerce? In 2000 a new term started cropping up in e-commerce companies— m-commerce, the “m” standing for mobile. With everyone toting around cell phones, pagers, and PDAs, many of which could access the Web, the e-commerce companies thought, Why not try to sell these people something online via their mobile equipment? It’s an interesting idea, but nobody has really been able to make it work. Amazon.com offered a limited catalog of items, mostly bestselling books, movies, and videos. The company kept the catalog small because of the slow connection speeds of most mobile devices. In addition, eBay made it possible to track auctions and jack up bids from your cell phone. These initiatives were announced with great fanfare—and were never heard from again.

It’s bad enough trying to access and read e-mail or weather reports on a tiny cell phone screen, using a tiny numeric key pad. Trying to make purchases via a wireless Web link is far worse, because you must ﬁnd the item, read a description, order it, and provide credit card and shipping information. PDAs with wireless capabilities would be better, given their larger screen and better input abilities, but the cellular and digital wireless networks are still very slow, making it difﬁcult to download large Web pages. It will take another two to three years before m-commerce can really be viable—that’s when higher-speed wireless networks will debut in the U.S. Until then, be wary of anyone trying to sell you an “m-commerce solution.” The problem hasn’t been solved yet.

off-hours service or if you’re doing business on another coast or overseas. Now let’s move on to consider workers who operate almost exclusively outside the ofﬁce, such as the people driving service trucks or your outside sales force. Not only will these people need mobile communications, most likely cell phones, but they may also require some form of mobile computing. For more service-oriented people, or those performing single tasks with no need for any extras, you might want to consider the modiﬁed handheld computers discussed earlier. While perhaps not so versatile as laptops, these devices are great for taking orders, providing information, even taking credit card information. Although most online grocery services thus far, such as WebVan and Homegrocer.com, have ultimately failed, they did make good use of handhelds for 158

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conﬁrming orders and mapping their delivery routes. Any kind of delivery or onsite service, such as heating oil companies or small cable TV outﬁts, can beneﬁt. Software for these functions is readily available with prices ranging from $10 to $50, depending on complexity. Finally, there are those brave few—typically, the classic business travelers, such as salespeople and executives—who will need the works: a cell phone, a laptop, possibly even a PDA or an e-mail pager. For them, I recommend going the desktop-replacement route, with the laptop as their only computer. This strategy will cost slightly less than purchasing both a PC and a separate laptop, and your employees won’t have to worry about ﬁguring out which computer has the data they need. This approach also means that you won’t have to worry so much about using virtual private networks (VPNs) or dealing with any kind of terminal server software—a major investment for small companies, as discussed earlier.

Cost Breakdowns EMERGENCY PAGERS AND CELL PHONES This is your basic emergency communications system— pagers for a couple of on-call people, and cell phones for you and two other key employees. Two alphanumeric pagers Paging plans Three cellular phones Basic cellular plans Total Start-up Cost Total Monthly Cost

$100 $50/month $150 $105/month $405 $155

THE FULLY EQUIPPED SALES FORCE In this case, we assume that ﬁve people need to have full mobility, including cell phones and individual laptops with monitors and docking stations for the ofﬁce. Although the start-up cost is high, remember that you’re saving approximately $4,500 by not buying desktop computers for these people. 159

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Five laptop computers Five docking station setups Remote access dial-up numbers on a network server (extra numbers from the phone company as well as installation and software) Additional dial-up numbers Five cellular phones Roaming cellular plans Total Start-up Cost Total Monthly Cost

160

$6,000 $2,500

$500 $100/month $250 $375/month $9,725 $475

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7

Better Business Intelligence ’ve had the good fortune of going to Las Vegas a number of times, although always on business. Still, I’ve been to most of the major casino hotels in the city, and in every one I’ve been amazed at the attention to detail. Here I’m referring not to the service provided but to the attention paid to making sure that the house maintains its edge when it comes to taking visitors’ money. Some things, of course, are obvious: There are no windows or clocks on the gaming ﬂoor, so as to deprive players of a sense of the passage of time. But cameras are everywhere. The ﬁlm Ocean’s Eleven wasn’t far off the mark when it comes to the paranoia of casino management. Every player at every table is carefully watched for signs of cheating, even card counting, which is very tough to detect. Some casinos even use face-analysis software to recognize noted cheats or professional gamblers, despite any attempts at disguise. Dealers also are carefully watched, to ensure fairness. That’s why dealers clap their hands and spread them wide at the end of their shift, to show casino security watchers that they have taken no extra chips off the table. That institutional paranoia carries over into the casinos’ various databases. The MGM Mirage company, which operates the Mirage, MGM Grand, and Bellagio hotels, uses special software, developed by a small company called Systems Research & Development, to comb through all the data collected by its various casinos, searching for unusual relationships between disparate pieces of data that could help protect the casinos’ investment. For example, SDR will compare a casino’s employee

I

Summary ■ ■ ■ ■ ■ ■

Your Business Is Data Know Your Customers Looking Inside Your Business Managing Inventory Data Mining A Final Word on Business Intelligence

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roster and a database of known cheats and professional gamblers to look for common threads, such as a common phone number, last name, or address. Even employees’ former addresses are thoroughly searched to determine whether an employee and a cheat ever crossed paths. The same goes for transaction records from the casino cashiers. If a guest cashes in a substantial amount of chips or takes out a line of credit with the casino, the casino records pertinent details about the guest. Those details can be fed into SDR’s software programs and, once again, compared with information about employees and known cheaters to see whether any common elements appear. Now think of all the databases that can be matched up, in addition to employee records and criminal information: hotel registries, casino slot-club membership records and the perks that come from them, credit card numbers, and every single sales transaction at the buffet or in the gift shop. The company has access to a wealth of data, and it would take an extremely diligent cheat to avoid getting ensnared by SDR’s software. SDR hopes to broaden its offerings by adding thirdparty database information to the mix. Imagine using a geographical plot for addresses, for instance. A casino employee might not have lived at the same address as a known cheater, but plotting addresses on a map could show that the cheat lived in the same neighborhood— maybe even around the corner. Linking that information to a time-frame analysis could then show how long the two lived in the same area, or match the time of a potential cheat’s credit card transaction with a suspicious employee’s shift. Could all this data matching simply unearth coincidences? Perhaps, but the casinos never leave anything to chance. They leave that to the gamblers.

Your Business Is Data Like the casinos, your business generates a sizable amount of data every day, through your computers and other technologies, and odds are it’s just sitting there. In 162

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talking with various business people throughout the country, I have been taken aback by the slim number of small businesses that are using their data to its fullest potential. Sales and inventory records, balance sheets, employee records, e-mail correspondence, data fed back from mobile sources, and trafﬁc on a bustling Web site—all these sources can tell you more about your business if you know where and how to look. In this chapter, we’re going to revisit the themes of the previous six chapters and look at the information you can glean from these different technologies, and the tools you need to get it. A number of techniques can be used to crunch your data for better business intelligence. Some are simply exercises in common sense, while others require extensive software applications and can be expensive—and there are plenty in between. You’ll probably be pleasantly surprised, however, at how little time many of these techniques take. You can end up getting new perspectives on your business at the end of every business day.

Know Your Customers The customers are the lifeblood of every business, so let’s start there. Every business has a different take on how much service is needed to please its customers, and, by extension, how much information from the customers is needed to serve them well. Most owners of general stores, for example, don’t ask for names and addresses while ringing up a pack of cigarettes, and a yardservice company isn’t likely to ask how many cars a customer has in the garage. Nevertheless, any customer data you have will give you clues about who your customers are and what they’re looking for. LEARNING FROM EACH SALES TRANSACTION Let’s start with the basic sales transaction. If you have a computerized retail system set up (see Chapter 4), you can generate a lot of data from your sales records—the items purchased, date and time, and mode of payment (cash or credit)—despite the relative anonymity of most transactions. Let’s look at each type of data in turn. 163

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Obviously, you’ll know from your inventory records which items are going out the door fastest and which are staying on the shelves. But by analyzing your sales records, you can see which items are purchased together most often and which items are bought in quantity. Here’s an interesting exercise that requires no new software: Take all of a single day’s sales records and put them into an Excel spreadsheet—any good retail software setup should let you do this easily. From there, put the items purchased in alphabetical order. The alphabetical listing will make it easy for you to scan for known relationships between items and will prompt you to discover others. For example, you should be able to see just how many people purchased sponges with their dishwashing soap, and perhaps move more sponges by offering a sale on the two items combined.

THE ITEMS PURCHASED.

Tip Here’s an interesting exercise that requires no new software: Take all of a single day’s sales records and put them into an Excel spreadsheet. From there, put the items purchased in alphabetical order. The alphabetical listing will make it easy for you to scan for known relationships between items and will prompt you to discover others.

THE DATE AND TIME OF PURCHASE. Actual sales-analysis software, which is usually sold separately from retail hardware, can take this analysis one step further, not only by outlining all these relationships for you, but also by pairing your sales data with the date and time of purchase. Are ofﬁce supplies more likely to sell on Monday? Perhaps people are grabbing them before heading off to work and school. Maybe putting the office supplies across the aisle from some prepackaged lunch foods would increase sales of both. If your deli sales are sluggish in midafternoon, that’s a good time to give employees a break or have them do the other chores necessary before the dinner crowd comes in.

You can also measure the popularity and staying power of new items by tagging those items to their prices. A bar owner, for example, might introduce a new brand of India pale ale at a discount, which will probably guarantee initial sales, before raising the price to match the rest of his selections. The owner can then use his software to compare how many pints were sold at the discount with those sold at the regular price. If sales dropped signiﬁcantly once the price rose, the owner can drop the beer from the menu or try again at a slightly lower price.

THE PRICE.

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If you learn that some item isn’t selling particularly well, try positioning it next to your best-selling items. It’s possible that customers simply did not realize that you stocked the item. The exercise might cause you to test or rethink the physical location of other items in your retail space.

THE STORE LOCATION.

Looking at your customers’ use of cash versus credit can also provide small clues to their habits. If you see extensive use of credit cards, for example, take a quick trip around the neighborhood; there simply may be no handy ATM machines. If that’s the case, your store might beneﬁt from having one, or from offering a debit or credit card cashback system.

THE USE OF CASH VERSUS CREDIT.

LEARNING FROM CONTACT INFORMATION Customer contacts represent one of the greatest databases any business can develop. If you have any contact with customers beyond the simplest of sales transactions, you have an opportunity to obtain their addresses. Once you have those, you can get an immense amount of data from them, data that may really surprise you and give you new perspectives on the people you serve every day.

Even collecting something as simple as Zip codes can be useful. We mentioned earlier that, for years, Radio Shack has asked customers for their Zip codes; now that retail chain is famous for having located one of its stores within just ten minutes of the vast majority of Americans. Similarly, those ﬁve digits can help you pinpoint where your customers live. Do most of them live right in your Zip code, or do people come from across the city to do business with you? And in either case, what is the reason? ■ If your customers are right in your neighborhood, is it time to think about expanding your business by attracting people beyond your Zip code through marketing? ■ And if your customers come from other areas, is it because your prices are too high for the immediate ZIP CODES.

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neighborhood? Or do you just need a little more local advertising? Are you providing a product or service that is unique or underpriced in your region? It may be that your potential draw is much larger than you anticipated or that you can turn your miscalculation— choosing the wrong location—into an advantage. Phone numbers reveal even more information, especially when paired with home addresses via a reverse-lookup directory, such as the one featured on AnyWho.com. Not only will you get some neighborhood information from the area code and possibly even the exchange (the ﬁrst three digits after the area code), but you can pinpoint exactly where your customers live if their numbers are listed in the phone directory. That information facilitates neighborhood-by-neighborhood comparison. You can purchase software that will automatically make these matches, although the directories used in these programs can be slightly out of date, and will usually require frequent upgrades to account for changing phone numbers.

PHONE NUMBERS.

If you have your customers’ home addresses, software available from Street Wizard (www .streetwizard.com), DeLorme Software’s XMap Business package (www.delorme.com), and others (available online; generally about $100) lets you take a database of those addresses and map them onto a city street grid. Once you’ve done this, you can see exactly where the highest concentrations of customers are, how close their homes are to your business, and where your business seems to lack traction. This knowledge will allow you to do such things as: ■ Target your advertising efforts. If the northwest side of town seems to be where your customers live, why not advertise with direct mail in that area? After all, you already have some customers there, and the mailings could help generate word of mouth and, eventually, more business. Or, if you prefer, look at the area with little customer support and do your best to change that through billboards, newspaper ads, or some other way. MAPPING SOFTWARE.

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Help you manage delivery routes. Give you an idea of where best to locate future operations. Sure, leases may be higher in the area where

most of your customers live, but if there’s a compelling reason why people are making the trip to see you, perhaps their neighbors would also be interested if you simply moved closer—and for the extra money you’ll pay for the lease, you’ll increase your business. Now let’s take your contact information and pair it with demographic data. If you’ve lived in your town or city for any length of time, you probably already have an idea where the “good” neighborhoods are, where the rich and not-so-rich live, and where the major hubs of business are. With mapping software and that bare minimum of knowledge, you already have a leg up on the competition. If your customers come primarily from a Latino neighborhood, perhaps it’s time to advertise on the local Latino radio station. If most of your customers drive miles to come to you from an afﬂuent neighborhood, perhaps it’s time to think about relocating or adding lower-priced merchandise to attract more locals. Advanced demographic software also can be used— you can buy it or pay someone to use it once on your behalf—to determine even more pertinent information. You can discover an immense amount of data about your customers, such as their gender, age, ethnic background, average income, and housing, plus the quality of education and crime prevention in their neighborhoods and their proximity to schools—all of which could help you further target sales and advertising. Easi Analytic Software Inc. (www.easidemographics .com) makes a number of software products that can take addresses from your customer database and give you a variety of demographic information—such as area incomes, newspaper and broadcast markets for advertising, local consumer expenditures (to show what else your customers are buying), and trend estimates through the middle of this decade. The advanced version, which works with your existing database, costs $1,000. The U.S. Census Bureau also offers much localized DEMOGRAPHIC DATA.

Tip Advanced demographic software also can be used to learn ever more about your customers, such as their gender, age, ethnic background, average income, and housing, plus the quality of education and crime prevention in their neighborhoods and their proximity to schools— all of which could help you further target sales and advertising.

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information that could help your business. You can obtain business data by county, to see what local competition you have, or economic data by city block, to ﬁnd the appropriate neighborhoods for your advertising campaign. This information can be obtained directly from the Internet or via CD-ROM or DVD, and it can be placed into your databases relatively easily. For example, the latest Economic Census data, on three CDROMs, costs $190. You can order these products at https://catalog.mso.census.gov/esales4boc/. A company called geoVue (www.geovue.com) has software that can perform even more intensive studies, but these cost thousands more, and the company’s customers tend to be larger businesses such as Dunkin’ Donuts and The Limited chain of clothing stores. TWO CAUTIONS. Naturally, addresses and phone numbers are powerful marketing tools in and of themselves, and you don’t necessarily need expensive technology to make a list and send out mailings or engage the services of mass-marketing ﬁrms. Your ofﬁce suite of software provides at least some word-processing tools for managing mailing lists or generating mailing labels. However, by knowing more about your customers when you contact them or send a mailing, you can push products that are appropriate to their income and buying patterns. When looking at mapping software—or any other kind of business intelligence software mentioned in this chapter—be sure to buy versions that will be able to take data directly from your existing databases. It’ll be more expensive, but will save dozens of hours of extra work that would be required to reenter the data in a new format.

WEB INTELLIGENCE Your Web site is also a great tool for gathering information about current and potential customers. Of course, you may get visitors who surf over to your site from boredom or by mistake, but most of the visitors to your small-business Web site will probably be local people or others who are interested in what you have to offer. 168

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So how can you tell who’s on the other end of that Web connection? The easy way is to be overt about it. If your business often has sales, promotions, or special events, it’s easy to ask visitors to register for news of upcoming opportunities by e-mail. Soon enough, you’ll have a growing database of e-mail addresses belonging to current and future customers.

CREATE AN E-MAIL LIST.

GATHER NAMES AND ADDRESSES. As part of the e-mail list registration, you could also ask for registrants’ names and addresses, but because privacy is becoming a bigger issue online and off every day, some users will simply avoid lists that require anything more than an e-mail address. To try to overcome this resistance, you could offer to enter visitors in a drawing for a free product or service. That way, your registrants feel as though they might get something for their trouble. In any case, you should be up front and tell the users that their e-mail addresses and other information will be used for marketing purposes. Check out the ﬁne print of any online giveaway for the kind of notiﬁcation required—it’s usually in literal ﬁne print on the bottom of a Web page. COMPARE ORDER AND SHIPPING INFORMATION WITH OTHER WEB-SITE ACTIVITY. If you’re selling items through

your Web site (see Chapter 5), you should already have a database of customer information and orders. You’ll have acquired customers’ shipping information (home and other mailing addresses) with each purchase. And you can measure and record what each customer is interested in, and how often the customer purchases from your Web site. A simple query through your database’s built-in search and compilation tools should give you the information you need—but few businesses make full use of their software for this purpose. You can also compare the number of clicks on a given Web page with the number of orders for items featured on the page, to get an indication of how popular a given item is as well as how many people view with or without buying. Don’t be discouraged if viewers outnumber buyers. Many Web surfers still research prices 169

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Tech Terms cookies: a small ﬁle, attached by an originating Web site and stored in a computer’s Web browser, that communicates with the Web site to list the browser user’s preferences and usage patterns. The main purpose of cookies is to identify users and possibly prepare customized Web pages for them, although the customization usually means targeted advertising rather than targeted content that the user might actually want to see.

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online, then head out to the bricks-and-mortar stores to buy. Through your datagathering, you’ll be able to compare the names of bricks-and-mortar buyers to online visitors, to see how many of those Web visits turn into bricks-and-mortar purchases. To the customer information you gather from your Web site, add the geographic mapping information described earlier and some relatively simple database work, and you have a powerful customer proﬁle to use in your marketing efforts. Most mapping and demographic software have this capability built-in. USE (OR AVOID) COOKIES. Let’s say, however, that you don’t sell anything on your Web site. There are other ways to obtain some pertinent information about who’s viewing the site, such as their rough geographical location, their Internet service provider, and even other sites that they’ve visited. Because that last item is somewhat controversial, let’s start there. When a Web surfer visits your Web site, you can track the last site the surfer visited before yours via a cookie, a small tracking program that your Web site installs on the surfer’s browser on its ﬁrst visit to your site. Keep in mind, however, that many users don’t like cookies, and can set their browsers’ security settings to reject cookies outright. Some businesses swear by these cookies, because they can provide a great deal of information about the surfing habits of users—such as whether they visited your competitor before they visited you. Cookies also allow you to provide some convenience to your customers by keeping track of their personalized information, so that when a customer returns to your Web site, the customer’s preferences and shopping cart are still there; as a result, the customer does not have to log in. Some Web surfers, however, strenuously object to the use of cookies on Web sites, and many people voice such opinions strongly on message boards and chat sites related to your business or your city. Although most ecommerce sites use cookies, if you aren’t selling anything on your Web site, you should not use them, in

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order to avoid alienating potential customers. Alternatively, you can set up a link so that your customers can opt out of cookies on your site, or provide information on your site about how your customers can disable cookies altogether on their Web browsers. You can easily detect where your visitor’s computer is in cyberspace, even without the use of cookies. As stated earlier, each computer connected to the Internet has an IP number. A dial-up connection has a dynamic IP number, randomly generated by the ISP each time the user visits the Internet. Other connections, such as most business computers and home computers using broadband connections, have static IP numbers. Your Web-hosting company probably offers either a service or the appropriate software necessary to match your Web-site visitors’ IP numbers to their ISP. If enough of your visitors come from a single ISP— especially a local provider as opposed to a national one such as EarthLink or AOL—you can focus your online advertising dollars toward that particular ISP. Furthermore, if a visitor’s computer has a static IP number, you might be able to determine the machine’s geographic location, although this should simply be considered a bonus—the ISP is information enough for most purposes.

TRACK WITHOUT COOKIES.

Looking Inside Your Business Knowing your customer is critical, and most businesses spend a great deal of money and time in pursuit of this knowledge. However, I found that surprisingly few small businesses take the time to use technology to get to know themselves. That’s an unfortunate omission, because by taking a close look at what’s going on in your business, you can gain a lot of useful information. USING YOUR FINANCIAL INTELLIGENCE Chances are, you’re already doing some of this prelimi171

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nary analysis simply by going over your ledgers. You’re living your business, so you already know intuitively that October was a rough month, while November was your best ever. But do you know why? Sources from both Intuit, makers of Quicken and QuickBooks, and Microsoft’s Money software group report that a great many of their customers neglect to make full use of the capabilities of these two simple money-management programs. Even the basic smallbusiness versions of these programs come loaded with analysis tools that can help you pinpoint both good and bad areas within your own business—yet nobody bothers to click on them. For example, both software makers say that few businesses bother to examine the payments they make to their vendors. However, if a business knows that it spends $1,000 on ofﬁce supplies every month, it can then ﬁgure out ways to save some of this amount by contracting with an office supply company for bulk supplies. The software makers also report that few people bother to list Schedule C purchases as they go, instead putting their receipts in the proverbial shoe box and letting their accountant sort out the details. Imagine the money one could save in tax-prep time and possibly in fees with a few extra clicks for each purchase. Even a home-based, single-person business can beneﬁt from a closer look at its business. All the owner needs to do is to record the money coming in and going out for business purposes, and run the results at the end of the month, setting aside the important stuff for tax time. Pretty easy, right? Remember that all sales and purchases have attendant data that you can use to make your home business more efﬁcient. Open up your copy of Quicken or Money and, if you’ve never done it before, run an analysis—look at exactly what you’ve spent money on over the past month, the past year, the past ﬁve years, as well as when the money came in. Then see if you don’t notice something you didn’t realize before. You might see that most of your receipts come in during the summer months, or that you tend to spend more than you realized on ofﬁce 172

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supplies or travel. Perhaps your tax bill over ﬁve years looks higher than you expected, or even climbed while business has otherwise been steady—time to get a new tax guy? One simple, 30-second analysis, and you could make a number of discoveries that will end up saving you money, or give you a new perspective on the way you run your business. Of course, once you have an accountant or business manager—whether on a retainer or a full-time basis— that person will constantly run financial reports like these for you. But in the meantime, if you want to squeeze every cent out of your business, you need to ﬁgure out the full capabilities of your ﬁnancial software. The same goes for nearly any other software product your business uses. If you’re a lawyer, for example, it could be as simple as comparing your files of briefs against the results—if a particular judge never accepts a particular legal maneuver, it’s time to come up with a new strategy. Be creative with the data you generate, and take the time to learn your software and take advantage of the tools in front of you. USING YOUR NETWORK INTELLIGENCE Chapter 3 discussed how you and your employees could set up and use computer networks. Despite the technical questions, the discussion was pretty straightforward— your business needs multiple computers, and they need to work well together. Indeed, but there’s valuable information about your business to be gathered from your computer network. The data are of two kinds: ■ First, you can measure the performance of your network and Internet connection to get a better idea of how efﬁciently your network is performing. ■ Second, you can analyze the work patterns of the people using your network.

There’s no need to debate the merits of the ﬁrst exercise; the second one can be even more fruitful, but is fraught with employee-relations landmines if your workers should object to such analyses of their workstations. 173

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Tech Terms benchmarks: tests used to determine the performance of hardware or software products. The measurement is usually a mathematical ideal developed by the benchmarker based on the kind of product being tested.

MEASURING NETWORK USAGE AND PERFORMANCE. There are a couple of ways for you to measure network usage and performance.

Access speed. First, you can measure how long it takes a

workstation to access information from a server or, in a peer-to-peer network, from another computer on the network. These measurement tools reside on both the server and an individual computer. Your IT consultant or in-house expert should run a number of benchmarks on your systems when they’re ﬁrst installed, to see how well your system runs before people really start using it. Then, if you experience any problems with the system, your consultant or IT manager can run more benchmarks to see how much the performance has degraded. Any deviation in performance from the optimum or the norm can usually be traced to a lack of RAM or processing power on one of the computers or servers in the network. Network components, such as the actual networking cards inside the machines and the Ethernet cables, have become fairly standard in the vast majority of computers purchased in the past two to three years, so they’re unlikely to be the source of any problem. Server multitasking performance. Second, you can mea-

sure the performance of your servers themselves. A server can certainly house and simultaneously perform a variety of different functions, especially in a small business. You may be asking your server to handle email, Internet service, print-and-ﬁle sharing, and even a small database program. Unfortunately, the more functions you ask a server to do, the more its performance can degrade—the jack-of-all-trades is truly the master of none. It takes longer for ﬁles stored on the server to be called up, longer for e-mails to be processed and sent, and longer for databases to be updated on the ﬂy. However, servers that perform multiple functions can be tweaked to perform better in complex tasks, with only slight degradation in simpler tasks, so it’s worth measuring the performance of your server. This 174

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service is best provided by your consultant and IT specialist. Basically, they’ll be trying to determine how long it takes for your server to handle any given task— e-mail, database queries, Internet service—and then ﬁgure out how to adjust the server to reduce any inefﬁciencies without creating new ones. Again, tweaking your database may end up slowing down other functions, especially when done simultaneously with other demands on the server, but in the end, if even several seconds can be saved overall, it’s worth ending the frustration on the part of your employees. MEASURING THE PERFORMANCE OF YOUR INTERNET CONNECTION. Most small businesses opt to share a T1 line

with other businesses, as explained in Chapter 3. Your ISP can readily tell you how much your business uses your Internet connection and how many times a day, for example, the shared T1 is bottlenecked with its various users and how much data they are pulling and pushing through the Internet connection. One small-businessman I talked with noted that his ﬁrm shared a T1 connection with a small branch ofﬁce of a major stockbroker. His company’s Internet connection always bogged down around 4 P.M. Eastern time—right when the last surge of orders was coming in to the brokerage. The businessman was able to work with his ISP to switch his shared connection to another T1 with a different ﬁrm whose peak usage times were different. Also, if your company’s mission doesn’t require heavy Web use, but employees nevertheless are using substantial bandwidth for Web surﬁng, you may want to remind them that their jobs don’t necessarily require them to keep tabs on ESPN.com during the workday. In addition, if your company isn’t burning up the T1 line through heavy use, you may end up deciding to opt for a lesser connection to save money. Your ISP won’t want to help you to downgrade your service (although they’ll be quick to tell you when you need more bandwidth), but you can certainly request a usage report at any time to help you decide. None of the foregoing measures are designed to 175

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make money or even to save a lot of it. Instead, tapping your network for usage patterns can squeeze additional efficiencies out of it which, down the road, will inevitably make working life easier and more productive for you and your employees. If the bulk of your employees work with technology, there are many ways to measure their performance through data analysis. Some of these opportunities are fairly obvious, while others are very stealthy—and could cause a stir with employees should they ﬁnd out that you’re keeping an eye on them via the network. As an employer, you certainly have legitimate reasons for keeping an eye on how your employees use paid time and company resources. In some businesses, being closely supervised is an accepted part of life as a worker. However, in many ofﬁces, workers will view monitoring computer use as an invasion of privacy. Ultimately, you’ll have to decide how vigilant you will be. You may feel that when employees show up to work, they should work, period. Or, you may not mind if employees check personal e-mail occasionally during work hours or do a bit of online shopping at lunchtime at their desks. Let’s take a look at the various software tools available, along with various usage policies I’ve seen in large and small companies. Then I’m going to leave it up to you to decide how you, as a businessperson, want to go about using these tools.

MEASURING EMPLOYEE PERFORMANCE.

When are they working? The most obvious measure of

employee work habits is the timeclock, whether it’s literal or virtual. Every major electronic timeclock system allows supervisors to run reports using various criteria, including hours worked, break times, and overtime. Most of these systems will synchronize directly with personnel and ﬁnancial software systems, allowing you to run even more detailed reports over the long term. For example, such systems can ﬁnd the employee who manages to call in sick after every major holiday—or every 176

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time the Chicago Cubs are playing your local team. In a retail or manufacturing environment, you can require your employees to log into their workstations, thus allowing you to track their activities on their shift. Then you can determine how much work the employees are doing, and how efﬁcient they are with materials. Let’s take a small manufacturing concern as our example: The worker logs in on a particular workstation and goes about his job. When the worker identiﬁes a mistake, or makes one himself, and removes a “dud” product from the line, that removal is noted both in the inventory database and in the employee’s records. Later, the supervisor checks the work record for that shift and ﬁnds that the worker has a high incidence of “duds” during his shift, more so than the rest of the line. Either that employee is much more vigilant about quality standards than other workers, or he is messing up and needs some remedial work. In a more white-collar work environment, working to the clock may be considered passé. However, in effect, your employees do just that every time they log into their computers. It’s a simple matter of programming to ﬁnd out when your employees come to work and leave—just look at the login times. Your network administrator can do this for you in larger ofﬁces, but if you’re in a small ﬁrm with a basic server, you can simply use the administration toolbar—found within most server operating systems—to look at the activity of a given workstation. If you really want to be nosy, you can also check to see how often the workers’ computers go into screen saver or idle modes. However, that degree of checking gets into another whole interesting area of employee monitoring. You can also monitor employees’ work from remote terminals, mostly those operated via Virtual Private Network or terminal server (see Chapter 6). However, if an employee is just dialing in to your servers the way he or she would to any other ISP and then using hacking tools or other tricks to cause damage, all you’ll have is the phone call record—and that’s not enough on which to base any serious assumptions about an employee’s work ethic.

Tip In a more white-collar work environment, working to the clock may be considered passé. However, in effect, your employees do just that every time they log into their computers. It’s a simple matter of programming to ﬁnd out when your employees come to work and leave—just look at the login times.

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How are they using the Internet and e-mail? A computer

directly connected to your Internet connection— whether it’s your server or a workstation in a peer-to-peer network (most likely, your personal workstation)—can easily monitor individual requests for Web sites sent via the network to the Internet. What Web sites are they viewing? It’s easy to harvest the Web sites requested by any individual on the network; if your ISP doesn’t have the software available, your IT consultant will be able to ﬁnd it. Of course, among the most suspect Web sites are pornographic sites, but you may be surprised to ﬁnd everything on the list from comic book sites to various job-listing sites directly related to your ﬁeld—a sure sign that the employee in question may not be happy. WebSense (www.websense.com) and Vericept (www.vericept.com) both make a suite of monitoring software for business, but their price tags— $1,000 or more—can be steep for your business. What are your employees writing? The other kind of sur-

veillance you can employ is something called keystroke tracking, and it’s exactly what it sounds like. You can install a program on every workstation in your business to track every key your employees press when typing. Obviously, this method not only can track Web sites through the URLs typed in, but also can keep tabs on email, instant messaging, and any non-work-related writing your workers are doing. One company—which ardently wished to remain unnamed—found three employees working on their résumés during company time. These keystroke tracking products can be set to recognize keywords—“résumé,” “party,” and various off-color terms are the most popular. Small software companies like KeyGhost (www.keyghost.com) and KeyLogger (www.keylogger.com) sell this software for about $100 to $150 per machine, though there are bulk deals in place for company networks. The ultimate snoop. Finally, if you have concerns about

extreme problems, such as repetitive slacking off, long 178

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hours of Web use, and unrecognized e-mail addresses, you can simply use your network’s administrative passwords to log into the worker’s computer yourself and root around. However, I’d like to reiterate that this step is extreme, and should never be undertaken lightly. In the interest of full disclosure, there is a fullaccess employee-monitoring product called, appropriately, Big Brother In A Box. It combines Web-site monitoring with the ability to see anything on a user’s screen at any time, and even open and close various programs remotely. Ostensibly, you could catch your employee doing something against company policy and stop it on the spot. It even comes with a tiny eye icon that ﬁts on the task bar in Windows so that employees know they’re being watched. This little slice of paranoia costs $595 for 30 computers. Unless you know without a doubt that you have a massive problem with computer misuse, avoid products like these. You’d be surprised how quickly word gets around on job boards and the like. COMMUNICATING YOUR COMPANY’S POLICY Because of the general sensitivity about the issue of monitoring in the workplace, most of the companies I interviewed wouldn’t tell me what safeguards— if any—they employed on their computer systems. However, if you reviewed the companies’ policies, you might get the impression that they were keeping a close eye on their employees. That’s because most of their employment policies include the following elements, in one form or another: ■

A restriction on employees’ use of computer and Internet resources. This restriction can be spelled out in as

much detail as you like, but many policies state that these resources are not to be “misused,” thus leaving the deﬁnition of abuse to the company. This restriction is, by the way, perfectly legal, although some codiﬁcation may be necessary to avoid lawsuits down the road from disgruntled ex-workers. ■

A statement that the company reserves the right to monitor employees’ computer use, and deﬁnes what is 179

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STORAGE: Where Do I Put All This Data? As your business expands, you may ﬁnd yourself running out of space—not in your ofﬁce, but on your servers. Databases are designed to store data in the most efﬁcient way possible, but if you keep transaction records for everything you buy and sell, crossreferenced with customer and supplier information, then referenced again with your electronic bookkeeping, employee records—you get the idea. That’s a lot of bits and bytes to keep track of. As you grow, you can easily add hard drives to your server to help take up the slack—an 80-GB hard drive costs about $200, and will probably double the storage available on most servers. Any more than that, however, and you’ll have to start looking at “storage solutions”—special storage devices that attach to your server and can cost nearly as much as the server itself—or “data warehousing,” a service performed by consultants and other companies. Essen-

tially, they take your old data—last year’s transactions, for example—and store it for you on their servers while still giving you unhindered access to it via the Internet. Unless you’re logging thousands of individual transactions every day, chances are you won’t need either of those options. If you are running out of space, however, I suggest getting a separate storage unit, which costs around $1,000. This storage unit, packed with hard drives, is the 21st-century equivalent of the shoebox you used to store old receipts in. This time, though, there are hundreds of thousands of receipts. Hewlett-Packard, Compaq, Dell, and other major computer companies provide storage solutions; your IT person will know where to get the best deal. Instructions for doing it yourself are beyond the purview of this book—and attempting to do it is not advised if you’re not an IT person yourself.

acceptable or not, as well as your rights as an employer and what, if any, expectation your employees should have regarding privacy. You can, if you choose, notify your workers if and when you need to access their e-mail accounts or workstations. State that choice clearly in your policy. Such provisions are fairly standard in most policies, although not necessarily in practice. Simply making the threat of monitoring is often enough, especially for employees who aren’t very computer savvy. Remember, however, that the people in your IT department, along with a handful of other knowledgeable workers, may discover on their own whether these products are in use. 180

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A clear warning that misuse of these resources can lead to punishment, up to and including termination of em-

ployment. Again, this warning gives the employer leeway in dealing with various infractions. In practice, most employers simply leave it at that, and don’t bother installing monitoring software unless they’re ﬁrst made aware of problems through nontechnological means. Furthermore, the vast majority of employers don’t mind if employees check e-mail, surf a bit, or even engage in a little private e-commerce on company time. Indeed, some employers believe that if employees can use Internet resources at work, there’s less reason for the employees to rush home at quitting time—thus, the employees stick around the office longer and, it is hoped, work longer. On the ﬂip side, some companies say that their policies are relaxed but they will use the Internet usage policy against workers who are already in trouble, or those whom the employer simply no longer wants to keep. As you can imagine, there’s bad news for you on either side of this issue: Either your employees believe you to be too permissive and get nothing done, or they ﬁnd you paranoid. Despite the facts that the computers they’re working on aren’t really theirs and all work produced on a workstation—including any e-mails that an employee sends, as well as passwords for server access— is generally considered the property of the company, many employees resent any monitoring of their workstations. Some simply feel that monitoring indicates a lack of trust on your part, while a few may feel guilty because they know that they are using their computers for a great deal of non-work-related activity. I’ll leave it to you to walk that line and ﬁnd your own comfort zone. Once you’ve made your policies clear you could… do nothing. Seriously, you have far better things to do than ensuring that your administrative assistant isn’t responding to a personals ad. Any good boss should be able to tell when an employee is slacking. If you see that happening, and if it continues, then check out the worker’s computer if you feel the need. 181

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Tech Terms data mining: a piece of software, or sometimes a service performed by consultants, that looks for otherwise hidden correlations in the information contained within a database or multiple databases. True data-mining software presents previously unknown relationships among the data. ASP: short for application service provider.

This term is used for companies that provide software to companies on a “rental” basis; instead of buying expensive software outright, a business can use an ASP to have access to that software more cheaply, usually via the Internet. However, the business will be at the ASP’s mercy for downtime and maintenance, and must hope that its Internet service provider never goes down.

Managing Inventory Let’s get back to something more uplifting—using your technology to manage inventory better. Again, most businesses simply use inventory tracking software to see what supplies or products are low so that they can order or produce more—usually a predetermined amount that varies only seasonally. And again, that’s a shame, because dedicated inventory tracking software often can improve managers’ perspective on their inventory use, productivity, and work ﬂow. The amount of information you can gather with your inventory database, however, depends on the kind of software you have. You may be able to do much of the work yourself, or you may need to have your IT consultant or in-house techie do it for you, at least initially. Either way, in the end you’ll want your people to be able to do these analyses for themselves. So what can you learn by analyzing your inventory use? Tying it to the date is the easiest method of analysis, and in so doing you’ll discover a lot more about inventory use than simply ﬁguring out the seasonal rush. You may ﬁnd that certain items are used more on Tuesdays than Thursdays, or at the ﬁrst of the month rather than the end, or in March than in April. You can even pinpoint heavy-use times during a single day and use that information to reﬁne your work process—say, by posi182

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tioning that inventory closer to your front lines to make it easier on your workers. You can also measure productivity and efﬁciencybased on the use of inventory, say, by work shifts; for example, you might find that your second shift works harder than the ﬁrst. Taking an example from earlier this chapter, you can tie use of inventory to individual workstations and logins. From there, your inventory managers can look at work schedules and make projections of inventory usage based on who’s working that week.

Data Mining: Weaving Disparate Threads of Information Let’s say you want to mesh your inventory information with your sales receipts, or match your customer purchases to a particular sales representative, in conjunction with times and dates. Or maybe, you just want to toss all your data into a computer and see what relationships develop, the way the casinos described earlier in this chapter do. This process is called data mining, and it’s a fairly impressive undertaking. Large corporations often engage in data mining, purchasing custom data-mining software or outsourcing the process to an ASP. Either way, the process can cost tens of thousands of dollars, but the results can be eye-opening. For examples of how larger companies have used data mining to increase sales or gain efﬁciencies, I suggest surﬁng over to a company called DigiMine (www.digimine.com), run by the man who used to head the data-mining efforts at Microsoft Research. You, however, probably don’t have or want to spend that kind of money. Thus, data mining will be, at best, an occasional process for your business—at most perhaps once a year or even once every few years. For data mining to be worthwhile, you have to have a number of dif183

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ferent databases of information—customer contacts, inventory, sales, purchases, personnel, and beneﬁts. If you only have two or three of these, you can easily run comparisons among the various databases with the software you have. But if a boutique interior decorator, say, has a customer database, project database, purchasing, sales, personnel, contractors, and other information, data mining could ﬁnd a relationship between a certain color and pattern, provided by a certain supplier, that happens to be popular in a certain neighborhood during the spring. Next spring, the design ﬁrm knows what to pitch to its customers, and knows it can do the job faster because it has already ordered the extra materials. APower Solutions (www.apower.com) is a national consulting ﬁrm that provides data-mining services for small businesses; such services may, however, cost several thousand dollars, depending on the number of databases and the amount of data you have. I recommend asking your consultant or IT specialist to determine whether your business could beneﬁt from data mining.

A Final Word on Business Intelligence As you can see, the data that your business generates can do amazing things to help you run a better business—if you know how and where to look. But there’s one other key to success here worth mentioning. Many companies get rid of data that they consider unnecessary in order to free up space on their hard drives. Sure, they may keep reports based on this data, but the hard data itself ends up erased, and the hard copies tossed in the dumpster or shredder. That’s a bad idea. Data becomes more valuable with time, especially as more data is added to it. As you get years of experience under your belt, the data reﬂects that experience. And unlike your memory, data isn’t necessarily selective. Analysis of old data alongside new data can add perspective on the cyclical nature, if any, of your business, and 184

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may remind you of the last time you tried that really neat idea that never quite worked. So buy the extra storage space, get some extra hard drives, and save all data your business generates.

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8

How to Scale Your Technology f you were to interview dozens of business owners around the country about their experiences with buying technology, as I have done, you would ﬁnd that the possibilities for making a mistake are nearly endless. Although many mistakes in buying technology come from purchases that neither fulﬁll your needs nor meet your expectations, you can also lose plenty of your hard-earned capital by buying too much or too little, or at the wrong time or from the wrong vendor, or with the wrong license or tech support plan. And to make things more difﬁcult, there’s no one correct way to make these decisions. Two businesses in the same ﬁeld and of the same size may have totally different technology needs, because the entrepreneurs have different approaches to their work and different talents and skills. When you get right down to it, managing your technology, like most other aspects of your business, is more art than science. You need to get a feel for how quickly or slowly your business is growing, decide how to best leverage your existing technology to make do, and, ﬁnally, plan for future purchases. This chapter, in which I’ve distilled the hard-won lessons of dozens of entrepreneurs, can help you develop that feel. I do not discuss speciﬁc technologies or force you to come to grips with a lot of techie terms. Instead, now that you know about the various technologies available to your business, I discuss how to purchase them, how to scale your system up—and down—and how to determine when it’s time for outside help with those tasks.

I

Summary ■ ■ ■ ■ ■ ■ ■

Hardware Growth Replacement Schedules Software Upgrades When to Bring in the Experts Hiring Your First IT Specialist Scaling Down Cost Breakdowns

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Tip Check the classiﬁeds for reconditioned machines being sold by computer refurbishers and local repair shops looking to unload older machines. Unlike private sellers, many of the shops will sell you additional warranties that will cover breakdowns.

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Managing Hardware Growth When you’re ﬁrst starting out, chances are you’ll work out of your home or some inexpensive ofﬁce space. It’s also safe to assume that working capital is at a premium. Thus, you’ll probably use the personal computer and other technologies you already have in your home. That makes sense; after all, buying a new computer for your business is impractical when you already have one at home. However, as your business grows and you move out of the nest, you’ll have to start thinking about computer purchases. As you hire new personnel, you should determine which ones will need a computer and take technology costs into account for every hire. Even if you don’t expect a new employee to sit at a desktop computer, you should still ﬁgure out how to integrate that person’s payroll, beneﬁts, and personnel records into your existing computer system. Some businesses in which e-mail is extensively used for contact with customers but whose workers don’t otherwise require computer access for their jobs, have added a couple of computer workstations to break rooms or other areas to enable their employees to keep track of e-mail. These machines can also be conﬁgured to surf the Web—a perk that many employees will appreciate during break time. Whether you want to add an Internet ﬁlter to block employees’ access to your choice of offensive online material is up to you. I tend to recommend brand-name computers for home users and readers of my work in Kiplinger’s Personal Finance magazine, because they offer far better service and support for home users. However, small businesses don’t have to pay as much as Dell, Gateway, Compaq, and the other big-name manufacturers of PCs for the consumer market charge for their products. Fortunately, you have a number of options. Begin by setting a price limit on each computer you will purchase. Unless you’re using sophisticated and specialized software that will need more processing power

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or better graphics capabilities, the overall price for a computer, including the monitor, shouldn’t top $1,000. THE USED PC MARKET If you’re simply using e-mail, spreadsheets, word processing, and ﬁnancial software, you can probably make do with a reconditioned computer that’s up to three years old. The classiﬁeds are a decent venue for ﬁnding these machines, because most of the ads are placed by computer refurbishers and local repair shops looking to unload older machines. I recommend buying from these outﬁts rather than from private sellers, because many of the shops will sell you additional warranties that will cover breakdowns. A year should be sufﬁcient on most extra warranties, and they should cost no more than $100 over the purchase price of the used computer. Our old friend eBay is also an excellent place to ﬁnd good equipment. Computer makers like IBM are starting to unload overstock and extra inventory through various auction sites; so are many repair shops and local retailers. You can pick up great deals on nearly new equipment here. As mentioned in the discussion of ecommerce in Chapter 5, the sellers with the best eBayuser ratings are serious about the business, so keep a sharp eye out for them; they’ll stand behind their products should something go wrong. Finally, many businesses, online and off, build their own computers from individual components. You can get an excellent computer, with either an Intel Pentium 4 or Advance Micro Device’s Athlon XP microprocessor— both top-of-the-line microprocessors—for hundreds of dollars less than for a similar product from Dell. Most of these shops advertise in national computer publications like Computer User, local editions of which can be found in newspaper boxes around most major cities. If you do opt for this cheaper route, look for local computer manufacturers who will be close at hand when questions or technical problems arise. BULK DEALS If you’re hiring many new employees at once and they 189

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all need computers, it might be time to contact a larger manufacturer and do some comparison-shopping. First, check with your current retailer to see whether it has any discount programs for buying in bulk—some do, others don’t, depending on the retailer’s size and inclination. If you’re buying three or more personal computers, most of the major computer manufacturers have smallbusiness divisions that will offer a not-so-great discount of 10% off the price, which your local refurbisher or builder may beat. Yet if you expect your business to grow rapidly over a ﬁve-year period, establishing a relationship with a major manufacturer now could help down the road.

Replacement Schedules Technology, unfortunately, burns out rather quickly; newer, faster computers are constantly being produced. Over the past six years microprocessor speeds alone have ramped up by a factor of ten, average RAM sizes have increased by more than 16 times, and the size of the average hard drive has increased by six to ten times. Those improvements are pretty hefty ones, and what’s most important, the software running these machines has kept pace. The average lifespan of a computer is said to be three years because new software will eventually require more computing power than the hardware can provide. Consider that the Windows XP program released in 2001 won’t even run on a computer that was produced when Windows 98 was introduced. In addition, after four years, the parts inside hard drives can deteriorate and start losing data. That said, however, you shouldn’t feel the need to constantly keep up with the ever-improving personal computer. The computers you buy should be more than enough for your needs for the next three to four years— three years for workers whose computers are their primary tools, and four years for workers who use their computers for only e-mail and Web surﬁng. Also keep in mind that computer monitors don’t be190

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come outdated so quickly as the computers themselves, and they generally age better as well. You should be able to keep your monitors for approximately twice as long as your desktop computers, and you can save $100 to $300 per workstation on any interim computer purchases. Those space-saving and attractive ﬂat-panel monitors won’t be practical for most small, growing businesses until the price comes down to around $200—something I don’t foresee happening over the next two years or so. Moreover, ﬂat-panel monitors tend to wear out faster, with a lifespan of four or ﬁve years, generally. When you plan your purchases, consider keeping at least one spare computer and one spare monitor in the storeroom. That way, if a computer goes on the fritz, the worker can continue working while you have the original workstation repaired. If you have 25 or more workstations, you should keep at least two of each item in reserve—or let your IT person decide what quantity is appropriate, because by the time you get that big, you’ll probably have hired one. If you’re buying in bulk, adding an identical machine should bring overall costs even lower, although you can get a slower, older, and even cheaper machine as a spare if need be. If you frequently use contractors onsite or have visitors or clients in your office and have the necessary space, it’s a good idea to keep a spare workstation set up and connected to your ofﬁce network, so that these visitors can have a place to work and access necessary ﬁles and e-mail while they’re with you. It’s a $1,000 convenience, but if you can afford it, you’ll ﬁnd that frequent visitors, clients, and contractors will all go the extra mile for you down the road. Moreover, your “visitor” computer makes a good emergency workstation for your employees as well.

Tip When you plan your purchases, consider keeping at least one spare computer and one spare monitor in the storeroom. That way, if a computer goes on the fritz, the worker can continue working while you have the original workstation repaired.

Managing Software Upgrades Software is far more expensive than hardware; I have seen $800 computers loaded with $3,000 worth of soft191

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ware. In addition, installing upgrades, and managing them, is a far more complex task than installing hardware. Manufacturers of software critical to your business are likely to upgrade it at least every 18 months—necessitating regular purchases by you. Software will probably be your largest, ongoing purchase, especially as you grow and have multiple workstations to contend with. But there are ways to manage the process so that you don’t break the bank every time PhotoShop comes out with an upgrade. DON’T UPGRADE YOUR OPERATING SYSTEM First, avoid the operating-system pitfall: Don’t upgrade! I expect to get a nasty letter from Microsoft about this, but Microsoft is in the business of making money and I’m in the business of saving you money. Thus, you should never purchase an operating-system upgrade for an existing workstation in your business. Not every OS upgrade is a must—indeed, most aren’t. Aside from the introduction of XP in 2001, the vast majority of Microsoft’s upgrades since 1993 have provided additional features, not necessarily a major improvement in operating-system technology. As you replace old desktop computers, the new ones you buy will already have the latest operating system on board. For example, new personal computers come with Windows XP already installed. XP is very stable (it crashes less frequently than its predecessors) and it’s based on computer code that won’t really change for many years. The same goes for other operating systems. In 2001 Apple made its move to OS X, which, like XP, is a more stable, reliable version of the Apple operating system. Mac OS X will be the standard for Apple products for the next four to ﬁve years, so the only operatingsystem upgrades you’ll need are the ones that would come with new hardware anyway. As for Linux, this software is being upgraded all the time, and it’s free for download in a dozen different places on the Internet. If you’re running Linux on your servers, your consultant or IT person can easily upgrade your operating system as needed, with little cost to you. 192

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DO UPGRADE OPERATING-SYSTEM SECURITY You will, however, need to check regularly with Microsoft (or Apple, or Red Hat, which is the largest distributor of the Linux operating system), or whoever made your OS, for security upgrades. In late 2001, for example, hackers found a way to take over every single function of a personal computer through a security ﬂaw in a Windows XP feature called Universal-Plug-andPlay. This was the biggest ﬂaw ever in a Microsoft product, and it came in a version of Windows that was touted as the most secure operating system the company had ever produced. Thus, at least once a month, you should make sure that you and every employee run Windows Update on your machines to get the latest security downloads. (If you have an IT person in your ofﬁce, he or she will—or should—regularly send these security updates to computers across your network.) Windows Update, by the way, is a feature Microsoft introduced during the past few years as a quick, do-ityourself upgrade mechanism. It’s easily found on the Windows Start menu, and clicking on it takes you to a Web site, where Microsoft recommends a batch of downloads for security and software upgrades. Apple has no such mechanism for its Mac OS, but you can easily find security patches on Apple’s Web site at www.apple.com. The Mac OS needs far fewer patches and upgrades because it has a better security track record. Security upgrades and some new features are made available free of charge and require no other software to install. Other upgrades, however, will require an operating-system purchase, depending on what Microsoft and Apple want to promote.

Tip At least once a month, you should make sure that you and every employee run Windows Update on your machines to get the latest security downloads.

DON’T UPDATE OFFICE WITH BELLS AND WHISTLES Now let’s tackle applications, the most popular of which is Microsoft Office. Again, at the risk of irking the biggest software company on the planet, I recommend that you not bother upgrading before you buy a new machine altogether. Then you can get Microsoft Ofﬁce in either its Professional or the more expensive Profession193

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Tip Major application upgrades are something you should always budget for, but you don’t need to buy every one. How do you decide? Get a list of features from the company, possibly along with a 30day trial of the software, and then ask your employees what they think.

al Special Edition version. The only substantial difference between the two versions is that the current Special Edition is loaded with Front Page 2002 (Web-editing software) and collaboration software that lets your workers share ﬁles via the World Wide Web. If you publish your Web site directly from your desktop or have workers in many different locales, you may already be running Special Edition; if you don’t, forget about upgrading to the Special Edition. Like Windows, the every-other-year Office upgrades tend to be more about bells and whistles than about improving core technologies. My work computer still uses Word 97, for example, and it interacts seamlessly with other computers that have Word 2000 or Word XP—and even with my book editor’s computer, which uses Word 6.0 for Mac. In other words, if it ain’t broke, don’t ﬁx it. At the same time, when you buy a new computer, your vendor should already be loading the latest (or if necessary for greater savings, even a previous version) of Ofﬁce. It’ll be cheaper than buying the upgrade at the store and installing it yourself. The same goes for the various e-mail programs available, such as Lotus Notes, and other basic business productivity software, and even basic ﬁnancial software like Quicken. DO UPDATE YOUR SPECIALIZED APPLICATIONS WITH BIG NEW FEATURES Now we get to the specialized applications your business uses. For small publishing houses, these are PhotoShop and Quark or Pagemaker. Legal ﬁrms, architectural enterprises, even construction businesses all have their own special software as well. In addition, your accounting department probably uses QuickBooks or other programs, and the personnel department has its own suite of software. And at some point, upgrades will appear for all of these. How do you manage them? First, minor upgrades come out all the time. If you’ve already purchased ten copies of LegalEdge’s Law Firm Suite of software for legal case management, for example, the company will, at the very least, provide necessary security upgrades and service free of charge

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or as part of your licensing agreement. You should decide case by case on the usefulness of minor upgrades, such as those that tweak one feature of one program in a suite of software. If none of your employees really use the feature, don’t worry about it. If some do use it and the lack of the upgrade is limiting their productivity, then buy the upgrade. On average, major software applications are signiﬁcantly upgraded every 18 months. Big new features are added to individual programs, and entire new programs are added to software suites; there is an effort to make the various programs work well with each other. These upgrades are something you should always budget for, but you don’t need to buy every one. How do you decide? Get a list of features from the company, possibly along with a 30-day trial of the software, and then ask your employees what they think. They’re the ones using the software, after all. If they feel that the upgrade will improve their work, buy the upgrade. If not, you’ve saved some money in your budget for that year. Also be sure to download any security patches for your business software as they become available. Because your software is probably registered with the manufacturer, it will e-mail a notice to you or your IT person when the patches are available. BEWARE THE PITFALLS OF SOFTWARE LICENSING SCHEMES Software licenses are, without a doubt, written by an unholy combination of sales people and lawyers. When you buy software, you’re technically purchasing the right to use the software in your business for a speciﬁed length of time—anywhere from a year to forever—for a speciﬁed number of users or machines. However, licenses are primarily a way for the software company to continue making money off of you after the original purchase and installation. When you buy a license, chances are you’ll be asked to pay additional annual or monthly maintenance or upgrade fees to continue receiving customer support and minor upgrades from the software company. In some cases, you’ll 195

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receive discounts on the next major upgrade of the software in question. I would agree to a full licensing agreement only with a company that provides software for which upgrades and continued support are critical to your business. Odds are that’s not the case with Microsoft Windows and Ofﬁce. Microsoft’s licenses have recently come under intense ﬁre for their cost, requirements, and upgrade fees. It is much simpler to buy upgrades to those software items as a private consumer than as a business customer, and as suggested previously, you can just include the upgrades in your next hardware purchases. When you do have to enter into a full license agreement, be wary of one that requires you to upgrade in order to keep your service intact; it’s your decision to blow major bucks on new software, not the software company’s. Also ensure that no matter what level of agreement you buy, you’ll at least get important security upgrades and debugging patches as needed— free of charge.

When to Bring in the Experts As a business owner and a professional in your particular ﬁeld, you’re already wearing enough hats without having to don the weighty sombrero of technical support for your group as well. Of course, the technical issues are fairly cut and dried when your company consists of just you and a couple of other people, and you’re already handling the purchasing and organization of the whole outﬁt anyway. But what happens when your organization grows to ﬁve employees? Ten? Twenty? At some point, you’re going to want some help. When should you hire an outside consultant or bring in a full-time IT person? The answer is, whenever managing your business’s technology starts to become overwhelming. Unless you’re actually running a technology company, you probably aren’t an expert in this ﬁeld. The smart thing to do is to defer to someone else when 196

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your expertise—or your patience—runs out. Trying to save money via the do-it-yourself mode could get you into technical and ﬁnancial trouble if you have inadequate knowledge, are unwilling or unable to read up on the technology yourself, and are spending valuable time messing around with the computer system when you should be managing your business. Most small-business people I’ve talked to for this project drew the line between manageable and unmanageable technology at from ﬁve to ten workstations and one small peer-to-peer network. Within those limits, you can quickly and easily share information while keeping things inexpensive and manageable. After that, however, the system starts getting complex and beyond the abilities of all but the most technically adept. Here are some things to think about when deciding whether to hire your ﬁrst outside help: ■

How long did it take you to install new computers on your network the last time? If it was more than a cou-

ple of hours, you may have wasted your time. ■

How many hours per week do you devote to maintaining or researching the technology in your business? If you

answer more than six or seven hours, you may be spending too much time on this. Would you have been better off spending that time developing your business? ■

Can you easily use and understand every piece of software and hardware in use in your business? You don’t

necessarily have to know how to take your computer apart, but you should be able to use everything that your employees are using. If you can’t, you may be wasting your employees’ time as well as your own. ■

Have you put off expansion because you’re worried about the technology hassles involved? This is the top

sign that you need help. If you decide it’s time for an outside consultant, don’t assume that you must automatically retain someone for $1,000 a month. Just as there are thousands of consultants in the IT business, there are many different ways to use them. If you simply want a consultant to 197

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RESOURCES: Computer Consulting Organizations There are a number of organizations that represent and recognize information-technology consultants, especially independent ones that tend to primarily serve small businesses. The two biggest are the Independent Computer Consultants Association and the National Association of Computer Consultant Businesses. The Independent Computer Consultants Association (www.icca.org ), a non-proﬁt organization based in St. Louis, holds its members to a fairly stringent code of ethics, as well as set standards and practices. It also serves as a support

center for education and training. The National Association of Computer Consultant Businesses (www.naccb.org) is a trade association that matches small businesses with consultants who serve them. The Alexandria, Va.,-based organization also has a statement of business principles to which members are expected to adhere. Both of these groups’ Web sites offer lists of their members throughout the U.S., making it easier for you to ﬁnd a qualiﬁed consultant.

draw up a long-term plan and leave it to you to ﬁgure out the details, that’s ﬁne. If you want someone to help with every new PC installation, that’s ﬁne as well. Generally, it’s a good idea to hire a consultant to get you started on your ﬁrst server, even if it’s a simple e-mail and ﬁle-and-print server—the simplest servers can get very complex in a hurry! For entrepreneurs and small to midsize businesses, I recommend going with a computer consultant—a person or ﬁrm independent of your business. For small businesses, I recommend individuals or small local ﬁrms who specialize in the kind of business you’re in. You should vet any prospective consultant carefully, just as you would a Web consultant (see Chapter 2, pages 46–48). Membership in an accreditation organization, like the Independent Computer Consultants Association or the National Association of Computer Consultant Businesses, is a big plus (see the box above for more information). The consultant or ﬁrm in question should also be willing to spend time with you, go over your current 198

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needs and plans, and provide some options and estimates—all before charging you any fees. The consultant should also be able to handle most of the major aspects of your business’s technology, from networks to databases. The only exception to this requirement would be Web-site work, which is often left to a separate Web consultant or design ﬁrm. Most important, any potential consultant should be willing to provide references, including other businesses in your area, that you can call freely to discuss the consultant’s performance. Also be sure that the consultant you choose can help you purchase all the hardware and software necessary for your future IT needs. Good consultants often have deals with major distributors and can get good prices on equipment and programs. You should be wary of a consultant who proposes to draw up a plan but leave it to you to do all the purchasing. The consultant probably doesn’t have the necessary contacts within the tech industry to ensure a steady stream of information from the company. Hence, future support may be spotty. Besides the cost of installation, the consultant’s estimate should include the cost of educating you or one of your employees—preferably you and one or two others for backup—about using and maintaining the technology the consultant is installing. Indeed, the ICCA Standards and Practices states that consultants should “attempt to transfer the knowledge (of installed technology) to the client or else suggest that the clients secure a backup source of long-term support.” It behooves you to spend any extra time and money necessary during the setup phase so that you don’t have to run to your consultant every time the network goes down. Most consulting ﬁrms also offer long-term support contracts, which should provide for several years of service at fixed cost. Such an agreement guarantees that someone from the consulting ﬁrm will be on call whenever you need to consult, and once your network has a server, that your server will get the regular maintenance it needs. 199

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Hiring Your First IT Specialist If your business doesn’t grow beyond 25 workstations, a server, and a basic Web site, you probably won’t need to hire a full-time IT specialist. Granted, you’ll pay more consulting fees as you grow, but that route should still be cheaper than hiring a full-time employee with beneﬁts. Yet there may come a time when bringing on a techie will be both time- and cost-effective. Again, here are some questions to ask yourself: ■

Do your regular consulting costs—aside from capital improvements and routine hardware and software purchases—exceed $30,000 annually? If so, a full-time

employee might eventually save you money, because that’s the bare minimum salary for most in-house techies. ■

Do you spend more than a few hours a week working with your consultant? If so, perhaps there are enough

decisions to be made that it’s time for someone else in your company to make them. ■

Do you or your employees spend time daily or weekly for routine computer maintenance? An hour once a month

isn’t bad—but an hour once a week, by a number of employees, adds up to lost efﬁciency. ■

Do you plan to bring your e-commerce Web site or your inventory management Web operation in-house? If so,

you’ll need someone on hand to maintain these critical applications. When the time is right, a good consultant will also recommend that you hire a full-time employee; although you may be paying for all its services, the consulting ﬁrm would rather have more shorter-term or lighter-support contracts than spend all its time at your business. Thus, you can expect your consultant to be fairly honest about your need for an in-house expert. And ﬁnally, having someone on board in house will mean that you’ll have a technology-minded person focused on your business all the time, which means that 200

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your organization will probably take advantage of new technologies and react to problems more quickly. Before you hire, you’ll need to deﬁne what you’re looking for: ■

If most of your time is taken up with creation and maintenance of your Web site, you’re looking for a full-time

webmaster. ■

If most of your work involves maintenance and expansion of your servers and PCs, a network administrator

is up your alley. ■

And if all your work relates to your important databases,

you should look for a database administrator. Your consultant can help you identify the need and write the job description for you. Keep in mind, though, that unlike a consulting ﬁrm, which may offer a variety of resources, a single IT expert probably won’t be able to do all of those things at a high level of expertise and efﬁciency. A network administrator might be able to help get a database running, but would require additional training and time before truly being able to take over for your consultant. And many webmasters may have no formal training in network or database administration. Your ﬁrst IT hire should address your most pressing needs, allowing you, the rest of your employees, and your consultant (more on this in a moment) to focus on maintaining the rest of your business’s technology. Ideally, you should look for an in-house techie who has a couple of years of experience working with the same hardware and software your business currently uses. Furthermore, job candidates should have the appropriate certiﬁcations in various software and tools. For example, if your business uses Windows 2000 Server software to run e-mail servers and print-and-ﬁle sharing, your potential network administrator should have a Microsoft Certiﬁed Systems Administrator certiﬁcate. Similarly, the person you hire to run your Oracle 9i database should be an Oracle Certiﬁed Professional Database Administrator. However, if you have a candidate who has worked on these software programs before and otherwise 201

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Tip If you expect that your company will continue to grow, your ﬁrst IT hire probably won’t be your only one. Thus, your ﬁrst hire should have the potential to supervise a second employee or, ideally, run a department.

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seems eminently qualiﬁed but doesn’t have certiﬁcation, don’t fret. Each company offers exams that your potential employee can take to gain certiﬁcation. You could hire the person contingent on his or her passing the exam; $100 to $250 is a small price to pay to test and certify someone who is otherwise a well-qualiﬁed applicant. These classes are held in most cities, and many are offered entirely online. Thanks to the technology bust of 2000–01, there is, as of 2002, a glut of IT talent in the marketplace, and you can hire such a worker at a reasonable price. A recent survey by Certiﬁcation Magazine, a publication for IT workers, said that the average techie was 33 years old, held about four different certiﬁcations, had been working in IT for nearly 8 1/2 years, and made $55,577 annually. In general, you can expect to pay between $40,000 and $60,000 a year for a network or database administrator, depending on experience and certiﬁcations. But webmasters tend to make less money because (at the risk of making webmasters around the world angry) the skill requirements are somewhat less stringent than those of network or database administrators. Expect salaries in the $35,000 to $45,000 range here. You can use the usual methods of employee hiring, crafting the ad with your consultant. Your consulting ﬁrm may even know of some people who might be interested in working for you as well. Although candidates thus referred could be exceptional, screen them carefully to avoid “friend of a friend” situations. Another thing to consider in your ﬁrst IT hire is leadership ability. If you expect that your company will continue to grow, your ﬁrst IT hire probably won’t be your only one. Thus, your ﬁrst hire should have the potential to supervise a second employee or, ideally, run a department. Of course, if he or she doesn’t have that experience or potential, you can make sure that your second hire does, but be prepared for the possibility of bruised egos. The other main traits to look for in an IT hire are good communication skills and patience. IT people have to handle numerous calls every day from employees, and many of these questions, to the IT person, appear very

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basic and possibly even bone-headed. Nevertheless, the IT person should be handle them with tact, diligence, and, perhaps most important, good humor. Once you have an in-house IT specialist, you won’t necessarily want to ditch your consultant, especially if you’ve worked with that person for a long time, because he or she possesses an institutional knowledge of your technology and can probably still help with purchasing. If you’ve hired a network administrator, you’ll probably still need a database administrator and a webmaster, and consultants can continue to ﬁll these roles. Your consulting fees will, of course, go down now that you’ve got someone on the payroll to handle a particular function, but don’t be surprised if your overall costs go up. Call it investing for growth—your company’s technology will be much more nimble with someone on the inside, and you can still take advantage of your consultants’ strengths as well. And once your company techie is delegated to interact more with the consultants, you should ﬁnd yourself with more free time to pay attention to the rest of your business. As your business grows, of course, you may ﬁnd a need for an additional person, either to assist your ﬁrst specialist or to handle another aspect of your technology needs. Consider this case: One IT manager—who didn’t want to be identiﬁed so as to avoid sales calls—handles about 150 workstations and six different servers for a company of about 200 people. The servers include a print-and-ﬁle/Internet service server running Novell NetWare, a backup for the first server, a SQL (pronounced “sequel”) database server, a server for Lotus Notes, an FTP server, and yet another backup server for the Novell machine, which was slated for removal. This manager inherited a system that was slapped together when innovations such as the Internet were introduced to businesses, in about 1995. Now, he’s busy streamlining the servers—only two to three are really necessary— and upgrading older workstations. Despite all the work involved in simply maintaining these computers, let alone upgrading them, he has only two assistants and rarely seeks outside consulting assistance. Only the com-

Tech Terms FTP server: a server that stores and distributes ﬁles through the File Transfer Protocol. This is, simply put, a server that makes various ﬁles available to general users on the Internet. FTP servers can be passwordprotected and placed behind ﬁrewalls in order to protect the ﬁles from unauthorized users. An FTP server is different from a virtual private network in that the Internet users never actually enter your network. Instead the users access the ﬁle in the same way that they would access a Web page.

203

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pany’s Web-site hosting is outsourced. (The site has two webmasters of its own.) This example shows that the vast majority of your technology needs can be handled in-house at some point. That point will vary from business to business, but your ﬁrst IT employee will no doubt be quite eager to help you ﬁgure it out for future hires.

Scaling Down Many businesses ﬁnd themselves in a period of belttightening every now and then. Such a situation is almost inevitable given the cyclical nature of the economy. How do you manage your technology during the lean times? Scaling downward can help. We’ve already discussed saving money on computer upgrades by keeping your computer monitors for as long as possible. If things are really tight, you should consider upgrading both your hardware and software instead of making new purchases. In the section on Cost Breakdowns that follows, we’ve budgeted for replacement PCs every other year. I truncated the time frame there to more easily illustrate growth costs. But if your growth is less robust than you’d like, replacing equipment every other year would be somewhat ambitious. In the real world, you could try replacing each of your computers every three to four years. I don’t recommend stretching things further than that, however, especially for workstations used by people performing the most important functions in your business. After that, your PCs will be woefully inadequate for most uses (see also the discussion of equipment longevity in Chapter 3). But if you’re looking for a cheaper way to breathe life into your workstations, you may want to just upgrade the RAM on older machines. In 2000 most computers came with 64 MB of RAM. In 2001 that ﬁgure jumped to 128 MB. This year, 2002, most midrange computers come with 256 MB of RAM, and some even have 512 MB at very affordable prices. If you want to prolong the life of your current machines instead of purchasing a full 204

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upgrade, load them up with RAM. A computer purchased in 2000 can be upgraded from 64 to 256 MB of RAM for less than $100, thereby adding perhaps another year of life. If you ﬁnd yourself with more workstations than employees because of downsizing, your ﬁrst thought might be to sell off some of the extra computers you had on hand for backups and visitors, and possibly even to downsize your computer network overall. I’d caution against either course, especially if you hope to expand again within the next couple of years. You can keep the servers running with fewer workstations in operation, and if you do rehire in two years, you can cycle the older workstations back into your network. However, if you suspect that growth is more than two years off, you might put some money back into the business by selling off extra workstations. Whatever you decide to do, be sure to keep at least one or two extra workstations handy, just in case the turnaround happens more quickly than anticipated. The same goes for servers, although you can keep basic servers around for up to three or four years, especially if they’re serving a smaller network, because their operating lives are easy to prolong with extra RAM and hard drives. Selling excess equipment is fairly simple, and your consultant may even buy older machines from your company. If not, your trusty auction sites or local computer dealers are good outlets for sales. By the way, the same goes for getting rid of older PCs when new upgrades come in, although many businesses prefer to donate older PCs to schools or other charities in the community. This practice is good community relations, and the cost of the machine, less any depreciation you’ve claimed previously, becomes a tax write-off. You can also save money by skipping an upgrade cycle on your software. As was mentioned earlier, some upgrades are relatively cosmetic and can be easily passed over. However, you can skip even more substantive upgrades, just as long as your business is still functioning well without them. You’ll be trading improved efﬁciency for cash in hand, but there are certainly times when this

Tip If you’re looking for a cheaper way to breathe life into your workstations, you may want to just upgrade the RAM on older machines.

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PRACTICAL TECH FOR YOUR BUSINESS

TIP: Relocation Whether your business is growing or shrinking, at some point you’re probably going to have to move from one location to another. Choosing a location can be tricky when you have a great deal of technology invested in your business. You must make sure that your new building is capable of handling both your electrical needs and your phone/data services. Ideally, most ofﬁce buildings should be fully wired with power outlets and Ethernet cables— or at least have ready conduits within the walls for these wires, but it’s a good idea to check anyway. You should also bring in your tech consultant or IT specialist to review the building’s plans, and ask how much additional work, if any, will have to be done to bring things up to speed.

Ideally, you should need to install additional electrical outlets only for your equipment and Ethernet ports and lines for setting up your network—anything more would probably be too expensive for your business’s budget. If you ﬁnd a great deal on ofﬁce space but it lacks some infrastructure, your potential landlord may agree to cut a deal on the lease if you promise to leave your infrastructure improvements, like your Ethernet cabling, intact when you leave. Moving your servers and computers shouldn’t be more than a day’s work, and the consulting fees for the work should be set accordingly. See our cost breakdowns below to get an idea of what you might have to spend.

is necessary. You can pick up the upgrade on the next cycle, although you may have to pay a few dollars more than you would have done for the earlier upgrade in order to acquire the previous improvements as well.

Cost Breakdowns What follows is a scenario for a small, professional company—let’s call it an architectural ﬁrm. I would have preferred to use a real example of a small company for these particular breakdowns, but information about the growth of a business is as close to a trade secret as most small businesses get. The entrepreneurs I interviewed were unwilling to discuss their growth plans on the record. So instead, I’ve created a composite example, taking the best moves from the various ﬁrms I’ve visited and combining them. I realize most businesses don’t have such an intense 206

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ﬁve-year growth spurt. Your business may be stuck on year 1 for three years, and on year 2 for two years after that. On the other hand, if you’re really onto something, you might even surpass this growth! These cost breakdowns suggest the costs involved in expanding your company—especially technology costs as you add new people. In this example, a newly hired architect requires technology purchases that average $4,349 a year over ﬁve years, not counting consulting fees, Internet service, and server and server software upgrades. Note the jump in costs from year 2 to year 3 as well, when the ﬁrst server comes in and many new people are hired. If you’re strapped for cash, you should be very careful about crossing that threshold between peer-to-peer networks and a server-based network. After your user group reaches about eight or nine employees, you may encounter problems such as increased lag time in calling up ﬁles from the server because of the number of users on the network. Your consultant may recommend some stopgap solutions, such as using an older PC as a stripped-down server/router for your Internet connection, which helps distribute data between machines without actually hosting any software. You will also notice that consulting fees grow as more complex technology is installed. In three or four years, especially if Smith and Jones LLC grows at this pace, it may well be time for the company to get its own in-house techie. Most of the small companies I interviewed made that transition when they had 20 to 30 computers, and at least two servers. YEAR 1 After spending a year “in the garage” as a partnership, Smith and Jones LLC has decided to open an ofﬁce and expand. Smith has stepped back a bit to take care of the books and administration, while Jones has hired two more architects to produce the bulk of the work. They’ve also hired an administrative assistant—a combination receptionist, assistant bookkeeper, and general helper. They’ve leased a small ofﬁce that gives them room to grow if they so choose. For argument’s sake, 207

PRACTICAL TECH FOR YOUR BUSINESS

let’s assume that Smith and Jones LLC has already created a Web site while the partners worked from home. Both Smith and Jones have brought their own PCs to the new ofﬁce from home, and both are using their personal cell phones for consultation work away from the ofﬁce while charging the service to the company. Three new PCs @ $1,000 each New professional inkjet printer Small copier Architectural-speciﬁc software for four PCs @ $700 each 768k DSL high-speed Internet installation Internet service, 12 months @ $300/month Web site hosting, 12 months @ $30/month Cell phone service, two handsets, 12 months @ $40 each Consultant installation services Consultant support services, 12 months @ $150/month Total Annual Cost

$3,000 300 400 2,800 300 3,600 360 960 1,000 1,800 $14,520

YEAR 2 This is a relatively slow ramp-up year for our new company. The ﬁrm hires another architect, bringing the total employment roster at Smith and Jones LLC to six people, including Smith and Jones. Although there aren’t that many changes to contend with, the personal computers Smith and Jones brought into the company are showing signs of age, and some of the software programs in use at the business need upgrades. Looking at the various release times of their blueprint, project management, and regulatory form software programs, they and their consultant decide to budget $200 a year per PC for software upgrades. One new PC Two upgrade PCs (without monitors) @ $800 each Architectural-speciﬁc software for one new computer 208

$1,000 1,600 700

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Upgrades of software for ﬁve other machines @ $200 each Internet service, 12 months @ $300/month Web-site hosting, 12 months @ $30/month Cell phone service, two handsets, 12 months @ $40 each Consultant support services, 12 months @ $180/month Total Annual Cost

1,000 3,600 360 960 2,160 $11,380

YEAR 3 This is a big year for Smith and Jones LLC. Having spent two years managing the business end of things, Smith has generated plenty of new business for the company, which means the ﬁrm will have to hire two more architects and a project assistant. Smith, wishing to free himself for more architectural work, has also hired a business manager and another administrative assistant for the two partners. With ﬁve new employees, the peerto-peer network that the company previously used may start to show some wear, with regard to both increased lag time in Internet access and difﬁculty in transferring files and database information between computers. Thus, the ﬁrm’s consultant has recommended buying a small server to handle print-and-ﬁle sharing, e-mail, and the company’s Web site. The number of new users has also necessitated an upgrade to a shared T1 line for the ofﬁce. Hence, the ﬁrm will experience a boost not only in the cost of hardware and software, but also in the price it pays for Internet service and tech support from its information-technology consultant. The partners also decide to cover the business manager’s cell phone costs. In addition, two of the three original PCs need upgrading; the third belongs to the administrative assistant, who can manage for another year without a new PC because he’s doing no design work. Five new PCs @ $1,000 each Two upgrade PCs @ $800 each Architectural-speciﬁc software for three PCs @ $700 each

$5,000 1,600 2,100 209

PRACTICAL TECH FOR YOUR BUSINESS

Business management software for one PC Upgrade software for six PCs @ $200 each One small all-in-one server (see Chapter 3) 1,024k T1 high-speed Internet installation Internet subscription, 12 months @ $1,400/month Cell phone service, three handsets, 12 months @ $40 each Consultant server installation service Consultant support services, 12 months @ $1,000/month Total Annual Cost

350 1,200 1,750 750 16,800 1,440 3,000 12,000 $45,990

YEAR 4 Another “maintenance” year for Smith and Jones LLC, as everyone works steadily, but the company adds no design staff aside from another project assistant. However, the partners decide to hire a sales specialist to take over the full-time job of attracting new clients for the ﬁrm. Thus, they now have seven full-time architects (including the founders), two project assistants, a sales specialist, a business manager, and two administrative assistants. As a reward and a boost to efﬁciency, the professional staff and specialists receive new handheld organizers by Handspring. The company also covers the cell phone bills for the sales specialist. In addition, the company has its consultant do some data mining on the peer-to-peer database (a feature of the architectural software) to gain some business intelligence for the sales specialist to use. If your consultant can’t do this without help, he or she can ﬁnd someone to do it. Midway through the year, as more work comes in, the partners decide to move into a larger office building, which means additional transition costs for their technology. Two new PCs @ $1,000 each Three upgrade PCs @ $800 each Architectural-speciﬁc software for one new PC Sales-speciﬁc software for one new PC Upgrade software for 11 PCs @ $200 each 210

$2,000 2,400 700 350 2,200

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Internet subscription, 12 months @ $1,400/month Consultant support services, 12 months @ $1,200/month Consultant data mining service Cell phone service, four handsets, 12 months @ $40 each Eleven Handspring Visor Pro handheld organizers @ $249 each 1,024k T1 high-speed Internet transition fee Consultant relocation fees Total Annual Cost

16,800 14,400 3,000 1,920 2,739 750 1,000 $48,259

YEAR 5 The data mining, now an annual event, and the hiring of the sales specialist paid off, as Smith and Jones LLC lands a massive contract for a new city municipal complex. However, the new project necessitates new hires and new resources. Three more architects and another project assistant are hired, and the consultant recommends installing another server, with database software, to handle the increased workload of the project. It’s also time to upgrade the first server, especially as more workstations are added. The ﬁrm’s partners promote one of their original architect hires, and the company covers his cell phone contract as well. This massive investment in people and technology will prove to be a very smart one down the road as the company takes on more large-scale projects. Four new PCs @ $1,000 each Four upgrade PCs @ $800 each Architectural-speciﬁc software for four PCs @ $700 each Upgrade software for thirteen PCs @ $200 each Two new servers @ $2,000 each Two server operating system licenses @ $1,200/year each Oracle 9i Database Standard Edition (14 named users)

$4,000 3,200 2,800 2,600 4,000 2,400 4,200 211

PRACTICAL TECH FOR YOUR BUSINESS

Microsoft e-mail and Web hosting software Internet subscription, 12 months @ $1,400/month Cell phone service, ﬁve handsets @ $40/month Consultant installation fee Consultant data-mining service Consultant support services, 12 months @ $2,000/month Four Handspring Visor Pro handhelds @ $249 each Total Annual Cost

212

3,000 16,800 2,400 10,000 3,000 24,000 996 $83,396

Index A Web site example, 45–46

Accounting ﬁrm,

ActiveX programming language, 48 Adobe software, 21 Airborne Express, 133 Alphanumeric pagers,

142–143 121 Marketplace Seller program, 123 zShops, 122–124, 137 America Online, 37 Amazon.com,

Analog/digital cell phones,

144–145 Angelﬁre.com, 35–36, 49 Antivirus software, 12–13,

79 AnyWho.com, 166 APower Solutions, 184 Apple computers. See

Macintosh operating system Application service providers,

182–183 Arcara & Borczynski LLP Certiﬁed Public Accountants, Web site

example, 45–46 ASPs. See Application service providers Auction-Works.com, 119 Auctions. See E-commerce AuctionWatch, 119, 121

B Bandwidth, 77 Benchmarks, 174–175 Beta, 122 Bidding price, 116 Big Brother In A Box, 179 BlueNile.com, 115 Brian K. Lewis Funeral Home,

Web site example, 44–45 Brint, 24, 52 Burstable T1 lines, 77–78 Business intelligence

application service providers, 182–183 communicating your company’s policy, 179–181 customer data, 163–171 data as the basis for your business, 162–163 data mining, 182–184 inside your business, 171–181 managing inventory, 181–182 using your ﬁnancial intelligence, 171–173 using your network intelligence, 173–179

C Cable modems, 23–25 Cable telephone services,

25–26

Web site example, 43–44 Cards, 6–8 Cash registers, 100 Casino business, business intelligence example, 161–162 Catalog.com, 41 CDMA. See Code Division Multiple Access Car dealership,

Cell phones

analog/digital, 144–145 Code Division Multiple Access and, 144–145 cost breakdown, 159–160 dual band, 145 Global System for Mobile Communications and, 144–145 options needed, 143–144 overseas use, 145 paging capabilities, 144 roaming plans, 146 service plans, 145–146 tax deductibility, 17 wireless Web access, 144–145 Channel Advisor Corp., 119 City guides, online, 54 Client-server networks

description, 62, 64 Ethernet lines and, 74–75 Code Division Multiple Access, 144–145 Company policies, 179–181 213

PRACTICAL TECH FOR YOUR BUSINESS

Computer consultants

appointing someone from within your organization, 82 choosing, 80–81, 196 consulting organizations, 196 deciding to hire, 195 estimates, 197 hiring someone for your staff, 82–83 keeping after hiring an IT manager, 201 responsibilities, 79, 197 selling unnecessary equipment, 79–80 service components of proposed contracts, 81 support contracts, 197 Computers

add-ons, 7–8 average lifespan of, 66, 188 backing up and saving ﬁles, 14 building your own, 187 bulk deals on, 187–188 cards, 6–7 connection speed, 22 donating older PCs, 203 downloading data, 12 generic versus brandname, 9, 186 graphics cards, 6–8 hackers, 11–12 handheld, 29–30 hard drives, 6–7 insurance for, 19 keeping spare, 189 laptop/desktop comparison, 5 214

Macintosh operating system, 1–2, 5–7 memory and storage, 8 microprocessors, 6–7, 187–188 monitors, 8, 188–189 motherboards, 6, 73 number of Americans owning, 4 “pinging,” 12 purchasing considerations, 186–188 RAM, 6–7, 188, 202–203 registering with the operating system manufacturer, 79 replacing, 188–189, 202 selling off extras, 203 special offers for small businesses, 65, 97 staggering purchases of, 66–67 tax deductibility, 16–17 tech support, 9 uploading data, 12 used PCs, 187 viruses, 11–12, 79 warranties, 9, 187 where to buy computers, 65 Windows-based, 1, 5–7 See also Hardware; Networks; Software Cookies, 170–171 Copiers, 17, 27, 29 Costs

basic do-it-yourself Web sites, 54–55 basic network, 108–109 budget ofﬁce, 30–31

emergency pagers and cell phones, 159–160 expandable ofﬁce, 31 full mobility for your sales force, 160 large, hosting ofﬁce networks, 84–85 large ofﬁce networks, 84 manufacturing network, 109 professionally designed, hosted, and webmastered Web sites, 55–56 professionally designed, hosted Web sites, 55 retail network, 109 small ofﬁce networks, 83–84 Web sites, 54–56 year 1 scenario, 205–206 year 2 scenario, 206–207 year 3 scenario, 207–208 year 4 scenario, 208–209 year 5 scenario, 209–210 CRM software. See Customer relationship management software Customer data

contact information, 165–168 cookies, 170–171 demographic data, 167–168 e-mail lists, 169 mapping software, 166–167 order and shipping information, 169–170 phone numbers, 166

Index sales transactions, 163–165 Web intelligence, 168–171 Zip codes, 165–166 Customer relationship management software

add-ons, 97 costs, 98–99 customer service, 97 fulﬁllment, 97 options, 97–98 sales management, 95 Cybersquatters, 36

D Data jacks, 152 Data mining, 182–184 Data warehousing, 180 Databases

additional servers for, 100 basic network, 105, 108–109 business uses, 93–99 cash registers, 100 closed systems, 104, 108 consultants, 101–102 cost breakdowns, 108–109 customer relations management, 95, 97–99 description, 89, 180 docking system, 99 electronic time cards, 100–101 embedded systems, 92 encryption, 92–93 “grab and go,” 90 handheld scanners, 99–100

hardware options, 99–101 hiring someone to manage, 102 IBM DB2 universal database, 92 integrating auction sales into, 119–120 inventory and, 93 manufacturing network, 107, 109 messaging programs, 92 Microsoft SQL Server, 91–92 Oracle 9i standard database, 92–93 personnel ﬁles and, 94 point-of-sale systems, 100 regulating access to, 103 remote access, 103–104 retail network, 106, 109 sales tracking and, 94–95 security issues, 103–108 separate servers for, 103–104, 108 service contracts, 102 synchronizing, 99 system integrators, 101–102 updating, 108 uses for, 89–90 See also Computers; Hardware; Software Desktop computers, 5 Dial-up modems, 23 DigiMine, 183 Digital subscriber lines, 23, 77 DirectNIC, 41 Docking systems, 99, 148 Domains, 37

DotEasy.com, 40 Downloading data, 12 Downsizing, 202–204 Dpi, 26–27 Dreamweaver, 51 DSLs. See Digital

subscriber lines DTI, 59 Dual band cell phones, 145 Dutch auctions, 116, 118 Dynamic IP addresses, 38,

171

E E-commerce

alternatives to eBay, 121 bidding price, 116 cautions about, 135–136 cookies, 170–171 cost breakdowns, 136–138 costs, 120–121 credit cards and, 130 description, 39 do-it-yourself plans, 129–132 Dutch auctions, 116, 118 eBay, 116–118, 136–137 estimating online sales, 135 inventory considerations, 132–133 lessons learned from failed businesses, 114–116 managing and expanding your auction business, 118–121 managing fast growth, 134–135 215

PRACTICAL TECH FOR YOUR BUSINESS

niche auction sites, 120 online auctions, 116 placing your eBay auctions on your own Web site, 122 portals, 112–113 reserve price, 116–118 resources, 119 shipping options, 133–134 shopping carts, 112–113 splash pages, 112–113 stores, 121–122 tips on what to sell online, 115 Web-based software or services, 118–119 Web design for, 126 we’ll-do-it-for-you plans, 127–128 we’ll-do-some-of-it-foryou plans, 128–129 Yahoo! Stores, 124–127 zShops, 122–124 E-mail

beneﬁts and pitfalls, 53 customer data, 169 including your address on your Web site, 36 laptops and, 147 monitoring employee use of, 177–178 pagers and, 142–143 personal digital assistants and, 150 spam, 40, 53 value of, 22–23 Earthstores.com, 128 Easi Analytic Software Inc.,

167 eBay

216

buying computers from, 187 costs, 117, 136–137 description, 116–117 Dutch auctions, 118 getting started on, 117 payment services, 117 placing your eBay auctions on your own Web site, 122 reserve price, 117–118 stores, 121–122 eFax.com, 28 802.11 protocol, 75–76 Electronic timeclocks,

100–101, 176–177 92

Embedded systems, Employees

communicating company policy to, 179–181 monitoring, 177–179 Encryption, 92–93, 154, 156 Entrepreneur.com, 24, 52 Errors and omissions insurance, 19 Ethernet, 72–73 Extensions for Web addresses,

37–39

G GeoCities, 35–36, 49 geoVue, 168 Global System for Mobile Communications,

144–145 GoAmerica, 152–153 GoLife 5.0, 51 Google, 35, 52 “Grab and go” databases, 90 Graphics cards, 6–8 GSM. See Global System

for Mobile Communications

H

F FairMarket Inc., Fax machines

133 Commerce Builder, 128 Firewalls, 12–13, 79, 104 FreeMail, 72 Freemerchant.com, 128 FrontPage, 16, 51 FTP servers, 201 Funeral home, Web site example, 44–45 Fusion MX, 51 Federal Express,

119

all-in-one machines, 29 memory, 28 separate telephone line for, 29 tax deductibility, 17 transmission speed, 28 Web site alternatives, 28–29

Hackers, 11–12, 155 Handheld computers, 29–30 Handspring handheld computers, 29–30,

150–151 Hard drives, 6–7 Hardware

database options, 99–101 managing growth, 186–188 network needs, 75–76 for servers, 68–69

Index See also Software Hits, 38–39 Homegrocer.com, 159 Homeowners insurance, 18 Homesteading, 35–36 HotJobs.com, 83 HTML programming language,

42

I IBM DB2 universal database,

92 iBooks, 5 ICANN. See

Internet Corp. for Assigned Names and Numbers iMac, 3, 5 iMASS servers, 72–73 Independent Computer Consultants Association,

196 Insurance

businessowners policies, 19 errors and omissions, 19 liability, 18 technology coverage, 18 worker’s compensation, 19 Internet

budget considerations, 78 cable modems, 23–25 cable telephone services, 25–26 costs of Web sites, 54–56 dedicated lines (T1 lines), 23–24, 59, 77 designing your Web site, 42–43 dial-up modems, 23

digital subscriber lines (DSLs), 23, 77 do-it-yourself Web design, 49–51 DSL versus cable, 24–25 e-mail, 22–23 extensions for Web addresses, 37–39 fax services, 28–29 high-speed connections, 2–3, 12 hiring a Web designer, 46–48 homesteading, 35–36 local newspaper Web sites, 54 measuring the performance of your Internet connection, 175–176 mobile access, 151–154 monitoring employee use of, 177–179 networked computers and, 76–78 online city guides, 54 online entrepreneurial aids, 24 online phone directories, 53 portals, 34, 112–113 privacy policies, 46 registering your business name, 37–39 search engines, 34, 52–53 small-business resources, 22 small-business Web site examples, 43–46

updating your Web site, 43 URLs, 34, 36–37 Web addresses, 34 Web hosts, 38–40 Web site content, 41–42 Web sites as complements to your business, 36 Internet Corporation for Assigned Names and Numbers, 37 Internet service providers, Inventory

23

databases and, 93 e-commerce and, 132–133 using technology to manage, 181–182 IT managers

certiﬁcation, 199–200 description, 68 hiring, 82, 194–202 leadership abilities, 200 traits to look for, 199–201

J JavaScript programming language, 48 Jay & Bob’s Secret Stash,

e-commerce example, 111–113

K KeyGhost, 178 KeyLogger, 178 Keystroke tracking,

178 217

PRACTICAL TECH FOR YOUR BUSINESS

Markheim Tropical Fish & Pet Store, Web site

L Laptops

example, 45

compared with desktop computers, 5 considerations, 147–148 cost, 146–147 docking stations, 148 most common use for, 147 personal digital assistants and, 149 LegalEdge, Law Firm Suite software, 192–193 LeGrow, Bob, wedding photography business, 33–35 Liability insurance, 18

Michael Kaminer Public Relations, network

Linux server operating system, 70–72,

Microsoft Ofﬁce,

190 Lotus Notes, 16, 192 Lycos.com, 52

M M-commerce, 158 Macintosh operating system

AppleTalk, 74 compared with Windows, 5–7 description, 2 upgrading, 190 Malpractice insurance, 19 Managing your technology.

See Scaling your technology Mapping software,

166–167 218

example, 57–60 Microprocessors, 6–7, 187–188 Microsoft bCentral, 24, 52 Microsoft Certiﬁed Systems Administrator certiﬁcate,

199 Microsoft Excel, 15 Microsoft Exchange Server,

72 Microsoft Internet Explorer,

92 Microsoft Money,

20–21,

172 3, 15–16, 90–91, 191–192 Microsoft Outlook, 15, 30, 98 Microsoft Pocket PC, 151 Microsoft SQL Server, 91–92 Microsoft Word, 15 Microsoft Works, 15 Mobile technologies

cautions, 141 cell phones, 143–146 cost breakdowns, 159–160 data jacks, 152 dial-up option, 155 future of, 154 identifying mobility opportunities, 157–159 integrating mobility into your existing framework, 155–157 laptops, 146–148

limiting dial-up users access, 155 m-commerce, 158 mobile Internet access, 151–154 pagers, 141–143 PCMCIA cards, 152–153 personal digital assistants, 148–151 proprietary citywide systems, 153–154 short-distance wireless networks, 153 terminal servers, 154, 156–157, 177 traveling or telecommuting employees, 155 uses, 158–159 virtual private networks, 154, 156, 177 Web-based interfaces, 154–156 wireless modems, 152–153 Modems, 23, 152–153 Money management software,

17–21 Monitors, 8, 188–189 Monster.com, 82–83 Motherboards, 6, 73 Moving your business, 204 MSN.com, 52 Mullane Motors, Web site

example, 43–44

N NAME Web Editor, NameZero, 41

51

Index National Association of Computer Consultant Businesses, 196 Netopia, 128 Netscape browsers, 92 Netscape.com, 52 Network Solutions, 37 Networks

access speed, 174 administrators, 82–83, 199 basic, 105, 108–109 benchmarks, 174–175 buying similar computers for, 65–66 choosing server hardware and software, 68–69 client-server, 62, 64, 74–75 computer consultants, 78–83 cost breakdowns, 83–85 data warehousing, 180 description, 61–64 electronic timeclocks, 176–177 hardware needed, 73–76 information about your business from, 173–179 Internet access and, 76–78 IT managers, 68, 82, 194–197 keystroke tracking, 178 management, 69 manufacturing, 10, 107 measuring employee performance, 176–179 measuring network usage and performance, 173–175

misconceptions about, 62–63 monitoring employees, 177–179 need for, 61 peer-to-peer, 62–63, 74 permissions, 74–75 planning for upgrades, 66–68 ports, 73 print-and-ﬁle sharing, 62 protocols, 62–63 remote access, 103–104 replacement work stations, 66–67 retail, 106, 109 routers, 78 seat licenses, 69 security considerations, 79 server administrators, 74–75 server multitasking performance, 174–175 server operating systems, 69–73 servers, 62–63 short-distance wireless networks, 153 storage solutions, 180 thin clients, 61 Web-hosting and, 64 where to buy computers, 65 wireless, 75–76 See also Computers; Databases; Software Newspaper Web sites, 54 Nokia 5185i phones, 144 Novell Netware 5.1 server operating system, 70–71

Numeric pagers,

142

O Ofﬁce suite software, 15–17 OmniSky, 152–153 Onyx Software, 98 openyourstore.com, 128 Operating systems, 2 Oracle Certiﬁed Professional Database Administrator,

199 Oracle 9i standard database,

92–93 Oracle small business suite,

24, 52 business setup example, 1–3 Overstock.com, 99 O’Reilly, Megan,

P PageMaker, Pagers

21, 192

alphanumeric, 142–143 buying multiple pagers, 143 costs, 159–160 numeric, 142 uses, 142 Palm handheld computers,

29–30, 150 Password protection, 14–15 PayPal, 19, 117 PCMCIA cards, 152–153 PDAs. See Personal digital

assistants Peer-to-peer networks

description, 62–63 Ethernet lines and, 74 Permissions, 74–75 219

PRACTICAL TECH FOR YOUR BUSINESS

Personal digital assistants

features, 149–150 Handspring Visor, 150–151 laptops and, 149 the Palm, 150 Pocket PC, 151 synchronizing with computers, 148–149 Pet store, Web site example, 45 Phone directories

online, 53 reverse-lookup, 166 PhotoShop, 21, 192 “Pinging,” 12 Pivotal, 98 Pocket PC, 29–30, 151 Point-of-sale systems, 100 Portals

costs, 35 description, 34, 112–113 Ports, 73 POSMicro.com, 99 PowerMacs, 3, 5 Print-and-ﬁle sharing, 62 Printers, 26–27, 29 Privacy policies, Web sites, 46

QuarkXPress, 3, 21, 192 QuickBooks, 20, 98, 172,

192 17–21, 24, 52, 98, 172, 192

Quicken,

R 220

Registering your business name, 37–39 Registrar.com, 37 Relocating your business, 204 Remote access, 103–104 Reserve price, 116–118 Resources

e-commerce, 119 e-commerce shipping options, 133 niche auction sites, 120 online entrepreneurial aids, 24 search engines, 52 special offers for small businesses, 65, 97 Web hosts, 41 Reverse-lookup phone directories, 166 Ricochet, 153–154 Roaming plans for cell phones, 146 Routers, 78

S database example, 87–89

SAFECO Field,

Scaling your technology

Q

RAM,

depreciating business equipment, 17

Recordkeeping,

6–7, 188, 202–203

cost breakdowns, 204–210 downsizing, 202–204 hardware growth, 186–188 hiring an outside consultant or full-time IT manager, 194–197 relocating your business, 204

replacement schedules, 188–189 software upgrades, 189–194 year 1 costs, 205–206 year 2 costs, 206–207 year 3 costs, 207–208 year 4 costs, 208–209 year 5 costs, 209–210 Scanners, 27–29, 99–100 Search engines

beneﬁts, 35–36 description, 34 resources, 52 Seat licenses, 69 Security

backing up and saving ﬁles, 14 combination software products, 13 computer viruses, 11–12, 79 databases, 103–108 encryption, 92–93, 156 ﬁrewalls, 12–13, 79, 104 networks, 79 password protection, 14–15 privacy policies, 46 tips on, 13 ugrading, 191 Seller’s Assistant Pro, 119 Server administrators, 74–75 Servers

description, 62–63 FTP servers, 201 lifespan, 203 upgrading, 67 Setting up your ofﬁce

Index budget ofﬁce costs, 30–31 buying your computer, 4–9 copiers, 27 expandable ofﬁce costs, 31 fax machines, 28–29 handheld computers, 29–30 hooking up to the Internet, 22–26 initial needs, 4 multipurpose machines, 29 peripheral equipment, 26–30 printers, 26–27 scanners, 27–28 software needs, 9–22 Shopping carts, 112–113 Siebel Systems, 98 Small Business Administration,

24, 52 Online Women’s Business Center, 24, 52

Smallbusinesscomputing.com,

24, 52 Software

antivirus, 12–13, 79 beta, 122 computer security, 11–15 costs, 189–190 customer relations management, 95, 97–99 diagram of how different software programs work within a computer system, 96 do-it-yourself Web design, 51

ﬁrewalls, 12–13, 104 inventory tracking, 181–182 licenses, 193–194 making copies, 10 mapping software, 166–167 money management, 17–21 ofﬁce suites, 15–17 page-layout, 21 photographs and images, 21–22 upgrades, 10, 67–68, 189–194, 203–204 Web-based software or services for ecommerce, 118–119 See also Computers; Databases; Hardware; Macintosh operating system; Networks; Windows operating system Source codes, 38–39 Spam, 40, 53 Stargate, 41 Static IP addresses, 38–39 Sun Solaris server operating system, 70 Synchronizing, 99, 148 System integrators, 101–102 Systems Research & Development, business

intelligence example, 161–162

T T1 lines

burstable, 77–78

description, 23–24, 59 routers, 78 shared, 77, 175 Tax issues, deductible business expenses, 16–17 Telecommuting, 155 Terminal servers, 154, 156–157, 177 Thin clients, 61

U United Parcel Service, 133 United States Postal Service,

133 Universal Resource Locators.

See URLs UNIX server operating system,

70 Upgrades

networks, 66–68 operating system, 190 RAM, 202–203 security systems, 191 software, 10, 67–68, 189–194, 203–204 Uploading data, 12 URLs

costs, 35 cybersquatters, 36 description, 34 domains, 37 getting your own address, 36–37 including on business documents, 52 transferring, 49–51 U.S. Census Bureau,

167–168 221

PRACTICAL TECH FOR YOUR BUSINESS

Web hosts

V Vericept, 178 Verisign, 137 ViewAskewniverse,

e-commerce example, 111–113 Virtual private networks, 154, 156, 177 Viruses, 11–12, 79 VPNs. See Virtual private networks

W Web address extensions,

37–39 Web-based interfaces,

154–156 Web design

do-it-yourself, 49–51 for e-commerce, 126 Web designers

background and experience, 47 responsibilities, 46–47 tips on hiring, 47–48

222

all-in-one hosts, 41 description, 38 networks and, 64 selecting, 39–40 Web sites. See Internet; speciﬁc sites

Wireless modems, 152–153 Wireless networks, 75–76 Worker’s compensation insurance, 19 World Wide Web. See

Internet WYSIWYG, 51

Webmasters

description, 48 responsibilities, 48–49 salaries, 200 WebSense, 178 WebVan, 159 WiFi protocol, 75–76 Willett’s Auto Repair, mobile technologies example, 139–141 Windows operating system

compared with Mac operating system, 5–7 description, 2 Home version, 10 Networking Wizard, 74 Professional, 10–11 Update, 191 upgrading, 190 Windows 2000 Server, 69

X XMap Business,

166

Y Yahoo!, 35, 52, 121 Yahoo! Stores

costs, 125, 137–138 description, 124–125 ﬂexibility, 126–127 revenue share, 125 tracking tools, 127

Z Zip codes, 165–166 Zip drives, 3, 14 zShops, 122–124, 137