Technological advances have greatly increased the ease with which you can run and grow a small business. If only technology weren’t so complicated.
These days, it’s tough for any entrepreneur to make it—let alone succeed—without a heavy dose of tech. You need a well-designed and easy-to-use website (that’s a no-brainer), plus you might benefit greatly from software, Web applications and equipment that allow you to manage inventory, track customers’ purchases, process invoices, manage payroll and communicate with staff. Most entrepreneurs want the freedom to leave the office yet still stay connected, meaning they (and key staff) need to be outfitted with cell phones, laptops and wireless devices.
Not long ago, the latest technology was only available to the biggest companies with the deepest pockets. Now, prices have dropped as big players such as Microsoft, Oracle, IBM and SAP try to tap the small business market. Increasingly, software is becoming available via the Web as “software as a service” or SaaS, replacing more expensive boxed software that needs to be purchased outright and installed. Open-source software, that is, software whose source code is freely available on the Internet for anyone to use or modify, has made it possible for small business owners (usually with the help of developers or consultants) to customize software for their unique needs.
If you’re just starting out, it’s quite possible that you’re feeling overwhelmed by the amount of technology you’ll need to run your business efficiently and professionally. I asked Ramon Ray, editor of SmallBizTechnology.com, to offer some pointers. He says every small business needs the basics:
• Hardware, such as desktop computers, laptops, phones and wireless devices
• Software, from a simple word processing program to industry-specific applications
• A server, which is a central computer that shares data, files and applications and allows you and your employees to access the Internet or use the same printer
• Networking devices, such as routers, hubs and switches, that tie workstations together and provide security features, such as firewalls
Unless you’ve got a solid background in technology, a computer consultant can be your best friend, Mr. Ramon says. To find one, ask other business owners for references, or check with your industry group or trade association for a recommendation. Some consultants, many of whom are small business owners themselves, charge by the hour or the day; others charge a flat rate. When you hire a consultant to install software or build a network, keep in mind you’ll probably want help down the road, when the system inevitably crashes or simply needs maintenance. See if you can negotiate a long-term support arrangement as part of your consultant agreement.
Aside from the basics outlined above, you’ll also want specific technology products to help your business run more smoothly. What you need may vary by industry. For instance, if your business is paper-intensive—say, it’s a law firm or an accounting practice—you may want to invest in a documentimaging system, which allows you to convert paper into electronic files. If you’re a retailer, you’ll probably need a point-of-sale system, which is essentially an electronic cash register that allows you to track sales. Almost all businesses will benefit from a database program, which allows you to collect, store and organize data, such as contact information for your customers, suppliers and vendors. Before making an investment in a specific product, consider feedback from current users by checking reviews on places like www.cnet.com, www .zdnet.com, and www.pcmag.com.
Still overwhelmed? Mr. Ray says it’s helpful to break your business down into distinct functions and then decide what software or hardware (or combination of both) can help in each area. Here are four common functions:
Sales and Marketing
A host of programs can help you cultivate relationships with clients. More companies are trying customer relationship management or CRM software, which organizes contact information for current and prospective customers, and allows multiple users (such as an entire sales team) to track customers’ buying habits. Popular programs include Saleforce.com’s SaaS CRM, Microsoft’s Dynamics CRM, Maximizer, ACT and Gold-Mine contact manager systems. If you want to promote your business via electronic newsletters, special email marketing software made by Lyris, Oracle, Unica and other providers can help you develop targeted, spam-free emails to send to your distribution lists.
Inventory Management and Operations
If you stock merchandise, then bar codes, radiofrequency ID tags, scanners and related software can help you keep track of inventory and fill customers’ orders in a more timely fashion. Some businesses use an enterprise resource planning (ERP) system, which pulls from both hardware and software programs to integrate various functions, such as distribution, shipping and invoicing. An ERP system can help a business owner figure out the amount of inventory needed to prevent overstocking, which can reduce overhead. Major players in the ERP space include Microsoft, NetSuite and Aplicor.
Finance and Accounting
Especially if you’re not a number cruncher by nature, an accounting software program can help you organize your business finances, track outstanding invoices and figure out how much cash your company has available. Online bookkeeping that keeps track of business expenses will also make life easier (for you and your accountant) during tax season. Many business owners use QuickBooks, MYOB, Peachtree or Microsoft Office.
A business owner might invest in sophisticated technology called business intelligence software, which culls data from various areas—such as accounting, inventory management and sales—and delivers reports and analysis. BI technology can help an entrepreneur figure out what’s driving profits and pinpoint areas in the company that aren’t running smoothly. IBM Cognos, Sage, SAP, MicroStrategy and SAS Institute offer BI tools.