practical tech for your business: using today's technology to make your business more...

Michael J. Martinez

PracticalTechfor Your Business

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

PracticalTech

for Your Business

KIPLINGER’S BUSINESS MANAGEMENT LIBRARYBusiness 2010Cash RulesCustomer Once, Client ForeverFast-Track Business GrowthHunting HeadsParting CompanyRaising CapitalTaming the Paper Tiger at WorkYou Can’t Fire Me, I’m Your Father

OTHER KIPLINGER BOOKSBut Which Mutual Funds?Buying & Selling a HomeThe Consumer’s Guide to the ExpertsDollars & Sense for KidsFinancing CollegeHome•ologyKiplinger’s Practical Guide to InvestingKiplinger’s Practical Guide to Your MoneyKnow Your Legal RightsMaking Money in Real EstateNext Step: The Real WorldRetire & ThriveRetire Worry-FreeSwitching CareersTaming the Paper Tiger at Home

Kiplinger offers excerpts and tables of contents forall of our books on our Web site (www.kiplinger.com).

For information about volume discounts contact:

Cindy GreeneKiplinger Books & Tapes1729 H Street, N.W.Washington, DC 20006e-mail: [email protected]@kiplinger.com

PracticalTech

for Your BusinessUsing Today’s Technology to Make Your Business

More Efficient, Creative and Flexible

Michael J. MartinezAssociate Editor, Kiplinger’s Personal Finance

Kiplinger BooksWashington, D.C.

Published byThe 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 2002658.5’14--dc21

2002023592

© 2002 by The Kiplinger Washington Editors, Inc. All rights reserved. No part of this book may be repro-duced or transmitted in any form or by any means, electronic or mechanical, including photocopying, record-ing or by an information storage and retrieval system, without the written permission of the Publisher, exceptwhere permitted by law.

This publication is intended to provide guidance in regard to the subject matter covered. It is sold with theunderstanding that the author and publisher are not herein engaged in rendering legal, accounting, tax orother professional services. If such services are required, professional assistance should be sought.

First edition. Printed in the United States of America.

9 8 7 6 5 4 3 2 1

Contents

Author’s Preface ix

Introduction xiii

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

CHAPTER 2: Your Business on the Web 33Homesteading on the Internet • Getting Your URL •How to Register Your Business Name • Finding a Hostfor Your Web Site • What Will Your Web Site Do? • SomeGood Examples • Hiring a Web Designer • Do You Needa Webmaster? • Do-It-Yourself on the Web • SeedingYour Business on the Web • Keep Your Web Site Fresh •Cost Breakdowns (Basic Do-It-Yourself Package; Professionally Designed, Hosted Site; ProfessionallyDesigned, Hosted, and Webmastered Site)

CHAPTER 3: The Networked Workplace 57Welcome to the Networked Business • What’s a Network? •A Computer for Every Desk • Choosing Server Hardwareand Software • Putting the Pieces Together • Getting Your Network Online • Picking the Right Computer Consultant • Cost Breakdowns (The Small Office Network; The LargeOffice Network; The Large, Hosting Office Network)

CHAPTER 4: Your Business Runs on Software 87I Have a Network—Now What? • Databases: The Work-horses of Business • Using Databases in Your Business •Inventory • Personnel • Sales • Management of CustomerRelations • Your Hardware Options • Getting EverythingInstalled • Some Thoughts on Security • A Final Wordon Databases • Cost Breakdowns (The Basic Network; The Retail Network; The Manufacturing Network)

CHAPTER 5: A Cautious Look at e-Commerce 111How to View e-Commerce in Your Business • The eBayWay • Managing and Expanding Your Auction Business •eBay Alternatives • Selling via Both Auction and Store •Move Your eBay Auction Home • Piggybacking OntoAmazon.com via zShops • Yahoo! Stores: A FlexibleHosting Option • Branching Out Beyond Amazon andYahoo • You Have Online Orders, Now What? • ManagingFast 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 139Rethinking the Pager • Don’t Overindulge in Cell Phones •Life on a Laptop • Personal Digital Assistants • Optionsfor Mobile Internet Access • Integrating Mobility Into YourExisting Framework • Identifying Mobility Opportunities •Cost Breakdowns (Emergency Pagers and Cell Phones; The Fully Equipped Sales Force)

CHAPTER 7: Better Business Intelligence 161Your Business Is Data • Know Your Customers • LookingInside Your Business • Financial Intelligence • NetworkIntelligence • Communicating Your Company’s Policy •Managing Inventory • Data Mining: Weaving DisparateThreads of Information • A Final Word on BusinessIntelligence

PRACT ICAL TECH FOR YOUR BUSINESS

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

Index 213

Contents

y grandfather never sat down in front of acomputer. He never sent an e-mail, surfed theWeb, or, to the best of my recollection, playeda video game—even when, as a kid, I’d thrustan Atari 2600 joystick in his hands. Yet his im-

print is all over this book.Pop was an extremely smart guy who worked with his

hands his entire life, beginning as a Pennsylvania coal minerin the 1930s and ending his career as director of the physicalplant at a private school. He retired in 1976. He knew tools,and always picked the right tool for the job. He was innova-tive and flexible in his work, and rarely either hesitated toomuch before tackling a task or rushed into it. “Sit and think aminute,” he used to tell me. “Then get what you need anddo it right. Work smarter, not harder.”

He loved that phrase. I like it too, especially in thecontext of technology—mostly because so many peoplearen’t doing it.

This book is called Practical Tech for Your Business for areason. 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 monopolizeyour time, and it definitely doesn’t create more stress in yourwork life. Who needs more stress?

When Pop sat and thought about the task at hand, he wasdrawing on his experience and knowledge of tools, and apply-ing both to the requirements of the task. Applying the lessonsof experience and your knowledge of tools is easy. Gaining theexperience and mastering the tools are harder. You may havehad very little experience working with technology. You’re anaccountant, a landscaper, a restaurateur, an architect, a retail-er, or a consultant, not an information technology specialist.

Preface

ix

M


That’s where Practical Tech for Your Business comesin. Contrary to what other books may tell you, you’reneither an Idiot nor a Dummy. It takes more than thebrain of a chimpanzee to start a business, after all, soyou’ve obviously got some smarts—you just need infor-mation. You may not have had much experience withtechnology, but many other business owners have, andI’ve interviewed a great many of them and recordedtheir experiences and their hard-won lessons. You prob-ably don’t know what a variety of tools are out there foryou to use, or even where to look. These subjects arecovered here, too.

Your Technological EvolutionThis book is laid out more or less in chronological order,starting in your home office, where most businessestake flight. Chapter 1 discusses the basics of gettingyour first computer, loading it with the business soft-ware you need, and getting hooked up to the Internet—everything you’ll need to start your business off on theright foot.

Chapter 2 takes you to the World Wide Web, whereyou can quickly and inexpensively promote your busi-ness. We discuss how to obtain a Web address, createWeb pages, and find a home for your Web site. If youget nothing else from this book, I hope that at least youstake your claim on the Web—establishing a Web ad-dress is too easy and too effective not to.

Chapters 3 and 4 discuss expanding your businessfrom your home and into an office—or into a retail ormanufacturing environment, depending on what yourbusiness is all about. Chapter 3 talks about the comput-ers and hardware you’ll need, while Chapter 4 intro-duces you to powerful software tools that can make iteasy to expand your business, create new sales, and im-prove efficiency.

Chapter 5 returns to the World Wide Web to dis-cuss electronic commerce, cautiously. After all, a lot of

x

people have lost a lot of money trying to bring theirbricks-and-mortar businesses to the Web. We’ve learnedfrom their mistakes, however, and you can, too.

Chapter 6 is all about mobility—the ability to usemobile 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 yourtechnologies to best advantage. Chapter 7 deals withbusiness intelligence, using your computers and all thedata your business generates to find out more aboutyour customers, your spending, your inventory, and yourworkers. Chapter 8 tackles the biggest question of all:How does a business improve its technology withoutbreaking the bank as the business grows from point A topoint B. We discuss managing your growth, your spend-ing, and your technology as your equipment ages andnew products are introduced.

Throughout this book, you’ll find boxes with moreinformation to help you make sense of it all. We define“Tech Terms” to help you translate techie-talk into plainEnglish, and we provide a number of resources on theWorld Wide Web for you to explore further.

All in all, the idea here is to make this book part ofyour “sit down and think” stage. I’m not going to tell youwhat to do—I don’t think you’d really appreciate that. In-stead, I’m giving you the information you need to makeinformed decisions about using these amazing tools inyour business. You may decide to use all of them, or onlya few, but at least you’ll know what technology is avail-able and understand how it might help you.

It is all about finding the right tool for the job, afterall. Enjoy and use this book, and remember: Worksmarter, not harder.

AcknowledgmentsFor a writer, there’s nothing quite like seeing your bookfirst offered for sale. This being the Internet age, I saw itfor sale before I had finished the final draft, thanks topre-sales on Amazon.com. Talk about an incentive tofinish on deadline! But the feeling was a thrill, and it

xi

Preface


made me reflect on the people who helped make thisbook possible.

My first thank-you goes to Pat Esswein, probablyone of the most patient and good-natured editors I’veever worked with in my writing career. Every time I gotoverly techie or made too many assumptions, her gentlequestions and good humor reeled me back to reality.

Thanks also to David Harrison, director of KiplingerBooks, who helped transform a rough idea into a feasi-ble project, and whose enthusiasm was contagious.

Cindy Greene provided editorial assistance; PriscillaTaylor copyedited the text; Allison Leopold proofreadthe final pages; and Heather Waugh designed the interi-or and exterior of the book. I offer my thanks to them.

Dozens of business people and entrepreneursaround the country opened their doors and computerfiles to me as I researched my subject, and their experi-ences and lessons are reflected in this book. Some ofthem appear in the pages ahead, but whether or notthey’re specifically mentioned here, their contributionshave been invaluable.

I’m also grateful to the editors of Kiplinger’s Person-al Finance magazine and Kiplinger.com for their supportduring the writing of this book, as well as their continu-ing help in bringing excellent technology coverage to themagazine’s readers. I particularly wish to thank BobFrick, senior editor of the magazine and my boss, for hispatience and counsel, and for his friendship. I’d also liketo acknowledge Kim Lankford and Kevin McCormally,colleagues at Kiplinger, who contributed to the coverageof insurance and taxes in Chapter 1.

Nobody can function without friends, and I’ve beenblessed with the best. For all their professional and per-sonal support, Karl Isselhardt, Drew Montgomery,Nancy Trott, and many others have earned my gratitude.

Family, too, is a very important support when one istackling a book like this. My mother has always encour-aged me and given me great love, for which I am grateful.

And my wife, Kate, has given so much to me overthe last five years that I cannot begin to thank her. Thisbook is dedicated to her.

xii

Introduction

f you’re at all like me, your knowledge of office technol-ogy probably falls into three categories: a lot of thingsyou’ve grasped pretty well, some subjects you’re still alittle shaky about, and a few aspects you find totally baf-fling. 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 run-ning 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 caremuch about technology, but is content to leave it to yoursubordinates, you need this book. Why? Because it will en-able you to understand what they are telling you—and whatthey’re asking for in their budgets. It will enable you to chal-lenge their assumptions and ask them about things they mayhave overlooked. Now, that’s empowering!

Frankly, most of us managers and business owners havea lot on our minds these days—like trying to understand ourcore business and where it is headed. We absorb what wecan about new technology—from reading, talking with oth-ers in our field, and generally keeping aware. But thereseems to be too much to learn, and it’s all changing rapidly.As a result, most business executives have been embarrassedat least once by a technology crisis…the over-budget instal-lation that didn’t work right, the system that became obso-lete too quickly, the system that took much more labor tomanage than anyone had anticipated.

That’s where my colleague Michael Martinez can help.It’s his daily business to follow technology—for the homeand for the office—and write about it in a clear, practicalway for the readers of Kiplinger’s Personal Finance maga-zine and Kiplinger.com, for which he writes the very popu-

xiii

I


lar column, “Practical Tech.”Mike loves technology, but when it comes to rec-

ommending what your business really needs—anddoesn’t need—his feet are firmly on the ground, hishead well below the clouds. He knows that your budgetis limited, your managerial time is valuable, and thatyou don’t buy technology to impress anyone, but to en-hance your bottom line.

This amazingly comprehensive new book can beyour roadmap to the dizzying world of tech choices inthe workplace. All the important aspects of office tech-nology are covered here: How to buy hardware. Thekey software you’ll need. How to edge your firm into e-commerce. How to use technology to learn more aboutyour customers and their buying preferences. Programsfor monitoring your employees’ performance—andWeb usage, if you wish. How to harness the wirelessrevolution to your sales goals. And with each discussion,Mike offers his impartial judgement on all of today’spopular business tech products.

Sure, there are entire books on subjects that he cov-ers in only a single chapter—such as e-commerce, se-lecting hardware and software, and using databases foryour marketing. And perhaps after reading what Mikesays, you’ll want to buy a shelfful of such books. But thenagain, maybe you won’t have to, because Mike has dis-tilled the essence of these topics so clearly.

Most of us have a love-hate relationship with officetechnology. We are seduced by its potential to improveour productivity and boost our earnings, but we areoften frustrated by its undue complexity, cost and unreli-ability. Mike Martinez understands this. Prior to joiningus at Kiplinger, he covered technology forABCNews.com and for The Associated Press in Seattle,the home of Microsoft and Amazon.com. Writing for ageneral, non-techie audience, he developed a keen un-derstanding of what’s important and what’s not, what hisreaders really need to know and what’s unnecessary de-tail. 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

you should splurge. He writes especially for the smalland medium-size business, but businesses of virtuallyevery size will find useful information here.

I hope you find this book as useful as I did. My bestwishes to you and your business as you come to gripswith the exciting possibilities—and pitfalls—of today’stechnology.

Knight KiplingerEditor in ChiefKiplinger’s Personal FinanceThe Kiplinger Letterand KiplingerForecasts.comWashington, D.C.

xv

Introduction

PracticalTech

for Your Business

In the Beginning

1

CHAPTER

1

riving through the tree-lined streets of thissuburban housing development in Spring-field, Virginia, you might notice the plastictoys in front of a certain brown-and-tanhouse and infer that a toddler was inside.

You wouldn’t know that the house is also sheltering aburgeoning business.

Yet between filling requests for another cookie andmaking trips to the pediatrician, Megan O’Reilly hasturned her part-time freelance job as a copy editor andpublishing production editor into a rapidly expandinghome-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 whenshe worked full-time in an office in Washington, D.C.

“This is the best thing I’ve ever done,” O’Reilly saysas her daughter mashes Play-Doh between her fingers ascant six feet away from her basement office. “I canspend a lot more time with her, and my commute ismuch easier now.”

O’Reilly didn’t necessarily mind the office life,where she was an assistant director of publications for anonprofit medical association. But with her daughter’sbirth and her husband’s desire to start taking graduatecourses part-time, she felt that freelancing from homewould help her offset child-care costs, become closer toher 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 homeoffice. She and her husband, Tim, had an older Windows-based computer—but the vast majority of the publishingindustry uses Apple’s Macintosh operating system for the

Summary

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

D


kind of editing and production work that O’Reilly does.Furthermore, the America Online dial-up Internet ser-vice just wasn’t fast enough to send bulky text andgraphics files via e-mail.

O’Reilly limped along with her older computer sys-tem for the first few months, until she made enoughmoney to invest in a new computer and Internet setup.She did her homework, consulting knowledgeablefriends, reading reviews, and comparing prices via theInternet. She eventually spent over $5,000 on bothhardware and software.

She decided against getting a new Windows com-puter. “This old thing works well enough for e-mail andthe Web, and that’s all we really use it for,” she says.She did, however, decide to get high-speed Internetaccess via her cable television company. She pays about$40 per month and can access the Web many timesfaster than with her old dial-up line—while keeping

2

operating system: thesoftware that comes with your computerthat manages basic functions, such as accessing programs, managing memory,and saving files to disk. Today’s computershave numerous additional features, suchas Web browsers, e-mail programs, andmultimedia players. These features are not critical to the computer’s function,and are thus not part of the operatingsystem.

Windows: a computer operating systemdesigned by Microsoft Corp., named forthe multiple frames the computer uses tovisually separate different computingtasks. First introduced in the 1980s, Windows didn’t take off until version 3.1was introduced in 1993. It became the

dominant operating system for home computers and business work-stationswith the introduction of Windows 95 in1995. The latest version, Windows XP,was introduced in October 2001.

Mac OS: a computer operating systemdesigned by Apple Computer Inc., namedafter the company’s first runaway hit,1984’s Macintosh Classic. Mac OS wasthe dominant computing platform in the1980s, although the departure of founderSteve Jobs and subsequent businessdecisions allowed Microsoft to compete,and subsequently monopolize, the operat-ing system market. Today, Mac OS hasabout 10% of the market for operatingsystems. The latest version, Mac OS 10.1,was introduced in July 2001.

Tech Terms

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 thetime, O’Reilly felt that it wasn’t expandable enough. “IfI’m going to spend this kind of money, I want to be ableto upgrade this computer and get as much life out of itas I can,” O’Reilly says. Because of the iMac’s all-in-oneshape, upgrading beyond adding a little memory is diffi-cult. Instead, she purchased a PowerMac G4 tower, oneof Apple’s most powerful and flexible computers. Ex-pandability is simple: the side of the tower drops down,neatly revealing the innards of the computer for easycare and upgrade.

However, the $2,500 G4 didn’t come with a moni-tor, which cost another $400. And O’Reilly wanted a Zipdrive, a storage device that uses special disks that canhandle up to 250 megabytes of data, as opposed to the1.44-megabyte capacity of a standard floppy disk. TheZip drive cost another $250. She spent yet another $250on an extended warranty for her computer.

Next, O’Reilly had to purchase all the software sheneeded for copyediting and, most important, for format-ting and laying out pages. She ended up choosing Mi-crosoft Office for the Mac as well as the professionalversion of QuarkXPress. She also purchased a conversiontool that makes it possible for Macs to read Windows-only files and vice versa, so that she could easily swapfiles between her Macintosh and the far more prevalentWindows-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 isglad she didn’t skimp. “I’m going to have and use thisstuff for years. It’s already paid for itself,” she says. “Andthe time I have at home is priceless. I don’t think I’dever go back to the office life.”

Your First OfficeEntrepreneurs love to tell the tale of their first day “onthe job” in their businesses and the transforming mo-

3

CHAPTER 1 In the Beginning

Tech Terms

tech terms: a featureof this book designedto help you understandthe jargon of computerand business technolo-gy. On first reference,a technical term ap-pears in bold face,which means that itwill be defined in a“Tech Terms” box onthe same page or with-in a page or two of it.Occasionally, a TechTerms box includes aword that doesn’t ap-pear in the text, butwill lend to your broad-er understanding.


ments they typically share: At-home businesspeople re-alize that their commute is now a 30-second walk fromthe coffee maker to the spare room that they’ve set up asan office. Business owners who have leased a building oroffice walk in and get a chill up their spine when they re-alize that it’s all theirs. Then they realize that they hadbest get cracking, because otherwise there won’t be apaycheck at the end of the month.

Getting to that point takes more than cleaning outthe spare room, finding some inexpensive office space,or even saving up enough money to live on until yourbusiness gets off the ground. You will need phones,computers, a copier—you name it. And this stuff is ex-pensive! So before you buy, sit down and consider whatyour initial needs will be. A good way to do this is tothink about how you’re working now. In your soon-to-be-old job, do you use e-mail a lot? How about faxes?Do you push a lot of paper or are you already doing thebulk of your work on the computer? What kind of soft-ware do you use? These questions are fairly straightfor-ward to answer, but clarifying your needs—and keepingyour conclusions in mind when you buy—will save you alot of time and money down the road.

Buying Your ComputerChances are, you already have a computer. According tothe 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 BusinessAdministration, approximately 75% of American smallbusinesses use computer technology for some aspect oftheir business. As later chapters of this book show, youcan use a personal computer for nearly every aspect ofyour business.

Although you may already have a machine, let’sbacktrack a minute and talk about buying one. After all,if you’ll be depending on this computer as an essentialtool for all or part your business, you had better be sureyou have the right one.

4

LAPTOP OR DESKTOP?When advising the readers of Kiplinger’s Personal Fi-nance magazine on computer purchases, the first ques-tion I usually ask is, “Laptop or desktop?” Each one hasadvantages and disadvantages, but the biggest differenceis price—you will pay for portability. Expect to pay a50% premium to get the same power in a laptop thatyou’d get in a comparable desktop computer. Ask your-self 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 orconsultation?

■ Do I work away from the office any more than onceevery few months?

If you’ve answered a definite yes to any of thosequestions, you may want to consider a laptop. Even so,however, you may want to wait until you can afford alaptop to go along with your desktop machine. AuctionWeb sites such as eBay, Amazon.com Auctions, anduBid are a great source of inexpensive laptops that willsuffice on the road.

WINDOWS OR MAC?Once you have made a decision and you know whatform your machine will take, the next question is gener-ally, “Windows or Mac?” I know I am going to alienatemany Apple fans out there, but there are very few casesin which a small-business person will need to incur theadded expense of purchasing an Apple computer in-stead of a PC. And yes, we’re talking expensive—Apple’s line of iMacs, iBooks, and PowerMacs tend tocost anywhere from 25% to 50% more than a compara-ble Windows machine.

That said, Apple’s Mac operating system is the stan-dard for a number of specialized, professional business-es, such as those involved in education, publishing,graphics design, video production, and photography.You probably already know whether your profession isMac-centric. Of course, if you’ve been an Apple user for

5



quite a while, you may choose not to sacrifice your com-fort and expertise on the Mac in the name of price.There are also some compelling reasons not to go with aMac, especially if you’re not in any of the aforemen-tioned professions:■ Most of the business community has standardized on

Windows. That means it’ll be easier to trade informa-tion between computers if you have a Windows-powered machine. Although there’s plenty of business

6

microprocessor: a microchipthat performs all the necessary equationsto make your computer run programs.Each program, at its root, is a series ofbinary mathematical equations—a bunchof ones and zeros. The microprocessorperforms these equations millions of timesper second, translating them back intodata, which the rest of the computer readsand reacts to in order to give you the re-sults of your program. In the human brain,the microprocessor would be the equiva-lent of higher reasoning.

RAM: an acronym that stands for RandomAccess Memory. RAM serves as a comput-er’s short-term memory, allowing it todeal with multiple equations, tasks, andqueries all at once. RAM stores the fin-ished equations from the microprocessorand helps translate them into images andwords on the screen.

hard drive: a mechanism inside a com-puter, made of magnetic disks, wheredata and programs are stored. All of thesoftware and files on a computer arestored on the hard drive, not unlike the

long-term memory in the human brain.

motherboard: the flat circuit board insideyour computer that connects the proces-sor, RAM, hard drive, and other piecesof hardware. All communications anddata within the computer go through themotherboard.

card: a piece of hardware that you addto your computer. On desktop machines,cards go inside the computer box andplug into the motherboard. Laptops havespecial cards that plug into special slotson the sides. Cards can have many func-tions, such as extra graphics processing,modem or broadband communications,and extra storage.

graphics card: a card, found on manydesktop and a few laptop computers,that gives the computer extra processingpower and memory when displaying high-resolution graphics. With the card’s help,the computer can process these graphicswhile still reserving power for the comput-er’s other functions.

Tech Terms

7


software available for Macs, there’s a great deal moreavailable for Windows.■ Software makers also tend to release their newest

products for the Windows platform first, and worryabout Mac second, which can sometimes mean thatthe Mac version is second best. Avid Mac users maynote the exceptions to these generalizations, but eventhey can’t deny the truth of them.

If you do choose to go for a Windows computer, youshould be able to get a very good desktop computer forabout $1,000, and a very good laptop for $1,500. Theprices for each category of computer—high-end, low-end, mid-range, small business, and enterprise—haveremained relatively stable over time. Thus, if you spend$800, you’ll get a basic office computer, while if youspend $1,800, you’ll get the perfect workstation for com-plex tasks like graphics work.

It’s difficult to comment here on the exact specifica-tions you should look for, such as the speed of your mi-croprocessor, as these seem to change every week in thefast-moving computer industry. At the bare minimum,you should at least get a processor with a speed of onegigahertz (1 GHz). Processors aren’t everything, howev-er, and you should look for a computer with no less than256 megabytes of RAM and a 20-gigabyte hard drive.That amount of memory will run the current WindowsXP operating system at a very high, productive level, andthe 20-GB hard drive is more than enough for mostbusiness documents. So look for those prices and thosebasic specs, and of course, feel free to consult the annualKiplinger’s Personal Finance magazine’s guide for PCbuyers, issued every summer.

BELLS OR WHISTLES?Don’t be fooled by add-ons when purchasing your com-puter. Whether you buy at the store or online, you’llfind a dizzying array of internal cards, (including soundand graphics cards), monitors, and speakers to choosefrom. These are great for your home computer, but thedemands of your business workstation are actually far


less than those of the typical home user. After all, youprobably won’t (or shouldn’t) be playing video games onyour business workstation, or listening to music. So un-less you’re creating advanced graphics as part of yourbusiness, forget about graphics cards. And although it’sgood to have a pair of basic speakers (otherwise youwon’t hear a sound your computer makes), you won’tneed Dolby Digital Surround Sound and a 128-bitsound card to tell you “You’ve Got Mail.” If you’re buy-ing at the store, ask about models without these extrafeatures. If you’re buying online, you’ll be able to pickand choose the components.

As far as monitors go, the standard 15-inch monitor,measured diagonally, should do nicely. If you’re doinggraphics work, lots of reading and editing, or just hatesquinting, a 17-inch is a nice little perk. Anything more,however, is an extravagance. The same goes for flat-panel monitors, similar to the screens on laptops. Al-though flat-panel monitors certainly save space, theadditional $400 (minimum) is tough to justify. Unfortu-nately, the price of flat-screen monitors isn’t going tocome down any time soon, either.

8

Is a megabyte a lot?What about gigabytes?

Let’s give you an idea of how muchdata we’re talking about here when itcomes to memory and storage.

Programs and files are stored inbits—the ones and zeros of binary lan-guage. Each bit is either a one or a zero.Eight bits make up a byte on most com-puters. A byte, generally, is enough forone letter or symbol in a Word file, orone small dot of color in an image.

A kilobyte (KB) consists of 1,024bytes. For example, this chapter, as aWord document, is about 113 kilobytes.

Put 1,024 kilobytes together and you havea megabyte (MB). A standard 3.5-inchfloppy disk can hold 1.44 megabytes, ornearly this entire book in Word format.

If you have 256 MB of RAM, thatmeans your computer can keep that muchinformation in short-term memory, readyto be used at a millisecond’s notice.

A gigabyte—the standard measure-ment for hard drives—consists of 1,024megabytes. A gigabyte is equal to about711 floppy disks—or, 711 books the sizeof this one. A computer with an 80-GBhard drive could thus hold 56,880 booksthis size.

STORAGE: How Much Is That?

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 oftheir computer, I normally suggest getting the mostbang for your buck, even if it means choosing a custom-built, generic computer from Joe’s Computer Shop overa well-marketed workstation from Compaq. However, asan entrepreneur, you’re going to depend on this com-puter to handle important aspects of your business.When it comes to computers, there’s still a great deal ofart included in all the science, and imperfections cansometimes result.

A name-brand computer gives you far more warran-ty protection for literally just a few dollars more thanyour local computer shop would do. At a minimum, nomatter whom you buy from, insist on at least a one-yearwarranty on every element of your machine, one year ofparts and service, and one year of toll-free, 24-hour tele-phone technical support. This much support shouldcome free from most major PC manufacturers, althoughsmaller PC makers will charge. You should pay no morethan $100 extra on your price tag for warranties.

I recommend purchasing three years on each ofthose warranties, however, which will cost you $99 to$299 more, depending on the manufacturer. This mayseem like an unnecessary expense, especially as you’restarting out, but if your plan will get you a replacementmachine and rapid service when your computer crashesin the middle of a project, you’ll be grateful for it.

Your Business, Powered by SoftwareThe kind of software you have on your computer is farmore important than the hardware you run it on. Ameri-can business is powered by computer, and for certaintasks and functions, over the past decade, particular typesand brands of software have become the de facto stan-dard, despite the ideal of competition. Sending aroundword-processed files that no one can open can be the

9



professional kiss of death for a small business. Thus, youuse alternatives to the standard at your own risk.

You may be tempted to simply make copies of thesoftware you used at your old job and use them in yournew home business. This is not, however, like copying asong from a friend’s CD to your new mix tape. Makingcopies of software when you don’t have a license to do sofrom the creator of the program is illegal and, depend-ing on the value of the software, is at least a misde-meanor offense if you’re caught.

FIRST, UPGRADE YOUR OPERATING SYSTEM?A lot of software programs that you will use in your busi-ness rely heavily on a particular operating system, andmany of the newest versions of these programs won’twork on older operating systems. Thus, let’s quickly getthe subject of operating systems out of the way. If you’rea Mac user, your job here is fairly simple—if you alreadyown a Mac, then you’re probably comfortable withwhatever version of the Mac OS you have, becauseApple has always made sure that its software programsrun well on its operating systems. If any of the softwareprograms described here require an upgrade of your op-erating system, grab it. If you’re getting a new Apple,you should do just fine with Mac OS X or better, as it’ssimply the best operating system that Apple has devel-oped to date.

Windows is a different story. As of this writing, theWindows XP operating system comes in two flavors—Home and Professional. Both run on the same under-lying computer code and have many of the samefeatures. The Home version has a brighter, sunnierlook, and the software that’s featured up front tends tobe media-based, such as Internet, music, and video.Professional, meanwhile, looks more austere, andkeeps your business-oriented software programs atyour fingertips. However, you can customize Home tofeature your most-used software, and Home comeswith some basic security software. Professional, in con-trast, assumes that you’re using heftier security soft-ware from another source and substitutes easier

10

Tech Terms

upgrade: (n.) a newversion of previouslyexisting software, de-signed for people whohave the older version;(v.) to replace old soft-ware with newer versionof said software.

management tools for hooking up your computer toother machines in a network.

That’s a very basic rundown of two highly complexoperating systems, though we should mention that Pro-fessional can cost up to $100 more than Home on a newcomputer. In short, if you’re not planning to add manymore computers to your business—if you’re a freelanceror have a handful of computers in a small office—gowith XP Home and pocket the change. If, however, yourbusiness is highly computer-centric and you plan toeventually have a network of a half-dozen machines ormore, invest in Professional.

If you already have a computer running a past ver-sion of Windows and all the other software you needruns well on it, don’t bother upgrading for now—unlessyou’re running Windows 95 or earlier. Frankly, youshould probably just get a new computer, because Win-dows 95-era computers generally don’t have the poweror memory need to run most of today’s programs.

YOU NEED SECURITYNow it’s time to talk about computer security software.In short, you need it. Even if you’re just using your com-puter to write business letters and respond to e-mail,some sort of security is a good idea. If you’re runningyour books or designing your latest products on yourcomputer, security is essential. Without security precau-tions, you could be vulnerable to having critical businessinformation stolen or destroyed.

A few years ago I had the pleasure of giving aspeech at the DefCon hacker conference in Las Vegas(DefCon is a hacker adaptation of military language for athreatening situation—“defense condition”—althoughin hacker-speak, “def ” means “cool” and “con” is shortfor conference). Hackers are interesting people, to saythe least, and the conference was memorable. What Icame away with, however, was simple: The vast majorityof people get hacked or succumb to computer viruses forone reason—they had absolutely no security. In fact, ex-perts say that just over 60% of computer users, home orbusiness, use no security software. Yet even the most

11


Tech Terms

computer virus:a computer programthat, once introducedinto a computer, im-pairs the computer’soperation. Some virusesmerely create nuisancemessages and thenerase themselves.Others can erase entirehard drives and causemassive system failures.Most viruses are sentvia e-mail attachmentsand are activated whenthe recipient clicks onthe attachment.

Tech Terms

download: to bringdata from an outsidesource into your com-puter. Accessing a Webpage, opening e-mail,or installing new soft-ware from a CD-ROMare all examples ofdownloading.

upload: to send datafrom your computerto an outside source.Sending e-mail, fillingout a purchase formon Amazon.com, orplacing a picture onyour Web site are allexamples of uploading.

Trojan horse: namedfor the historical refer-ence, a small softwareprogram that seemsnormal and may be innocuous or useful, but is designed to infil-trate your computer tocause harm.


basic protection will send malicious hackers scurryingaway for greener pastures.

Computer security comes in two common forms:antivirus and firewall.

ANTIVIRUS SOFTWARE. Antivirus software analyzes any-thing that you download from e-mail or the World WideWeb, as well as anything you upload to outside sources.Most antivirus software today combines two differentforms of detection. First, the software compares filenames and other identifying material to a database ofvirus profiles—rather like checking for a fingerprintmatch. If a file matches a profile, the software will pre-vent you from downloading the file in question. Sec-ond, the antivirus software looks for patterns in newlydownloaded or installed files that haven’t been imme-diately detected. If the file in question misbehaves—bystarting to ship off information to a third party or byerasing your hard drive—the antivirus software will tryto shut it down.

FIREWALLS. The second piece of the security puzzle isthe firewall. If you have any kind of high-speed connec-tion to the Internet (discussed later in this chapter), youshould get a firewall, especially if you leave your com-puter on and connected to the Internet for long periodsof time. A firewall prevents unauthorized users from ac-cessing your computer.

Every computer that is on the Internet can theoret-ically be accessed by any other computer that’s also on-line through what’s called an IP address—a 12-digitnumber that lets the Internet know where you are sothat it can send you e-mail and Web pages. Hackershave created tools that will allow them to randomlysearch IP addresses to see which ones are currently on-line. This tactic, called “pinging,” works somewhat like aradar echo. If your computer is on, it’ll send a ping backto the hacker. That’s normal, indeed critical, for the waythe Internet works. But if you’re pinged, the hackerscan target and invade your computer via your Internetconnection.

12

A firewall blocks any interaction between your ma-chine and any other computer, keeping hackers fromsending any data, such as a virus or Trojan horse, to yourcomputer unannounced. Some security products alsocloak your computer’s IP address or otherwise make itinvisible to pings.

SHOPPING. All this sounds fairly complex, but the solu-tion is very simple: buy an antivirus program and a fire-wall. You can get most combination products for as lowas $75. Stronger protections can cost $100 or more foreach piece, but can be worth it if you’re in a high-profilebusiness or any computer-oriented field of work.

When your security software encourages you to up-date your programs, courtesy of those pop-up reminderson-screen, be sure that you do so as soon as possible.Updating will ensure that you have the latest virus pro-files and hacker tricks, and can adequately defendagainst them.

13


■ Never put a floppy disk,a CD-ROM, or any other kind of stor-age card or device into your computerunless you know exactly where theitem came from.

■ If you get an e-mail attachment froman unfamiliar source, don’t open it.Similarly, if you get an attachmentyou weren’t expecting from a familiarsource, don’t open it until you checkwith the person who sent it.

■ Do not open any files with the exten-sion “.exe” when they are unexpect-edly sent to you via e-mail or madeavailable to you for download froman unfamiliar Web site. These fileslaunch programs, and you won’t haveany idea what kind of program until

you click and it’s too late.■ If you don’t use macros—that is,

programmable shortcuts withinMicrosoft Word and Excel that canperform multiple functions with asingle click—disable those functions.(Your software manuals will show youhow.) Malicious hackers can hijackand use them to send commands toyour computer.

■ Use an antivirus program, and makesure to update it at least once a year,preferably every three months. If youread about a new virus on the loose,update your protection yet again.

■ If you have a high-speed connectionto the Internet, get a basic firewallprogram.

SECURITY: Mike’s Pillars of Safe Computing


PASSWORD PROTECTION. Finally, let’s take a moment toconsider some basic protections that few of us seem tobother with—passwords and backups.

Mac OS and most versions of the Windows operat-ing system come with the option of creating passwordsfor logging onto your computer when you start it up.Most of us don’t bother with them, but if you’re run-ning your business from a computer, it’s a good idea touse this option and make sure that your computer ispassword-protected. Passwords are no replacement forother security measures, but they will create an extra

14

When I first turned inthe rough draft of this book, Chapters 7and 8 proved to be garbled beyond allrecognition. Once my heart started beat-ing again, I checked my workstation atKiplinger’s Personal Finance magazine,my laptop, and the backup disk pluggedinto the PCMCIA card slot (see the defini-tion on page 152 of Chapter 6) on thelaptop. Unfortunately, they all carriedthe same garble. It took a data recoveryservice to recover the information frommy disk, and I still ended up having torewrite about 40% of the two chapters.

There are a number of technical rea-sons why such a disaster might happen—inadequate RAM, too many Windows openat once, even a few misplaced keystrokeswhile you’re saving the file. Sometimes,the reason simply isn’t apparent. The factis, as everybody knows, computers loseor corrupt files on occasion. It’s a fact ofcomputing life.

Thus, you need to be sure that yourfiles are properly saved and properlybacked up. Your business depends on it.

In my case, I had a number of back-ups, but I actually saved the file after itwas corrupted. Thus, for really importantwork, 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 abackup 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 anothermedium. It may be desirable to keepone version of the work off site. You cancopy your files to a floppy or Zip disk—or perhaps your client will allow you to copy back your work to its on-site servereach day.

As your business and computer sys-tems grow, you may need more complexbackup systems for reconstructing yourbusiness’s entire body of data. You’ll probably need the help of an informationtechnology expert to accomplish this task(see Chapter 8).

SECURITY: Where’s My File?!

hurdle for intruders to overcome. Also, be sure that thepasswords available for various programs, such as Out-look 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 programsand services! If you use “bunnyslippers” as your pass-word for everything, it becomes altogether too easy for ahacker to tackle the rest of your programs once he orshe has access to your computer.

AN OFFICE SUITEThe most common suite of software after operating sys-tems and security is the office (lowercase) suite. Forbasic word processing, spreadsheets, e-mail, and elec-tronic slideshow presentations—the real basics of thebusiness world—Microsoft’s popular Office software is,hands down, the standard for both Windows and Mac.Office consists of Word for word processing; the Excelspreadsheet program; Outlook for e-mail; schedulingand keeping track of addresses and contacts; and Power-Point 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 yoursas well if you want to do business.

Some different versions and options are available inOffice, and you need to have at least one of them:

Most new home computers come with MicrosoftWorks, a slimmed-down, cobbled-together version ofOffice for basic home use. Works comes with the latestversion of Word, which is helpful, as well as a basicspreadsheet program compatible with Excel and thestripped-down Outlook Express, which lacks a databasefor managing information about your business contacts.

Business users, quite frankly, should avoid Workslike the plague. For $50 to $100 more on a new comput-er, 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 Pro-fessional, Small Business Edition, which includes theAccess database program for storing and mining dataabout your company—highly recommended for busi-

15



nesses that have to keep track of inventories, employees,and other data-intensive processes (see Chapter 4).

Some versions of Office also include Microsoft’sFrontPage software, used to design Web sites. If you getit, fine; if not, don’t worry—there are better Web sitecreation tools out there anyway (see Chapter 2).

A few alternatives to Office exist, such as IBM’sLotus Notes software, but these are not standard in theindustry and are not truly compatible with Office. Asmuch as the tech world loves to rail against Microsoftproducts, Office is the one to go with.

If you already have a computer with Office 97 orOffice 2000, you’re in luck because there’s no reason toupgrade right now—they’re still compatible with the lat-

16

All the costs of tools andequipment required in your

work can qualify as tax-deductible busi-ness expenses on your Schedule C filing.However, if an item is likely to last formore than a year, you must depreciate itby one of two methods. This means thatyou can deduct replacement toner car-tridges for your printer as a businessexpense, but the cost of your computerwill have to be depreciated.

Computers have a five-year tax life,but the percentage of your computer’svalue that you will qualify to deduct eachyear (actually six years because of account-ing procedures) depends on whether yourbusiness use of your computer exceeds50%: If it does, you will use an acceleratedschedule that allows you to deduct abouthalf the value of the machine in the firsttwo years. If your business use is 50% orless, then you can deduct only about athird in the first two years.

The rules for depreciating businesssoftware differ depending on whether itis bought as part of a package with com-puter hardware or purchased separately.In the first case, the value of the softwareis depreciated at the same rate as thehardware—six years. When purchasedseparately, however, the cost is usuallywritten off over three years. However,if you can show that the software has auseful life of one year or less, you candeduct the full cost in the year you buy it.

A super accelerated depreciationschedule, called expensing (or the Section179 deduction), is available to businessowners whose use of a computer exceeds50%. This lets you immediately write offin one year business costs (proportionalto your business use of the machine) thatwould otherwise be depreciated over fiveor more years. This strategy will give youthe biggest tax-saving boost when appliedto property that otherwise would have the

TAXES: Breaks on Technology

est Office XP software. If your machine has Works butyou don’t want to spend hundreds of dollars on OfficeXP, consider checking eBay or other auction or discountsites for a copy of Office 2000 or 97.

MANAGING THE MONEYNext, let’s think about finances. Just as most entrepre-neurs have little knowledge of business technologywhen they start out, everyone can use a little help whenit comes to business financial management and book-keeping. Fortunately, some superior programs are avail-able to help small-businesspersons keep the books. Thetwo biggest competitors in this space are Intuit’s Quick-en and Microsoft’s Money programs. Quicken, which

17


longest depreciable life. So, applying ex-pensing to seven-year property, such asoffice furniture, rather than five-year prop-erty, such as your computer, will maximizeyour write-offs.

Remember that you will need tokeep records establishing the cost of theproperty that you depreciate, and if there’sa split between your business and person-al use, you’ll need evidence to support thebusiness percentage that you claim. (In-clude any sales tax paid in the depreciablebusiness cost.) You might, for example,keep a log book near the computer, andhave every user sign in, noting the date,the time use begins and ends, and thereason for using the computer. If the rea-son is not personal, cite the specific pro-ject. When you file your return, you’ll beasked whether you have written evidenceto support your write-off.

Other office equipment, like copy orfax machines, have the same five-year tax

life as computers. The 50% business-userule doesn’t apply here.

If you use a cell phone in your busi-ness, it has a seven-year tax life but iscovered by the 50% business-use test.If your business use of the phone doesn’texceed 50%, you’re stuck with a slower10-year depreciation schedule and youwill miss out on the opportunity to“expense it.”

We can’t get into the intricacies ofthe tax code here, so if you aren’t familiarwith your obligations, you should see atax planner or accountant as soon aspossible. You can also go to www.irs.govand download Pub. 946: How to Depreci-ate Property (use the publications andforms search engine on the home page).

Finally, keep in mind that once youreplace your old computer, you can getanother write-off by donating the old ma-chine to a nonprofit organization, whichwill likely be grateful for the assistance.


has concentrated entirely on personal and business fi-nancial software for 18 years, definitely has a leg up onfar-flung Microsoft, but Money has steadily improvedthrough the years.

INTUIT’S QUICKEN AND MORE. Quicken has a number ofsoftware titles available for small business, and you canupgrade as your business grows.

The first, Quicken 2002 Home & Business, allowsyou to keep track of both personal and professional fi-nances in one program—which is handy, considering thatthe two are invariably intertwined when you’re startingout. Of course, the two records are as separate as you

18

If you’re running a busi-ness from your home, you

should double-check your homeownerspolicy to be sure your technology is ade-quately covered—the odds are it won’t be.Although your homeowners policy maycover tens of thousands of dollars of per-sonal property, the limit for businessproperty frequently drops to a skimpy$2,500. That low ceiling may still applyeven if you have a rider on your policythat raises the coverage for personalcomputers, because the rider’s higherceiling may not apply if you use thosemachines for a business. Worse, mosthomeowners policies cover just $250 ofbusiness property that is stolen or de-stroyed when you’re away from home—tryreplacing 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.

■ You telecommute from home using your employer’s equipment. Checkfirst with your employer: Does itsinsurance cover you if the equipment is damaged or destroyed in your homeor stolen?

■ You employ others working remotely from their homes using yourequipment.

ON A RELATED, BUT NONTECHNOLOGYISSUE: Don’t forget to check your liability,too. A $1-million limit on your homeown-ers policy might fall to zero for liability re-lated to your business, if, say, a clientwere to fall down your stairs.

For a modest home office, the cheap-est way to increase your business coverageis to add a home-business endorsementto your homeowners insurance policy.Typically, for less than $100 a year youcan raise your business-property and lia-bility limits to the same level as the restof your homeowners coverage.

INSURANCE: Is Your Technology Covered?

want them to be. You can even pay yourself, and theHome part of the program will automatically update yourpersonal accounts from the Business part. Quicken 2000Home & Business easily handles all the routine businessbookkeeping chores, including checking, invoicing, andeven basic payroll and Schedule C tax functions. You canexamine your business’s spending habits, pay your billsonline, and even accept payments for online invoices viaa deal with online payment company PayPal, which pro-vides a secure method for sellers to send invoices andcollect payment online, while giving buyers credit-cardsecurity and the ability to use a single account to paymultiple online vendors. So instead of waiting weeks for

19


If you are running a more complicat-ed home office, you will probably wantto purchase a business-owners policy.One designed for home-based business-es may cost from $150 to $300 annual-ly. Other policies that cover any kind ofbusiness—in your home or in a separatespace—usually cost $200 to $2,000,depending on what’s covered.

The best place to start shoppingfor a policy is the company that issuesyour homeowners or renters policy, fortwo reasons: You may get a discount ifyour business policy is with the samefirm, and you may eliminate any argu-ment over distinguishing between homeand business property—and who isresponsible for what—when you makea claim.

Business-owners policies cover busi-ness property and liability—just as anextension on your homeowners policywould. But the business-owners policiesalso cover such contingencies as damage

to your equipment caused by powersurges and loss of income if you can’tdo your job because your equipmentbreaks down or your office is destroyed.

Computer riders in business policiesmay cover damage to a computer andlost business caused by a hacker attackor virus, as well as the cost of buyingnew software, reprogramming your com-puter, and re-creating data. (Such a rideris often more cost-effective than stand-alone hacker insurance, which may cost$30 to $40 per year for just that limitedcoverage.)

Even the most-comprehensive busi-ness policies don’t cover two importantrisks: worker’s compensation and businessliability (often known as errors and omis-sions or malpractice).

Finally, as your business and yourinvestment in technology grow, don’t for-get to increase the limits of your coverageas necessary.


the check, you could have your money in a matter ofhours (depending, of course, on how fast the other per-son decides to respond to your online invoice).

The Quicken product also includes links to Websites that discuss various small-business issues, such asthe nolo.com legal site. These handy links provide basicbut critical information on employee relations, contracts,and other potential hazards for small businesses.

Intuit’s other two products are QuickBooks andQuickBooks Pro, which do away with the personal finan-cial software but are far more able to keep up with yourgrowing business than the Quicken 2000 product. Intuitrecommends that Quicken 2002 Home & Business beused for businesses with no more than four to six em-ployees. After that, you’ll need QuickBooks or Quick-Books Pro (described in Chapter 4). For now, theQuicken product will be enough to get you up and run-ning, and all the data will transfer easily to QuickBookswhen the time comes.

THE ADVANTAGES OF MICROSOFT MONEY. MicrosoftMoney 2002 Deluxe & Business approaches personal fi-nance from the same philosophy as Quicken. TheMoney product has better customer contact and man-agement tools and better employee tracking and payrollinformation—even to the point of tracking your employ-ees’ stock options, if you offer them. However, invoicing,tax preparation, project tracking, and estimates prepara-tion are better in Quicken, as is the upgrade path forwhen your business grows beyond your first computer.Both products offer extensive customer contact anddatabases, which are essential for maintaining the kindof relationships necessary to your business, and are farsuperior to anything you could do with Outlook’s con-tacts management. Both products also offer Web sitesand subscription rates for continual updates of the soft-ware, as well as newsletters and other business informa-tion. For the nominal monthly fees—no more than $10a month—these subscriptions are worth the price.

Overall, I recommend the Quicken product, but thefinal decision is ultimately yours. Because bookkeeping

20

is critical to the health of your business, it’s worth yourtime to ask around, test-drive these products, and de-cide which piece of software suits you better.

THE VISUAL SIDE OF BUSINESSTwo more pieces of software, although not essential, cansave you time and effort when it comes to marketingyour new business. The first software program I recom-mend is a page-layout product, either Adobe’s PageMak-er or Quark’s XPress. Both are fairly simple to use, andboth can be used to create attractive flyers and adver-tisements that you can save to disk for shipment to yourfavorite copy store or newspaper, or print out and mailyourself. You can also translate your new advertisementinto a ready-made Web page with just a few clicks.

QuarkXPress has a slight lead as the industry’s stan-dard, especially on the Mac, but both products are wide-ly used. The basic versions of these products cost about$850 for XPress and $450 for PageMaker, and comewith a vast array of fonts, graphics, and templates thatare probably sufficient for most businesspeople.

Finally, if you want to use a lot of photos or imageswith your business—product shots, customer testimoni-als, and icons—you’ll need Adobe’s PhotoShop. Sure,you can import an image directly from a digital camerainto XPress or PageMaker, but PhotoShop makes theprocess much easier. And you’ll be able to easily manip-ulate your photos—cropping them, changing the con-trast, enlarging and saving them onto your computer.The basic version of PhotoShop costs about $600.

Keep in mind that these last two products are un-necessary for any business other than those involved indesign or publishing. However, between XPress orPageMaker and PhotoShop, you can save hundreds oreven thousands of dollars in professional design fees,and ensure that the first marketing efforts of your busi-ness are exactly what you’re looking for.

If you have doubts about your ability to design yourown marketing materials, you might want to outsourcethat task, at least initially. You could employ a designerto create a logo and other marketing materials and pro-

21



vide you with appropriate files that you could then tweakas necessary, with the appropriate software, until a majordesign overhaul is required. You’ll still save money overthe long run.

And one last piece of advice on software: Delete orhide all the games that came with your computer, suchas Solitaire or Minesweeper. You’ll thank me later.

Getting Plugged InNow that you have all this software, you’ve turned yourcomputer into a valuable business tool. By getting onlineand hooked up to the Internet, however, you can in-crease that value exponentially. How? With informationand communication.

The small-business resources available on the WorldWide Web are impressive—everything from tax infor-mation and legal help to professional contacts and re-search assistance can be had online (see page 24 for a listof sites that are of particular interest to entrepreneurs).You can also use the Internet to see what other smallbusinesses in your field offer—or even check up on thelocal competition.

Then there’s communication. E-mail can be im-mensely valuable to your business. Your e-mail address

22

Like storage capacity, acomputer’s connection speed has its ownmeasurements. The rate of data flowingthrough a network—either between com-puters or from a computer to the Inter-net—is measured in bits per second.Remember, bits are the ones and zerosof binary code.

Transmission speeds are first mea-sured in kilobits—1,024 bits. Cellphones manage around 14.4 kilobitsper second (kbps)—a little less than a

kilobyte of data—while a dial-up modemhandles 56 kilobits per second, or rough-ly 7 kilobytes—enough for a couple ofparagraphs of text every second. An aver-age DSL line can handle 256 kbps.

At the T-1 level, we start measuringin megabits per second—1,024 kilobitsper second. A 5-megabit line, one of thefastest lines commercially available, candownload the text of this entire book inabout two seconds.

SPEED: The Limits

Tech Terms

Internet serviceprovider: a companythat, quite simply,provides Internetservice to homes andbusinesses. In additionto independent ISPs,phone and cable tele-vision companies havestarted ISP branchesto better serve resi-dences and businesses.

will make it easier for not only your suppliers and part-ners to reach you, but also your customers—the mostimportant people in your business. Not having an e-mailaddress is, not to be melodramatic, unthinkable intoday’s business world.

YOUR OPTIONSTo get online, you’ll need an Internet connection. Thereare three basic ways to connect:

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

DIGITAL SUBSCRIBER LINE (DSL). This is a special line thatthe phone company or Internet service provider installs inyour home or office. With a single DSL line, you can si-multaneously 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 downif you’re also on the phone or if multiple users in the of-fice share the same DSL line.

CABLE MODEM. The same cable lines that give you 500boring cable channels can also give you impressively fastInternet 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 en-tire residential block could be hooked up to the samecable, and you all have to share—that’s just the way thecable company has things set up.

DEDICATED LINES (T-1). If your first office is in a densecommercial area, you should probably talk to yourphone company about setting up a dedicated high-speedline, especially if you envisage expansion within six

23



months to a year. Dedicated high-speed Internet serviceis covered in more detail in Chapter 3.

If you need service for yourself but have no otheremployees, I recommend either a DSL or cablemodem. If you’re constantly checking e-mail or Websites as part of your job, dial-up modems don’t give youthe immediate connectivity you’ll need. For example, ifyou 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 onlyon your expansion plans but also on the availability ofvarious services in your neighborhood or office building.My wife works from home as a freelance health journal-ist, and within a few months of starting out on her own,she got the dial-up blues. We checked to see whetherDSL was available in our residential neighborhood and,to my surprise, it wasn’t. However, a cable provider didoffer high-speed Internet access, so we switched our TVservice as well as our ISP.

If you do have both services available, here are afew hints on choosing. Cable is faster, to be sure, andworks well if you work during the day from your home,because most other users are then at their offices. Atnight, however, you may experience slower service; youmay at times even feel as if you have a dial-up modemagain. DSL, while somewhat slower than cable, doesn’tget nearly as bogged down during busy hours and it

24

The Internet can be animmense resource as you set up your busi-ness. Here are some popular Web sitesdesigned to help you get off the groundand find the information and servicesyou 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

RESOURCES: Online Entrepreneurial Aids

provides far more consistent service. If you’re in acommercial office building or even at home, DSL isprobably the better initial option.

Prices between the two services shouldn’t varymuch. In major cities and suburban areas, you should beable to get either cable or DSL Internet service for nomore than $50 a month. Any higher than that is a rip-off.Because most neighborhoods have multiple high-speedproviders, not just the phone or cable company, it’s agood idea to do your homework—both online and off—in order to get the best deal. Remember, though, thatsigning on with another company could mean that you’dhave to switch either your phone service or cable TVprovider to it. Competition for your business is fierce, sodon’t be afraid to haggle a bit. Your sales representativeshould have enough leeway to give a little.

One more note about cable. Cable high-speed In-ternet service is generally a poor choice for the rapidlyexpanding business because there’s no upgrade path.Once the cable is hooked up to a computer, that’s it. Youcan split off the cable to add more computers, but witheach addition you’re progressively degrading the service.If 20 computers use the same cable service, you’re bet-ter off just getting 20 dial-up lines installed—getting on-line could be that slow (depending, of course, on howoften those 20 users are accessing the Internet).

Many DSL providers, however, also sell dedicatedlines—that is, one line to one computer—and if you’realready a customer of theirs, they can provide discountsfor additional lines or a DSL line with higher band-width. All this is something to think about as you plotthe course of your expansion.

Your phone company, cable company, or other ser-vice providers may try to sell you various other services.In theory, a single company could handle your entiretelecommunications needs, and all you’d need to worryabout is one bill. In practice, that’s not a good idea. Inparticular, you should be careful about allowing yourcable company to sell you telephone service. Althoughit’s technologically possible for you to receive phone ser-vice through your TV and Internet cable system, cable

25



lines are too easily overwhelmed in peak-usage times,and if your cable goes out, you’ve just lost your entirecontact with the outside world. And remember that nosingle company currently can provide cable television,high-speed Internet service, phone service, and wirelessphone service. You will have multiple bills no matterwhat you do.

In general, it’s a good idea to leave the cable line at-tached to your TV, and, if you’re on your own without astrong DSL alternative, to your computer as well. Oth-erwise, you should aggressively compare prices amongthe various companies and never put all your eggs inone basket.

Thinking About PeripheralsOf course, a single computer does not an office make.After your business begins to grow, the trips to Kinko’swill probably become more and more frequent. If youcan afford them all right off the bat, individual machinesthat print, copy, scan, and fax will give you a lot of flexi-bility and efficiency. In the discussion here, I’ve high-lighted the critical considerations in choosing theequipment. When you go shopping, however, you’ll haveto decide which other bells and whistles are worth yourmoney. Multipurpose machines are discussed after thesingle-purpose ones.

PRINTERIf you do a minimal amount of printing or only occasion-ally need high-quality printing, you can probably getaway with the $49.95 printers found at your local RadioShack or Circuit City. (You might even get a deal for afree printer wherever you purchase your computer.)These printers tend to print an average of only five to sixpages per minute, however, and the print quality hoversbetween 300 and 600 dpi. (By way of comparison, thisbook is printed with a degree of precision equivalent toabout 600 dpi.) These printers are perfectly acceptable

26

Tech Terms

dpi: stands for dots perinch. This is a measureof resolution—that is,clarity or crispness—inany image. The moredots per inch, the higherthe resolution. Laserprinters commonly pro-duce 600 dots per inch,or a total of 360,000dots per square inch.For manipulating pho-tos, 1,200 to 2,400 dpiis preferable, especiallyif you plan to zoom inon the image withoutloss of resolution.

for letters, invoices, and other straightforward, day-to-day use. For the high-quality stuff, however, you’ll stillbe heading to Kinko’s.

On the other hand, if you’re going to do a lot ofhigh-quality printing, including your marketing work, asdescribed earlier, you will need a better printer. A print-er that can do 12 to 20 pages per minute at resolutionsof 1,200 to 2,400 dpi will cost between $200 and $400,depending on the brand you choose and the speed, ca-pacity (the size of the paper tray and the number ofpages the printer can hold in memory at one time), andquality you need. I highly recommend a faster, finerprinter for artistic or scientific users, who need the high-est quality in their everyday work.

COPIERWhen it comes to pages per minute and resolution, acopier has much the same output as a printer. You canget a small personal copier for $150 or less, but don’tcount on more than six pages per minute. Midrangedesktop-size copiers will cost $350 to $500 and give youcopy speeds of up to 30 pages per minute—not very fastcompared with the big, stand-alone copiers but goodenough for home. Anything more advanced will requirea visit from your Canon or Xerox sales representative,and is beyond the scope of this chapter.

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

27



time can cost $500 or more. Again, weigh your usagepattern, your needs, and your cash carefully. (The typicalcopy shop also has scanners, by the way.)

FAXFaxes have become fairly standardized and straightfor-ward over the years. Even small home-office faxes nowuse plain paper instead of that atrocious waxy thermalpaper. 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 considerits transmission speed as well as its memory capacity.Most faxes transmit at 9.6 kilobits per second—enoughto send a page every 15 to 20 seconds. Newer, more ex-pensive faxes transmit at 14.4 kilobits per second, whilethe most expensive machines send pages at 33.6 kilobitsper second—enough to send a page every four secondsor so. Unfortunately, models featuring even the 14.4kbps speeds start at about $400. Thus, unless faxing isabsolutely critical to your business, you can easily settlefor 9.6 kbps.

The other important function is memory. Youshould make sure that your fax machine has enoughmemory to store at least 20 pages of faxes—around 512kilobytes of storage. An “out-of-paper reception” fea-ture—which lets the machine store faxes in memorywhen you run out of paper—is handy as well, although afax that has such a feature will cost $250 to $300.

Fax use has steadily declined as e-mail has takenover many of the functions of the fax. Thus, for now,your small office probably just needs a fairly inexpensivemodel. Of course, there are always alternatives. A num-ber of Web sites, such as eFax.com, offer fax servicesthat you can take advantage of without needing a fax ma-chine. For a monthly fee, around $10 or so, these siteswill give you a fax number and an ID code to permit youto receive faxes, view them online, and download a copyto your own computer, which you can then print out.You can also upload a copy to the Web site, which willsend the fax on to the appropriate fax number for a per-page or per-minute phone charge.

28

Some businesses prefer to have separate fax tele-phone lines, even during the at-home or in-garagephase of business life, especially if they wish to avoidannoying clients with a frequent busy signal or the auto-matic pick-up feature on their fax machines. That’sfine—they run about $50 for installation and around$15 to $30 a month for service, depending on your car-rier. But again, keep in mind that e-mail can accomplishfar more than faxes can these days. Whenever you needto send or receive a fax, you can simply switch out yourregular phone line into the fax machine. Or, if you haveDSL, you can keep both your phone and fax pluggedinto the same line, and program your fax machine topick up if it receives a fax transmission.

MULTIPURPOSE (ALL-IN-ONE) MACHINESIf you don’t plan to expand your computing environ-ment significantly—we’re talking no more than a half-dozen computer users through the life of yourbusiness—you might want to consider a multipurposedevice, which will combine your printer, fax, scanner,and copier. These devices can start as low as $150 andrange 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 multipur-pose machines will copy at only 12 pages per minute. Itmay be tempting to automatically snap up the multipur-pose machine, and for the single-person office, it’s not abad idea. Any more workers than that, though, andyou’ll end up junking your investment relatively soon.

HANDHELD COMPUTEROne addition to your high-tech office that you may wantto consider is a handheld computer like the Palm, Hand-spring, or Pocket PC. When these little wonders wereintroduced in 1995, they took the world by storm. Askany handheld users about their devices, and chances areyou’ll get high praise, maybe even a few rhapsodic odes.

These devices, which measure about four incheslong, three inches wide, and half an inch thick, weighabout four ounces. Using a stylus and a touch-sensitive

29



screen, you can access phone numbers and addresses,schedules, to-do lists, notes and memos, and even youre-mail—and all this is synchronized with your desktopcomputer. For example, if you log a new business con-tact into Microsoft Outlook, that information will besent to your handheld device the next time you connectit to your PC. Similarly, if you make a note to yourselfon your device about a future appointment, the datawill appear on the calendar on your PC after synchro-nization. The handheld is a great way to take a piece ofyour office with you when you can’t be there. More ad-vanced models also include wireless services, check-book registers, and even e-book readers.

Handheld devices usually cost $149 to $249 for thebasic Palm and Handspring models, and up to $500 and$600 for the advanced Microsoft Pocket PCs. Most be-ginners are happy with the Palm or Handspring, eventhough both still require learning the Graffiti shorthandwriting technique (fortunately, it is easy to learn). Be-sides, it’s a good idea to get used to using the device be-fore spending big bucks on the more advanced models.

Again, when it comes to peripherals, think seriouslyabout what you’ll use and, even more important, whatyou won’t. Think also about how your business might ex-pand and how your potential purchases will fit in. A$49.95 printer won’t be able to handle more than oneuser—two if you’re lucky and don’t print much. But a$300 printer may still be around when you have a dozenpeople using it.

Cost BreakdownsTHE BUDGET OFFICEThis is enough to get you started, though expansion be-yond this initial setup will be tough. Recommended forthe freelancer or other solo operations.

Computer (with Office XP and antivirus) $999All-in-one printer/fax/copier/scanner $180Handspring Visor $250Quicken or Money software $80

30

Paper, ink cartridges $20/monthDSL service $50/monthSoftware subscriptions $10/monthTotal Initial Cost $1,589Monthly Costs $80/month

THE EXPANDABLE OFFICEThis is the top-of-the-line setup, probably necessary onlyfor people with rapid expansion plans and a taste for cre-ating their own marketing materials. Even for ambitiousand well-funded entrepreneurs, this is probably a bitmuch—but if you spend any more than this, you’reworking in a Mac environment, running a research lab,or spending too much.

Computer (with Office XP and antivirus) $1,300Fax $200Scanner $200InkJet printer $250Personal copier $300iPaq Pocket PC $600Quicken or Money software $80Adobe PageMaker software $200Adobe PhotoShop software $250Paper, ink cartridges $40/monthDSL service $50/monthSoftware subscriptions $20/monthTotal Initial Cost $3,490Monthly Cost $110/month

31


Your Businesson the Web

33

CHAPTER

2

ob LeGrow had his first job as a wedding pho-tographer in 1980. It was never meant to be afull-time job, but rather an extension of hispassion for photography that, as he put it, “letme buy the big-screen TV and the other little

things in life.” He and the three other photographersworking with him put in 35 to 40 weekends a year innorthern New York, New Hampshire, and LeGrow’shome state of Vermont, one of the most popular placesin the U.S. to get married.

The business purred along nicely for many years, butLeGrow became increasingly frustrated by having to re-peat the same information to every single customer whophoned him. Finally, in 1998, he decided that he neededto place all the pertinent information on a Web site.

“I liked the name weddingphotographs.com, butdot-com was gone,” LeGrow said. “Dot-net was avail-able, 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 im-mediately found he had a whole new outlet for busi-ness. “I had really wanted to use the site as a tool. It’s afairly static site, but everything you want to know isright there. When people call, I can just send them toweddingphotographs.net.

“But it really brought a whole new set of customersto us. If you go to any search engine and type thewords ‘wedding,’ ‘photographs’ and ‘Vermont,’ we’llprobably be at least in the top five results, if not num-ber one,” he added.

For the record, it’s more like the top ten, but it’sthere—an important outreach to Web users who might

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

B


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 wedding-or Vermont-related Web site as long as there isn’t a feefor doing so. (Some larger sites require smaller ones topay in order for the larger site to promote them.) “Wehave plenty of business to go around, and I just don’tthink fees for links are that useful, considering the trick-le of traffic you get from them,” he said.

A look at LeGrow’s Web site shows a very simpledesign, but there are internal links to all kinds of infor-mation about his business: his experience, rates, pack-ages, album information, sample photos taken byLeGrow’s photographers, and a wealth of wedding infor-

34

portal: a large Web site thatoffers many services in one place. Yahoo!,for example, offers Web searching, newsand information, e-mail, stock quotes, auc-tions, classifieds, and more. Other exam-ples are Excite, Lycos, and Netscape.com.MSN and AOL also have Web portals,though more for their own dial-up servicecustomers than for the typical Web surfer.

Web address: simply put, a Web addressis where your Web site is located on theInternet. A Web address is commonlyknown as a URL, which is short for Univer-sal Resource Locator; a URL is what yourcustomers will type into their browser toaccess your Web page. However, the actu-al address that the linked computers ofthe Internet use to find your Web site is aseries of 12 numbers, set apart in groupsof three. Typing in that series of numbersin their browsers would also allow cus-tomers to access your site, much like dial-

ing a phone number. URLs were createdto make that process easier for everydayInternet users.

search engine: a special Web site, or partof a larger Web site, that customers willuse to find your Web page and othersthat provide similar products or servicesor discuss similar topics. (To use asearch engine, type the subject or a keyword of the topics you’re seeking and hitthe return key. A list of pages with possi-ble relevance to your search will thenappear.) Popular search engines for theWorld Wide Web include Google andMSN Search—typing “search engine”into a search engine should give you alist of the most popular ones currently inuse. You can also add an internal searchengine to your Web site, such as the oneused on Amazon.com, so that customerscan search for specific information. (Formore on this, see page 126.)

Tech Terms

mation and local Vermont links. There’s also a link toLeGrow’s e-mail. He used to have an e-mail form (aWeb page with fill-in-the-blank spaces for names, ad-dresses, and a message), but he took it off the site whenthe amount of e-mail dropped—people found it easierto send questions through a simple address link. “I thinkforms can be a little confusing for first-time users. Plus,some people don’t like putting their contact informationin there,” he said. “I have no interest in calling peopleup and trying to sell to them, anyway.”

LeGrow pays $20 a month for the Web-site hostingand another $50 or so a year to reregister the name.Moreover, LeGrow said he has greatly reduced hispostage costs.

“I think every business needs at least a page upthere on the Web, even if it just lists a mailing or e-mailaddress or a phone number,” LeGrow said. “If you canget all of your basic information out there, you’ll reallyhelp the customer out.”

Homesteading on the InternetSo far in this book, I’ve tried to stay away from tellingyou what to do—the idea here is to provide informationso 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 no-brainer as you can get in business. A basic Web sitethrough a major portal like Geocities or Angelfire.com isfree, and a Web address (also called a URL) with yourbusiness name on it, such as mikesbarandgrill.com, cancost as little as $35 a year. Moreover, creating a Web sitecan be almost as easy as creating a document in Mi-crosoft Word.

The marketing benefits are immense. Your site canturn up in major Web search engines, such as Yahoo! orGoogle, giving people around the globe access to infor-mation about who you are and what you can do. I cannotimagine a business that would not benefit from this kind

35

CHAPTER 2 Your Business on the Web


of exposure. By including an e-mail address on the Website, potential customers are just a few clicks away fromtalking directly to you. Through images, they can seeyour establishment and determine whether it’s a placethey’d like to go, or view your product line quickly andeasily. You can quickly inform people about special of-fers, answer many frequently asked questions all at once,and draw people to your door.

The combination of price and content flexibility isunbeatable. Compared with static newspaper advertis-ing or expensive radio and television spots, the WorldWide Web will be your business’s best friend.

But keep in mind that for most businesses for theforeseeable future, the Internet won’t be the sum totalof your business—that’s where all the failed dot-coms ofthe 1990s went wrong. A Web site is a complement toyour business, but it cannot and will not provide a crutchif your real-world venture isn’t doing as well as you’dlike. If you sell through your Web site and find that yourInternet sales are starting to surpass your storefrontsales, consider yourself lucky—and then think hardabout why that’s happened and work to translate yoursuccesses back into your bricks-and-mortar business.The Internet is far too fickle to be relied on for consis-tent growth and revenue. However, as a companion toyour main business—as a marketing tool and outreachto customers—it is unsurpassed.

Getting Your URLOne of the first things you should do when you startyour business is to pay for the rights to your name on theInternet. As some companies and individuals have foundout the hard way, there are plenty of so-called cyber-squatters who will buy up preferred and popular names,like plumber.com or weddingplanner.com, and then sellthem to others at highly inflated prices.

It’s also good to link your Web pages to that URL assoon as possible. The alternative to having your ownURL—a Web address at Geocities or Angelfire.com—just appears less professional than having your very own

36

name. In addition, a name that closely mirrors that ofyour business is far easier to remember than a Geocitiesname 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 BobLeGrow’s quick action in securing his URL. Unlessyou’re in a unique business or have a unique businessname, you’ll find that getting the URL you want is goingto be a tedious process. Be flexible and creative, andkeep in mind that the name should be intuitive and easyto remember—and to spell!

How to Register Your Business NameRegistering the name itself is easy. You simply go onlineto one of the many authorized registrars that handle newWeb addresses for the Internet. Some of the more pop-ular registrars are Network Solutions/Verisign (www.nsi.com), America Online, and Registrar.com. A Websearch will turn up a number of these services, and theInternet Corporation for Assigned Names and Numbers(ICANN), a nonprofit group that oversees the electronicaddress 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 yearfor the rights to your Web address. These prices may in-clude various offers for page holders and redirect ser-vices—basic pages that give you a place to promote yourbusiness while you build the rest of your site, or thatredirect Internet users to the rest of your Web site,which may or may not be within the same domain asyour URL. For example, you could register mikes-barandgrill.com, but have that site redirect customers toyour old Geocities site, or link to pages on the previoussite 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


Tech Terms

domain: a domain isrepresented by the finalextension on a URL.For example, .comand .net are top-leveldomains. Individualcountries have sec-ondary domain names;Britain’s domain,for example, is .co.uk.


and the “dot.” The most popular is the .com extension;the others are .org, .net, .gov, .mil, and .biz. The .org ex-tension is generally accepted as a nonprofit extension,while the .net extension is more widely accepted as onefor 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 couldwell be an interesting alternative to .com. However,.com is the best-known extension in the world, and peo-ple trying to find your Web site are likely to simply typeyour business’s name, followed by .com. (This, by theway, is the reason why one of the most-accessed pornog-raphy Web sites is whitehouse.com. This Web address

38

source code: the computercode that generates the Web page you seeonline. Your Web browser serves as a kindof translator, turning the source code intotext and images.

Web host: a computer connected to theInternet that holds the information neededto generate a specific Web site. The com-puter is usually a server (see page 62 ofChapter 3), although some people hosttheir Web sites on their personal comput-ers. The computer, server or not, musthave a constant connection to the Internetas well as a static IP address.

static (and dynamic) IP address: theseries of Internet Protocol numbers thatlets the major hubs of the Internet knowwhere a specific computer is located. Astatic address is for computers constantlyconnected to the Internet; such addressesare reserved for servers as well as for per-

sonal computers using DSL, cable, orfaster high-speed connections. (A dynam-ic IP address is commonly used for dial-up customers—the series of numberschanges each time the computer is con-nected to the Internet.)

hits: Each mouse click that a user makeson a given Web site, whether to moveelsewhere within the Web site or to re-quest a function of the Web site, iscalled a “hit,” because it stands for aseparate request from the server hostingthe Web site. When compared with thenumber of visitors to a site in any givenday, week, or month, the average numberof hits indicates to the Web owner howmany clicks each visitor makes on a Website. By looking at the number of hits oneach page of your site, you can deter-mine which pages are popular and whichpages might need updating to be moreuseful to the reader.

Tech Terms

39


was purchased by a particularly shrewd entrepreneurwho figured that at least some of the people who reachthe site by mistake will be sufficiently intrigued to surfthrough the rest of the site. The real White House Website is whitehouse.gov.)

You should be very wary about buying a certainWeb address if the .com version of it is already taken.Even if you buy .biz, .org, or .net, you’ll still find thatmany people will look for you at .com. It’s better tochange your initial URL idea than to end up sendingprospective customers to another business across thecountry—or worse, across town.

Your best bet is to find a unique name, and then, atthe very least, register the .com version of it. If you canafford it, you should also register the .net, .org, and .bizversions as well. That will not only protect your URLfrom cybersquatters, but will also alleviate any confusionin the marketplace. You can set up redirects from theother URLs to your .com address.

Finding a Host for Your Web SiteLet’s get ahead of ourselves and assume you have a de-sign and possibly even the source code necessary to cre-ate Web pages (these necessities will be coveredshortly), and you have your Web address. Now you haveto find a host, a computer where you can store your Webpages. This computer needs to be connected to the In-ternet, and needs to have a static IP address. It soundscomplex, but really isn’t. You can choose from the fol-lowing ways to acquire a Web host:

Your current ISP probably has Web hosting services,and for the beginning Web site, the cost for those ser-vices is relatively inexpensive. For as low as $20 a month,most ISPs will host about a half-dozen Web pages persubscriber, allow you access to edit the contents any timeyou like, and handle a decent amount of hits. As yougrow, you can work with your ISP on larger packages thatinclude e-commerce capabilities. (Chapter 5 discusses the

Tech Terms

e-commerce: short forelectronic commerce.Generally applied tosales transactions con-ducted via Web sites,the definition is slowlyexpanding to includebusiness conductedvia mobile phones andhandheld computersas well.


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 youfor a few dollars less than the usual fees (from $15 to$25), and then host your site and an unlimited amountof e-mail at no charge. The catch? Unlike other ser-vices, such as those of Register.com, which place un-sightly banner ads right on your business’s Web page,DotEasy.com will simply e-mail you offers from its ad-vertisers once a day, most likely regarding products foruse in your small business. Is it a good business plan?Hard to say: Targeted e-mails have been proven to bemore effective than banner ads at making sales, but foryou as a DotEasy.com customer, it’s quite easy to simplydelete your daily spam and get on with the rest of yourrelevant e-mail. Services like DotEasy.com are a greatway to get your business up and running on the Webwithout much hassle.

But whether you’re paying $40 a month or noth-ing, there are a few things you need to look out for.Make sure that the Web hosting plan you sign up for isflexible—if you’re allowed only 10 gigabytes of trafficper month, that may be enough for your first fewmonths on the Web, but could be limiting as your sitegains popularity. You should be able to easily upgradeyour plan with minimal additional costs and fees. Youshould also have regular access to your Web site inorder to make changes to the content. Some hostsallow only limited changes, measured either inmegabytes 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 pageto say and do.

40

Tech Terms

spam: a term used todescribed bulk e-mailadvertisements sentto thousands, evenmillions, of e-mailaddresses at the sametime, especially if thosee-mails weren’t request-ed by the individualusers. Because suche-mails can often cloginboxes, spam is de-spised as an invasionof privacy and a generalpain in the neck.

OFFER THE ESSENTIAL ELEMENTSWhile the content on your site depends largely on whatkind of business you operate, there are a few things thatevery good Web page has:

AN INTRODUCTORY PAGE. This should describe your business—what you do, whom you serve, and what youcan do for the reader.

DETAILS ABOUT YOUR GOODS AND SERVICES. Let yourcustomers know exactly what you can do for them andwhat it will cost. For a handful of goods or services, youcan devote a page to each. A broader offering will proba-bly require groupings of products by category onto a sin-gle page, or you’ll have too many pages to manage andcould use up the amount of storage you’re allowed byyour Web host. Images are important here; customerswill expect to see what they’re getting.

FREQUENTLY ASKED QUESTIONS (FAQS). If you find thatyour bricks-and-mortar customers are asking the samequestions whenever they visit or call, a FAQ on your Website can be informative for them and save time for you.

CONTACT INFORMATION AND LOCATION. Be sure to includeyour address, phone numbers, and e-mail address; youwant to ensure that customers can reach you howeverthey prefer. Rather than adding you to their Rolodex,they may just bookmark your Web page to save your

41


Doteasy.com is only one of a number of Web hosts thatalso handle URL registration. A recent survey byCNET.com profiled four other all-in-one hosts:

1. www. Catalog.com2. www. DirectNIC.com3. www.NameZero.com4. www.Stargate.com

RESOURCES: All-In-One Web Hosts


contact information on their Internet browser.How do you want your customers to interact with

you? If you’re comfortable with managing multiple e-mail addresses, you can create a number of different ad-dresses, so that, for instance, sales questions will go [email protected], and customer service ques-tions will go to [email protected]. It’s a prettygood way of organizing your correspondence—as long asyou remember to check each address frequently.

If you want, you can include an e-mail form on yourWeb site instead of simply choosing an e-mail addresslink. The form offers fill-in blanks for the user’s ques-tions, and often asks for the user’s name, e-mail address,and other information. Such a form is very easy fornovice Web surfers to use, but as Bob LeGrow’s exam-ple shows, some people don’t like the regimentation orsome of the privacy-reducing requirements of e-mailforms. In the end, it’s up to you. A good compromisewould be to include the form, but make all the blanksoptional except for a return e-mail address.

OFFER SMART DESIGNAnother element to keep in mind as you build yourWeb site is consistency of design. If you are alreadyusing a logo, business cards, and signs in your business,your Web presence should reflect or at least comple-ment 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 thosesame elements. If you don’t have a consistent brandscheme, creating a Web site will provide a good oppor-tunity to seriously consider how you want your busi-ness to look, both online and off.

Once you have your branding scheme in mind, it’stime to sit down and design your Web site. Do not dothis on the computer! Professional Web designers do notsimply sit down and start coding HTML right off the bat,and neither should you. Get a pencil and paper andblock out your pages. Write your introduction. Thengather your photographs, pricing data, marketing info,and everything else into a pile, and then put the pieces

42

Tech Terms

HTML: stands for HyperText Markup Language;this is the programminglanguage used to createWeb pages. As far asprogramming languagesgo, HTML is one of theeasiest to learn.

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 whostop to view your Web site. The natural inclination is topost everything, but that’s not necessarily the best thingfor you to do. The more information you post, the moreyou’ll likely have to update your Web site; updating willcost additional time or money, depending on whetheryou or someone else does it. It pays to keep things sim-ple. In addition, numerous studies have found that thetypical Web surfer has a pretty short attention span. It’sbest to keep things concise or your visitor may move onbefore thoroughly investigating your product or service.On a plumber’s Web site, a full-page essay on a drainsnake will probably be nothing more than a waste ofbandwidth for all involved.

In addition, you’ll want to keep your pages relatively“light”—that is, in Web-speak, you don’t want them clut-tered with all kinds of pictures and graphics. Thosepages take a long time to download on dial-up Internetconnections, which many people still use. Also, somefeatures may not be supported (that is, viewable) de-pending on what Internet browser a visitor is using.

Of course, there’s no one answer for how best to de-sign a Web site. I suggest that you surf a great deal to fa-miliarize yourself with what the Web can and cannot do.A look at small businesses similar to yours, as well asthose in your local area, would also be helpful as youprepare to create your own Web presence.

Some Good ExamplesLet’s take a look at some small-business Web sites togive you an idea of how a basic, informative Web site isstructured. All the companies mentioned, which havefound the Web to be a good tool for advancing theirbusiness, happen to be based in the Buffalo, N.Y., area.

CAR DEALERSHIPMullane Motors, www.mullane.com: This Web site is fora dealership group that sells Chrysler, Plymouth, Dodge,

43



Jeep, and Chevrolet vehicles. Each new model of cargets a page describing its general features, while numer-ous used cars appear with pictures, stock numbers, gen-eral data, and prices. Note that the dealership doesn’tpost prices for the new cars—probably a smart movethat preserves its room for incentives or haggling. Theparts page includes a quick parts-request form—an on-line e-mail form sent to the parts department—as wellas contact information, while the service page contains aphone number, department hours, payment methods,and details about the auto services provided. A financingpage describes the various local and national banks thatthe dealership works with, along with an Internet CreditForm (another specialized, secure e-mail that is then fedinto Mullane’s credit computers on-site for preapproval)and contact information. Finally, the “about” page givesaddresses, hours, and maps for the group’s two dealer-ships in western New York, along with phone numbersand e-mail addresses.

The site is very informative. I know exactly whatkinds of new cars Mullane can sell me, as well as theexact specifications of the used cars on its lot. Yet allthese pages are fairly run-of-the-mill, with no extra-spe-cial bells and whistles. Navigation is easy, and the com-pany’s Five Star Award for Excellence graphic istastefully yet prominently displayed on every page—a nice touch.

FUNERAL HOMEBrian K. Lewis Funeral Home, www.blewisfuneral-home.com: The URL is a bit long and the Web designbasic, but the Web site for this funeral home is informa-tive and helpful. The main page features the addressand contact information for the business, as well as ane-mail address for owner Brian Lewis. The next pageprovides a list of services available, including funeralservices, consultations, financing, and other arrange-ments. The third page describes how the business helpscustomers on a personal level, which is an important ad-dition, given the nature of the business. The fourthpage is a link to Mapquest, an online map service, so

44

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 youwere looking for such services in advance of need andusing the Internet to gather information, this Web sitewould probably pop up in a search engine, thus puttingthe funeral home’s name out there in an appropriate andsubtle way.

PET STOREMarkheim Tropical Fish & Pet Store, www.wnybiz.com/markheim: You’ll note that this company decid-ed not to get its own URL, but is instead part of theWestern New York Internet Business Directory. Ob-viously, the pet store saved some money, yet it still hasa decent URL and is part of a larger directory. Thesite itself is basically a one-pager, with location andhours at the top, a bit of company history, then a de-scription of its specialties in birds, ferrets, tropicalfish, and…ugh…snakes and other reptiles. Near thetop, you also get links to a discount coupon for $5 offof any purchase of $30 or more, a map, a photogallery of the various denizens of the shop, and a listof links to various animal care sites on the Internet. Atthe bottom are a number of links to unusual andamusing photos of animals.

This simple site is slightly tongue-in-cheek—andslightly out of date—but very illustrative of whatMarkheim’s sells. The coupon is a nice touch, as it dri-ves traffic from the Web site to the front door. The linksare also good in case the kids want a pet snake, becauseyou can surf over to see just how to take care of thedamn thing.

ACCOUNTANTArcara & Borczynski LLP Certified Public Accountants,www.abllpcpa.com: A great Web site, although the URLis confusing until you put the company name next to itand spell it out. It doesn’t exactly lodge itself in one’smemory and lends itself to typos. However, the site itselfcontains much information about the services this Buffa-

45



lo accounting firm provides, from audits and reviews totax work and even new business start-up consulting. Italso provides links to tax forms, charitable organizations,tax and accountancy organizations, and even some localBuffalo links, such as the newspaper and the BuffaloSabres hockey team. There’s also a page for user com-ments, a Frequently Asked Questions page, and a newspage that links to a password-protected bimonthlynewsletter for the firm’s clients.

This Web site is extremely thorough and informa-tive, done with the Spartan precision one comes to ex-pect from accountants. Seriously, though, it gave me anexcellent idea of what this firm provides.

Hiring a Web DesignerBuilding your own Web site is not for everyone. The eas-iest way to create your presence on the Web is to simplyhire someone to build your Web site for you. Onceyou’ve drafted your ideas on paper, it’s a simple matterto hit the Yellow Pages and find a qualified Web design-er or firm to do the work for you. If you see a site youadmire on the Internet, don’t hesitate to contact the de-sign firm that created it; the Web site will probably cred-it the design firm.

Web designers will work with you on the fine pointsof your design, come up with alternatives, show you pre-liminary designs, and generally become the interior dec-

46

Most commercial Web siteshave privacy policies. These began tospring up in 1998, as Web surfers start-ed to receive more spam and to questionhow their personal information wasbeing used.

Privacy policies can be as simple asa single statement or a full Web page ofcaveats. My advice is to keep yours very

simple. A good privacy policy promisesnot to sell any information gathered onthe Web to a third party, promises tosend e-mail only when requested, andpromises to delete any information onrequest of the customer.

Check out your favorite Web sites tosee what their policies are like, and thencraft one that suits your business.

PRIVACY: What Will Your Policy Be?

orator of your site. Many Web design firms will evenwork with you on registering your Web address and find-ing a host for your site.

Because learning HTML is fairly easy, there areplenty of Web designers out there—some good, othersnot. A background in graphic design, marketing, or ad-vertising can help, but plenty of Web designers who lackthese qualifications are still excellent at what they do.The best way to judge designers is to look at the sitesthey’ve already done. Any designer should be ready toshow you a number of examples of his or her work onthe spot. If you see a site that’s close to what you envi-sion, that designer may be the one for you. You shouldalso ask any and all designers you work with for cus-tomer references. If they’re any good, they’ll have anumber of customers willing to brag about them.

Some designers will help you with writing and edit-ing the content of your Web site, while others will ex-pect you to provide fully edited, ready-to-go copy. Workout this arrangement beforehand, and make sure that ifyou want help with your words, you can get it. Also,larger firms and some individuals are willing to help youcome up with logos, business cards, and other market-ing tools for your business. Accepting such a servicemay be very convenient, but be wary about Web de-signers who offer this service without a background inmarketing and advertising, and make sure you see anumber of proposals, plans, and cost packages beforeyou sign off on anything.

Before you make a deal with an outside Web de-signer, 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 morethan taking out a complex advertisement and provid-ing some e-mail addresses for potential customers toreach you. Unless your business requires it, you don’tneed a special link to Weather.com to display the tem-perature in your particular city, nor do you need astock ticker. Stick to your basic plan and don’t clutterup your site with useless stuff.

■ Be sure to agree on a final price tag for the project. If

47



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

■ Be sure that the designer provides you with tools andthe know-how necessary to make changes to your Website without having to contract with the designeragain. By the same token, you should be able to callyour hired Web designer at any time if there’s a prob-lem with the site.

Do You Need a Webmaster?The Web designer can, if you so desire, also act as thewebmaster, handling any customer complaints about thesite’s design and updating the site as appropriate. Thisservice, however, will require an additional contract thatcan, depending on the amount of updating you want todo, cost up to $100 a month. Thus, if you hire a Web de-sign firm, it’s better to take over the webmaster dutiesyourself once the designers’ work is finished. Your Webdesign firm should be perfectly willing to show you thebasics of updating the content of your site.

Webmasters are also responsible for keeping the siteup-to-date with regard to technical matters. The Internetand the tools used to access it are being constantly updat-ed. As Microsoft and Netscape produce new versions oftheir Web-browsing software, some Web sites may needtweaking to enable new browsers to view them properly.Older browsers and new Web programming languageslike ActiveX and JavaScript also may pose problems. Ifyou contract with your designer or someone else to act aswebmaster, that person will update these things automat-ically. If you don’t contract with anyone, chances are youwon’t notice the difference—but a small percentage ofWeb surfers may have problems that they won’t bother toe-mail you about. Instead, they may just not visit again. Ifyou keep your site relatively simple, however, you shouldeasily avoid most of these pitfalls.

48

Tech Terms

webmaster: whoevermaintains a Web site,regardless of whetherhe or she designed it.The webmaster updatesinformation on the site,fixes bugs, and respondsto technical questionsfrom Web surfers.

Do-It-Yourself on the WebPerhaps you’re confident in your own abilities—or sim-ply don’t want to hire someone to design your site. Whatfollows is a quick primer on how to design and publishyour Web site without going through a designer. Keep inmind, however, that unless you’re a practiced hand atHTML, your site simply won’t look as clean and profes-sional as one designed by a pro.

STARTING OUT WITH A FREE HOSTAs discussed earlier, portal sites such as GeoCities andAngelfire.com allow you to create your own Web pageat no charge, either on your own or using their Web-based 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 amal-gamation of your business’s identity with your host’sURL—for example, www.geocities.com/mybusiness/index.html. That address is neither clean nor easy toremember. In addition, GeoCities and other free Webpage services will litter your Web site with their ownadvertising.

So why even bother with these services? Becausefor a first-time webmaster, these sites provide some verygood, easy-to-use tools for Web-site creation. You canchoose from different fonts (styles of lettering), and vari-ous ways to create links and to display photos. If youhave only a half-dozen pages of material, you can be upand running with just a day’s work. Granted, you won’thave topnotch, professionally designed Web pages, butthey’ll be better than as if you tried to code HTML allby yourself, and the prompts and tools provided are fair-ly easy to work with.

TRANSFERRING TO YOUR UNIQUE URLOnce you have your Web site up and running at GeoCi-ties or another site, it’s a simple matter to transfer thecode to a different Web site—one with your own distinctURL. There are three steps:

49



1. While viewing your Web site, simply go to the top ofyour browser and click on the “view” menu, then on“view source.” A text window will pop up, displaying thesource code for your Web page. Don’t panic—you don’tneed to know what all this means. Just copy the entiretext and save it to a file in your favorite word-processingprogram.

2. From there, you’ll need to make a few easy modifica-tions. You’ll likely have a number of links to the variouspages within your site. In the word-processing file, thesewill look like the following:

<a href=”www.geocities.com/mybusiness/rates.html”>rates</a href>

In that example, you have a link on your page thatpoints to your “Rates” page.

Now, let’s say you purchased the URL www.mybusi-ness.com and want to transfer the code for your Website to that address. Simply switch out the GeoCities linkto your new URL, like this:

<a href=”www.mybusiness.com/rates.html”>rates</a href>

Essentially, just substitute your URL for the GeoCi-ties’ or other services’ URL in all references—otherwiseyou’ll be sending your customers back to GeoCities in-stead of to your new site. It’s a good idea, however, tokeep the subdirectories (the end of the URL after thelast slash, and before the .html)—in this case, “rates”—the same. That way, you won’t have to completely reor-ganize your HTML files.

3. From there, just save your changes in your word-processing program, and then, in the reverse of step 1,copy the revised text, return to your Web page, and re-place the old code with the new by pasting over it.

Of course, this is a fairly cursory overview of HTMLauthoring, and should only be done if you’ve at least had

50

some basic experience with personal homepages on theWorld Wide Web.

SOFTWARE FOR DO-IT-YOURSELFERSThere are a number of commercially available pro-grams for people who want to maintain complete con-trol over their Web pages, ostensibly without having tolearn HTML. Microsoft FrontPage, Macromedia’sDreamweaver, Jasc Software’s NAMO Web Editor,NetObjects Fusion MX, and Adobe GoLife 5.0 are fiveof the better-known programs for putting together yourown Web sites. FrontPage and NetObjects are the easi-est to use, while Dreamweaver definitely takes the prizefor most advanced tool—your hired Web designerprobably uses it for at least part of his or her work.

These tools aren’t cheap; prices start at about $100for NAMO Web Editor and NetObjects Fusion MX, riseto$169 for FrontPage, and go up to $299 forDreamweaver. 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 ele-ments, so that what you see in your toolkit and yourWindow is what you’ll get on your final Web page. Thesetools will work on any site, whether it’s a unique, hostedURL or a GeoCities site.

Using the other programs, however, may requiresome basic HTML knowledge. There are plenty ofdecent books on the subject, and community collegesaround the nation offer inexpensive classes on thesubject for people interested in taking a hands-onapproach.

Seeding Your Business on the WebCongratulations. You’ve purchased your URL, de-signed and built your Web site, and found a host.When you type http://www.mybusiness.com, up popsyour Web site, with all the information your potentialcustomers need to make their spending decision—we

51


Tech Terms

WYSIWYG: techieshorthand for What YouSee Is What You Get.Connotes ease of use.


hope in your favor. All they have to do is find it. You are now faced with the task of letting people know this re-source is available.

BUSINESS CORRESPONDENCE AND COLLATERAL MATERI-ALS. The obvious method is to simply include yourURL and e-mail on all your business documentation:bills, forms, letterhead, business cards, pamphlets—anywhere that you already put your phone number andaddress. That goes for advertising, too, whether it’s theYellow Pages, the Pennysaver paper, magazine ads,radio, or television. A two-by-three-inch ad in thepaper can tell a reader only so much, but if your URLis there, you’ve just increased the reader’s access to in-formation about your business by a hundredfold.

INTERNET SEARCH ENGINES AND PORTALS. The Internetitself is a great way of drawing attention to your Website. Once your site is up and running, you should im-mediately register it with as many search engines andportals as possible. That way, when consumers type“plumbing” in a search engine on Yahoo.com, yourplumbing business will pop up as one of their options.

Registering with sites is generally free, but timecon-suming. There are services online that will register yourWeb site with a broad array of directories and search en-

52

Perhaps the most popular way for Web surfers to find your site is through a search engine. Here’s a list of thetop 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

RESOURCES: Top Search Engines

gines for a fee of $20 to $50, depending on how manysites they register for you. See the accompanying box fora list of several Web sites that offer this service and tuto-rials for the do-it-yourselfer.

THE PHONE COMPANY. Don’t forget your local phone ser-vice directories. Your phone company, for example, willprobably include links to your Web site in its onlinephone directories as part of a package deal. You mayeven be able to pay your phone company for preferen-tial placement in search results for your area and busi-ness category—a search on plumbing, for example,would thus put your business at the top of the searchpile instead of in alphabetical order.

YOUR LOCAL NEWSPAPER’S WEB SITE. Many major citynewspapers have turned their Web sites into local por-tals for all kinds of information, including business di-rectories. Your newspaper’s ad representative will haveinformation on pricing for advertising or listings on thepaper’s Web site.

53


It can be very tempting toblanket the Internet with e-mails to callattention to your Web site. However,although junk mail may have been effec-tive back when e-mail was still a novelty,it’s generally perceived today by recipientsas a nuisance or worse.

Sending bulk e-mail, also known asspamming, is very easy and inexpensiveto do—you can have a million e-mailssent out for less than $100. A place thatwill, for $150, send and manage bulke-mail—and give you 33 million e-mailaddresses on top of that—can be foundat www.marketing-2000.net. A search onbulk e-mail software on Google.com will

turn up scores of similar products—noneof which are made by large, well-knownsoftware companies.

However, bulk e-mail is extremelyintrusive and not easily targeted. Out ofthose million e-mails, you might be luckyto get 500 nibbles. And you’d probablyanger many more people than that.

Instead, you can have visitors toyour Web site voluntarily sign up fore-mail newsletters about your business.That way, you create and mail to a baseof customers who are already interestedin your business and will be receptive toyour e-mails, especially if you keep theminformative.

E-MAIL: Its Benefits and Pitfalls


ONLINE CITY GUIDES. In addition, sites like Sidewalk.comand AOL’s Digitalcity.com are popular with people whoare looking for services in your city. These sites revieweverything from restaurants and nightspots to, in somecases, auto repair shops and computer outlets. Theytend to attract both local users and potential visitors, andare a great way to target your advertising dollar.

Keep Your Web Site FreshNow that you’re up and running and everybody knowsyou’re out there, you need to be sure that you keepyour Web site as relevant as possible. Any changes inyour business need to be reflected online as well—whether you’re introducing a new product or service,running a special, or changing addresses. Frequent andperiodic updates will keep customers coming back tothe site to see what else you’re doing or offering, andwill ultimately drive more business to your doorstep—online and off. On the other hand, an obviously stag-nant Web site—one featuring a special event thathappened two months ago, for example—will causepeople 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 vastlyuseful tool to gain customers.

Cost BreakdownsBASIC DO-IT-YOURSELF PACKAGEThe following figures represent the cheapest possibleway to get your Web site up and running. It’s also themost time-consuming, but ultimately worthwhile if yourbottom line is a concern.

Web registration fee (at DotEasy.com; one .com URL) $25/year

54

Web hosting (at DotEasy.com; with 5 gigabytes oftraffic and unlimited e-mail) free

Web site creation (at GeoCities.com) freeWebmastering (done yourself) freeWeb seeding (done yourself with search

engines, newspaper and local directory sites) freeTotal Initial Cost $25Annual Fee $25

PROFESSIONALLY DESIGNED, HOSTED SITEIf you don’t trust your Web design skills—and it’s quiteall right if you don’t!—the figures below show what youcan expect to spend to get your site up and keep it run-ning. This assumes, however, that you are comfortablemaking your own changes to the site and can seed it onyour own as well.

Web registration fee (your URL with .com, .net and .org extensions at Register.com) $90/year

Web hosting fee (with 10 GB of traffic and up to 10 e-mail addresses; through your ISP) $30/month

Web creation fee (through design firm) $500Webmastering fee (done yourself) freeWeb seeding fee freeTotal Initial Cost $620Monthly Hosting Fee $30Annual Registration Fee $90

PROFESSIONALLY DESIGNED, HOSTED,AND WEBMASTERED SITEThis is the hands-off approach to your Web site. Onceyou have a basic idea, the designers, webmasters, hosts,and seeders take over for as long as you are willing topay them. Even at this level, however, your Web site re-mains a very cost-effective tool for attracting customers.

Web registration fee (at Network Solutions; includes .com, .org, .net, .biz and .us) $175/year

Web design fee $600

55



Web hosting fee (includes 20 GB of traffic and unlimited e-mail) $50/month

Webmastering fee (through design firm) $40/monthWeb seeding fee $100Total Initial Cost $965Monthly Hosting and Webmastering Fees $90Annual Registration Fee $175

56

The NetworkedWorkplace

57

CHAPTER

3

owadays, the billboard hanging over the inter-section of 24th St. and Broadway in Manhat-tan is rather anachronistic, and even duringits best days it was somewhat braggadocio. Itreads “You Are Now Entering Silicon Alley.”

Silicon Alley was once a burgeoning dot-com locale,centered in the Chelsea and Flatiron neighborhoods inlower Manhattan. It was populated by dozens of dot-com sites, mostly copycat Web portals trying to beat outAmerica Online, Yahoo!, and Excite, as well as artsy“content” sites that attempted to make money sellingsubscriptions and those banner ads—that show up onmost commercial Web pages. But by the summer of2001, the Alley was a ghost town, with plenty of cheapoffice space and very little hope for what was supposedto be New York City’s new technology hub.

The Silicon Alley sign is just out of sight fromMichael Kaminer’s window, which is just as well be-cause, as he puts it, “it’s a little depressing when youstare at it too long.” Nevertheless, Kaminer and his busi-ness, Michael Kaminer Public Relations, are an Alleysurvival story, a dot-com hanger-on turned into a thriv-ing business.

Kaminer started MKPR in 1992 after realizing hewas better at writing freelance press releases than maga-zine articles. He now has seven employees and worksout of a modern office on the eighth floor of a Broadwayoffice building.

Seated at a metal conference table in a glass-enclosed meeting room at his offices, Kaminer is thepicture of a successful small-businessman. He’s dressedin the uniform of New York business casual, a look that’s

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

N


popular among people who work in media, public rela-tions, and the once-mighty dot-coms. The office dogwanders in and, after sniffing the newcomer, settlesdown on the floor by the entrepreneur.

“For a long while,” Kaminer says, “PR was some-thing that I was just going to do until my other writingcaught on. But I began to realize that if I picked mydeals and my clients carefully, PR wouldn’t be so bad.”

Kaminer launched MKPR from his apartment, usinghis home computer and a fax machine. For the first twoyears, most of his clients were gay and lesbian organiza-tions—nonprofits that he now serves as a board memberor volunteer. By 1994, however, he had branched out toserve small magazines and media outlets, which NewYork has in abundance. He also brought on another per-son to help with the backlog of work. At first they sharedthe computer, but by the time Kaminer moved into hisfirst office and hired a third person, the advent of e-mailmade him decide to purchase two more computers.

“We were one of the first PR firms out there to usee-mail, and more important, we were the first to givethe people on our press list the option of receiving ourpress releases solely by e-mail,” Kaminer says. “We’vegot thousands of e-mail addresses on our list today, andthey all opted in—we’re not spamming anyone. We takea lot of pride in that.” At first, Kaminer managed thedatabase of e-mails on his press list. Today, a part-timecontractor does it.

Kaminer originally signed on with America Onlinefor its office e-mail and Internet service, but as use ofthe World Wide Web grew in the mid 1990s, Kaminersays, it was no longer “cool” to use AOL for business.So, in 1997 Kaminer purchased the “mkpr.com” do-main. By this time, Silicon Alley was beginning to blos-som with companies that would later go public withbillion-dollar initial offerings (and file for bankruptcytwo years later). MKPR was already in demand for itsunderstanding of dot-com public relations, and Kamin-er was in the enviable position of turning away work.MKPR’s Web site then was only a single page with con-tact information. “I liked the minimalist approach,”

58

Kaminer says. “At the time, we really didn’t have anyneed to drum up business online. We spoke throughour clients, and that was that.”

Soon, MKPR had moved on to yet another officeand had grown to a staff of five, all working on comput-ers that Kaminer bought direct from Gateway or Dell,depending on which had the better deal. And they wereall connected to the Internet—through dial-up modemson a bunch of dedicated phone lines. That arrangementbecame untenable as more clients—and journalists—went online themselves. “We needed to do research, andsome of our computers still had 28.8 (kilobits per sec-ond) modems, very old stuff,” Kaminer says. “So I triedto fix that and ended up making the biggest businessmistake of my life.”

Kaminer’s mistake came about when he decided hewanted to get a T1 line installed in his office. “I didn’tknow where to start,” he says. “I should’ve stuck with thecompany that had handled my phones and my otherlines. Instead, I went with the first salesman whoshowed up at the door.”

The experience became a nightmare. The salesmansaid he represented an up-and-coming telecommunica-tions firm in New York, but the firm turned out to bethree guys working out of an apartment. Nevertheless,the salesman promised to get MKPR up on the Internetin a matter of days—which turned into a week. Andthings got worse once the service was installed. The techsupport “hotline” was located in the salesman’s apart-ment, and it certainly wasn’t manned on a 24-hour basis.“We would have these outages all the time, and wecould never get anybody on the phone,” Kaminer says.“It was an expensive lesson.”

MKPR eventually switched its service to DTI, amuch larger, more stable Internet service provider. “Ifthere’s a problem, they’ll call us first to let us know be-fore we even notice anything. I could have spent less,but the reliability of both the service and the companywere really important,” Kaminer says.

At its highest point in 1999, MKPR employed 11people. Today, with the loss of dot-com clients, MKPR is

59

CHAPTER 3 The Networked Workplace

Tech Terms

T1 line: a dedicatedtelecommunicationsconnection that sup-ports data transfer ratesof 1.54 megabits persecond. A typical T1line consists of 24separate and individualchannels, each of whichcan carry voice or datatraffic. A user whopurchases only someof these channelscan have fractional orshared T1 service.


down to eight employees, counting Kaminer, each with acomputer networked to the other computers in the of-fice and the T1 line. Although the dot-com-ers are gone,MKPR has adapted by going back to more traditionalmedia, recently signing deals with the Bloomberg familyof companies and soundportraits.org, the Web home ofthe popular NPR radio documentaries.

In March the company’s utilitarian Web site was re-placed with a marketing package that features informa-tion about the company’s clients, latest press releases,contact information, and testimonials. “I never used tohave to hustle for clients until things went to hell,” hesays. “Only this year did it become clear that we’d needthe site to actually help us.”

In nearly a decade of entrepreneurship, Kaminersays he’s learned a few important things about technolo-gy. “One, don’t be penny-wise and pound-foolish. It’s acliché, but if you get the best you can up front, you’llsave later,” he says.

“Two, don’t over-buy, either. Sure, it might be niceto have Quark on these machines, but we don’t need itor use it. So many of these dot-coms went under be-cause back in their heyday, they spent their money so ex-travagantly on technology—and on Aeron chairs, too.

“And three, never make decisions in a vacuum,”Kaminer says with a rueful smile. “Find good consul-tants, do your homework, and don’t settle for the firstguy who comes along.”

Welcome to theNetworked BusinessAs your business grows, you will find, as Kaminer did,that a single computer just won’t suffice anymore. Ifyou’re a white-collar entrepreneur for whom the com-puter is the primary tool of business, you’ll reach thatpoint as soon as you hire a second person. Nobody likessharing a computer, and sharing is inefficient. There arebound to be usage conflicts. If you’re engaged in a ser-vice or retail business, you’ll probably have a bit more

60

time before buying more equipment, but as soon as youhire a bookkeeper, an administrative assistant, or anyother kind of manager, you’re going to need anothercomputer, software, Internet access—the works.

This chapter deals with the task of expanding from asingle-computer business to a networked business. Un-fortunately, it’s not as easy as simply buying more com-puters and plugging them in. You’re going to need toconnect them all; give them access to printers, other pe-ripheral equipment within your office, and the Internet;and give them all the software that users need to dotheir jobs. It’s a pretty big undertaking, but still fairlymanageable if you do your homework and plan carefully.

Nearly any kind of business can benefit from net-worked computerization. Although the most obvious ap-plication is for a professional style of office, you don’thave to be a lawyer, an architect, or a banker to makeyour business more efficient and responsive. More andmore restaurants, for example, have computerized or-dering and payment systems—dedicated computers,also called thin clients, that can be networked togetherto enhance communication and gather important dataabout how the business works (see Chapter 4).

Starting with this chapter, you’ll probably en-counter some technology that you haven’t thoughtabout before, or perhaps haven’t even heard of. Theidea here is not to make you a network administrator(see page 82), but rather to make you an informed tech-nology consumer.

What’s a Network?Whenever two or more computers are linked togetherand can share data, they form a network. The Internet issimply a massive computer network. Your business willhave an internal network as well as a connection to thelarger Internet network. The internal network is whatwe’ll consider here.

Why network your computers together? First, ittakes far less time to send e-mails or files between your

61


Tech Terms

thin clients: a comput-er workstation that canhandle only a handful oftasks and is connectedto a server where thebulk of the data process-ing is done. Computer-ized cash registers andinventory barcode scan-ners are good examplesof thin clients (dis-cussed in Chapter 4).Most thin clients don’teven have hard drivesfor resident memory.


employees than to swap floppy disks or to use your In-ternet connection. Second, you’ll be able to share print-ers and other peripherals within the office—an easilyaccommodated cost-saving choice that usually doesn’timpair efficiency. (These two functions are known asprint-and-file sharing.) And you’ll be able to share the In-ternet connection to your office, which is far more effi-cient than providing everyone with an individual dial-upline or digital-subscriber line (DSL).

Novice networkers may hold a number of miscon-ceptions about office networks that need to be dispelledright away:

YOU NEED A SERVER FOR YOUR NETWORK. MichaelKaminer’s example shows that statement to be false. Aserver is really necessary only for relatively large organi-zations, or ones that handle e-mail and Web services in-house instead of outsourcing the task.

62

print-and-file sharing: abasic network setup in which multiplecomputers can easily swap files by access-ing each other’s hard drives, and canshare a printer or other peripheral.

server: a computer, attached to a network,which manages network resources. A typi-cal office server not only manages the datathat moves between individual computersand the Internet, but also manages print-ers and files stored on the server and onits client computers.

network protocols: an agreed-upon format for transmitting data betweentwo devices. The protocols allow for errorchecking as well as acknowledgment be-tween computers that data was success-

fully sent and received. These functionstake place in fractions of a second.

peer-to-peer networking: a computernetwork in which individual computerworkstations are linked together withouta central coordinating computer. Eachcomputer can be linked directly to thenetwork’s Internet connection, or a singlecomputer that is linked to both the net-work and the Internet can funnel Internetdata through to all the others.

client-server: a computer network inwhich individual workstations are linkedtogether, with a server at the center of thenetwork. The server coordinates all activityamong those computers, and between thenetwork and the Internet.

Tech Terms

63


WINDOWS MACHINES CAN’T BE NETWORKED TO MACS ORANY OTHER KIND OF COMPUTER. Network protocols areused to link computers to each other and to servers. Akind of universal language, these protocols are used byjust about every kind of networking hardware and soft-ware out there, giving Macs, Windows computers, andother devices a way to work together. Although youmay need some extra software to assist in the overalltranslation, you can link any kind of machine to yourbusiness network.

BUSINESS NETWORKS ARE EXPENSIVE. They don’t have tobe. You can network a dozen or more computers togeth-er with very little additional cost. However, getting themall connected to the Internet is another, more expensivematter (it’s discussed later in this chapter, beginning onpage 76). But if you don’t use the Internet a lot in yourbusiness, you can dramatically reduce your costs by notproviding or limiting Internet access. At the same time,it’s unwise to keep such an immense resource from youremployees if they’ll use it well.

Two kinds of networks are discussed here.

A SMALL NETWORK: PEER-TO-PEERThe most common type of network in small businesses,ones with, say, ten or fewer computers, is called peer-to-peer. Basically, the computers are linked togetherwith no intermediaries, using the networking softwarealready provided within the Windows or Mac operatingsystems to link together the computers, your officeprinter, and your Internet connection. Setting up a net-work among three or four computers that share aprinter and a Net connection can probably be accom-plished with a trip to Circuit City for networking cablesand a day of work—if you’re fairly comfortable withcomputing in general. If you aren’t, get some help, ei-ther from a knowledgeable employee or friend, or froma consultant (see page 78). Networks that involve morethan ten computers will probably require professionalassistance.


FOR LARGER NETWORKS: CLIENT-SERVERIn the client-server network (see definition on page 62),each person has one computer, called a client, but thenetwork uses another computer to manage interactionsamong clients. Introducing a server into your networkadds a lot of complexity as well as benefit.

Chances are, if you’re in an office with no more thanten other people, you won’t have to worry about having aserver in-house. You’re probably not generating enoughdata to warrant storing it on a server, and you can haveyour Internet-service provider (ISP) handle things likee-mail and your Web site. However, as organizationsgrow, in-house servers become a necessity. For example,at somewhere between eight and 20 workstations, de-pending on the company, you’ll want to begin handlinge-mail internally, so that interoffice e-mail is both fasterand more secure. At that point also it will begin to makesense to store group projects on the server, where every-one involved can access the pertinent data, instead ofhaving it channeled through a handful of people. Theseadvantages are offset, of course, by the cost.

You may also find a client-server network a necessi-ty if you decide to handle Web hosting in-house, ratherthan outsourcing it through your Internet serviceprovider or other service. Such an arrangement wouldgive you direct control over your Web presence and,down the road, will save money on hosting, especially asyour Web site grows.

Which of these two network types is right for you?Read on. By the end of this chapter, you should have apretty good idea.

A Computer forEvery DeskBefore you can create a network for your thriving busi-ness, however, you must purchase the machines you’llbe connecting. Here are some things to consider beforeyou rush out to Best Buy and slap a dozen Compaqs onyour credit card.

64

WHERE TO BUY?Like any good businessperson, you should comparisonshop. However, odds are you won’t be heading to themall to pick up your computers. Because computermakers offer a number of incentives and discounts tomake buying computers in bulk attractive, businessestend to buy directly from the manufacturer. It’s a goodidea at this stage to find a computer maker with whichyou’re comfortable. For example, if you’ve used Dellmachines and really like them, stick with Dell for yourfuture purchases. If, however, you’re unhappy withDell’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 forbusinesses right on their Web sites. (Chapter 4 discusseshardware for specialized businesses—such as retailshops or restaurants—which tends to be sold in specifi-cally focused hardware-software packages.)

IMPROVE EFFICIENCY THROUGH UNIFORMITYWhen you’re purchasing computers, it’s a good idea tomake them as similar as possible, because they’ll be fareasier to maintain and fix. If you buy a 2-GHz Pentium 4for yourself, a slower Pentium III for your assistant, anda clunker for your accountant, it’ll cost more to fix themindividually than if you have a contract for the same

65


The majority of top computer manufacturers and software makers offerspecial deals and packages for small businesses. If you’re just starting out, you maybe too small to take advantage of these deals, but the sites below can still be valuableresources.

■ 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

RESOURCES: Small-Business Offerings


model throughout your business. In essence, if eachcomputer has different parts and different software, ittakes more time to repair and upgrade each machine.

To figure out what features and hardware you’llneed for your computers, use the guidelines presentedin Chapter 1, making sure that each computer you buyhas the power necessary to run the most complex soft-ware program used in your business. Even if only oneemployee is doing serious number crunching, it’s best tomaintain a high level of performance throughout thecompany’s computers so that you can lengthen the timeneeded between upgrades. As is true throughout yourbusiness, get the best equipment you can afford. Don’tskimp on RAM to save $50, for example, when morememory could give your computer an additional three tosix months of effective life.

PREPARE NOW TO UPGRADE LATERYou should also plan to regularly upgrade your system,because your budget can more easily accommodate buy-ing some equipment every year, rather than facingcrunch-time every few years. Also, such a plan meansthat you’ll always have top-notch computers in your of-fice for running the latest software.

REPLACEMENT WORK STATIONS. The average lifespan of acomputer is down to about three years, although somebusinesses can stretch that to five or six years, dependingon what the computers are used for. After three years,you’ll find that most of the new software programs won’trun on your old computers; software makers love to takeadvantage of hardware advances to make their programseasier to use and pack them with features. If you’reusing specialized software, such as graphics modelingprograms or complex databases, you’ll find that youneed new machines sooner than if you were just usingMicrosoft Word and an e-mail program.

To minimize the financial impact, most businessesstagger such purchases. For example, let’s say you have anetwork of 20 computers, and because you don’t use alot of complex software, you can get four years of use out

66

of them. Starting in year three, you should buy sevennew computers; in year four, buy another seven; and inyear five, buy the last six.

Your key employees—the people who have jobs thatdirectly rely on computers and who produce the bulk ofthe business’s work—should be first to get the new ma-chines. Those who play supporting roles can be upgrad-ed in the second and third years.

SERVER UPGRADES. If you’re using a server in your net-work, you need to fit server upgrades into your plan, inorder to keep your network and the computers connectedto it running as efficiently as possible. Without upgradingthe server, you’ll probably notice a steady and appreciabledecline in your server’s performance, especially if you’veadded much data or a number of new workstations in theintervening years. One business owner I talked to hadfailed to upgrade his server since 1998, and it took net-work users almost a full minute to download spreadsheetdata from the server. Each year, you can add componentsto your server to make it more powerful, so that your net-work can keep up with more users and more data. For ex-ample, one year you add extra RAM so that the machinecan better handle the multiple hits from individual net-work computers. The year after, you can add another harddrive to better manage everyone’s files. And in year three,you’re probably ready to upgrade the microprocessor—or just get a new server.

SOFTWARE UPGRADES AND LICENSE RENEWAL. You willalso need to budget for software upgrades and licenserenewals. For workstations, you generally purchase thesoftware you need, install it, and you’re good to go untilthe software maker issues the new, improved version.However, companies that make server software handlethe purchasing process in different ways. In addition tothe up-front purchase price, you pay a yearly licensefee to the software manufacturer. And in exchange, itprovides a steady supply of upgrades, security patches,and bug fixes.

For example, Windows NT—Microsoft’s operating

67



system for servers and networked workstations—firstcame out in 1993. Soon after it was released, Microsoftissued a number of service packs containing securitypatches and other tweaks. A year later, NT 2.0 cameout. By paying your license fee, you could receive thesepacks, and, if you paid enough each year, the 2.0, 3.0,and 4.0 upgrades. However, major releases may not al-ways be covered under your license agreement. For ex-ample, a business that was running NT 4.0 on its servercould get service packs but would have to buy a new li-cense to run Microsoft’s Windows 2000 Server soft-ware, which the company positioned as a completelynew product.

If you do have a server, you probably have a consul-tant or IT manager (see also discussion beginning on page78) who will make the appropriate recommendations forboth hardware and software. Most servers have a lifespanof three or four years, after which time the upgraded soft-ware becomes too complex for the hardware to handle.

Choosing ServerHardware and SoftwareYou now need to decide what kind of software andhardware you want running your network. If you’reusing a peer-to-peer network, this decision is prettyeasy: You set it up on your own computer and let it go.E-mail and Web hosting can be taken care of via yourISP. As far as computer networks go, the setting up isfairly easy but, again, if you’re not comfortable doing ityourself, pay someone to do it for you. It’s also a goodidea to pay for additional tech support, through a ser-vice contract with your computers’ manufacturer or aconsultant.

If you need a client-server network, you or yourconsultant will need to choose server hardware and aserver operating system. Because some server hard-ware manufacturers design their products for use withonly one or two operating systems, your choice of serv-er operating system basically determines what kind of

68

Tech Terms

IT: acronym, stands forinformation technology.This is a catchall termfor computers, servers,networks, printers, and,in some cases, phonesand copiers.

IT manager: the personin your organizationresponsible for all infor-mation technology deci-sions. In many smallbusinesses, that personwill be you, ably assist-ed by consultants anda great deal of home-work. As your businessgets larger, you maywish to hire a full-timeIT manager who canserve as the point ofcontact for all your tech-nology needs, makeintelligent IT decisions,and serve as your network and server administrator.

hardware you’ll end up with. These operating systemsmainly handle permissions—literally, who’s allowed toaccess which data—and network management and print-and-file sharing. You’ll be able to store files on the serv-er and allow anyone in your office access tothem—provided they have the appropriate permis-sions, of course.

Because you are a business client and not a homeuser, your hardware vendor or consultant may have toinclude seat licenses with your server software package.The manufacturer will enable your server software forthe number of client computers in your network. Insome cases, server-related software must be installed ineach client computer. Hence, you’ll be paying extra on amonthly or yearly basis to increase the number of yourclients or upgrade them along with your server software.This arrangement sounds onerous, but it’s standard in-dustry practice, and you’re guaranteed software patchesand upgrades as soon as they are available.

Your consultant will have his or her preference ofoperating system, but you should have a good idea aboutthe benefits of each.

SERVER OPERATING SYSTEMSHere are the pros and cons of some of the major playersin server operating systems.

WINDOWS 2000 SERVER. This is Microsoft’s basic serverproduct, and naturally, it works really well with theWindows 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 shar-ing situations as well as handling basic e-mail and Webhosting. The vast majority of specialized software pro-grams are written for Windows, making it a rising starin server operating systems, as businesses go for an all-Windows computing network. Windows 2000 Serversells for $850 to $900 if bought separately from a serv-er, and it comes with five free seat licenses. The soft-ware with ten seat licenses costs about $1,050, and thatwith 25 seat licenses, about $1,500.

69


Tech Terms

network management:organizing the network,managing the numberof people who haveaccess to it, providingsecurity and ensuringsmooth operation.

seat licenses: the waysoftware companiescharge for server soft-ware, in line withthe number of work-stations, or “seats,”that the server will beconnected to. In addi-tion to licensing theserver, you must buya number of seatlicenses equal to thenumber of workstationsconnected to it.


SUN SOLARIS. This brand of UNIX server operating sys-tem is made by Sun Microsystems, and it’s one of thebest available. It scales very well—meaning that it can easily handle new software programs and more workstations—and it is the operating system of choicefor large Web operations. Sun prices Solaris softwareaccordingly—it’s expensive. Still, Sun continues to havethe highest market share of any server operating sys-tem on the market in the U.S., especially since creatinga version of the Solaris operating system that will workon servers that use the popular microprocessors madeby Intel Corp. Previously, Solaris worked only on Sun’sown hardware. With the introduction of Sun Solaris 8,the company decided to follow the lead of Linux, whichdoesn’t charge for the actual software code itself. Suncharges $75 for the server software, to cover expenses,but telephone tech support from Sun costs $450 annu-ally for the server and $200 for each workstation. Sounless you have a Solaris expert on staff, you’ll still endup paying.

NOVELL NETWARE 5.1. Novell’s server operating systemwas recently revamped and is now greatly improved.The new operating system comes with a small directoryserver for handling e-mail and a number of Web servertools as well. This good, solid operating system for

70

UNIX: an operating systemdeveloped by Bell Labs in the 1970s.This operating system can be installed onmany different kinds of computers, andits reliability and low incidence of crashingmake it popular on the more expensive andpowerful servers that handle e-commerceand larger networks.

Linux: a variant of UNIX first developedby programmer Linus Torvalds in 1991.

This operating system, which can runboth servers and workstations, was laterreleased free of charge via the Internet,and has been altered and improvedupon by thousands of programmersfrom around the world who share theirimprovements freely. Torvalds still hasfinal say about what goes into Linux,thus keeping some control over Linux’scourse of development.

Tech Terms

small networks costs around $750 to $800, and comeswith five seat licenses. Ten licenses cost around $1,150,and 25 licenses about $2,300. The prices include theoriginal server software as well, so you aren’t makingtwo purchases.

OTHER “FLAVORS” OF UNIX. IBM, Hewlett-Packard, andother companies offer their own versions of the UNIXserver operating system. These systems are fairly easy tomanage and seldom crash. Priced between Solaris andWindows, they are generally available only preloaded inthe server hardware purchased from these companies.Depending on the “flavor” you go with, the original serv-er software will cost $750 to $1,000, and $2,000 to$3,000 for server software with 25 seat licenses.

LINUX. This homegrown operating system is a variant ofUNIX, but Linux is much more efficient. It also takesup less memory and requires less power than Windows,both on the server and on clients. It’s also the cheapestoperating system available, because you can downloadthe entire operating system from the Web free ofcharge. Most Linux vendors charge merely for provid-ing tech support and handling the maintenance and up-grading chores, so using it could save you a lot ofmoney. It makes a fine Web server as well. However,Linux is said not to scale well when serving thousandsof clients—probably not a problem for your small busi-ness, at least not yet. And, because fewer programs arewritten for Linux, it may be difficult to find specializedsoftware for it.

Linux server software packages range from $400 to$800, depending on the software included for makingnetwork management easier, and on the tech supportand warranty plan. And because of the open-source li-censing method, you don’t need to worry about seat li-censes. However, if you opt to go with your softwarevendor for tech support, your costs for support may risewith the number of clients connected to the server.

For your small business, I recommend either Win-dows or Linux, depending on what your budget is and

71



what your local consultants support. Finding tech sup-port and software for a Windows system will never be aproblem, and the prices are relatively reasonable.Linux is an excellent choice for the budget conscious,as long as you restrict your server usage to simpleprint-and-file sharing, e-mail, and Web hosting. Solarisis a wonderful operating system, but it takes an experi-enced hand to run a Solaris network—an expensiveproposition for a small business. A flavor of UNIX maywork for you, but finding immediate support could bedifficult, as some consultants or outsourced tech sup-port companies work with only specific flavors of UNIXand not with others, and UNIX tends to be more ex-pensive than Windows.

OTHER PROGRAMSBesides the operating system, you can house other programs on your first servers, and many small busi-nesses do. Microsoft Exchange Server or FreeMail, forexample, can manage your company’s internal e-mail, ifyou 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 serv-er software for Linux. You can also house databasesand other programs (these are discussed in Chapter 4).For now, though, an operating system and, if you sochoose, an e-mail server program will be enough to getyou started.

ALL-IN-ONE SERVERSA number of companies, including Systemax and Toshi-ba, have recently introduced user-friendly, all-in-oneservers, which come with software that combines print-and-file sharing, e-mail, Internet access, and Web serv-ing. Using an all-in-one server makes setting up aclient-server network surprisingly easy.

Systemax’s iMASS servers, for example, automati-cally configure your network once all the computersare connected via Ethernet (discussed in the followingsection) and turned on. The server detects each com-puter and matches it to the resources, such as printers

72

and different files, available on the network. TheiMASS server, which runs on the Linux operating sys-tem, can handle your Internet connection and serve asan e-mail and Website server. You can be your ownserver and network administrator by using a fairly sim-ple point-and-click interface to assign permissions.While these machines aren’t really suitable for morethan 30 or 40 clients, they are an easy way of setting upan office network.

All-in-one servers range in price from $2,000 to$7,000, depending on the hardware inside and theamount of service and tech support you desire fromthe companies in question. Some service packages areso comprehensive that they may do away with the needfor a consultant. However, you should have a fairamount of confidence in your skills—and actually seethese products in action—before you decide to pur-chase an all-in-one.

Again, this discussion provides just an overview, andthese aren’t exactly items that you’ll see on store shelves.You’ll need to work with your hardware vendor or yourcomputer consultant to see which operating system isavailable and appropriate for your business. We’ll dis-cuss choosing network consultants later in this chapter.

Putting the PiecesTogetherSo now we’ll assume that you have your computers andpossibly a server, and it’s time to connect them all andmake them work with one another and with your print-ers and scanners in the office. With respect to the hard-ware needed, you have a couple of options.

First, make sure when you purchase your comput-ers that they come with network cards, also called Ether-net cards or Ethernet ports. These cards, which areplugged into slots on a computer’s motherboard (definedon page 6 of Chapter 1), work somewhat like modems totransfer data. You’ll notice that the actual connectionpoints are slightly larger than a phone jack. That’s be-

73


Tech Terms

Ethernet: a networkprotocol developed byXerox Corp., DEC, andIntel in 1976 to stan-dardize the way comput-ers share information.Ethernet supports datatransfer rates of 10megabits per second.

port: an interface ona computer throughwhich you can connectit to another device.An Ethernet port, forexample, is the jack onthe back of your com-puter that lets you con-nect it to a network.


cause Ethernet lines aren’t like normal phone cords—they can handle a lot more data. A 100-megabit Ether-net line can transfer data at the rate of 10 megabits persecond—or about 175 times faster than a standard dial-up modem. This speed is very important when you’resending a large file, like a schematic drawing or market-ing plan, around the office.

PEER-TO-PEERIn a peer-to-peer network, you simply plug in Ethernetlines to connect all the client computers to a centralEthernet hub, which serves as a kind of switchboard op-erator between them as well as your main Internet con-nection. Then, on each computer, you run the built-inWindows Networking Wizard (or AppleTalk, dependingon which operating system you’re using) to let the com-puters “find” each other in the network. It will also findany peripherals connected to the network, such as print-ers. From there, you’re ready to go, although you shouldcarefully read the Windows and/or Mac OS manuals formore details about your specific system and any bugs orother issues that you might encounter.

CLIENT-SERVERIn a client-server network, the Ethernet lines areplugged into the server, of course, as are the printersand any other peripherals in your office. The server ad-ministrator then logs onto the server, either directly or

74

server administrator: theperson in your organization who canmake changes to the server. This couldbe you, your IT manager, your consultant,or several people. A server administratorcan change the way data is managedon that server, allowing some usersaccess to files or to the Internet, whilenot allowing others.

permissions: the rules that each useron a network is assigned by the networkadministrator. Each person who hascomputer access in your organizationcan be assigned resources to use, andcan likewise be blocked from viewing ordeleting important files, such as yourbookkeeping or personnel files.

Tech Terms

from a client workstation, and “maps out” each com-puter and printer—that is, identifies each of the ma-chines to be connected within the network. Thisprocess is much longer, and more exacting, than settingup a peer-to-peer network. As we mentioned earlier,the server administrator develops profiles for eachclient computer, handing out permissions to each ma-chine to give it and its user access to the network’s re-sources. If you use a consultant to install yourcomputer network, he or she will work with you to de-termine who gets which permissions.

WIRELESS NETWORKINGAnother networking option that’s worth mentioning iswireless networking. Instead of stringing cables all overyour office space, you can purchase equipment that willlet your computers and other devices connect to thelocal network and the Internet from anywhere in youroffice—even outside on a porch, if you or your employ-ees so choose. Obviously, you get the maximum advan-tage of portability, and wirelessness, if you’re usinglaptops instead of desktop computers. If you alreadyhave 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 olderbuildings pose problems with wiring, for example, be-cause the walls are too thick or otherwise too difficult tosend wires through.

The current standard in wireless networking isbased on the so-called 802.11 protocol, as developed byacademics around the world and used by the vast ma-jority of computer makers. Also called WiFi, 802.11transfers data at speeds up to 6 megabits per second—not so fast as Ethernet lines, but certainly fast enoughfor most users. Wireless networking cards, whether fora desktop or laptop, cost $125 to $175 each. You cancreate a peer-to-peer network with just the cards, too;simply choose one computer to serve as the main con-nection point for your Internet connection, and plugthe cards into the other machines. For networks of sixor more machines, you’ll also need a wireless hub,

75



which costs from $250 to $700, depending on howmany cards it can support. The price also increases withthe strength of network security software loaded ontothe hub. Some have firewalls rivaling those of mostmajor servers. The hub plugs into your server.

The 802.11 networking protocol can be used in anumber of innovative ways to make nearly any businessmore efficient. (Chapter 6 describes specific 802.11 applications.)

Getting YourNetwork OnlineOne piece remains to our task: getting access to the In-ternet for all these computers. Depending on the natureof your business, you might laugh at that notion. Afterall, why would employees of a construction contractor,flower shop, or restaurant need Internet access?

Well, for lots of reasons. Most important, your em-ployees will have e-mail addresses. That’s critical for anysales, customer support, or other necessary contact withthe outside world. E-mail is the preferred method ofbusiness communications around the world, and you,the boss, aren’t the only one who needs it. Everyone inyour company can benefit from e-mail, even if the em-ployees don’t have their own computers set up for theirprivate use. Imagine how much easier it would be to letworkers know about policy changes, customer com-plaints, or good news if they regularly logged into an e-mail account, even just once a day. It just makes goodbusiness sense.

The same goes for access to the World Wide Web.In a professional setting, your employees can glean sub-stantial research from the Web. Indeed, they might sur-prise you with the information they can dig up that cangive your business an edge. Not everyone needs con-stant Web access—but identifying those employees whowill make the most of it will give you a great deal of re-search and market intelligence, empowering your work-ers on many levels.

76

YOUR CHOICE OF IMPROVEDINTERNET CONNECTIONUnless you’re adding only a handful of computers in apeer-to-peer network, your old DSL line won’t cut it anymore. Again, you have options.

HIGHER SPEEDS ON DSL. Your phone company or Inter-net service provider can increase the amount of band-width you receive on your DSL, thus increasing theamount of data your network can receive from the Inter-net in the same amount of time. You can receive up to1.5 megabits per second via DSL, and you can split thatline off to individual workstations in your network. In-stallation of a new DSL line for businesses costs $200 to$400, and service another $300 to $500 per month. Thisis much costlier than home DSL service because of thecomplexities of installing the line in an office building, aswell as the number of users and the higher speeds. DSLlines can reasonably handle the demands of up to 20 In-ternet surfers with little degradation in speed and per-formance, even with multiple users surfing at once. ButDSL service can be spotty; it can fail as frequently asyour phone service, especially because of constructionor bad weather.

SHARED T1 LINE. A T1 line is the next step in the high-speed Internet hierarchy. A T1 line can send and receivedata at speeds of 1.54 megabits per second—24 timesfaster than a dial-up modem. A shared T1 line meansthat your business is sharing this bandwidth with otherbusinesses. In general, you’re guaranteed from 512 kilo-bits per second to 1,000 kilobits per second. T1 lines arefar more reliable than DSL in general. Installation canrange from $750 to $1,000, while service costs $500 to$1,000 a month, depending on how fast you want yourlines to be.

DEDICATED “BURSTABLE” T1 LINE. A dedicated T1 linemeans that you get all of the bandwidth all of the time,and you don’t have to share with any other business. Inaddition, if you somehow fill that data-transmission

77


Tech Terms

bandwidth: a measure-ment of the amount ofdata that can be trans-mitted in a given periodof time. The measure isusually expressed inkilobits per second ormegabits per second.


“pipe” with massive downloads, your Internet serviceprovider can help you manage the data so that it doesn’toverwhelm your server. You can get the full transmissionspeed of 1.54 megabits per second, but it will cost$1,500 to $2,500 per month, plus the same installationfee as the shared T1. If you’re hosting your own Website as well, you’ll need a T1 router to manage the flow oftraffic into and out of your Web site at these highspeeds, which will cost another $500 to $1,000.

CONSIDER YOUR BUDGETObviously, budget considerations will play a huge role inwhat kind of Internet service your business can afford. Ahandful of computers can subsist quite nicely on a regu-lar commercial DSL line, although if you have an officeof heavy e-mail and Web users, I suggest linking nomore than ten computers to DSL; otherwise, you’ll startto see some lagging downloads and irritated employees.A shared T1 line, however, is great for many businesses.For example, the Kiplinger Washington Editors build-ing, in Washington, D.C., uses a shared T1 line for up to300 computers—although editors sometimes find accessto the Internet somewhat slow around the time the mar-kets close. Still, if you have a network of 20 to 50 ma-chines and a server, a shared T1 should be enough foryour needs. A dedicated T1 line can handle hundreds ofcomputers and multiple servers without breaking asweat, and is especially necessary if you plan to host yourcompany’s Web site on an in-house server.

Picking the RightComputer ConsultantSetting up your own office is one thing—setting up anentire computer system for your employees is somethingelse entirely. As I’ve shown previously, you’ll face a mul-titude of decisions about hardware, software, network-ing, peripherals, and Internet connections—and youprobably won’t be able to do it all yourself. Unless you’rea true computer geek, in which case you don’t need this

78

Tech Terms

burstable: to managemultiple transmissionsmore efficiently, aburstable T-1 linegathers data and sendsit off in a burst, ratherthan in a constantstream.

router: a device thatconnects a number ofnetworks in an office.If your business expandsso much that, say, youdecide that your admin-istrative staff shouldoperate on an entirelydifferent network fromyour professional staff,you’ll need a router sothat the two groups cancorrespond by e-mailand share a single Inter-net connection.

book, you will probably have to call on someone else tohelp you get things set up. And that’s all right—you’vegot a business to run, after all.

At this point, you’ll also have to make a decisionabout your role in your company’s technological future.While you’ll still have the final decision, you’ll find your-self leaning on others for their advice and support. Youhave a couple of options here:

Computer consultants, sometimes called system de-signers or network consultants, will probably be yourfirst point of contact as you begin to look at a full-scalebusiness network. Consultants will discuss your optionswith you, purchase and install everything, and, for amonthly or yearly fee, perform the routine maintenanceand occasional odd job for you. A good consultant (asopposed to a full-time IT or systems manager) can be in-valuable for a small to midsize business, saving the en-trepreneur a lot of time and headaches.

Keep in mind, however, that a consultant is also asalesperson, and probably wants to sell you expensive sys-tems and equipment that, although not entirely unneces-sary, could be more advanced than what you need. Mostconsultants also have business agreements in place withmany different hardware and software vendors. Although

79


You might have felt thatyou could get away without a lot of extrasecurity while working from your home,despite my advice to the contrary inChapter 1, but that definitely won’tbe the case here.

At the very least, you will need botha firewall and good antivirus software.The firewall can be easily obtained fromyour Internet service provider—someISPs, in fact, won’t install business-classInternet service without a firewall ob-tained from them or on your own.

Most workstation computers youpurchase come with some form of an-tivirus software. Be sure to register everymachine for antivirus updates, however,so that you’ll get all appropriate defensesagainst the latest viruses.

And finally, register your computerswith the operating system manufacturer,most likely Microsoft, to get the latestsecurity patches as soon as possible. Besure to run Windows Update, Microsoft’sdo-it-yourself online upgrade service,regularly—at least once a month.

SECURITY: Network Security


an exclusive arrangement between a consulting firm anda single manufacturer could give you a good price on thatmanufacturer’s products, it could also limit your access tothe newest and best technologies. You should ask a po-tential consultant about any relationships he or she mighthave with hardware and software manufacturers.

So how do you choose a consultant? Pretty muchthe way you choose any other service that you outsourcein your business. A good place to start is by asking othersmall businesses and entrepreneurs in your area abouttheir experiences with the companies they used. Go tothe Internet and do a search on the companies thatyou’ve heard about, or discovered in the Yellow Pages. Agood Web search will usually find not only the consul-tant’s Web site, but also customers’ praise for and com-plaints about the consultant.

When contacting potential consultants, tell themwhat you want to do and ask about the brands and tech-nologies they use and sell. If you have come across a par-ticularly attractive technology in this book or elsewherein your research, ask whether the consultants can pro-vide it, and if not, why not. Also, ask for references.Most computer consultants should be happy to give youcontact information for customers who have agreed tosay good things about them. Similarly, those customers,when called by a fellow businessperson, may be morehonest than the consultant intended, so you may hearthe downside, too.

Call the references and ask about the consultant’strack record in keeping costs down, the ease and effi-ciency of the installation, the performance of the system,and responsiveness in emergencies. Ask about fees, aswell, to be sure you’re not getting a raw deal on the fi-nancial end of things.

It’s a good sign if a consultant is a member of theBetter Business Bureau. The local agency will keep trackof any complaints registered with it about the consultant.The Better Business Bureau’s national office recentlyranked computer sales just above car sales in a customercomplaint survey. (Go to www.bbb.org to locate and linkto the Web site of the BBB office nearest you. The local

80

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 youa dollar-amount estimate on the spot, but they should beable to at least get you in the ballpark. Within a shorttime, they should be able to give you a detailed estimatethat outlines the expected costs of individual pieces ofhardware and software with exact specifications, installa-tion, and a projected upgrade plan. Although prices varywidely in this field, the estimate should spell out how theconsultant will charge you and for what. Don’t be afraidto ask for more details—it’s your investment.

Also make sure you carefully review any servicecomponent in the proposed contracts. If your networkgoes down for some reason, you don’t want to get hitwith a big fee that you didn’t expect to repair the dam-age. You might imagine that the service contracts andsupport offered by some hardware and software vendorswould be a viable alternative to that of a consultant.However, unless you get the most expensive contractsthat these companies offer—too expensive for most smallbusinesses—chances are you’ll be on the phone withtech support a lot more often than you’d like. If you’veever had to call tech support for your home computerand have someone walk you through a complex problem,multiply that frustration by a hundred when it comes tobusiness systems. It’s always better to have someone localwho can come to you in an emergency, knows the sys-tems, and can fix the problem quickly and efficiently.

If the estimate appears to be clear and specific, re-flects the needs that you have discussed with the consul-tant, and fits your budget, make sure that you setappropriate timetables for completion of the workyou’re contracting for, and make sure those are writteninto the contract. You don’t want your consultant toleave you hanging for a week while he or she goes offand does something else.

Above all, use common business sense here. Whilehiring a consultant is a fairly expensive undertaking, it’squite similar to any other outsourcing project. Ask smartquestions, read the fine print, and do your homework—

81



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. Youmay be tempted to appoint someone from within yourorganization as a de facto IT manager. I strongly recom-mend against this course—technology is a major invest-ment, and handing it off to someone with little or notraining is a big mistake. As you’ve probably alreadygathered, setting up a full business network can be bothtime-consuming and expensive, not to mention com-plex. Would you invest in a private jet, only to have oneof the flight attendants also handle the mechanicalmaintenance? Unless you have an employee who’s ex-tremely technically knowledgeable, it’s best to let thepros handle it.

Hiring a qualified IT manager from the outside willprovide you with an experienced hand who presumablyhas the company’s best interests at heart—but the costwill be steep. Despite the technology implosion in2000–01, IT salaries are still pretty high, certainly higherthan any service contract you would sign with a consul-tant. In addition, you will still have to purchase all yourhardware, as well as your software licenses. Unless yourbusiness has a distinct technological bent—perhapsyou’re still trying to sell stuff over the Internet or youwant to wire multiple branch offices—or unless you planon quickly scaling up to several dozen computers in yournetwork, you should get along fine with a consultant andservice contract.

If you do find yourself struggling with growth andcalling on your contractor above and beyond your servicecontract, you may then want to consider hiring someonefor your staff. Indeed, if you’re calling on your consultanttoo much, the consultant may very well suggest it! Ifthat’s the case, be sure to get a good one. Your consultantwill certainly be able to give you an idea of whom to hire.You can also check the classified ads—in your local news-paper or on Web sites like Monster.com orHotJobs.com—to see what other companies require andpay. At a minimum, you should get someone with at leastthree years as a network administrator or IT manager.

82

Tech Terms

network administrator:the person in your organization responsiblefor keeping a computernetwork up and running.This person—whetherit’s you, your consultant,or an IT manager—nearly always has admin-istrative permissionson all your company’sservers and workstations.He or she can also man-age your network’s Inter-net connection.

Cost BreakdownsThere is quite a bit to consider when breaking downthe cost of a fully networked office. Here are three de-tailed examples that will give you an idea of the differ-ent kinds of networks, as well as the balance betweensize and price. None of these examples includes soft-ware, which is discussed in Chapter 4. The computersin each of these examples are assumed to have the fol-lowing configuration: 1.2-GHz processor, 128-MB ofRAM, 20-GB hard drive, network card, three-year war-ranty, and Windows XP and Office XP preinstalled.The estimated $1,300 per computer assumes thatyou’re not buying laptops—if you are, add at least an-other $500 each. We’re also assuming in all these casesthat you’ll be using a fairly costly operating system foryour servers and computers—Windows XP Server, aflavor of UNIX, or Sun’s Solaris, because these havethe largest market shares among server operating sys-tems at the moment.

THE SMALL OFFICE NETWORKThis is, essentially, the same kind of network that thebusiness in our earlier example of peer-to-peer network-ing uses. Let’s say you have six computer users (you canhave many more employees, but you may only need sixof them to work on computers). This is a peer-to-peernetwork with a sizable DSL Internet connection.

Six computers $7,800LaserJet printer $400Scanner $400Small copier $500Paper and peripheral upkeep $100/monthSoftware upkeep (business upgrades and

tech support) $50/month768k DSL high-speed Internet installation $300768k DSL high-speed Internet subscription $350/monthConsultant installation fees (if necessary) $1,000Total Initial Cost $10,900Monthly Cost $500/month

83



THE LARGE OFFICE NETWORKThe first of two client-server networks we’ll profile is thelarge office network, which consists of an office of 12computers and a small server used merely for print-and-file sharing and as an Internet connection hub. Forabout $500 more in server costs, you can get one of theaforementioned all-in-one servers and do away with theconsultant costs, saving $2,500 on your initial outlay andnearly the entire monthly service contract.

12 computers $15,600Small server $1,500LaserJet printer $400Scanner $400Small copier $500Paper and peripheral upkeep $100/month12 client operating-system licenses $100/monthServer operating-system license $50/month1,024k T1 high-speed Internet installation $7501,024k T1 high-speed Internet subscription $1,400/monthConsultant installation fees $3,000Consultant service contract fee $1,000/monthTotal Initial Cost $24,800Monthly Cost $2,650/month

THE LARGE, HOSTING OFFICE NETWORKThis is about as big a computer network as you’re goingto need while still calling yourself a small business.We’re assuming a network of 24 computers and a pair ofservers—one for print-and-file sharing and permissions,and the other to handle Internet service, internal and ex-ternal e-mail, and a fairly well-trafficked Web site. Thisdoes not assume use of an all-in-one server, given thatthe Web traffic or internal server use could be too muchfor an all-in-one.

24 computers $31,200Print-and-file server $1,500Web server $2,000Two LaserJet printers $800Scanner $400

84

Large copier $2,000Paper and peripheral upkeep $300/month24 client operating-system licenses $200/monthTwo server operating-system licenses $100/month1,536k T1 high-speed Internet installation $1,000T1 router $1,0001,536k T1 high-speed Internet subscription $2,000/monthConsultant installation fees $10,000Consultant service contract fee $2,000/monthTotal Initial Cost $54,500Monthly Cost $5,600/month

85


Your BusinessRuns on Software

87

CHAPTER

4

he second-level Terrace Club seats at Seat-tle’s SAFECO Field are undoubtedly some ofthe best in baseball. The view from thatperch, slightly to the right of home plate, isoutstanding.

So is the service. The wait staff actually comedown 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, suchas fresh sushi and lattes from Tully’s Coffee. The excit-ing part is that the wait staff comes back with your foodin mere minutes, quicker than you’d get it if youtraipsed off to a concession stand yourself. When Iasked my waitress how she did it, she took the answeroff her belt for me to see—a small handheld computerwith an antenna.

Given that Seattle is such a high-tech incubator, thiswasn’t too surprising. Nevertheless, the order-takingprocess itself is impressive, and the database softwarebehind it even more so. In talking with SAFECO Fieldofficials, I was able to get a good idea of how it works.

The waitress’s handheld computer is about as com-plex as a Palm Pilot, circa 1997. She fills in the row andseat 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 an-tenna on the device is connected to a short-distancewireless network, and the device sends the order overthe network to a centralized computer bank in thedepths of the ballpark. That computer analyzes andlogs the order and sends it to the nearest concessionstand to be filled. The waitress goes to that stand, picks

Summary

■ I Have a Network—Now What?

■ Databases:The Workhorsesof Business

■ Using Databases in Your Business

■ Hardware Options■ Installation■ Security■ Cost Breakdowns

T


up the order, and delivers it to the customer, who paysfor the food and chows down.

But there’s more to the system than that. Theservers in the computer bank are tracking all kinds of in-formation at once. The sales that my waitress made, forexample, are tabulated on the go, so that when shechecks out for the day, the computer knows exactly howmuch money she should have to turn over. The samegoes for the concession-stand workers, who log ontotheir registers, which are computers tied to the servers.In addition to tracking the money, the computers trackevery soft drink and french fry sold, for several reasons.The computers track inventory, notifying workers whenthey appear to be getting low on Red Hook beer in theHit It Here Café or sprinkles at the upperdeck icecream shop. Workers can restock as needed, before thevarious stands run out. The computer also tracks thepopularity of items so that inventories for future eventscan be adjusted as needed. At the end of the day, work-ers dutifully log wasted items, so that the computers canfurther tweak inventory. And when overall inventorygets low, managers for the food service at the ballparkcan place the necessary orders to suppliers. New inven-tory is also logged in so that the computer can make anaccurate count.

Stadium managers can also use the system to ana-lyze the productivity of individual service workers. If,God forbid, my waitress happened to be slacking off, hermanagers would know by comparing the number of or-ders she filled during the game with the performance ofother wait staff members. On the other hand, if she washustling and doing her job exceptionally well, her man-ager would know that, too.

Of course, the system isn’t perfect. A worker mayforget to log in an order of fries that hit the floor beforeit hit the counter, and concession stands can sometimesrun out of food items before replacement supplies ar-rive. But these systems certainly come a lot closer topainting a timely and realistic picture of sales and inven-tory at the SAFECO stadium than other methods might.

The whole system is designed, of course, to make

88

going to a Mariners game as fun and easy as possible.Its computer servers churn away at these numbers sothat if you decide to stretch your legs and buy a beerand a dog between innings, you still have a decent shotat getting back to your seat before Edgar Martinez (norelation, unfortunately) hits a home run off of somepoor, unsuspecting pitcher.

I Have a Network—Now What?Chapter 3 discussed establishing your computer net-work. With that simple task now accomplished, youremployees can write documents, keep records, accessthe World Wide Web, trade information via e-mail, andshare files over your server. All those chores are practi-cally built into each PC on your network. But the wholeidea of this chapter is to enable you to create somethingbigger than the sum of its parts, and for that you needsoftware that will allow you to accumulate, access, ma-nipulate, and use your data.

The array of software available to businesses of allkinds is almost too vast to contemplate, and certainly toovast to cover in a single book. So let’s look at the basickinds of software that people use in business, along witha few examples of practical applications. The idea is todemonstrate the power and flexibility of network andserver software.

The Workhorses of BusinessDatabases are ubiquitous and extremely flexible. Nomatter what business you’re in, if you share data of anykind, you might benefit from a database program thataccumulates data in a consistent, centralized, and acces-sible format. Indeed, in many cases, databases are nearlymandatory, and you should become familiar with whatthey can do on a computer network.

89

CHAPTER 4 Your Business Runs on Software

Tech Terms

database: a collectionof information organizedso that a computer pro-gram can quickly selectand view parts or all ofthat information. Theterm can also refer todatabase managementprograms, such as cus-tomer relationship man-agement programs, thatare used to view, com-pile, sort, and analyzeinformation on a data-base. We use the termsinterchangeably here.


Some firms simply use databases for storing informa-tion about clients or contacts. For example, throughoutmy career as a technology writer, I have had extensiveworking relationships with a certain public relations firm,which keeps records of my interactions with it, alongwith information about my articles on their client compa-ny. Because this firm is fairly large and its staff turns overfrequently, I deal with new account executives all thetime, but a new person can enter my name into the com-pany’s contact database and pull up my entire historywith the firm. The firm keeps entries on literally hun-dreds of journalists, along with notes on their areas of in-terest, fairness, trustworthiness, and, probably, gullibility.

That’s an example of a simple “grab and go” data-base. Instead of keeping duplicate records, a worker cansimply call up the jointly accessible record and, if appro-priate, add to it as needed. In that way, all workers canbenefit from their colleagues’ experiences.

90

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 buildsoftware and, perhaps more important,market the heck out of it.

Office XP (and its predecessors, Office 2000, 97 and 95) is the dominantproductivity suite—the basic tools of office life like word processing andspreadsheets—on the market today.When is the last time you wrote a word-processing document in something otherthan Microsoft Word? Even on the AppleMac OS platform, Office remains king.Depending on which think tank is doingthe study, some 85% to 90% of Ameri-can businesses use Microsoft Office inone form or another.

Office XP Professional is a suite of five separate programs optimized forbusiness—Word, Excel, PowerPoint, Out-look, and Access. This suite was intro-duced in Chapter 1 (see page 15), buthere I want to emphasize the importanceof Access, a database program for storingand organizing data. With Office XP in-stalled on all your computers, Access canbecome an important—and inexpensive—tool your workers can use to share data.

Furthermore, it’s an important toolfor you to use in sharing information withanyone who contacts your business. Afterall, if the vast majority of people use Of-fice, a cheaper alternative might save youmoney in the short term, but could causeproblems when your big client can’t readthat report you sent via e-mail.

TREND: Microsoft Office Is Here to Stay

Similarly, whole projects may be kept on databases.PowerPoint presentations, blueprints, reports—youname it—can all be put on a database for many peopleto access and work with. The latest version of Microsoft’sOffice XP contains fairly simple tools for creating collab-orative-work databases like this, using a variety of tech-nologies to let people communicate via messaging asthey work on the same database entry. For example, twopeople working on a construction blueprint can “instant-message” each other as they work, to ensure thatchanges aren’t deleted or overwritten, and to more easilydivide up the work.

The biggest database maker in the world is OracleCorp., with Microsoft Corp. and IBM tied for secondand gaining steadily. Each of these companies offers var-ious database products designed for businesses of differ-ent sizes, along with various tools that can be used tomake the best possible use of them. For smaller busi-nesses, database programs come with a number of tem-plates for customizing, along with fairly easy-to-use toolsfor managing the technical end of things, such as thenumber of users who have access to particular pieces ofdata. For larger businesses, the databases are far morecomplex, but still immensely flexible when it comes topermissions, types of data, and overall management.Prices reflect the number of users or workstations ex-pected to access the database. It’s worth noting that acash register, timecard system, or bar-code scanner actsand counts as a user, just as a PC does.

Let’s consider the products you’re most likely to usein your business. Remember that although these data-bases can be used by anyone in your company, installingand managing them will require professional help.

MICROSOFT SQL SERVERMicrosoft’s answer to Oracle’s dominance relies heavilyon Microsoft’s history of being simple and easy to use.SQL Server makes it easy to create individual databaseswith a variety of input methods and forms—a task thatusually takes much longer on any other database pro-gram. From a simple desktop window, you essentially

91



create not only the database but also the forms that youremployees will use to enter data into the system.

Of course, the drawback is that you must be run-ning Windows on nearly every part of your network—not only on your personal computers, but also on yourembedded systems, such as cash registers—as well as useMicrosoft’s Internet Explorer browser. If you use aNetscape browser, for example, you may find that somedatabase functions won’t work, or will take far too muchtime to process. SQL also hogs a space on your server’shard drive, perhaps requiring an additional hard drive tostore data.

SQL Server prices are generally fair, and scale downnicely as you add more users to the network. A five-seatlicense is $298 per user, or $1,490, while a 10-seat li-cense drops to $225 per user, or $2,250.

IBM DB2 UNIVERSAL DATABASEIBM’s database entry adapts to many operating systemsand devices, and it’s capable of growing nicely as moredata and users are added. It also has a variety of tools youcan use to draw out different analyses from your data.

Another nice feature is the built-in messaging program—anyone using DB2 can send messages toother people currently using it—an advantage for finan-cial service companies that are required to check in reg-ularly with supervisors around the country while makingtrades. It also has built-in encryption for security. Otherdatabase makers require additional payment for encryp-tion, 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 betweenthe costs of SQL Server and Oracle’s offerings.

ORACLE 9i STANDARD DATABASEOracle is considered the king of databases: Its databasesoftware is fast and easy to use, and it doesn’t take up aninordinate amount of hard-drive space. Administrationis easy, based on a simple browser, and 9i can be runwith any operating system and any device. As your net-work and databases grow, 9i will handle them with ease.

92

Tech Terms

embedded systems:a specialized computersystem that is part ofa larger machine ornetwork. Typically,embedded systemsare computing deviceswith only one or twofunctions. A handheldbar-code scanner ornetworked cash registerare both examples ofembedded systems.

93


Unfortunately, 9i is expensive. Oracle charges aminimum of $300 per user or device, and some of thebetter diagnostic tools cost extra.

Using Databases in Your BusinessThe ways that databases can be used in the business en-vironment are probably close to infinite, and I encour-age you to think creatively. Here are some of the mostcommon uses.

INVENTORYMany businesses need to keep an inventory of some-thing as part of their processes. Granted, keeping a data-base of office supplies and usage is probablycounterproductive and a waste of money. But for retail-ers, manufacturers, food service, and many other busi-nesses, inventory management is critical.

The most inexpensive, though labor-intensive, wayto maintain an inventory database is to physically typeinto the computer a record of each piece of inventory asit comes in the door and again as it is used or sold. Forthat task, though, you might as well use an Excel spread-sheet. A database comes into its own when you tie yourreceiving and sales programs into the inventory data-base. In the SAFECO Field example earlier in thischapter, databases were used to track where inventory—in this case, food—was being used throughout the ball-park via the sales system. Bar-code scanners can be usedto log in shipments from your supplier; tying in yoursales systems will give you an accurate picture of what’sgoing out the door as well.

We’ve seen this system at work in a food service envi-ronment, and its use in retail isn’t hard to imagine either.But the system also works well for manufacturing. As or-ders come in, it’s easy to break down each one into theparts needed, compare the list to the database of supplieson hand, and place an order with your suppliers beforethe assembly lines even realize they have orders to fill.

Tech Terms

encryption: the transla-tion of data into, inessence, a secret code.Using complex mathe-matics, computerscan encrypt your dataso that only users whohave the necessarypassword or key canread it. Breakingthrough encryption isvery difficult—it couldliterally take a high-powered network ofcomputers years tobreak through a singlepiece of encrypted data,and most security sys-tems change encryptionregularly to confoundeven those efforts.


PERSONNELHandling personnel files can be a sensitive issue, butyou may have reasons for sharing them among yourmanagers or other select workers. A database with pass-word protection can be a good means of maintainingthese files. If you use an electronic timecard system, youcan tie it into both the personnel database and your ac-counting system to generate paychecks. Also, you maybe able to monitor efficiency by comparing the timecarddata to the data generated from the worker’s station onthe assembly line or retail station.

SALESYou may be familiar with the way some Radio Shackoutlets ask you for your name and address whenever youmake a purchase. All that information goes into thestore’s database. If you consider how the databases ofevery Radio Shack store in the country are combined,you’ll realize that Radio Shack has a massive amount ofinformation on its customers, where they live and whatthey buy. You’ve probably had a similar experience withother retailers who ask only for your phone number orfor your Zip code—similar means of identifying wheretheir client base comes from. Retailers can use this in-formation to target their advertising and fine-tune theirinventory choices. (Chapter 7 gives examples of whatcan be done with this information.)

Because consumers have become more protectiveof their personal information these days, some maychoose to withhold the information for which you ask.But even basic information, such as the item purchasedand the time and date of purchase, can be helpful. Per-haps your blue widgets sell well on weekends, whileyour white doodads seem to sell best on Tuesdays, andyou can stock up or plan your promotions accordingly.

What about use of customer records by service andother nonretail firms? When doing business with repeatclients, think of the advantage of having all of their pre-vious transactions on record. You and your employeeswill be able to ask them about past service and learnwhat their current needs may be.

94

And think of promotions! Whether you gain infor-mation from credit-card data or from direct interactionwith clients, you can, for example, design a system thatwill identify credit card users who should get a 10%discount on their next purchase after they spend $300over a given period of time, and you can send e-mailsor regular mail to your client list to publicize promo-tions or to remind them that it may be time to patron-ize your business again. For example, fuel oilcompanies in the Northeast often send cards in themail to their past customers in late summer, when salesare slow, to remind them that they’ll need to purchasemore fuel for the winter.

Once the data is in the database, you have to figureout how to make it answer your questions. Fortunately,most standard database programs come with the toolsyou need to manipulate the data for analysis.

MANAGEMENT OF CUSTOMER RELATIONSOne of the most popular tools for mining information inbusiness databases is called customer relationship man-agement (CRM) software. The idea here is to meld yourvarious databases—customers, transactions, inventory,etc.—into a coherent whole, using CRM software toconnect them all.

If you ask 50 companies what their CRM offeringsare, however, you’ll get 50 different sets of products andrationales for using them. CRM is, in many ways, simplya buzzword to describe a suite of business softwareproducts. What that suite consists of is up to the compa-ny marketing it. Nevertheless, there are a few things thatevery suite of CRM software should have.

SALES MANAGEMENT. All CRM suites should have astrong customer component; that is, they should beable to match the information you have on your cus-tomers to their transactions, providing a meaningfulanalysis for your sales force to use in retaining thosecustomers in the future. With a simple click, youshould be able to see the entire history of your transac-tions with a given customer.

95



96

This diagram shows you how different software programs work togetherwithin a computer system. At the bottom, the operating system tells the computer’shardware what to do, and also serves as an interface between the user, the other soft-ware programs, and the computer. On top of that lie the databases, which store andmanage the data input by users. And finally, the applications layer rests on top of itall. These applications, or programs, rely on the databases for information and callupon the computer’s hardware via the operating system to process that information.

DIAGRAM 4.1: How Your System Software Works

Contacts Personnel FinanceCustomer

RelationshipManagement

OperatingSystem

Databases

FULFILLMENT. Good CRM software suites should alsoquickly update your inventory or project databases sothat each customer’s latest orders can be fulfilled andshipped (if applicable) quickly and easily. After making asale, your sales professional should be able, throughCRM software, to place an order and have those prod-ucts in the works within seconds.

CUSTOMER SERVICE. Good CRM software will be able torecord service calls, customer comments, and other ser-vice notes. That way you can quickly respond to a cus-tomer who calls with a problem.

MISCELLANEOUS ADD-ONS. Software companies also pro-vide a number of “add-on” services and features to theirCRM suites. For example, in the legal or accountingfields, some CRM software suites include confidentialityfeatures so that only those persons with appropriatepasswords and access can see specific information abouta client’s case or finances. Other CRM suites tie intoyour accounting software, providing billing and paymentservices for the customer as soon as the sale is made.

How do you decide which CRM suite is right foryou? The choice can be difficult, given the number ofoptions that often accompany this software. The currentleaders in this area are:

97


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 securitycompanies 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

RESOURCES: Network Security


■ Siebel Systems (www.siebel.com), which is mostly formidsize to larger businesses,

■ Pivotal (www.pivotal.com),■ Oracle (www.oraclesmallbusiness.com), and■ Onyx Software (www.onyx.com).

Microsoft, through its Great Plains small-businesssoftware company, is expected to introduce CRM soft-ware in the last quarter of 2002.

Each of these companies offers, or will offer, a basicsuite of software functions that includes all of the afore-mentioned features—sales, fulfillment, and support.Anything else is extra, and no matter who’s selling, makesure you look closely at what you’re buying, and get theadvice of your IT professional or consultant as needed.

CRM software, unfortunately, doesn’t come cheap.Most CRM makers assume you’re already using not onlya number of databases, but also a contact-managementand e-mail system on the desktop, such as MicrosoftOutlook. Once these pieces are installed, the CRM soft-ware sits on top of all of the other software on each work-station that requires it in your business. Without all theother pieces of software, you can expect to pay, at mini-mum, $200 per workstation for good CRM software. Inaddition, software vendors may charge up to $1,000 a day

98

Although databases definite-ly do the heavy lifting in computerizedbusinesses, you will also need other finan-cial software programs to round out yoursystem.

For at least a while you may be ableto get away with using Microsoft Money orIntuit’s Quicken Home & Business (dis-cussed in Chapter 1), but as your busi-ness gets bigger and more complex, you’llneed to move up to software that can han-dle larger tasks and manage more data.

Intuit’s QuickBooks Pro and QuickBooksPremier represent the next steps in ac-counting. You’ll be able to do billing, pay-ments, taxes, and payroll on a large scale,all from the QuickBooks program. Yoursales database and timecard system canalso be fed into QuickBooks with a littleextra effort.

The Pro version costs $179.95, whilethe Premier version—which includes re-port generation and better integration withthe rest of your business—costs $379.95.

RESOURCES: Advanced Financial Software

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

Your Hardware OptionsGetting the most out of your databases may requiremore than just establishing a network of PCs and a serv-er. Manufacturing and retail environments will probablyrequire specialized hardware for access to the database.However, buying this hardware is generally cheaperthan putting full-fledged PCs on your assembly line orusing them as glorified cash registers.

Look into buying used specialized hardware. Busi-nesses shut down all the time, often leaving behind goodequipment that you can get cheaply. Take a look onOverstock.com, POSMicro.com, and auction sites likeeBay for deals. Local classified ads and bankruptcy auc-tions are also great sources of equipment.

HANDHELD SCANNERSMost warehouses, large and small, use bar codes totrack inventory, and you can too. You’ll need to checkwith your suppliers to ensure that they use bar codes,but the vast majority do. So every time you order, thepeople responsible for unloading and storing your in-ventory can scan the boxes and log them into the data-base on your network. Handheld scanners cost $250 to$350 apiece, store information in an onboard memorychip, and synchronize with your computer networkthrough a docking system. To achieve close to real-timeinventory management, you can use wireless enabledscanners, which will log the new inventory to your net-work within a second of scanning it.

Now, let’s say that your production line or retailstore needs more materials from your inventory. Yourwarehouse worker scans the materials again, alerting thedatabase that these materials are now in use. Whenenough materials are taken out of inventory, your man-agement software will send you or your manager a mes-

99


Tech Terms

synchronize: To sharedata between twodevices or pieces ofsoftware. When yousynchronize a handheldscanner with a com-puterized database,for example, the datafrom the scanner up-dates the database,and, if necessary,the scanner can takeupdated data fromthe database.

docking system:a piece of hardware that plugs into yourcomputer and allowsa handheld or mobiledevice to connect withthe computer. For ex-ample, handheld orga-nizers use a dockingsystem to rechargetheir batteries andto trade informationwith the PC they’reconnected to.


sage to let you know that, at the current rate of use,you’ll run out soon and should order more productionmaterials. In some cases, you can even have your soft-ware place that order for you, ensuring that you’ll alwayshave enough materials in your inventory.

CASH REGISTERSIf you’re a retailer, you can use your cash registers tofeed all kinds of data directly to any database you haveup and running. Many of these registers are thin clientsand thus are fairly inexpensive. Essentially, they arestripped-down computers, some with keyboards forentering customer data, plus bar-code scanners andmagnetic-strip readers for credit cards.

The more expensive point-of-sale system will notonly pop open the cash register when a sale is logged,but will also automatically enter details of the transac-tion into a customer database, a sales information data-base, and an inventory database. A new, fully functional,network-ready, computerized cash register with a bar-code scanner can cost about $3,000.

ANOTHER SERVERTo house this complex database you may need additionalstorage, and perhaps even another server. Storage sys-tems, which are essentially a couple of extra hard driveslashed to an existing server, can cost between $300 and$1,000, depending on the amount of storage you need tohouse the data generated from your sales. An additionalserver will cost $1,500 to $2,000, depending again on theamount of storage and RAM needed.

ELECTRONIC TIMECARDSI first saw an electronic timecard system was when I wasa 16-year-old worker at McDonald’s after school. Oneday, the old clock and our paper timecards were re-placed with a magnetic card scanner and plastic time-cards with our names on them. Our manager wasthrilled because figuring out everyone’s hours, a former-ly onerous job, now took about two minutes—the time ittook for the machine to print out a daily report.

100

Tech Terms

point-of-sale system: aspecialized thin clientthat is used literally atthe place where thetransaction betweencustomer and businessoccurs. These thinclients usually come inthe form of computer-ized cash registers.

Today, these systems are smaller and more effi-cient. They can be connected with the rest of yourcomputer network. Employees punch in and out asusual, and the time data is either kept onboard thetimeclock system or, in some cases, sent to personneland payroll programs on other computers in the net-work. Figuring out someone’s hours for the day, week,month, or year takes only a few seconds. When theelectronic timecard system is tied in with the payrollprogram, hours can be compiled, taxes removed, andchecks printed in a matter of minutes.

You can expect to pay $500 to $1,000 for the hard-ware, including timecards, and another $100 to $300for the necessary software. Full-blown systems, includ-ing installation, cost $1,200 to $2,000, depending onthe reseller and the complexity of the existing comput-er systems.

Leaders in this technology include Time Clock Plus(www.timeclockplus.com) and TimePilot Corp.(www.timepilot.com).

Getting Everything InstalledEven if you are a very technologically adept person,who perhaps set up your own PC network and createdyour own Web page, I strongly caution against settingup all but the most basic databases on your own. Thejob is exceedingly complex, and it requires a great dealof effort to get all the hardware and software function-ing together. You’ll have to create physical links—usingEthernet cable, most likely—between your variouscomputers and servers, and you’ll have to set up thenetwork so that the software running your businessknows where to send data.

That means you’ll need a consultant, oftentimes asystems integrator. Such people specialize in gettingdatabases up and running within your business. Thesame people who helped set up your computer networkcan sometimes handle database installation—if they

101


Tech Terms

systems integrator: Acomputer technicianwho can bring disparatepieces of hardware andsoftware together into afunctioning network.Systems integratorsoften work with databas-es and other complexpieces of software. Hir-ing one for your staffwould be prohibitivelyexpensive, so chancesare you’d hire one as aconsultant.


have the appropriate expertise and certification—butgiven the complexity, flexibility, and variety of the differ-ent kinds of software, hardware, and uses involved, onesize seldom fits all; specialization is almost imperative forpeople in this field.

Again, the key to success is to do your homework.The information provided here on the leading databasesoftware 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 asimple retail system that logs into a database, in additionto fees for installing the server and computers (as de-scribed in Chapter 3). Fees to install and configure largerretail or manufacturing systems can amount to $10,000.

Getting a service contract is critical. Don’t merelygo for an “emergency” plan. If you’re using databases totheir utmost, you will probably need daily, on-call help.You need a service plan that permits you to call yourconsultants or integrators whenever you might needthem. These plans can be purchased on a monthly oryearly basis, depending on the consultant involved.

You may also think about hiring someone specificallyto manage your databases. In smaller businesses, if yoursystem administrator has database experience and certifi-cation—a very important piece of paper that means theconsultant has studied and passed tests with regard to thespecific brand of database software—you can combinethe two jobs instead of hiring a network manager and adatabase administrator. But in larger or more complexbusinesses, in which you have, say, a computer networkfor your managers and salespeople, plus a retail or manu-facturing operation that uses databases, you’ll probablyneed to employ a database administrator on your staff inaddition to your network administrator.

Some Thoughts on SecurityWhatever the size or type of your business, the informa-tion in your database is often among the most sensitivethat you have, and you should treat it with appropriate

102

caution. If you don’t, you’ll be vulnerable not only to out-side hackers but, more likely, employees who figure outhow to access computer systems that they shouldn’t.Computer experts say that most of the hacking and dam-age done to business computer networks comes from theinside—either by accident or by disgruntled employees.

REGULATING ACCESSOne of the simplest precautions you can take is to de-termine which of your employees needs to see databasedata, who merely needs to feed data into the database,and who doesn’t need to take part at all. For example, ina small manufacturing outfit, you and your top man-agers will need access to all the databases, whereas yoursales chief really needs to see only the sales database,and your manufacturing head needs only the inventorydatabase. In a retail operation, a salesperson may haverestricted access to the sales database, while the stockboy can only add to the inventory database without ac-cessing any information from it. This system works thesame way as basic network access does—through a sys-tem of permissions set up by your database administra-tor or systems integrator.

A SEPARATE SERVERAnother precaution is to eliminate the possibility thatanyone can access your database via the Internet with-out your authorization. The best preventive strategy is tohouse your database on a separate server—one that’sconnected to PCs throughout the office but has no di-rect connection to the Internet. Because servers aren’tcheap, you’ll have to factor cost into that decision.

If your network has remote access, however, youmay want to give your workers direct access to the data-base via the Internet, especially if they often generatesales or other kinds of data on the road or from home.To do that, you’d set up a series of passwords and fire-walls, just as you would for access to your main comput-er network. (See Chapter 6 for a discussion onmobile-access options.)

I’ve included the diagrams beginning on page 105

103


Tech Terms

remote access: literal-ly, accessing a comput-er system remotely, viathe Internet or a directdial-up to the server.Many workers who travelfrequently or telecom-mute use remote accessto read their companye-mail or manage im-portant data.


to give you an idea of how databases interact withinthree kinds of networks. You’ll see these networks againat the end of the chapter, when we give you the costbreakdowns for this chapter.

You’ll note that each diagram has a firewall (see thefollowing page) between the Internet and the networkserver (or, in the second example, a PC) providing thecompany’s Internet connection. Security is critical for anybusiness, and you’ll need to have a strong firewall installedon your server—the choke point between the Internetand your network—as well as antivirus protection for boththe server and every computer on your network. Despitethe fact that the database server in the second exampleisn’t directly connected to the Internet, hackers do havetools that can give them control of a PC. If that PC has ac-cess to a database server, the hacker has access to it too.

Unless you use an entirely closed system, in whichno PC with Internet access has access to the databaseserver, there’s always a risk, and you should act cautious-ly. (A closed system basically means that there’s no out-side connection to the Internet. You set it up like anyother network but without the Net connection, and thecost is reduced accordingly.) Keep in mind, though, thatthere are compelling business reasons for you and yourmanagers to have access to both the database server andthe Internet on the same machine, the biggest of whichis efficiency.

104

firewall: a piece of hard-ware or software designed to preventunauthorized access to or from a privatenetwork. The most common firewalls aresoftware-based and installed on yourserver; they are used mainly to preventany unauthorized user from accessingthe company network via the Internet.Hardware firewalls are far more expen-sive and far more effective, because

they have independent processing powerto more thoroughly analyze incomingand outgoing data. Firewalls can alsoprevent employees from downloadinglarge files or sending certain types ofdata through the Internet. For example,some instant messaging services areblocked by firewalls because they canalso transfer sensitive data.

Tech Terms

This diagram represents the computer network of a white-collar professionalfirm that has a pair of databases, one for client information and one for projects underdevelopment. Both databases reside on a server separate from the one that provides In-ternet access and print-and-file sharing. The database server, however, is connected tothe network server so that employees can access databases remotely.

DIAGRAM 4.2: The Basic Network

105


Workstations

Firewall

INTERNET

RemoteUsers

Network Server

Internet Access

Print-and-FileSharing

Database Server

ClientInformation

ProjectsUnder

Development

External Access viathe Internet

Internal Access Only

KEY TO NETWORK ACCESSIBILITY

Point-Of-SaleCash Registers

InventoryScanners

Firewall

PC

INTERNETExternal Access viathe Internet


Database Input Only



106

This diagram shows how the sales and inventory databases of a retailnetwork are separated from the Internet by a single PC, probably the owner’s, to whichthey are connected.

DIAGRAM 4.3: The Retail Network

Database Server

Sales

Inventory

107


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

DIAGRAM 4.4: The Manufacturing Network

Workstations

Firewall

INTERNET

InventoryScanners

ElectronicTimecardSystem

External Access via the Internet


Database Input Only


Database Server

Sales

Inventory

Personnel

NetworkServer


So, healthy paranoia means that you put up fire-walls and make sure that your database server is heavilyprotected with passwords and other software. Some se-curity software can even detect whether a violatingcommand originates internally, from a PC on your orga-nization’s network, or externally, via the Internet. Itworks by simply looking at the log-ins on your networkto see whether any of those machines sent the com-mand in question. Unhealthy paranoia, of course, keepsyou from getting the job done.

A Final Word on DatabasesDatabases are only as good as the people who maintainthem, so no matter what you use your database for,everyone in your business needs to be sure to update thedatabase as a matter of course. You can simply make thisrequirement a part of the description and training foreach position. Of course, if you’re using specialized soft-ware for various functions, that software may very wellupdate the database for you. But if your workers clock into an electronic timecard machine, or are required toinput data into the database regularly, you must requirestrict compliance.

Cost BreakdownsTHE BASIC NETWORKThe following figures relate to a small office of ten peo-ple. They do not include the cost of the PCs and net-work server because that subject was covered in Chapter3. Thus, these figures represent only the database costs,including integrating the database software with appro-priate software on each workstation in your business.

Microsoft SQL Server (ten licenses) $2,249Server hardware $1,500Installation and integration $3,000Service contract $500/monthTotal Start-up Cost $7,249Total Monthly Cost $500

108

THE RETAIL NETWORKThe following figures apply to a fairly advanced retailnetwork, with two bar-code scanners and two point-of-sale machines. Many small retailers can get away withone of each. The installation and service costs are small-er because the network itself, despite using specializedequipment, is fairly simple.

Microsoft SQL Server (five licenses) $1,489Server hardware $1,500Installation and systems integration $2,000Service contract $250/monthTwo new Posiflex Windows-based

point-of-sale systems $6,580Two new Symbol bar-code scanners $500Total Start-up Cost $12,319Total Monthly Cost $250

THE MANUFACTURING NETWORKThis network definitely belongs to an ambitious smallbusiness. Again, the figures assume a managerial, sales,and support staff of ten people, and a manufacturingstaff of ten to 25 additional people. A three-scanner in-ventory system as well as a timecard management sys-tem are also assumed.

Oracle 9i Database Standard Edition(14 named users) $4,200

Server hardware $2,000Installation and systems integration $10,000Service contract $2,000/monthThree new Symbol bar-code scanners $750TimePilot electronic timecard system $870Total Start-up Cost $19,820Total Monthly Cost $2,000

109


A Cautious Lookat e-Commerce

111

CHAPTER

5

he bedroom community of Red Bank, N.J.,has been immortalized in film by one of itsmost famous sons, film director Kevin Smith,whose “Jersey Chronicles” include themovies Clerks, Mallrats, Chasing Amy,

Dogma and the latest memorial to his two amazinglystupid and funny signature characters, Jay & SilentBob Strike Back.

But Smith is far more than just a screenwriter andmovie director. He has written storylines for a numberof comic book lines, including D.C. Comics’ Daredeviland Green Arrow, and he owns his own comic book andmovie memorabilia store on Broad Street, the town’smain drag. His store, appropriately called Jay & SilentBob’s Secret Stash, is a magnet for fans of Smith’smovies and home to his production company, ViewAskew Productions—the movie industry’s version of asmall business.

In the movies, Jay (played by childhood Smithfriend Jason Mewes) is a foul-mouthed, moronic mari-juana dealer, while Silent Bob (played by Smith) is hisliterally 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 WideWeb to promote his all his enterprises.

The main entry into the “ViewAskewniverse” isthrough the production company’s Web site,www.viewaskew.com. Smith uses this front page to pro-mote his latest movies, post articles and reviews abouthis production company, and plug his latest comic bookprojects. In order to try for a bigger opening weekendfor Jay & Silent Bob Strike Back, Smith used his site to

Summary

■ 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

T


promote a giveaway of signed movie merchandise toanyone who sent in movie stubs from two consecutiveshowings of the film.

A companion site, www.newsaskew.com, is a bul-letin board where fans and Smith can communicate withone another. Ever since the Internet became an impor-tant part of culture, Smith has been right there with it,even spoofing his fans’ occasional jibes in Jay & SilentBob Strike Back by having his two main characters travelacross the country to stop a film based on their lives be-cause Internet users panned it. (In the end, perhaps ful-filling one of Smith’s secret fantasies, the two travelacross the country to pummel every single person whohas ever posted a negative review about them.)

You would think, however, that a director whose lasttwo movies pulled in more than $30 million apiece inthe U.S. would have a massive e-commerce presenceonline as well, with servers in the back of the SecretStash churning out orders to a well-oiled distribution

112

portal: an Internet term,circa 1997, for a Web site that offersa number of useful features, designed toattract many people and to serve as theiraccess point to the rest of the Internet.These sites tend to offer search engines,Web-site directories organized by subjectand subcategories, e-mail, chat, classi-fied ads, news and weather, and evenshopping. Examples of portals areYahoo!, MSN, Netscape.com, Excite,Lycos, and the failed Go.com and Infoseek sites.

splash page: a Web page, usually thefirst page a customer encounters on aWeb site or subsection of a site, thatsimply provides the name of the site,

some graphics, and a link to the mainindex page. In other words, it causesa “splash,” then turns the reader overto the meat of the site. Good splashpages encourage users to read more,while boring splash pages can sendusers surfing off to another site.

shopping cart: online, this is wheree-commerce customers store theirtentative purchases. A shopping cartlets users refer back to descriptions ofthe items they’ve chosen and wish tobuy. Once users have finished shoppingon the Web site, they proceed to the“checkout,” where they provide paymentinformation and shipping information,and the transaction is processed.

Tech Terms

and fulfillment machine. Instead, the online Stash is agood example of how to easily integrate e-commerceinto your existing business.

Smith’s Web site is hosted by the Web portalYahoo!. A link from the ViewAskew Productions’ homepage takes you to a splash page featuring a businesscard from Jay & Silent Bob’s Secret Stash, which has alink to the online store at Yahoo!. The online store hasits own look and feel, but borrows heavily from the de-sign elements of both the ViewAskew site and Smith’smovies, providing a sense of visual continuity eventhough the URL has changed to http://store.yahoo.com/jsbstash/. Links along the side take you to merchandisefrom each of Smith’s films, as well as from the produc-tion company and Smith’s comics. Other links returnyou to ViewAskew at any time—a critical feature thatassures users that they’re not getting lost on someoneelse’s Web site.

Each movie link features about a dozen items.Clicking on an item reveals more details, includingwhether Smith himself has signed it.

The Yahoo! site provides all the tools necessary torun a large e-commerce site. Users can put their pur-chases in a shopping cart and proceed to the checkoutpage found on virtually every e-commerce site, wherethey enter their credit card and shipping information.Yahoo! also provides the merchant with authorization ofcredit card purchases, aids in the transfer of funds to thestore’s accounts via simple wire transfer or credit cardcrediting, and e-mails the order information to the store,where a member of Smith’s staff reads the order off thescreen, puts the items in a box, and ships it.

Sure, the online Stash handles no more than a fewdozen orders a day except for when one of Smith’s moviescomes out, but Smith’s bricks-and-mortar store does abrisk business. And considering that his Yahoo! store costshim only about $60 a month to maintain, plus the 0.5%cut Yahoo! gets on each sale, Smith is able to maintain animportant link to his fans and make a few bucks in theprocess, without having to invest in expensive servers andsoftware or pay for their care and maintenance.

113

CHAPTER 5 A Cautious Look at e-Commerce


How to View e-Commerce in Your BusinessIn the late 1990s e-commerce was the hottest thinggoing. Remember the obscene amounts of money madeby the initial public offerings of companies like Pets.comand eToys? Venture capitalists threw literally billions ofdollars at nearly any e-commerce company they couldfind, even though none of them, including giants likeAmazon.com, had a clear and well-defined vision of howthey would make a profit. These companies and the ven-ture capitalists that backed them up assumed that allwould be revealed eventually in the learning process ofthe New Economy.

Today, we can look back and share a grim chuckleat these companies’ expense. An e-commerce Web sitedoes not a business make. Billions of dollars were lost,and thousands of people ultimately lost their jobs be-cause of the “irrational exuberance” surrounding e-commerce. However, we did learn a few things out ofthis failed e-commerce experiment:■ e-Commerce works best as an extension of your real-

world business, a way for you to reach new customersand, eventually, bring them in the store. One of themost successful retailers online today is Wal-Mart,and a large part of that success comes from the com-pany’s taking advantage of its numerous distributioncenters already located throughout the country. Wal-Mart didn’t need to build expensive infrastructure togo online; companies that did got burned.

■ The fewer real-world, bricks-and-mortar resources—andthe less money—you must devote to e-commerce, thebetter off you’ll be. Toys ‘R’ Us and Target stores bothspent millions on e-commerce, and in the end, decid-ed that a partnership with Amazon.com was far moreprofitable than trying to reinvent the wheel for theirown online businesses.

■ The more you can piggyback your business onto existinge-commerce infrastructures, the better off your bottomline will be. Again, large businesses are now piggy-

114

backing on Amazon.com or eBay’s infrastructure,while small businesses, like Jay & Silent Bob’s SecretStash, are using turn-key online operations providedby Yahoo!, eBay, and other sites.

Obviously, e-commerce is not for every business—it’s hard to sell home-cooked meals or legal advice viathe Internet. Only a handful of service-oriented busi-nesses translate well to the Internet, and trying to inte-grate online functions into your daily work could distractyou from serving your real-world customers. The onlineenvironment is best for goods or services that you candeliver to the customer quickly and easily, using your ex-isting infrastructure—items you can easily box and sendor intangibles such as reports or information.

115


One of the biggest survivorsof the 1990s dot-bust was BlueNile.com,the online jewelry store. The margins ondiamonds and jewelry are inordinatelyhigh: 10% to 20% for some items, up to50% for diamonds and gemstones. Ship-ping is also easy—the products weighonly a few ounces, though the shippinginsurance does add up.

Like BlueNile, the survivors of thedot-com bust were book and music stores,computer and software retailers, high-ticket retailers like jewelers, or boutiqueswith unique items. In general, items thatare relatively expensive and have a rela-tively high margin of profit make for bettere-commerce products, as do products thatare easy to ship through the mail.

And no matter what you sell, it’simportant to provide your would-be cus-tomers with as much information as youcan, including photos! After all, unlike in

a real-world shop, the online buyer can’thandle the merchandise.

When it comes to price, check otherWeb sites to see what similar items sell forand price yours accordingly. Since you’llhave less overhead on Web sales than inyour real-world store, you may wish to passthese savings along to your online cus-tomer. At the same time, you don’t wantyour best customers going to the Web in-stead of stopping by your shop. Offering a5% to 10% discount off real-world retailprices has worked well for many onlineretailers, while charging full retail priceseems to work for retailers who attractcustomers for whom the convenience ofshopping online overcomes any price resis-tance. Unfortunately, there’s no exact sci-ence for e-commerce pricing. Experimentwith price in the early stages of your Website to find out what seems to attract buy-ers and what seems to hurt your sales.

TIPS: What to Sell Online


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

The eBay WayIn 2001 the online auction site eBay launched an initia-tive to attract more businesses to its auctions. Via“eBay Stores,” businesses of any size not only couldauction off their wares online, but also could use theexisting eBay infrastructure to place auctions directlyonto their individual Web sites or develop stores wherethe businesses could charge fixed prices for items in-stead of auctioning them off.

This is a brilliant idea for small businesses looking toget into e-commerce. There are approximately 30 mil-lion registered users on eBay—a massive audience forany potential seller—and the site gets literally millions ofvisitors every day. It stands to reason that at least a fewof these teeming millions might be interested in what

116

bidding price: in an auc-tion, online or off, the price at which aseller starts the bidding on an item

reserve price: this is the minimum pricethe bidding must reach for the seller toactually agree to sell the item. If the bid-ding on an item does not reach the re-serve price, the seller is not obliged topart with the item and no money changeshands. Reserve prices are not initially re-vealed to prospective buyers, in order toprotect sellers against bids that come inright at the reserve price and to keep in-terested parties bidding higher. However,on eBay and other auction sites, after

prospective buyers bid, they are toldwhether they have met the reserve priceand whether other bidders have alreadymet it. Reserve prices are optional onmost sites, and “no reserve” auctions cancreate some interesting bidding scenariosas well.

Dutch auction: an auction in which twoor more identical items are up for bid.The top bidders, in order, receive theitems, as long as they have met the re-serve price on each item. If only fourbids for five identical items meet thereserve price, the fifth item is not soldto the fifth-highest bidder.

Tech Terms

117


you have to sell. You can test the waters with any num-ber of different products from your business and seewhat the online market will bear.

Getting started on eBay is simple: You fill out a fewonline forms to provide contact and billing information,read the service agreement carefully, post a few items toget 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 yourauction listing, such as size, weight, and technical speci-fications where appropriate. A picture of the item giveswould-be bidders a much better sense of what’s being of-fered. A .jpeg formatted photo—like the ones from digi-tal cameras or those found on other Web sites—is perfect for this.

In addition, eBay charges a percentage of the sale asits 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 thatyour buyers can safely send you money, while ensuringthat they’ll receive the item sent to them. Services suchas eBay’s proprietary service, eBay Payments, and theindependent PayPal let people pay quickly via creditcard. Through any of these, your proceeds go directlyto your checking or credit card account. Unless youhave a corporate credit account that you use heavilyand account for regularly, I suggest moving the fundsthrough your business’s normal bank accounts for easeof accounting.

In exchange for verifying the customer’s credit in-formation and transferring the funds to your account,the payment service will also skim a percentage point offthe top of each sale. If your items don’t sell, you’ve lostonly the original posting fee.

Auctions can last three, five, seven or ten days, withmost business users, according to eBay, opting for thefive-day run. To ensure that you’ll make at least a fewbucks off the deal, I suggest that you set your reserve


price somewhere above your total auction and paymentcosts if you sell the item, as well as between your whole-sale cost and your in-store price. Checking out similaritems on eBay can give you a reasonable idea of whereto place this reserve price. You can also sell multipleitems via a Dutch auction (see page 116). For example, ifyou have five identical items, the Dutch auction will sellthem to the top five bidders in your auction, as long asthey’ve all met the reserve price.

Once your auction of an item is complete, thebuyer pays you via the payment service and sends youan address; you are responsible for packing up and ship-ping your items to the buyer. By the way, you can speci-fy in your listing of an item that shipping and handlingcosts are extra, and even consult with buyers to deter-mine the shipping method, so that they don’t feelthey’re paying too much.

Get a few auctions under your belt and see how thesystem works for you. First, of course, ensure that you’remaking money. If, after the service payments, you’reclearing only cents, you may have to jack up the reserveprice. If the reserves aren’t being met, perhaps the onlinedemand for your item is less than the real-world demand,or perhaps other items in your inventory would be bettersuited for online marketing. Try again with new auctions,using different items, reserves, and methods.

For a novice seller to establish a reputation as a reli-able businessperson, it’s important to rack up a numberof sales. Many veteran eBay buyers won’t purchase any-thing from unproven sellers. Once you’ve sold ten, 20,50, or even 100 items on eBay, you may find that yoursales come faster, and your final sales prices are higher,because more bidders can drive the price upward quick-ly. Patience is a virtue, especially on eBay.

Managing and ExpandingYour Auction BusinessOnce auctions seem to be profitable for you, it’s time toexpand. It can be a pain to manage dozens of online

118

Tech Terms

Web-based softwareor services: softwareprograms that areaccessible via theInternet, where Websurfers can access anduse them via their Webbrowsers. For example,Microsoft Outlook isa standard, computer-based software pro-gram, while Yahoo!Mail is Web-based.

auctions, especially if you have a business to run in thereal world. Fortunately, eBay and a number of othercompanies offer additional software that lets sellers au-tomate their auction processes to make it easier to postitems, design attractive listings and deal with buyers.The Seller’s Assistant Pro is eBay’s Web-based manage-ment tool that lets business sellers create dozens of list-ings at a time, manage e-mails from prospective buyersand winning buyers who will send you shipping infor-mation, keep track of multiple auctions, and help withfulfillment after the sales are made by consolidatingshipping information into spreadsheets. The Pro ver-sion of this service, which is accessible from any Webbrowser, costs $15.99 a month, and offers a great way tosafely bulk up your sales without committing yourself tolengthy contracts.

A number of companies also provide software andsupport for further integrating auctions into your busi-ness. Companies such as AuctionWatch, Auction-Works.com, Channel Advisor Corp., and FairMarketInc. provide management tools much like eBay’s Auc-tion Assistant Pro (see the box above for Web-site ad-dresses), while allowing you to integrate your auctionsales into your existing databases. For example:■ You can add your auction sales into your general in-

119


Dozens of software programs are available to help youmanage 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

RESOURCES: Auction Management


ventory database in order to ensure that you don’trun out of product.

■ You can add the names and addresses of buyers to yourpromotional database for mass mailings or e-mails.

■ You can integrate the sales from your auctions intoyour financial programs, so that they’re automati-cally accounted for as you run your spreadsheets.

■ You can even completely outsource the entire sales andfulfillment process, letting one of these companieshandle everything for you in exchange for a percent-age cut, typically in the low double digits, dependingon the type of products you’re selling and their cost.All you have to do is ensure that the company has theinventory on hand.

The cost of these services varies with the company.Some, such as eBay’s services, are Web-based and thusare run on the subscription model. Others are softwareprograms that must be installed on your servers and runin conjunction with your existing database programs;

120

Believe it or not, eBay and Amazon.com have yet to cor-ner the market on online auctions. Granted, both siteshave the critical mass necessary to practically guaranteea buyer for every seller, but other sites have explored cer-tain niches. Here’s a sample of smaller auction sites thatyou can find online. Chances are, there’s one for yourproducts, too.

■ 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

RESOURCES: Niche Auction Sites

these can run into hundreds of dollars each. A full, Web-based auction fulfillment package can cost hundreds ofdollars each month, but the monthly fee is a percentageof your auction sales.

eBay AlternativesIf your eBay auctions are going well, it’s a good idea toinvestigate auction listings on other Web sites to reachan even broader base of buyers. In an attempt to com-pete with eBay’s business, Amazon.com, Yahoo!, andother portals offer auction opportunities. A number ofsmaller auction Web sites also try to approach eBay’sscope, while others focus on smaller business niches (seethe box on page 120). AuctionWatch’s software was ini-tially designed for use with multiple auction sites, and itcan help you expand in this way. Again, start small atfirst, then scale upward if you think the sales will beworth it. However, eBay is the clear winner in onlineauctions, so don’t let your experiment with other sitesdistract you from eBay ventures.

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

121



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

Move Your eBay Auction HomeTaking the eBay store concept one step further, you cannow place your eBay auctions on your own Web site.This free service, which was formally introduced in early2002, has two options:■ You can simply create a listing of links from your Web

site to each of your eBay auctions for information oneach offering. Creating such a listing is simple to do,but it robs your business of some of its online identityby taking everything to eBay’s site with a single click.

■ The second option lets you create a unique page thathouses all the auction information on your Web site,as opposed to eBay’s, so that visitors to your Web sitelink to eBay only if they decide to place a bid.

For now, either option is free, and requires you tosimply cut and paste the HTML code onto your Website, but eBay executives say that they plan to chargesellers a fee for this service once the bugs have beenworked out.

Placing your auctions on your Web site by either ofthese methods is a good idea, because you’re drivingtraffic to your Web site and providing a convenient, cen-tralized place for your customers to bid on your wares.(The first option takes less of a toll on your Web serverbecause it requires fewer pages.)

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

122

into your own e-commerce storefront, auctions remaineasy-to-handle moneymakers. However, you may decideto forgo the vagaries of auctions altogether in exchangefor a more traditional, fixed-price e-commerce presence.If you do it right, you can build an online store of yourown 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 andsee what happens. For this to work, you should have al-ready built your Web page (see Chapter 2), completewith your own unique URL. You have to start some-where, after all, and it’s best to start where people al-ready know to find you.

Next, as with auctions, you need to determinewhether an online market exists for your goods. Theplace to start, believe it or not, is Amazon.com, because ithas already done the research and, in some cases, madethe mistakes to determine what sells online and whatdoesn’t. Chances are, if Amazon.com sells it, you can too.

If a market appears to exist online for your widgetsor service, you can even sell your wares right on Ama-zon.com, taking advantage of its technology and its cus-tomers. The company’s zShops program lets you create astorefront page on Amazon.com itself. Your products arelisted in search results alongside Amazon’s, you use Ama-zon’s payments system, and you can list as many items asyou have in stock. (Don’t confuse the zShops programwith Amazon.com’s Marketplace Seller program, whichcharges exorbitant fees for you to sell the very sameitems that Amazon sells, except in used condition.)

The zShops system works like this: You pay $39.95 amonth to Amazon.com for it to maintain and host a Webpage for each of up to 40,000 items. Chances are, youwon’t even come close to selling 40,000 different items,but if you do, Amazon will charge you 10 cents per itemsold after that. You can also opt for featured placementin the various store categories in zShops. Thus, if yousell razors, you can pay five cents per day to have yourrazors featured higher up on the page than those of youronline zShop competitors. For $2 per item listed youcan also have your listings appear in boldface in search

123



results. And finally, Amazon will, at no cost, cross-linkyour zShop items to related items in its stores and onother pages throughout the site.

When a transaction is made, Amazon takes a cut of5% for items that cost $25 and under, $1.25 plus 2.5%for each item priced from $25 to $1,000, and $25.63plus 1.25% for items over $1,000. Proceeds from yoursales are deposited directly into your checking account,or credited to a credit card, using the same techniquesused by eBay and, indeed, by most other online auctionand store sites.

This system offers you some benefits, such as ease-of-use and manageability, but there are also some draw-backs. The zShop pages are definitely Amazon.compages, and look nothing like your Web site or other com-pany branding. Although you can link from your home-page to your zShop, linking back from the zShop to yourWeb page is more difficult; zShops are designed to fun-nel traffic into Amazon.com, not away from it. More-over, the fees are somewhat high, although the cost maybe offset somewhat by volume of sales, given that Ama-zon.com users tend to be much more ready to purchasethan a Web surfer who happens upon an independentWeb site. Research done by a variety of technology thinktanks shows that Amazon.com is one of the most trustedonline names around.

A listing on zShops will certainly provide your busi-ness with some exposure and let you get an idea of whatit’s like to conduct online transactions. However, I seezShops as little more than steppingstones to greater e-commerce possibilities. Despite Amazon’s reach and itsaudience, there are better ways to make money onlineonce you get the hang of things.

Yahoo! Stores: A Flexible Hosting OptionYour next step will be to create an online storefront ofyour own, one that can stand as an independent store,

124

without feeding into or off of another site. However, youmay still need assistance with building your online store.Kevin Smith, whom we talked about at the beginning ofthe chapter, uses one of my favorites sources, Yahoo!Stores, for his comic book store.

Yahoo! has been coming on strong with its paid ser-vices for online businesspeople, and its stores are no ex-ception. Yahoo! will help you build your storefront, linkit to your existing Web site, apply for a merchant ac-count to accept credit card transactions, and process or-ders by listing them on a Web page viewable throughyour Internet browser, sending them to you via e-mail,or inputting them directly into whichever database pro-gram you happen to use so you can fulfill them. You canalso process credit cards through your bricks-and-mortarstore’s system if you wish.

And the price…that’s the best part. Yahoo! Storeshave the most reasonable hosting and transaction priceson 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 addi-

tional 10 cents per month, so a store with 100 itemswill pay an extra $10 monthly.

■ The transaction fee. Yahoo! also takes a cut of 0.5% onevery transaction, one of the lowest transaction feeson the Internet today.

■ Revenue share. Finally, if you decide to participate inYahoo! Shopping, the portal’s own directory of e-commerce sites, Yahoo! will take 3.5% of sales thatoriginate from the Yahoo! network of sites. In otherwords, if a customer comes to your site through a linkfrom 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 Website, for example, Yahoo! gets only 0.5%. The largercut is in exchange for driving traffic to your Storefrom Yahoo!, which has millions of users every day, soit’s a good idea to opt in for those Yahoo! listings. Be-sides, 3.5% is less than what Amazon.com charges oncertain transactions.

125



Unlike Amazon, which shoehorns everyone into itsWeb design and branding, Yahoo! is extremely flexiblewhen it comes to the design of your Web site. The com-pany offers free Web-building tools, or you can uploadthe HTML code that you or your Web designer has cre-ated. Indeed, your Yahoo! Store can look exactly likeyour own proprietary Web site, with the only differencebeing the URL.

If you have an inventory database, you can useYahoo!’s tools to link it to your store, creating your store-front directly from your database files and logging trans-actions so that you can get an accurate count of yoursales and inventory on the fly.

If you’ve registered your domain name throughYahoo! GeoCities and are hosting your Web site on thecompany’s servers, your Yahoo! Store can be seamlesslyadded to your current URL (e.g., www.mikesgizmos

126

The principles of Web de-sign, as discussed in Chapter 2, applydoubly to your e-commerce site. Youshould make sure that every page hasthe same look and feel as all others, thatnavigation between pages is easy, andthat customers have a place to turn tofor help. Furthermore, you should posta privacy policy (see page 46 of Chapter2) to ensure that customers know howyou will use their personal information.

Also, you should make sure that yourproduct line up is organized sensibly,much like the aisles of your retail store.Nuts go with nuts, bolts with bolts. Youmight also consider cross-listing itemsunder their individual brands or under vari-ous uses. For example, in a tool shop, youcould list a Brand X hammer under handtools, hammers, carpentry, and Brand X.

If your product listing is extensive—at least 100 items or more—you mightconsider purchasing some search soft-ware for your site. For no more than acouple of hundred dollars and some timespent going through your Web pages,you can create your own search enginethat will let customers find exactly whatthey’re looking for by typing a keywordinto a search field. Your webmaster orconsultant will have the latest informa-tion on which search applications arecurrently available and which will fit inyour budget—new ones are being intro-duced every day. They consist basicallyof HTML and database code that youplug into your Web server. However, stayaway from including a search functionif you’re offering relatively few items—it just highlights what you don’t have.

TIPS: e-Commerce Web Design

.com/store), unlike Kevin Smith’s store, which has asomewhat clumsy URL—http://store.yahoo.com/jsbstash/—because the rest of his View Askew site doesnot reside on Yahoo’s servers.

Finally, Yahoo! offers tracking tools that enable youto see not only where your customers surf within yourstore, but also where they come from and where theysurf off to next, allowing you learn more about your on-line competition.

The company also offers tools to help with register-ing your store, as well as your main company Web site,with search engines across the Web.

Yahoo! Stores represents one of the better deals outthere, and can grow with your e-commerce effort.

Branching Out Beyond Amazon and YahooThere are literally dozens of other companies that canhelp you establish your e-commerce efforts, with variousstrategies on how to do so. They tend to fall into the cat-egories described below. In all categories, you can gen-erally expect to pay more than at either the Amazon.comzShops or the Yahoo! Stores, with varying degrees of ad-ditional control in return.

THE WE’LL-DO-IT-FOR-YOU PLANMany companies will build your site, list and illustrateyour goods, provide credit-card authorization, link toyour database and fulfillment functions, provide the nec-essary customer service, and basically do everything ex-cept put your products in a box and ship them. AWe’ll-Do-It-for-You company could charge several hun-dred dollars to set up your Web site and create the nec-essary links to your inventory, sales, and financialdatabases, plus perhaps $100 to $200 per month in fees,including per-item transaction fees. All you’ll have to dois fulfill orders once or twice a day. Some companies willeven dynamically update your Web site whenever youget new inventory or run out of a particular item.

127



THE WE’LL-DO-SOME-OF-IT-FOR-YOU PLANThe most popular companies provide Web site hosting,shopping carts, and checkout software. But it’s up toyou to build your Web site, have contact with the cus-tomer, fulfill orders, and, in some cases, keep yourdatabases up to speed. Amazon.com’s zShops andYahoo! Stores work like this, but aren’t hosted on thesame server as the rest of your Web site and thus won’thave your unique URL.

For companies that do some of it for you, you canexpect to pay less. The Yahoo! Store is a good example,as it requires your attention to build the site, add newitems, and otherwise maintain the storefront. Yahoo!Stores remains a solid baseline on price, with other com-panies generally more expensive.

Many Web-hosting companies (see Chapter 2)offer those kinds of e-commerce services as well, withthe additional benefit of having your store housed directly inside your domain. On top of normal Web-hosting costs, expect to pay another $50 to $100 amonth for such services, plus any transaction fees.(Transaction fees, by the way, can be fairly sticky. Youmay be able to get 2% or under, but 3% to 4% is ac-ceptable; 5% or higher is a rip-off, so buyer beware.)Some sites offer much cheaper hosting—as low as $20a month for a dozen items—but charge higher transac-tion fees from the get-go or more per item after a cer-tain threshold is reached.

Presenting an extensive list of these companies andtheir services and prices is nearly impossible. Forstarters, the technology shake-out of 2001 put many ofthese companies out of business, and the prices and ser-vices of the survivors seem to change every four to sixmonths. Some of the winners, however, are:■ Openyourstore.com■ Freemerchant.com■ FedEx eCommerce Builder (from Federal Express;

http://mybiz.mainstreet-stores)■ Netopia (www.netopia.com/en-us/solutions/sb

/index.html)■ Earthstores.com

128

THE DO-IT-YOURSELF PLANSome companies merely offer the tools and softwarenecessary to create your storefront, requiring you to payfor their tools up front and host your e-commerce ef-forts yourself.

Frankly, bringing your e-commerce enterprise toyour own servers isn’t appropriate for most small busi-nesses. The investment is equal to opening up anotherreal-world storefront, assembly-line, or distribution cen-ter, and can be just as risky. Indeed, hosting your own e-commerce enterprise could spell the difference betweenbeing a small business and becoming a midsize or largebusiness, and you should consider such a step carefully.

There are benefits, to be sure. If you’re already pro-cessing hundreds of transactions per day, you’re proba-bly losing hundreds of dollars a day in fees toAmazon.com, Yahoo!, or eBay. In addition, doing it allyourself means there are no limits to customizing yourstorefront and no roadblocks to full integration betweenyour existing databases and your Web site. Absolutelyevery aspect of your e-commerce enterprise is underyour control, and you get a bigger chunk of the profits.

THE DISADVANTAGES. 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 beginat $5,000, and they could rise to $10,000. You’ll needservers, after all, to handle these transactions andstore all the records. Also, you’ll need extra hard dri-ves to store customer histories and transactionsthrough time, which add around $1,000 yearly to yourprice tag. And if your e-commerce enterprise is suc-cessful, you may find yourself having to add evenmore servers. Even if you’re pulling in hundreds oftransactions per day, it’ll take quite a while to make upthe cost of adding new servers.

■ Then there’s software. Microsoft, AOL’s NetscapeCommunications, Oracle Corp., and other companiesmake a variety of e-commerce-server software prod-ucts. The software needed to run e-commerce trans-

129



actions, by itself, costs at least $1,000. You’ll also haveto beef up your hardware and software for your exist-ing business systems, the ones we looked at in Chap-ter 4, because you’ll be rapidly adding data to yourdatabases. Thus, you’ll need more complex databaseprograms and more storage.

■ You’ll need design help. You’ll want to lean on yourcurrent Web-site designer or IT people for the design

130

When I sell my old stuff oneBay, I can easily and readily accept Visaand MasterCard—and I don’t even own abusiness. Both eBay and Amazon.comhave proprietary services that make it easyto accept credit card payments. All you dois set up a seller’s account, and onceyou’re approved—the vast majority of peo-ple are—eBay or Amazon.com will processyour credit card payments for you in ex-change for a cut of the sale, usually nomore than 2% to 3%. The proceeds of thesale can either be deposited in your check-ing account via wire transfer or credited toa credit card of your choice, thus reducingyour overall balance.

Let’s say your business already has acredit card acceptance system in place.For the vast majority of small businesses,that simply means you have a verificationdevice, obtained from the bank or brokerwhere you have your merchant account,which dials into the bank network to verifythat your customer has enough availablecredit to cover the transaction.

Many banks offer online credit cardverification on top of the service they pro-vide to your bricks-and-mortar store. Inthat case, as part of your overall credit card

merchant account setup, you’ll receivedesktop software that will link up to youre-commerce Web site. Some software pro-grams require you to manually send offcredit card numbers for verification; thistime-consuming process must be done atleast once a day. Another type of program,called a gateway service, plugs right intoyour Web-hosting server—either your on-site server or your host’s—and sends creditcard numbers automatically for verificationin real time, as well as e-mails to confirmpurchases with your customers.

How much does all this cost? Ofcourse, if you already accept credit cards,you’re already paying a lease on yourstore’s card-swipe verification device (un-less you bought it outright), as well a dis-count rate of 1.5% to 5% to the bank oneach purchase. For the very simple desk-top software—the kind that requires youto input numbers manually—you’ll spendabout $100, plus the discount rate oneach transaction. If, however, your e-commerce site is growing rapidly, considerthe gateway service. Prices for the hard-ware and software range from $350 to$1,000, depending on the extra equip-ment needed and installation costs.

TIPS: Accepting Credit Cards

of your storefront. You simply should not design ityourself, 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 oneperson—more likely two people—to handle your e-commerce Web site. Your current system administra-tor will probably walk out if you propose to adde-commerce to his or her current workload.

REACH CRITICAL MASS FIRST. In case you haven’t gottenthe point, hosting your own e-commerce site is difficult.(There’s a reason that Pets.com is remembered only forthe 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 ofexperts who watched the dot-coms fail a few years ago,I’ve come to the following conclusions:■ 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 tothe thousands before you consider making the moveto self-hosting.

■ The transaction fees you’re paying to your Web-hostingand e-commerce providers should outweigh the cost ofa long-term investment in your own Web storefront. Themath on this should be fairly simple: If your revenuesfrom e-commerce are $500 a day ($130,000 a year)and you’re giving $20 a day of that away in transactionfees (about $7,300 a year), investing $20,000 in equip-ment and $80,000 in two employees (not includingtaxes and benefits) hardly makes sense. Think of host-ing and transaction fees as your “lease” for space onthe Internet, and keep in mind that, aside from thehosting fee, you aren’t paying unless you’re makingmoney. When your business outgrows your lease, it’stime to invest in your own turf.

■ You have to make sure that your transactions are steadyover time; you need to know that a couple of months ofstrong sales aren’t a fluke. If your sales remain highand strong for a year—perhaps for even two years, totake into account seasonal fluctuations—then you

131



have a clear picture of what your e-commerce effortsare doing for you, and whether your own hosting isright for you.

You Have Online Orders,Now What?Naturally, e-commerce involves far more than simplythrowing up a Web site and making sure you can acceptcredit cards. Once the orders come in, you have to fulfillthem, which means having product on hand, packing it,and sending it off. Although discussing fulfillment is re-ally beyond the focus of this book, let’s cover a few basicshere. After all, if you can’t deliver on your orders, youwon’t be engaged in e-commerce for long.

KEEPING INVENTORY ON HANDFirst, you should make sure you have sufficient inventoryon hand—and acquiring inventory means an additionalcost to you up front. It’ll take time for Web surfersaround the country to catch on to the fact that your store-front is out there, but once they do, you may be in for asurprise. Jeff Bezos, the CEO of Amazon.com, recalledthat when he first started his bookstore, business wasfairly 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 al-ready have. Think of your Web site as a new branchstore, and keep it stocked accordingly. Once the orderscome in and begin to stabilize a bit, you can see whatsells and what doesn’t, and order accordingly from yoursupplier. The inventory management tools discussed inChapter 4 could make life easier when you plug in youre-commerce site.

Of course, if you start out with auctions, you won’thave to anticipate inventory needs. Auctions let youcontrol the amount of product you have available andtherefore your inventory costs—another reason to con-

132

sider eBay before you get into your own e-commercestorefront.

SHIPPING AND HANDLINGNext, you’ll have to think about shipping. The nationalplayers, such as United Parcel Service, Federal Ex-press, and the U.S. Postal Service—have local businessagents with whom you can discuss opening an accountfor bulk shipping.

Be sure to pass along the cost of shipping to yourcustomers by charging a blanket fee per order or on asliding scale, depending on the dollar amount or num-ber of items ordered, or by incorporating the cost ofshipping into the price of each item on your Web site.To make a separate cost for shipping seem less onerousto the buyer, you can, if you wish, increase the prices ofyour items slightly and decrease the charges for ship-ping. Don’t forget to factor in the cost of any packingmaterials that you need; banana boxes from the grocerystore probably don’t represent the branding you want.

Next, you’ll have to find a place within your office,

133


All the big shipping companies want a piece of your busi-ness, especially if you start shipping product regularly be-cause of your Web site. The deals themselves constantlychange in response to market forces, although once youget one, you’re locked in until you can renegotiate withyour sales representative. Here are the URLs for thebiggest U.S. shipping companies and their software andsmall-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

RESOURCES: Shipping Deals


store, or building to actually fulfill these orders. Whenyou accumulate a handful of orders—or up to a couple ofdozen—a day, clear off a table in your storeroom andtake the time to box everything up. If you work by your-self, you might set aside time after normal business hoursfor 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 han-dle fulfillment. You can (1) hire someone to simply fillboxes, get them ready for pickup, and then do other jobsaround the store or (2) hire someone to handle the e-commerce operation entirely, including fulfilling andshipping orders, interacting with customers, and updat-ing the Web site. Obviously, hiring someone to do morewill cost more, but will free up your time considerably.

Managing Fast GrowthThe steps I’ve outlined here—moving from auctions, tozShops or Yahoo! Stores, to your own hosted site—should help you manage your e-commerce growth, en-abling you to handle whatever flow of orders you receive.But every now and then, you’re going to be hit with aspike in sales. How can you tell whether it represents aserious 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 otherkinds of e-commerce in this regard, because you controlthe flow of product. If each of your products is getting adozen bids, you’ve got the right amount of product outthere. If each one is getting 20 to 30 bids or more, youcan put more items up for auction until demand backsdown to around a dozen bids per item again. This strate-gy will help you anticipate sales, and let you structureyour fulfillment operation accordingly, maybe by hiringyour neighbor’s kid to pack boxes for a few hours duringa time of peak demand.

For an online store, demand is unpredictable be-cause the customer base is so large. You might get 60orders one day, and then no more than three orders fora week. Or you might get 50 orders a day for a month,

134

only to see sales drop off for some inexplicable reason.The tools you use to gauge sales in your real-worldbusiness are a good place to start to estimate your on-line sales, but they don’t account for the reach of theInternet. For example, if your best sales come duringthe back-to-school season, that demand may very wellbe mirrored on the Internet. However, you may alsosee an online upswing in January, when college stu-dents go back to school, even if your town doesn’t havea college. A sporting goods store needs to keep in mindthat it’s always warm somewhere in America, and thatthe market for ski equipment may extend far later inthe year than you would anticipate on the basis of yourlocal weather.

But let’s say that you’ve got something hot on yourhands, you’ve had booming sales for three or fourmonths, and you’re having trouble keeping up withgrowth. First, you need to invest the money you havebeen making on these additional sales into your infra-structure—hire more help, bring in more inventory—so that you can make the e-commerce portion of yourbusiness manageable again and pay attention to thereal-world part of your business. Orders mean money,after all, so while you have it, go ahead and invest inyour business. Even a three- or four-month sales spurtcan fall off after a while, but online customers tend tobe loyal; if they have a good experience with your busi-ness online, they’re likely to come back. Thus, yournumbers will still be higher than they were before thespurt, and the investment will serve you in good steaddown the road.

The Last Word on e-Commerce, For NowIn an ideal world, e-commerce will bring new customersto your business in a manageable, profitable way. Engag-ing in e-commerce is a lot of work and certainly entailsrisks, but it can be a great way to expand your businessbeyond your hometown, your region, your state—all

135



around the world. Just keep a tight rein on growth, andcontrol the pace as much as you can. And always look tothat poor Pets.com puppet as an object lesson on howyou should never put growth before profitability when itcomes to e-commerce.

Cost BreakdownsThis section presents three e-commerce cost scenariosbased on eBay, Amazon.com zShops, and Yahoo! Stores.I’ve chosen not to price out the costs of installing a fulle-commerce server because such an expensive move,involving many different pieces of software and hard-ware, is too complicated to estimate. In the end, I standby my earlier statements: Unless your online business isgetting out of hand and you just can’t keep up, gettingyour own e-commerce server is cost-effective for onlythe largest privately owned businesses.

Remember that the following costs are for the tech-nology and computer-based services only. No shippingand handling costs are included because at least some ofthose will be passed onto the consumer.

THE eBAY SELLERHere’s a cost breakdown for a professional eBay sellerwho has approximately ten five-day auctions going on atany given time. For argument’s sake, let’s assume thatthe average reserve price of the 60 items on offer is $35,and that, on average, they sell for $45 each, for totalsales of $2,700 per month.

Insertion fees for 60 items per month $66/monthHighlighted auctions for four items

per month (the listing is highlighted in search results with a yellow band) $20/month

Bolded auctions for eight items per month (the listing is highlighted in search results with boldface type) $16/month

Average final sale fee for a $45 item at $1.75 per item $105/month

136

Credit card acceptance fees $27/monthSubscription to eBay Seller’s Assistant

Pro subscription $16/monthTotal Monthly eBay Fees $250/month

THE zSHOPS SELLERThe breakdown for an Amazon.com zShops seller is a lit-tle more difficult to do because there’s no way to controlthe amount of product that sells each month. For argu-ment’s sake, however, let’s assume the same number oftransactions per month at the same selling price as in theeBay example: 60 items sold per month at $45 each for atotal sale of $2,700. (This is somewhat optimistic, be-cause zShops are rarely so well frequented as eBay’s auc-tions.) By using Amazon.com Payments, the company’sown payment system, you incur no additional fees, andthe buyer is covered under Amazon’s own guarantees.

Listing fees $40/monthBoldfaced listings on the search and

browsing pages of eight items per month $16/monthAverage final sale fees $105/monthTotal Monthly zShop Fees $161/month

THE YAHOO! STORE OWNERIn the full e-commerce storefront experience, we makesome of the same assumptions as in the preceding sce-narios, including the same 60 items sold monthly for anaverage of $45 each, for sales of $2,700 a month. Giventhe integration with your own Web site, which should al-ready be attracting regular traffic, 60 transactions amonth is somewhat low, but again, this estimate is onlyfor the sake of comparison. However, we need more de-tail, 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-and-

mortar business, you don’t need to pay for a separatemerchant account for your online store.

■ You’ll need a little outside help to integrate your cur-rent inventory, credit card sales and financial databases

137



with your online store, and a little more design assis-tance to make your store look exactly like the rest ofyour Web presence.

Web-design fees (this is low, because you’rebuilding on design work previously done tocreate your Web site) $200

Database integration work $500Hosting fee $50/monthProduct insertion fee (for 15 products) $1.50/monthTransaction fee (60 items at $45 each) $13.50/monthYahoo! revenue share (five items at $45 each,

assuming that five of your sales came frompeople coming to your site from Yahoo!instead of your own site) $7.88/month

Total Start-up Fees $772.88Total Monthly Yahoo! Store Fees $72.88/month

138

MobileTechnologies

139

CHAPTER

6

illett’s Auto Repair in Topeka, Kan., han-dles a few dozen cars every day, thanks tofour repair bays and six mechanics onstaff. The shop will fix just about every-thing on wheels, from classic muscle cars

to any kind of import, sport utility vehicles, and mailtrucks, to commuter cars and motorcycles.

Paul Willett makes sure that his mechanics remainwell trained—seeing that their certifications and examsare up to date and providing all the latest manuals andreference tools they need to fix a variety of cars. Somemechanics in the shop specialize in certain vehicles—American trucks, Japanese compacts, etc.—but all em-ployees are able to step in and help when the shopneeds them. Thus, schematics and manuals of all kindsused to line the walls of Willett’s office.

No more, however. An auto repair shop isn’t a par-ticularly likely place for mobile technologies, but in late2001, Willett purchased six Handspring Visor handheldcomputers for his mechanics. Each Visor came with twoSpringboard modules—hardware add-ons that slip neat-ly into a slot on the back of the Visor. One of the mod-ules contains maintenance manuals for every domesticand imported vehicle from 1983 to the present—a seriesof books that would take up an entire six-foot shelf—made more useful because the manuals are also search-able through a keyword entry right on the Visor.

The second module contains a program to help me-chanics keep track of their work, such as an inventorydatabase for repair tools and supplies, a labor manage-ment program to keep track of hours spent on each ve-hicle, and a daily calendar for scheduling assignments.

Summary

■ Pagers■ Cell Phones■ Service Plans■ Life on a Laptop■ PDAs■ Mobile Internet

Access■ Integrating

Mobility IntoYour Existing Framework

■ Cost Breakdowns

W


Just for fun, the modules also keep track of popularauto-racing events around the country. When the Visorsare synchronized with Willett’s personal computer, hecan obtain overall estimates of the hours his mechanicsare working and a fully-compiled inventory database.The Visor and module packages, which cost around$500 each, are sold by Mitchell Repair InformationCompany, a subsidiary of Snap-On Tools.

“I can’t say enough about these handhelds,” Willettsaid. “Sure, there was some griping when we first broughtthem in, but now every one of our guys uses them everysingle day. The pages on the handhelds are just like theones in the books, right down to the diagrams.” In addi-tion, Willett said, the handhelds are becoming popular forother reasons, because the mechanics are allowed—andencouraged—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 check-book register on there.”

Wisely, Willett still keeps his manuals around, but heis ordering them on CD-ROM for use on his own com-puter. Slowly, he’s been getting rid of his paper manuals.“Nobody comes in to look anything up anymore. They’redoing it right there on the floor, which means they’re sav-ing time and saving our customers a bit of money. Plus,we can get more cars in here every day.” Willett said thatsince the handhelds were introduced, his workers nowaverage an additional one to two repair jobs per week.

“The handhelds have already pretty much paid forthemselves.”

I, too, have enjoyed the benefits of mobile technolo-gy. I wrote this book mostly at home thanks to a Dell ul-tralight Inspiron 2100 laptop computer. But I also wroteit on airplanes, in the office, in a Las Vegas hotel, and atmy mother’s home on Martha’s Vineyard. Twenty-fiveyears ago, being a mobile writer meant lugging around a15-pound portable typewriter, reams of paper, and a sin-gle copy of your precious, unfinished manuscript. Fortu-nately, those days are over.

Although laptops and other forms of mobile technol-ogy have certainly freed workers from the tyranny of

140

their desks and cubicles, however, you should be verycautious when approaching the whole concept of “mobil-ity.” Computer companies, cell phone providers, consul-tants, and your own IT guys will all try to sell you on thelatest in mobility, promising greater efficiency, more pro-ductive hours worked, and a great deal of convenience.

Well, mobility, for most businesses, isn’t all it’scracked up to be. Sure, you can be linked to e-mail 24-7,have access to nearly every piece of software on yournetwork from anywhere on the planet, and convene avideo conference with people scattered around theglobe. You can send quick messages to your sales forceon a variety of devices, from pagers to cell phones topersonal digital assistants (PDAs). But do you need to doany of these things? Probably not.

Practical technology isn’t just about reducing theamount of time spent accessing data; people have al-ways found a way to get their data when and where theyneed it, at speeds that are at least appropriate to theirneeds, if not always the most rapid. Rather, practicaltechnology is about creating more time, allowing us todo more. For example, if your sales people, equippedwith the latest e-mail pagers, spend far too much timeusing their tiny keyboards to check e-mail after everymeeting, that technology isn’t helping to create time,even though it has reduced the amount of time it takesto respond to e-mail.

Of course, adding mobile technology to your busi-ness has benefits, which is why I’ve included a chapteron it. So as you review your options here, keep practical-ity in mind and ask yourself whether these technologieswill actually create more time for you and your workersor just create more opportunities to waste time.

Rethinking the PagerThe first piece of your mobile puzzle is the ubiquitouspager, that little black box that hangs on your belt andflashes telephone numbers when someone is trying toreach you. At a time when most people have cell phones,some readers may question why you need pagers at all.

141

CHAPTER 6 Mobile Technologies


However, pager coverage is much better than cell phonecoverage, even in major cities, so there’s a better chanceyour pager will get through. Also, pagers are lighter andsmaller than most cell phones, and thus are easier to livewith. Although I strongly believe in using a piece of tech-nology for its original purpose (cell phones, for example,are atrocious when it comes to accessing e-mail), forpagers I can make an exception, because some of the lat-est alphanumeric and e-mail-capable pagers offer usefulfeatures that can be a healthy addition to your business.

NUMERIC PAGERSThe standard pager is both cheap and limited, but it getsthe job done. If you want to give pagers to your key em-ployees in case of emergency, by all means do it. A basicnumeric pager—the smallest and cheapest pager thatdisplays numbers only—can cost as little as $19.95 forthe pager itself, with monthly service rates ranging from$5.95 to $10.95, depending on which plan you subscribeto and whether you choose a voicemail option.

ALPHANUMERIC PAGERSAlphanumeric pagers, in contrast—pagers that can sendboth text and numbers—can give the person you’re pag-ing a head start in responding to your business’s needs,especially in an emergency. The “on-call” person whohas the pager may delay in calling back if all he or shesees is a number. But if the paged message also includesthe message “SHOWROOM FLOODED, PRODUCTDESTROYED”—well, you get the idea.

Many alphanumeric pagers also have the advantageof being accessible by e-mail. In addition to having itsown phone number, the pager may—depending on yourservice plan—have its own e-mail address, so that yourcallers can page you via e-mail by typing in the pagernumber and your service’s e-mail address, such [email protected]. This feature is especially impor-tant when, God forbid, the phones go down. You canbuy an alphanumeric pager for as little as $40, or less ifyou’re willing to hunt around; paging plans cost $10 to$20 per month.

142

TWO-WAY, ALPHANUMERIC PAGERSTwo-way pagers allow you to send short messages backto your callers using pre-programmed responses or,preferably, a tiny keyboard. Thus, if you’re on call, notonly will you be aware of an emergency, but also youcan send stopgap instructions or information that willsuffice until you can get to a phone. With a two-waypager, you can receive pages sent by e-mail and sendyour replies via e-mail, as well as telephone back to acomputer user or even another pager user. You can findalphanumeric pagers for under $100; service plans costabout $20 a month for up to 500 short messages sent toand from the pager.

BETTER DEALS ON MULTIPLE PAGERSBusinesses can often get better paging deals when buy-ing multiple pagers. Buy five pagers, for example, andpay just $20 a month for unlimited one-way paging. Yourlocal paging companies, easily found in the Yellow Pagesor online, will have more information, but rememberthat buying in bulk and putting it all on one bill is fareasier to manage.

Don’t Overindulge in Cell PhonesMany businesspeople manage to overspend when itcomes to mobile phones, also commonly known as cellphones. That’s not surprising, however, when you consid-er all the pricing pitfalls that surround these purchases.

THE HARDWAREFirst, there are the phones themselves. Contrary to pop-ular belief, smaller isn’t always better, and a sleek, gim-micky phone does not reflect well on you or youremployees. Yet people manage to spend upwards of$200 per phone for tiny, feature-laden phones that haveterrible battery life, squint-inducing screens, and key-pads more appropriate for toddlers’ fingers than yours.

I carry a basic Nokia 5185i phone, the one you see

143



in most Nokia and AT&T Wireless commercials. It has areadable screen, good-size buttons, and a battery thatlasts all day long when I’m on the road. It does not ac-cess the World Wide Web, play music, or show picturesof my wife on the screen. And it cost only $19.95 at theVerizon Wireless store in Washington, D.C. It’s…useful.And that’s enough.

Unlike pagers, a cell phone can simply be a cellphone. You don’t necessarily need one with paging capa-bilities because you have the options of simply pickingup and talking and of purchasing a service plan withvoicemail.

You probably don’t need wireless Web access or e-mail services on your phones either, because a quickphone call can probably find you the information youwant just as fast, if not faster. In addition, wireless Webaccess can eat up your minutes of service very quickly,because you’re essentially making a cell phone call to theInternet. And have you ever tried to enter in a URL oran e-mail message using only the numbers 0 to 9 plusthe symbols # and *? It takes forever.

144

analog/digital: a type ofmobile phone that can use older analognetworks as well as newer digital net-works. Analog networks basically sendsound waves in a very tight pattern,which is deconstructed to create sound.Digital networks and phones deconstructsound into actual pieces of data—onesand zeros, the basic digits of binary language—transmit it, then reconstructit on the other end. Digital is clearer,generally, but a weak signal creates thatinfamous dropout effect, when wholechunks of data are garbled or lost. Analognetworks, conversely, can sound faint orstaticky when coverage drops off.

dual-band: a mobile phone that can usetwo different kinds of digital networks

GSM: short for Global System for MobileCommunications, a kind of digital mobilephone network. GSM is most commonlyfound in Europe and Asia, where it hasbecome the standard. In the U.S., GSMis largely confined to major cities.

CDMA: short for Code Division MultipleAccess, another digital network standardfor mobile phones. CDMA is the mostcommon network in the U.S., but it isnearly unheard of elsewhere.

Tech Terms

145


You should, however, keep an eye out for inexpen-sive analog/digital or dual-band phones. Any city in theUnited States has many kinds of cellular service, includ-ing the digital standards GSM and CDMA as well as ana-log service. Don’t worry so much about the alphabetsoup (the box at left provides definitions of theseterms). Ideally, you want to be sure that your phone canhandle, at the very least, both analog and digital calls. Ifyou can get a dual-band phone—one that runs, for ex-ample, on both GSM and CDMA—then do so. Smallertowns in the U.S. have only one band available for ser-vice, so if your phone doesn’t match up, you could beleft 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 needto enter into a global-roaming contract with your cell-phone carrier in order for your phone to work outsideNorth America.

My aforementioned Nokia phone, for example, is atri-mode digital phone. That means it runs on the twodifferent kinds of CDMA digital service availablearound the country, along with the older analog re-ceivers in more rural areas. So no matter where I go, Iget reception. Make sure your dealer sells you at leastan analog/digital phone, or a dual-band phone if youcan get one.

Which brands of phones meet my requirements?That’s hard to say—between the time this book is com-pleted and the time it comes into your hands, most mo-bile phone makers will have already revamped theirofferings. But if you spend more than $150 on aphone—the high-end, dual-band phones cost about thismuch—you’ve spent too much.

THE SERVICE PLANThere are basically two kinds of service plans—thosethat assume you won’t leave your home city much, andthose that assume you’re a traveler and will visit differ-ent cities and states regularly. If you or your employeesreally don’t leave your home city, don’t get a big roamingplan. However, if you often send your people to sales

Tech Terms

roaming: in mobilephone parlance, whena phone user movesbeyond the area desig-nated by the serviceprovider as the user’s“home.” Using yourphone while roamingnearly always resultsin higher charges peruse. Many plans, how-ever, expand that homebase to include entireregions. There are alsomany no-roaming plansfor the U.S. market.


meetings, trade shows, and other out-of-town events,make sure that your roaming plan is appropriate. Anddon’t get a nationwide roaming plan if your employeesare really only traveling up and down the West Coast.

Calling plans are further distinguished by thenumber of minutes you’re allowed. A simple plan willgive you 60 minutes of talk time per month for a verylow price—as low as $14.95 in some cases—but willcharge you 25 cents or more per minute if you go overthat amount. The more minutes you want, the higheryour monthly fee, but the per-minute overflow rate willbe much lower. It’s tough to know how many minutesyou’ll need, but you can make an educated guess, andafter a few months of experience, adjust your plan ac-cordingly. It will probably behoove you to guess a littlehigh on the minutes, though, so that you don’t incurwhopping per-minute charges because of an overlycheap plan.

Some of the better business-service plans allow youto purchase multiple phones for a discounted price, andthen give you a block of minutes for the whole companyto use. If your business requires more than one cellphone and your local carriers offer this service (mostdo), this is definitely the way to go. You’ll avoid paying ahigher price for individual service plans for people whojust need phones for emergencies or high per-minutecosts for your traveling sales force.

Life on a LaptopLaptops, in case you haven’t noticed, are expensive. Youcan get a perfectly serviceable desktop computer, com-plete with monitor, for $900. A laptop with the sameprocessor, RAM, hard drive, and other goodies will costabout $1,200—at least $300 of which is accounted for bythe screen.

Why are laptops and flat-screen monitors so expen-sive? Contrary to popular belief, laptops aren’t expen-sive simply because they’re portable—squeezing allthose components into a small case is tricky, but not toocostly. The big expense comes from the screen. Liquid-

146

crystal displays (LCDs) and other kinds of flat-panelmonitors and laptop screens require costly componentsand very difficult manufacturing processes.

Nevertheless, if you or some of your employees willneed to work outside the office now and then, purchas-ing a laptop for those occasions may be in order. And ifyou have account executives or sales people on the road,laptops will probably be essential.

Why? Studies show that the most common use oflaptops on the road is dialing into the corporate net-work to check e-mail. Yes, $1,200 is somewhat expen-sive for a portable e-mail machine, but there’s moreinvolved than just e-mail. Road warriors also tend towork on whatever projects they would otherwise haveleft behind at the office; road trips can be disruptive,after all, and the less you have to catch up with after re-turning home, the better. Also, most PowerPoint pre-sentations are done via laptop.

If you’re in the market for laptops, here are a fewthings to consider:

First, think about which employees might need alaptop, how often those people are out of the office, andwhether they travel at the same time. If only one personis out at a time, you’ll probably need only one machinethat can be “checked out.” If several people are likely tobe traveling simultaneously, you may need multiple ma-chines. Experience will ultimately tell you how manyyou need, although you could think in terms of one ma-chine per a certain number of staff members who travel.

Let’s say that you need a couple of laptops. That’san additional $2,400, and you’ve already blown $900per person on desktop machines as well. Some compa-nies—especially those with numerous frequent travel-ers—have decided to give each mobile worker a laptop,along with a monitor, docking station (see the followingpage), keyboard, and mouse in lieu of a conventionaldesktop set-up. A laptop docking station for the officecan cost around $500. This approach is still more ex-pensive than simply buying desktop computers foreveryone and a couple of laptops, but there are somebenefits in efficiency that aren’t easily quantified. Hav-

147



ing your own computer on the road, complete withpasswords and all the necessary software, increases effi-ciency. Employees with laptops are also more likely totake them home and squeeze in an extra hour’s work inthe evening or during the weekend.

Avoid buying laptops loaded with expensive extrassuch as CD-RW drives, extra-large screens, and videocards. Most mobile users are doing word processingand e-mail—they’re not creating digital works of artand you’re not outfitting the machines so that your em-ployees can play video games. Keep it simple and you’llsave money.

Personal Digital AssistantsEvery morning, before I leave for work, I synchronizemy Hewlett-Packard Pocket PC with my computer todownload the day’s news. During my ride, I plug a set ofheadphones into the PDA and listen to downloadedmusic while reading CNET News.com, CNN, and TheNew York Times. By the time I turn on my computer atwork, I’m already up on the day’s news, technologicaland otherwise. I pass the ride home the same way, withthe addition of some Microsoft Word documents that Ihave to review or edit.

Although handhelds are expensive and probablynonessential in your business, a handheld makes it easy

148

docking station: a stationaryplatform on which you can install a lap-top. When the laptop is in the office,it usually rests on top of the dockingstation, which contains connectionsfor Ethernet networks and slots for CD-ROM, DVD, or CD-RW (RW stands forrewriteable) drives and a floppy diskdrive. Docking stations are made specifi-cally for each brand and model of

computer—one size does not fit all.

synchronize: to transfer and duplicatedata between a computer and anotherdevice, either a handheld computer ora cell phone. When you “synch” yourhandheld, for instance, any changesyou’ve made to that data are down-loaded and changed on your PC, andvice versa.

Tech Terms

to carry large amounts of text and graphics in a verysmall form, as my example and the one at the beginningof the chapter illustrate. Handhelds have become quitepopular in the medical field, for they allow doctors andnurses to consult, alter patients’ charts, and search med-ical texts for specific keywords on their devices. Someauto sales people, who often wander far from theirdesks, keep data on handhelds. Although you could dothe same thing with a laptop, laptops are woefully ineffi-cient to carry around, especially if all you’re doing is ac-cessing 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 laptopsaltogether. With the addition of a collapsible keyboard(which folds into a package about the size of the hand-held), a PDA can be used for basic word processing ande-mail. When a task is finished, the user can synchronizethe PDA with a computer to transfer the data, or evenuse a specially made dial-up modem that attaches to thehandheld, or a regular cell phone with a cable that plugsinto the PDA, to call in the file to the network. A col-league of mine from Reuters wrote and filed his storieswith such a set-up, giving me a run for my money a fewtimes. (I took the decidedly low-tech approach of phon-ing my stories in, giving me the advantage of having myeditor tweak the story as I dictated—a good lesson onusing whichever method, high-tech or low-, works best.)

Most handhelds also come with features such ascalendar/scheduler programs, address books, clocks,reminders, memo pads, or word processing, and theability to download your e-mail, write your responses,upload your e-mail back to your company’s servers, andsend it when you’re done. Most can also downloadWeb pages from the Internet, via synchronization withyour computer, through a free service called AvantGo(www.avantgo.com).

THE PALMThe company that invented the handheld computer,Palm Computing Inc. (once a part of U.S. Robotics, then3Com), still makes the most popular handheld comput-

149



ers around. The company’s basic handhelds usually sellfor $125 to $150, while higher-end versions can cost $400or more—the only difference being a color screen andadditional memory for storing more data. These devicesalso come with slots for Secure Digital memory cards—postage-stamp-size storage cards for keeping additionalfiles or programs, such as songs, maps, or documents.They can also accept certain attachments, such asmodems—wireless (see definition of wireless modemson page 152) or otherwise—and keyboards.

THE HANDSPRING VISORRival Handspring Corp. uses Palm’s operating systembut makes cheaper and, frankly, better devices thanPalm. Handspring’s low- and high-end models usuallycost $50 to $100 less than similar Palm devices, but allHandspring Visors, as the handhelds are called, comewith a “Springboard” slot—a large slot on the back ofthe device that can be used for a variety of hardwareadd-ons, called modules. Some of the Springboardmodules most appropriate for business use are memo-ry back-up modules for keeping extra copies of yourimportant data, digital voice recorders so that you canuse your handheld like a tape recorder, and even re-mote controls for major home electronics. The pricesrun from $30 for memory modules to $150 and up forcomplex hardware like music players that take advan-tage of the PDA’s processing power and wirelessmodems for checking e-mail and viewing Web pages inreal time, without the need for a telephone line.

THE POCKET PCMicrosoft Corp. and its hardware manufacturing part-ners teamed up to create the Pocket PC. These de-vices, for their size, have powerful processors andplenty of memory for storing files and music. The soft-ware on board makes it easy to work with other Mi-crosoft products, such as Word and Excel, and thedevice includes a music player. There are slots formemory cards and hardware add-ons, although thetype and number depend on the manufacturer. Com-

150

paq and Hewlett-Packard make handhelds that acceptCompact Flash cards, while Casio’s handheld acceptsonly Secure Digital cards. The problem, however, isthe price. When these devices were introduced in late2001, they sold for more than $600 each—there is nolow end when it comes to Pocket PCs. Prices will sure-ly go down in 2002 and beyond, at least until Microsoftcomes out with a new version of the software.

Many people who own handhelds swear bythem—I certainly do. I find mine very helpful in keep-ing track of appointments and my checkbook, and it’sgood to have your entire database of contacts on handwherever you happen to be. But these are personal de-vices, not necessarily business tools. Whereas anyonein the working world would probably find a handheldvaluable, most businesses believe they’re more of anextravagance—if they have to pay for them. Chancesare, if your workers find them useful, they’ve alreadybought one for themselves, and unless you can makean outstanding argument for adding the device to yourworkers’ arsenal, there’s no real need to make themstandard equipment. Well, maybe for the boss.

Options for Mobile Internet AccessGetting online on the road is difficult at best, so much sothat many road warriors leave the laptop in the hotelroom, where they can at least have a phone line handyand incur a few bucks more in phone charges from thehotel. Using a pay phone is worse—finding one with adata jack (see the following page) outside an airport is aquest on the scale of seeking the Holy Grail. But thereare other options.

A SIMPLE WIREMany frequent travelers have purchased the necessaryequipment—essentially, a $20 wire—to connect theircell phone to their laptop’s modem. From there, all youneed to do is turn on your cell phone and dial normally

151



into your corporate network or Internet serviceprovider. Unfortunately, cell phone coverage is oftenspotty, even within the same building. Furthermore, thetop data-transmission speeds you can achieve on a cellphone are about 14 kilobits per second—which is fourtimes slower than a standard dial-up connection via aland line. This solution may be fine for checking e-mail,but trying to do anything else can be a real test of pa-tience. And that’s before the cell phone bill comes due.

PCMCIA CARDSPCMCIA cards also are available to serve as wirelessmodems, complete with antennae. These cards cost $200a pop, however, and you get only the same data trans-mission rates as your cell phone. Wireless Web compa-nies, such as OmniSky (acquired by EarthLink;http://earthlink.omnisky.com) and GoAmerica(www.goamerica.com), sell these cards, as well as $40monthly service for your cellular-system use, which isabout the same as you would spend for 400 to 500 min-utes of regular cell phone talk time. This service isaimed primarily at PDA users, who slip the cards intotheir handhelds to create a wireless, handheld Web-browsing device, although these can also be used in lap-tops. It’s not bad, but again, it’s working at 14 kbps.

SHORT-DISTANCE WIRELESS NETWORKSA handful of public places, such as airports, hotels, and

152

data jack: The telephoneplug in your laptop computer.

PCMCIA cards: special cards designedfor portable computers that make it easyto add functionality on the go. PCMCIAcards, also simply called PC cards, canfunction as modems, network ports,hard drives, and other memory storage

devices. PCMCIA stands for the PersonalComputer Memory Card InternationalAssociation, which created a standardfor these devices.

wireless modem: a modem (see Chapter1) that uses mobile phone networksinstead of a regular telephone line totransmit data.

Tech Terms

some Starbucks coffee shops, have installed short-distance wireless networks. These networks are incredi-bly fast—you can send or receive at least one gigabitper second from your laptop or PDA—but they are alsoextremely limited in range. Walk out the door of Star-bucks, and halfway down the block you’ll lose serviceentirely—not something you’d need to worry about ona laptop. (I’ve used such a network with a PDA, andhave forgotten about the limited range when I startedto walk off.) Some networks charge for use. When thenetwork detects a new client, it shoots an e-mail mes-sage to your laptop or PDA, giving you rate informationand asking for your credit card via an online form. Therates are usually no more than the rates for a long-distance voice call, but you still need a PCMCIA wire-less networking card—different from a wireless modemon cellular networks—which costs $125 to $175.

PROPRIETARY CITYWIDE SYSTEMSUntil the summer of 2001, an excellent service calledRicochet provided wireless Web service in a number ofU.S. cities. The Ricochet system didn’t use the mobilephone networks. Instead, the company built its ownmore powerful system, which provided outstanding ser-vice at rates ranging from 28 kbps in its first cities to 128kbps in later locations. Specialized modems, which at-tached to the back of a laptop, cost $100 to $200, andservice cost around $50 a month for unlimited use. Con-nections were made quickly and the service was very re-sponsive, but for many years the system was availableonly in Washington, D.C., and San Francisco. Ricochet’sparent company went belly up trying to expand and im-prove service to other U.S. cities. The company’s assets,including its wireless infrastructure, were sold off tocreditors and other interested parties.

At this writing, various companies are trying to res-urrect the Ricochet service, but aside from a trial effortby the city of Denver, nobody has yet done so.

THE FUTUREAnd that, unfortunately, is a full accounting of your

153



wireless mobile options. Wireless companies are work-ing on building next-generation networks that will pro-vide 128 kbps service—and more—but they are at leasttwo 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, wire-less access from the road is probably a waste of moneyunless it’s critical to your business. At least you havethe option of wasting only $20 on a wire, far less thanthe cost of other methods.

Integrating Mobility Into Your Existing FrameworkIf you have traveling or telecommuting employees whowill want to access your company’s servers from remotelocations, you’ll need to pursue one of two options:■ You can create a dial-up account that turns your net-

work server into a mini-Internet service provider, or

154

Web-based interface: a wayof accessing a program via the Internet,usually inside a Web browser insteadof through the program’s own separatewindow.

encryption: the translation of everydaydata into a secret and, it is hoped, un-breakable code to preserve the securityand privacy of the data being transmit-ted. With today’s computers, this codecan be extremely complex, using num-bers that are dozens of digits long tocreate and unlock encrypted files.

virtual private network: a connection that

uses the Internet to connect two comput-ers but also uses encryption and othersecurity technologies to ensure that thelink between the two computers remainsprivate. VPNs, as they are known, are farmore secure than standard dial-up con-nections, and are thus preferred by majorcompanies.

terminal server: despite its name, a pieceof software installed on two differentcomputers that allows one computer tovirtually take over the other. Some fre-quent business travelers use this softwareto log in and use their office computersfrom a laptop or, in some cases, a PDA.

Tech Terms

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

SET UP THE DIAL-UP OPTIONThe dial-up option requires that you acquire additionalphone numbers, which your mobile workers will use fordialing into your company’s servers. You’ll also needconnections between the phone network and your In-ternet or other servers, which your consultant, IT peo-ple, or phone service provider will be happy to hook upfor you, for a fee, unless you do it in house. Likewise,you’ll need additional software on the server, thoughnothing too complex.

Most dial-up systems allow users to have access tothe Internet and e-mail only via your network’s high-speed connection. Still, you’ll need to adjust your securi-ty regimen for your network to account for dial-up users.You can limit dial-up users’ access to system resourcesby blocking them from shared files and databases. Usethis capability! A hacker may simply stumble across yourdial-up numbers in the course of hacking (there arehacker tools that specifically look for these numbers).For the same reason, you should make sure that thedial-up process itself is password-protected.

CREATE A WEB-BASED INTERFACEYou can also use the Internet itself, creating a password-protected 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 anyonewho comes across the Web site can try to break intoyour larger system. It’s difficult to break in, to be sure,but it’s far easier than trying to find your dial-up numberand get past a password and firewall.

However, some companies regularly allow theiremployees such access, and with enough precautionsand security, you can, too. I only recommend this,though, if you constantly have people on the road whoneed very fast access to e-mail. And you shouldn’tmake anything other than e-mail or Word files availableonline; providing access to anything more could pro-

155



vide additional entry points for hackers.

TWO GENERALLY LESS DESIRABLE OPTIONSVirtual private networks (see page 154 for definitions), ineffect, create a secure tunnel through the Internet tolink a laptop or other computer in a remote location tothe rest of your office’s network. Unlike simply dialinginto a server to recover e-mail and surf the Web, VPNsuse encryption technology to ensure that nobody canhack into the data on either end, as well as while thedata is in transit between the two machines.

VPNs have the benefit of providing full access tothe office network’s resources. Thus, if you have a pro-ject stored on a company server, someone logging on toyour office network via VPN can have access to that,just as if he or she were working on a computer right inyour office.

As noted earlier, VPNs aren’t for everyone. Even ifyou have a mobile element in your company, the vastmajority of work can be done without exposing your net-work to this kind of access. If an employee’s laptop isstolen or lost, the thief could conceivably find the key tothe VPN software on that laptop, then log in and haveaccess not only to the data stored on that particular lap-top but also to everything on your network.

Also, VPNs can be expensive to set up and run, andsome larger VPN setups require extensive network andserver work, which can cost thousands of dollars. Unlessyou and a number of your employees positively have tobe on the road for the bulk of your work, don’t worryabout VPNs.

The same goes for terminal server software, whichcan be used within a VPN to virtually take over yourworkstation at your desk from another computer—whether that computer is on your network inside youroffice or remotely located and logging in via VPN.Granted, you may enjoy pulling files right off your harddrive at work in this way, but it’s far cheaper and moresecure to simply e-mail those files back and forth or, in adecidedly low-tech move, just put them on a floppy disk.

Again, most of these expenses can be avoided with

156

common sense. If a number of your workers travel a lot,you can give them desktop-replacement laptops, allow-ing them to have their files on hand at all times, and letthem dial into the network normally to pick up e-mailand surf the Web.

In essence, there’s really no need to expose yournetworks to VPN and terminal server products.

IDENTIFYING MOBILITY OPPORTUNITIESSo who in your organization needs to be mobile? Cer-tainly not everyone. While possibly apocryphal, tales ofthe West Coast technology start-ups that equippedevery worker with RIM Blackberry e-mail pagers—thetop of the line in e-mail-capable pagers—or expensivelaptop computers provide good lessons in the waste ofventure dollars. You need to carefully distinguish be-tween employees in your company who really needthese tools, and those who would merely enjoy them asa convenience.

As a first rule of thumb, if work rarely, if ever, takesyour employees outside your building or demands theirattention in off hours, you need not buy them any mo-bile technology. Sure, your personnel guy or accoun-tant might gain some convenience from a company-provided cell phone or pager, but unless you’re antici-pating an accounting emergency in the wee hours,there’s simply no need.

On the other hand, workers who are necessary in anemergency, any time of day, are likely candidates forpagers or cell phones. And that includes you as theowner and proprietor. It also includes the top managersof your key products, processes, and services. If yourproduction line breaks down, you want the person incharge of it to be in touch as quickly as possible. Thinkof three potential crises that would really hurt your busi-ness, and then think of the people who could best han-dle each of those situations. Those are your candidatesfor emergency pagers or cell phones.

Generally, people who interact frequently withclients or other outside vendors will need mobile com-munications, especially if they’re expected to provide

157



off-hours service or if you’re doing business on anothercoast or overseas.

Now let’s move on to consider workers who operatealmost exclusively outside the office, such as the peopledriving service trucks or your outside sales force. Notonly will these people need mobile communications,most likely cell phones, but they may also require someform of mobile computing. For more service-orientedpeople, or those performing single tasks with no needfor any extras, you might want to consider the modifiedhandheld computers discussed earlier. While perhapsnot so versatile as laptops, these devices are great fortaking orders, providing information, even taking creditcard information. Although most online grocery servicesthus far, such as WebVan and Homegrocer.com, have ul-timately failed, they did make good use of handhelds for

158

In 2000 a new term startedcropping up in e-commerce companies—m-commerce, the “m” standing formobile. With everyone toting aroundcell phones, pagers, and PDAs, manyof which could access the Web, thee-commerce companies thought, Whynot try to sell these people somethingonline via their mobile equipment?

It’s an interesting idea, but nobodyhas really been able to make it work.Amazon.com offered a limited catalogof items, mostly bestselling books, movies,and videos. The company kept the catalogsmall because of the slow connectionspeeds of most mobile devices. In addi-tion, eBay made it possible to track auc-tions and jack up bids from your cellphone. These initiatives were announcedwith great fanfare—and were never heardfrom again.

It’s bad enough trying to access andread e-mail or weather reports on a tinycell phone screen, using a tiny numerickey pad. Trying to make purchases via awireless Web link is far worse, becauseyou must find the item, read a descrip-tion, order it, and provide credit card andshipping information. PDAs with wirelesscapabilities would be better, given theirlarger screen and better input abilities,but the cellular and digital wireless net-works are still very slow, making it difficultto download large Web pages.

It will take another two to threeyears before m-commerce can really beviable—that’s when higher-speed wirelessnetworks will debut in the U.S. Until then,be wary of anyone trying to sell you an“m-commerce solution.” The problemhasn’t been solved yet.

TREND: First e-Commerce, Now M-Commerce?

confirming orders and mapping their delivery routes.Any kind of delivery or onsite service, such as heating oilcompanies or small cable TV outfits, can benefit. Soft-ware for these functions is readily available with pricesranging from $10 to $50, depending on complexity.

Finally, there are those brave few—typically, theclassic business travelers, such as salespeople and exec-utives—who will need the works: a cell phone, a lap-top, 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 strategywill cost slightly less than purchasing both a PC and aseparate laptop, and your employees won’t have toworry about figuring out which computer has the datathey need. This approach also means that you won’thave to worry so much about using virtual private net-works (VPNs) or dealing with any kind of terminalserver software—a major investment for small compa-nies, as discussed earlier.

Cost BreakdownsEMERGENCY PAGERS AND CELL PHONESThis is your basic emergency communications system—pagers for a couple of on-call people, and cell phones foryou and two other key employees.

Two alphanumeric pagers $100Paging plans $50/monthThree cellular phones $150Basic cellular plans $105/monthTotal Start-up Cost $405Total Monthly Cost $155

THE FULLY EQUIPPED SALES FORCEIn this case, we assume that five people need to have fullmobility, including cell phones and individual laptopswith monitors and docking stations for the office. Al-though the start-up cost is high, remember that you’resaving approximately $4,500 by not buying desktop com-puters for these people.

159



Five laptop computers $6,000Five docking station setups $2,500Remote access dial-up numbers on a

network server (extra numbers from the phone company as well as installation and software) $500

Additional dial-up numbers $100/monthFive cellular phones $250Roaming cellular plans $375/monthTotal Start-up Cost $9,725Total Monthly Cost $475

160

Better BusinessIntelligence

161

CHAPTER

7

’ve had the good fortune of going to Las Vegas anumber of times, although always on business. Still,I’ve been to most of the major casino hotels in thecity, and in every one I’ve been amazed at the atten-tion to detail. Here I’m referring not to the service

provided but to the attention paid to making sure thatthe house maintains its edge when it comes to takingvisitors’ money.

Some things, of course, are obvious: There are nowindows or clocks on the gaming floor, so as to depriveplayers of a sense of the passage of time. But cameras areeverywhere. The film Ocean’s Eleven wasn’t far off themark when it comes to the paranoia of casino manage-ment. Every player at every table is carefully watched forsigns of cheating, even card counting, which is very toughto detect. Some casinos even use face-analysis software torecognize noted cheats or professional gamblers, despiteany attempts at disguise. Dealers also are carefullywatched, to ensure fairness. That’s why dealers clap theirhands and spread them wide at the end of their shift, toshow casino security watchers that they have taken noextra chips off the table.

That institutional paranoia carries over into thecasinos’ various databases. The MGM Mirage company,which operates the Mirage, MGM Grand, and Bellagiohotels, uses special software, developed by a small com-pany called Systems Research & Development, tocomb through all the data collected by its various casi-nos, searching for unusual relationships between dis-parate pieces of data that could help protect the casinos’investment.

For example, SDR will compare a casino’s employee

Summary

■ Your BusinessIs Data

■ Know YourCustomers

■ Looking InsideYour Business

■ Managing Inventory■ Data Mining■ A Final Word

on BusinessIntelligence

I


roster and a database of known cheats and professionalgamblers to look for common threads, such as a com-mon phone number, last name, or address. Even em-ployees’ former addresses are thoroughly searched todetermine whether an employee and a cheat evercrossed paths. The same goes for transaction recordsfrom the casino cashiers. If a guest cashes in a substan-tial amount of chips or takes out a line of credit with thecasino, the casino records pertinent details about theguest. Those details can be fed into SDR’s software pro-grams and, once again, compared with informationabout employees and known cheaters to see whetherany common elements appear.

Now think of all the databases that can be matchedup, in addition to employee records and criminal infor-mation: hotel registries, casino slot-club membershiprecords and the perks that come from them, credit cardnumbers, and every single sales transaction at the buffetor in the gift shop. The company has access to a wealthof data, and it would take an extremely diligent cheat toavoid getting ensnared by SDR’s software.

SDR hopes to broaden its offerings by adding third-party database information to the mix. Imagine using ageographical plot for addresses, for instance. A casinoemployee might not have lived at the same address as aknown cheater, but plotting addresses on a map couldshow that the cheat lived in the same neighborhood—maybe even around the corner. Linking that informationto a time-frame analysis could then show how long thetwo lived in the same area, or match the time of a poten-tial cheat’s credit card transaction with a suspicious em-ployee’s shift.

Could all this data matching simply unearth coinci-dences? Perhaps, but the casinos never leave anything tochance. They leave that to the gamblers.

Your Business Is DataLike the casinos, your business generates a sizableamount of data every day, through your computers andother technologies, and odds are it’s just sitting there. In

162

talking with various business people throughout the coun-try, I have been taken aback by the slim number of smallbusinesses that are using their data to its fullest potential.

Sales and inventory records, balance sheets, employ-ee records, e-mail correspondence, data fed back frommobile sources, and traffic on a bustling Web site—allthese sources can tell you more about your business ifyou know where and how to look. In this chapter, we’regoing to revisit the themes of the previous six chaptersand look at the information you can glean from these dif-ferent technologies, and the tools you need to get it.

A number of techniques can be used to crunch yourdata for better business intelligence. Some are simplyexercises in common sense, while others require exten-sive software applications and can be expensive—andthere are plenty in between. You’ll probably be pleasant-ly surprised, however, at how little time many of thesetechniques take. You can end up getting new perspec-tives on your business at the end of every business day.

Know Your CustomersThe customers are the lifeblood of every business, solet’s start there. Every business has a different take onhow much service is needed to please its customers,and, by extension, how much information from the cus-tomers is needed to serve them well. Most owners ofgeneral stores, for example, don’t ask for names and ad-dresses while ringing up a pack of cigarettes, and a yard-service company isn’t likely to ask how many cars acustomer has in the garage. Nevertheless, any customerdata you have will give you clues about who your cus-tomers are and what they’re looking for.

LEARNING FROM EACH SALES TRANSACTIONLet’s start with the basic sales transaction. If you have acomputerized retail system set up (see Chapter 4), youcan generate a lot of data from your sales records—theitems purchased, date and time, and mode of payment(cash or credit)—despite the relative anonymity of mosttransactions. Let’s look at each type of data in turn.

163

CHAPTER 7 Better Business Intelligence


THE ITEMS PURCHASED. Obviously, you’ll know from yourinventory records which items are going out the doorfastest and which are staying on the shelves. But by ana-lyzing your sales records, you can see which items arepurchased together most often and which items arebought in quantity. Here’s an interesting exercise thatrequires no new software: Take all of a single day’s salesrecords and put them into an Excel spreadsheet—anygood retail software setup should let you do this easily.From there, put the items purchased in alphabeticalorder. The alphabetical listing will make it easy for youto scan for known relationships between items and willprompt you to discover others. For example, you shouldbe able to see just how many people purchased spongeswith their dishwashing soap, and perhaps move moresponges by offering a sale on the two items combined.

THE DATE AND TIME OF PURCHASE. Actual sales-analysissoftware, which is usually sold separately from retailhardware, can take this analysis one step further, notonly by outlining all these relationships for you, but alsoby pairing your sales data with the date and time of pur-chase. Are office supplies more likely to sell on Monday?Perhaps people are grabbing them before heading off towork and school. Maybe putting the office suppliesacross the aisle from some prepackaged lunch foodswould increase sales of both. If your deli sales are slug-gish in midafternoon, that’s a good time to give employ-ees a break or have them do the other chores necessarybefore the dinner crowd comes in.

THE PRICE. You can also measure the popularity and stay-ing power of new items by tagging those items to theirprices. A bar owner, for example, might introduce a newbrand of India pale ale at a discount, which will probablyguarantee initial sales, before raising the price to matchthe rest of his selections. The owner can then use his soft-ware to compare how many pints were sold at the dis-count with those sold at the regular price. If sales droppedsignificantly once the price rose, the owner can drop thebeer from the menu or try again at a slightly lower price.

164

Tip

Here’s an interestingexercise that requiresno new software: Takeall of a single day’s salesrecords and put theminto an Excel spread-sheet. From there, putthe items purchased inalphabetical order. Thealphabetical listing willmake it easy for you toscan for known relation-ships between itemsand will prompt you todiscover others.

THE STORE LOCATION. If you learn that some item isn’tselling particularly well, try positioning it next to yourbest-selling items. It’s possible that customers simply didnot realize that you stocked the item. The exercise mightcause you to test or rethink the physical location of otheritems in your retail space.

THE USE OF CASH VERSUS CREDIT. Looking at your cus-tomers’ use of cash versus credit can also provide smallclues to their habits. If you see extensive use of creditcards, for example, take a quick trip around the neigh-borhood; there simply may be no handy ATM ma-chines. If that’s the case, your store might benefit fromhaving one, or from offering a debit or credit card cash-back system.

LEARNING FROM CONTACT INFORMATIONCustomer contacts represent one of the greatest data-bases any business can develop. If you have any contactwith customers beyond the simplest of sales transac-tions, you have an opportunity to obtain their address-es. Once you have those, you can get an immenseamount of data from them, data that may really sur-prise you and give you new perspectives on the peopleyou serve every day.

ZIP CODES. Even collecting something as simple as Zipcodes can be useful. We mentioned earlier that, foryears, Radio Shack has asked customers for their Zipcodes; now that retail chain is famous for having locatedone of its stores within just ten minutes of the vast ma-jority of Americans. Similarly, those five digits can helpyou pinpoint where your customers live. Do most ofthem live right in your Zip code, or do people comefrom across the city to do business with you? And in ei-ther case, what is the reason?■ If your customers are right in your neighborhood, is it

time to think about expanding your business by attract-ing people beyond your Zip code through marketing?

■ And if your customers come from other areas, is it be-cause your prices are too high for the immediate

165



neighborhood? Or do you just need a little more localadvertising? Are you providing a product or servicethat is unique or underpriced in your region? It maybe that your potential draw is much larger than youanticipated or that you can turn your miscalculation—choosing the wrong location—into an advantage.

PHONE NUMBERS. Phone numbers reveal even more in-formation, especially when paired with home addressesvia a reverse-lookup directory, such as the one featuredon AnyWho.com. Not only will you get some neighbor-hood information from the area code and possibly eventhe exchange (the first three digits after the area code),but you can pinpoint exactly where your customers liveif their numbers are listed in the phone directory. Thatinformation facilitates neighborhood-by-neighborhoodcomparison. You can purchase software that will auto-matically make these matches, although the directoriesused in these programs can be slightly out of date, andwill usually require frequent upgrades to account forchanging phone numbers.

MAPPING SOFTWARE. If you have your customers’ homeaddresses, software available from Street Wizard (www.streetwizard.com), DeLorme Software’s XMap Busi-ness package (www.delorme.com), and others (availableonline; generally about $100) lets you take a database ofthose addresses and map them onto a city street grid.Once you’ve done this, you can see exactly where thehighest concentrations of customers are, how close theirhomes are to your business, and where your businessseems to lack traction. This knowledge will allow you todo such things as:■ Target your advertising efforts. If the northwest side of

town seems to be where your customers live, why notadvertise with direct mail in that area? After all, you al-ready have some customers there, and the mailingscould help generate word of mouth and, eventually,more business. Or, if you prefer, look at the area withlittle customer support and do your best to change thatthrough billboards, newspaper ads, or some other way.

166

167


■ Help you manage delivery routes.■ Give you an idea of where best to locate future opera-

tions. Sure, leases may be higher in the area wheremost of your customers live, but if there’s a com-pelling reason why people are making the trip to seeyou, perhaps their neighbors would also be interestedif you simply moved closer—and for the extra moneyyou’ll pay for the lease, you’ll increase your business.

DEMOGRAPHIC DATA. Now let’s take your contact informa-tion and pair it with demographic data. If you’ve lived inyour town or city for any length of time, you probably al-ready have an idea where the “good” neighborhoods are,where the rich and not-so-rich live, and where the majorhubs of business are. With mapping software and thatbare minimum of knowledge, you already have a leg upon the competition. If your customers come primarilyfrom a Latino neighborhood, perhaps it’s time to advertiseon the local Latino radio station. If most of your cus-tomers drive miles to come to you from an affluent neigh-borhood, perhaps it’s time to think about relocating oradding 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 yourcustomers, such as their gender, age, ethnic background,average income, and housing, plus the quality of educa-tion and crime prevention in their neighborhoods andtheir proximity to schools—all of which could help youfurther target sales and advertising.

Easi Analytic Software Inc. (www.easidemographics.com) makes a number of software products that can takeaddresses from your customer database and give you avariety of demographic information—such as area in-comes, newspaper and broadcast markets for advertising,local consumer expenditures (to show what else your cus-tomers are buying), and trend estimates through themiddle of this decade. The advanced version, whichworks with your existing database, costs $1,000.

The U.S. Census Bureau also offers much localized

Tip

Advanced demographicsoftware also can beused to learn ever moreabout your customers,such as their gender,age, ethnic background,average income, andhousing, plus the qualityof education and crimeprevention in theirneighborhoods and theirproximity to schools—all of which could helpyou further target salesand advertising.


information that could help your business. You can ob-tain business data by county, to see what local competi-tion you have, or economic data by city block, to findthe appropriate neighborhoods for your advertisingcampaign. This information can be obtained directlyfrom the Internet or via CD-ROM or DVD, and it canbe placed into your databases relatively easily. For ex-ample, the latest Economic Census data, on three CD-ROMs, costs $190. You can order these products athttps://catalog.mso.census.gov/esales4boc/.

A company called geoVue (www.geovue.com) hassoftware that can perform even more intensive studies,but these cost thousands more, and the company’s cus-tomers tend to be larger businesses such as Dunkin’Donuts and The Limited chain of clothing stores.

TWO CAUTIONS. Naturally, addresses and phone numbersare powerful marketing tools in and of themselves, andyou don’t necessarily need expensive technology tomake a list and send out mailings or engage the servicesof mass-marketing firms. Your office suite of softwareprovides at least some word-processing tools for manag-ing mailing lists or generating mailing labels. However,by knowing more about your customers when you con-tact them or send a mailing, you can push products thatare appropriate to their income and buying patterns.

When looking at mapping software—or any otherkind of business intelligence software mentioned in thischapter—be sure to buy versions that will be able totake data directly from your existing databases. It’ll bemore expensive, but will save dozens of hours of extrawork that would be required to reenter the data in anew format.

WEB INTELLIGENCEYour Web site is also a great tool for gathering informa-tion about current and potential customers. Of course,you may get visitors who surf over to your site fromboredom or by mistake, but most of the visitors to yoursmall-business Web site will probably be local people orothers who are interested in what you have to offer.

168

CREATE AN E-MAIL LIST. So how can you tell who’s on theother end of that Web connection? The easy way is to beovert about it. If your business often has sales, promo-tions, or special events, it’s easy to ask visitors to registerfor news of upcoming opportunities by e-mail. Soonenough, you’ll have a growing database of e-mail ad-dresses belonging to current and future customers.

GATHER NAMES AND ADDRESSES. As part of the e-mail listregistration, you could also ask for registrants’ namesand addresses, but because privacy is becoming a biggerissue online and off every day, some users will simplyavoid lists that require anything more than an e-mail ad-dress. To try to overcome this resistance, you could offerto enter visitors in a drawing for a free product or ser-vice. That way, your registrants feel as though theymight get something for their trouble. In any case, youshould be up front and tell the users that their e-mail ad-dresses and other information will be used for marketingpurposes. Check out the fine print of any online give-away for the kind of notification required—it’s usually inliteral fine print on the bottom of a Web page.

COMPARE ORDER AND SHIPPING INFORMATION WITHOTHER WEB-SITE ACTIVITY. If you’re selling items throughyour Web site (see Chapter 5), you should already have adatabase of customer information and orders. You’llhave acquired customers’ shipping information (homeand other mailing addresses) with each purchase. Andyou can measure and record what each customer is in-terested in, and how often the customer purchases fromyour Web site. A simple query through your database’sbuilt-in search and compilation tools should give you theinformation you need—but few businesses make full useof their software for this purpose.

You can also compare the number of clicks on agiven Web page with the number of orders for itemsfeatured on the page, to get an indication of how popu-lar a given item is as well as how many people view withor without buying. Don’t be discouraged if viewers out-number buyers. Many Web surfers still research prices

169



online, then head out to the bricks-and-mortar stores tobuy. Through your datagathering, you’ll be able to com-pare the names of bricks-and-mortar buyers to onlinevisitors, to see how many of those Web visits turn intobricks-and-mortar purchases.

To the customer information you gather from yourWeb site, add the geographic mapping information de-scribed earlier and some relatively simple databasework, and you have a powerful customer profile to use inyour marketing efforts. Most mapping and demographicsoftware have this capability built-in.

USE (OR AVOID) COOKIES. Let’s say, however, that youdon’t sell anything on your Web site. There are otherways to obtain some pertinent information about who’sviewing the site, such as their rough geographical loca-tion, their Internet service provider, and even other sitesthat they’ve visited. Because that last item is somewhatcontroversial, let’s start there.

When a Web surfer visits your Web site, you cantrack the last site the surfer visited before yours via acookie, a small tracking program that your Web site in-stalls on the surfer’s browser on its first visit to your site.Keep in mind, however, that many users don’t likecookies, and can set their browsers’ security settings toreject cookies outright. Some businesses swear by thesecookies, because they can provide a great deal of infor-mation about the surfing habits of users—such aswhether they visited your competitor before they visit-ed you. Cookies also allow you to provide some conve-nience to your customers by keeping track of theirpersonalized information, so that when a customer re-turns to your Web site, the customer’s preferences andshopping cart are still there; as a result, the customerdoes not have to log in.

Some Web surfers, however, strenuously object tothe use of cookies on Web sites, and many people voicesuch opinions strongly on message boards and chat sitesrelated to your business or your city. Although most e-commerce sites use cookies, if you aren’t selling any-thing on your Web site, you should not use them, in

170

Tech Terms

cookies: a small file,attached by an originat-ing Web site and storedin a computer’s Webbrowser, that communi-cates with the Web siteto list the browser user’spreferences and usagepatterns. The main pur-pose of cookies is toidentify users and possi-bly prepare customizedWeb pages for them,although the customiza-tion usually means tar-geted advertising ratherthan targeted contentthat the user mightactually want to see.

order to avoid alienating potential customers. Alterna-tively, you can set up a link so that your customers canopt out of cookies on your site, or provide informationon your site about how your customers can disable cook-ies altogether on their Web browsers.

TRACK WITHOUT COOKIES. You can easily detect whereyour visitor’s computer is in cyberspace, even withoutthe use of cookies. As stated earlier, each computer con-nected to the Internet has an IP number. A dial-up con-nection has a dynamic IP number, randomly generatedby the ISP each time the user visits the Internet. Otherconnections, such as most business computers and homecomputers using broadband connections, have static IPnumbers. Your Web-hosting company probably offerseither a service or the appropriate software necessary tomatch your Web-site visitors’ IP numbers to their ISP. Ifenough of your visitors come from a single ISP—especially a local provider as opposed to a national onesuch as EarthLink or AOL—you can focus your onlineadvertising dollars toward that particular ISP.

Furthermore, if a visitor’s computer has a static IPnumber, you might be able to determine the machine’sgeographic location, although this should simply be con-sidered a bonus—the ISP is information enough formost purposes.

Looking Inside Your BusinessKnowing your customer is critical, and most businessesspend a great deal of money and time in pursuit of thisknowledge. However, I found that surprisingly few smallbusinesses take the time to use technology to get toknow themselves. That’s an unfortunate omission, be-cause by taking a close look at what’s going on in yourbusiness, you can gain a lot of useful information.

USING YOUR FINANCIAL INTELLIGENCEChances are, you’re already doing some of this prelimi-

171



nary analysis simply by going over your ledgers. You’reliving your business, so you already know intuitively thatOctober was a rough month, while November was yourbest ever. But do you know why?

Sources from both Intuit, makers of Quicken andQuickBooks, and Microsoft’s Money software group re-port that a great many of their customers neglect tomake full use of the capabilities of these two simplemoney-management programs. Even the basic small-business versions of these programs come loaded withanalysis tools that can help you pinpoint both good andbad areas within your own business—yet nobody both-ers to click on them. For example, both software mak-ers say that few businesses bother to examine thepayments they make to their vendors. However, if abusiness knows that it spends $1,000 on office suppliesevery month, it can then figure out ways to save someof this amount by contracting with an office supplycompany for bulk supplies. The software makers alsoreport that few people bother to list Schedule C pur-chases as they go, instead putting their receipts in theproverbial shoe box and letting their accountant sortout the details. Imagine the money one could save intax-prep time and possibly in fees with a few extraclicks for each purchase.

Even a home-based, single-person business canbenefit from a closer look at its business. All the ownerneeds to do is to record the money coming in and goingout for business purposes, and run the results at the endof the month, setting aside the important stuff for taxtime. Pretty easy, right? Remember that all sales andpurchases have attendant data that you can use to makeyour home business more efficient.

Open up your copy of Quicken or Money and, ifyou’ve never done it before, run an analysis—look at ex-actly what you’ve spent money on over the past month,the past year, the past five years, as well as when themoney came in. Then see if you don’t notice somethingyou didn’t realize before. You might see that most ofyour receipts come in during the summer months, orthat you tend to spend more than you realized on office

172

supplies or travel. Perhaps your tax bill over five yearslooks higher than you expected, or even climbed whilebusiness has otherwise been steady—time to get a newtax guy? One simple, 30-second analysis, and you couldmake a number of discoveries that will end up savingyou money, or give you a new perspective on the wayyou run your business.

Of course, once you have an accountant or businessmanager—whether on a retainer or a full-time basis—that person will constantly run financial reports likethese for you. But in the meantime, if you want tosqueeze every cent out of your business, you need to fig-ure out the full capabilities of your financial software.

The same goes for nearly any other software prod-uct your business uses. If you’re a lawyer, for example, itcould be as simple as comparing your files of briefsagainst the results—if a particular judge never accepts aparticular legal maneuver, it’s time to come up with anew strategy.

Be creative with the data you generate, and take thetime to learn your software and take advantage of thetools in front of you.

USING YOUR NETWORK INTELLIGENCEChapter 3 discussed how you and your employees couldset up and use computer networks. Despite the technicalquestions, the discussion was pretty straightforward—your business needs multiple computers, and they needto work well together. Indeed, but there’s valuable infor-mation about your business to be gathered from yourcomputer network. The data are of two kinds:■ First, you can measure the performance of your net-

work and Internet connection to get a better idea ofhow efficiently your network is performing.

■ Second, you can analyze the work patterns of the peo-ple using your network.

There’s no need to debate the merits of the first ex-ercise; the second one can be even more fruitful, but isfraught with employee-relations landmines if your work-ers should object to such analyses of their workstations.

173



MEASURING NETWORK USAGE AND PERFORMANCE. Thereare a couple of ways for you to measure network usageand performance.

Access speed. First, you can measure how long it takes aworkstation to access information from a server or, in apeer-to-peer network, from another computer on thenetwork. These measurement tools reside on both theserver and an individual computer. Your IT consultant orin-house expert should run a number of benchmarks onyour systems when they’re first installed, to see how wellyour 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 bench-marks to see how much the performance has degraded.

Any deviation in performance from the optimum orthe norm can usually be traced to a lack of RAM or pro-cessing power on one of the computers or servers in thenetwork. Network components, such as the actual net-working cards inside the machines and the Ethernet ca-bles, have become fairly standard in the vast majority ofcomputers purchased in the past two to three years, sothey’re unlikely to be the source of any problem.

Server multitasking performance. Second, you can mea-sure the performance of your servers themselves. Aserver can certainly house and simultaneously performa variety of different functions, especially in a smallbusiness. You may be asking your server to handle e-mail, Internet service, print-and-file sharing, and evena small database program. Unfortunately, the morefunctions you ask a server to do, the more its perfor-mance can degrade—the jack-of-all-trades is truly themaster of none. It takes longer for files stored on theserver to be called up, longer for e-mails to be pro-cessed and sent, and longer for databases to be updat-ed on the fly.

However, servers that perform multiple functionscan be tweaked to perform better in complex tasks,with only slight degradation in simpler tasks, so it’sworth measuring the performance of your server. This

174

Tech Terms

benchmarks: tests usedto determine the per-formance of hardwareor software products.The measurement isusually a mathematicalideal developed by thebenchmarker based onthe kind of productbeing tested.

service is best provided by your consultant and IT spe-cialist. Basically, they’ll be trying to determine howlong it takes for your server to handle any given task—e-mail, database queries, Internet service—and thenfigure out how to adjust the server to reduce any ineffi-ciencies without creating new ones. Again, tweakingyour database may end up slowing down other func-tions, especially when done simultaneously with otherdemands on the server, but in the end, if even severalseconds can be saved overall, it’s worth ending the frus-tration on the part of your employees.

MEASURING THE PERFORMANCE OF YOUR INTERNET CON-NECTION. Most small businesses opt to share a T1 linewith other businesses, as explained in Chapter 3. Your ISPcan readily tell you how much your business uses your In-ternet connection and how many times a day, for exam-ple, the shared T1 is bottlenecked with its various usersand how much data they are pulling and pushing throughthe Internet connection. One small-businessman I talkedwith noted that his firm shared a T1 connection with asmall branch office of a major stockbroker. His company’sInternet connection always bogged down around 4 P.M.Eastern time—right when the last surge of orders wascoming in to the brokerage. The businessman was able towork with his ISP to switch his shared connection to an-other T1 with a different firm whose peak usage timeswere different.

Also, if your company’s mission doesn’t requireheavy Web use, but employees nevertheless are usingsubstantial bandwidth for Web surfing, you may want toremind them that their jobs don’t necessarily requirethem to keep tabs on ESPN.com during the workday.

In addition, if your company isn’t burning up theT1 line through heavy use, you may end up deciding toopt for a lesser connection to save money. Your ISPwon’t want to help you to downgrade your service (al-though they’ll be quick to tell you when you need morebandwidth), but you can certainly request a usage re-port at any time to help you decide.

None of the foregoing measures are designed to

175



make money or even to save a lot of it. Instead, tappingyour network for usage patterns can squeeze additionalefficiencies out of it which, down the road, will in-evitably make working life easier and more productivefor you and your employees.

MEASURING EMPLOYEE PERFORMANCE. If the bulk of youremployees work with technology, there are many waysto measure their performance through data analysis.Some of these opportunities are fairly obvious, whileothers are very stealthy—and could cause a stir with em-ployees should they find out that you’re keeping an eyeon them via the network.

As an employer, you certainly have legitimate rea-sons for keeping an eye on how your employees use paidtime and company resources. In some businesses, beingclosely supervised is an accepted part of life as a worker.However, in many offices, workers will view monitoringcomputer use as an invasion of privacy.

Ultimately, you’ll have to decide how vigilant youwill be. You may feel that when employees show up towork, they should work, period. Or, you may not mind ifemployees check personal e-mail occasionally duringwork hours or do a bit of online shopping at lunchtimeat their desks.

Let’s take a look at the various software tools avail-able, along with various usage policies I’ve seen in largeand small companies. Then I’m going to leave it up toyou to decide how you, as a businessperson, want to goabout using these tools.

When are they working? The most obvious measure ofemployee work habits is the timeclock, whether it’s liter-al or virtual. Every major electronic timeclock system al-lows supervisors to run reports using various criteria,including hours worked, break times, and overtime.Most of these systems will synchronize directly with per-sonnel and financial software systems, allowing you torun even more detailed reports over the long term. Forexample, such systems can find the employee who man-ages to call in sick after every major holiday—or every

176

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 employeesare doing, and how efficient they are with materials. Let’stake a small manufacturing concern as our example: Theworker logs in on a particular workstation and goes abouthis job. When the worker identifies a mistake, or makesone himself, and removes a “dud” product from the line,that removal is noted both in the inventory database andin the employee’s records. Later, the supervisor checksthe work record for that shift and finds that the workerhas a high incidence of “duds” during his shift, more sothan the rest of the line. Either that employee is muchmore vigilant about quality standards than other workers,or he is messing up and needs some remedial work.

In a more white-collar work environment, workingto the clock may be considered passé. However, in ef-fect, your employees do just that every time they loginto their computers. It’s a simple matter of program-ming to find out when your employees come to workand leave—just look at the login times. Your networkadministrator can do this for you in larger offices, but ifyou’re in a small firm with a basic server, you can simplyuse the administration toolbar—found within mostserver operating systems—to look at the activity of agiven workstation. If you really want to be nosy, you canalso check to see how often the workers’ computers gointo screen saver or idle modes. However, that degreeof checking gets into another whole interesting area ofemployee monitoring.

You can also monitor employees’ work from remoteterminals, mostly those operated via Virtual PrivateNetwork or terminal server (see Chapter 6). However,if an employee is just dialing in to your servers the wayhe or she would to any other ISP and then using hack-ing tools or other tricks to cause damage, all you’ll haveis the phone call record—and that’s not enough onwhich to base any serious assumptions about an em-ployee’s work ethic.

177


Tip

In a more white-collarwork environment, work-ing to the clock maybe considered passé.However, in effect,your employees dojust that every timethey log into their com-puters. It’s a simplematter of programmingto find out when youremployees come towork and leave—justlook at the login times.


How are they using the Internet and e-mail? A computerdirectly connected to your Internet connection—whether it’s your server or a workstation in a peer-to-peernetwork (most likely, your personal workstation)—caneasily monitor individual requests for Web sites sent viathe network to the Internet.

What Web sites are they viewing? It’s easy to harvest theWeb sites requested by any individual on the network; ifyour ISP doesn’t have the software available, your ITconsultant will be able to find it. Of course, among themost suspect Web sites are pornographic sites, but youmay be surprised to find everything on the list fromcomic book sites to various job-listing sites directly relat-ed to your field—a sure sign that the employee in ques-tion may not be happy. WebSense (www.websense.com)and Vericept (www.vericept.com) both make a suite ofmonitoring 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 keystroketracking, and it’s exactly what it sounds like. You can in-stall a program on every workstation in your business totrack every key your employees press when typing. Ob-viously, this method not only can track Web sitesthrough the URLs typed in, but also can keep tabs on e-mail, instant messaging, and any non-work-related writ-ing your workers are doing. One company—whichardently wished to remain unnamed—found three em-ployees working on their résumés during company time.These keystroke tracking products can be set to recog-nize keywords—“résumé,” “party,” and various off-colorterms are the most popular. Small software companieslike 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 placefor company networks.

The ultimate snoop. Finally, if you have concerns aboutextreme problems, such as repetitive slacking off, long

178

hours of Web use, and unrecognized e-mail addresses,you can simply use your network’s administrative pass-words to log into the worker’s computer yourself androot around. However, I’d like to reiterate that this stepis extreme, and should never be undertaken lightly.

In the interest of full disclosure, there is a full-access employee-monitoring product called, appropri-ately, Big Brother In A Box. It combines Web-sitemonitoring with the ability to see anything on a user’sscreen at any time, and even open and close variousprograms remotely. Ostensibly, you could catch youremployee doing something against company policy andstop it on the spot. It even comes with a tiny eye iconthat fits on the task bar in Windows so that employeesknow they’re being watched. This little slice of para-noia costs $595 for 30 computers. Unless you knowwithout a doubt that you have a massive problem withcomputer misuse, avoid products like these. You’d besurprised how quickly word gets around on job boardsand the like.

COMMUNICATING YOUR COMPANY’S POLICYBecause of the general sensitivity about the issue ofmonitoring in the workplace, most of the companies Iinterviewed wouldn’t tell me what safeguards—if any—they employed on their computer systems.However, if you reviewed the companies’ policies, youmight get the impression that they were keeping aclose eye on their employees. That’s because most oftheir employment policies include the following ele-ments, in one form or another:■ A restriction on employees’ use of computer and Inter-

net resources. This restriction can be spelled out in asmuch detail as you like, but many policies state thatthese resources are not to be “misused,” thus leavingthe definition of abuse to the company. This restric-tion is, by the way, perfectly legal, although some cod-ification may be necessary to avoid lawsuits down theroad from disgruntled ex-workers.

■ A statement that the company reserves the right tomonitor employees’ computer use, and defines what is

179



acceptable or not, as well as your rights as an employ-er and what, if any, expectation your employeesshould have regarding privacy. You can, if you choose,notify your workers if and when you need to accesstheir e-mail accounts or workstations. State thatchoice clearly in your policy. Such provisions are fairlystandard in most policies, although not necessarily inpractice. Simply making the threat of monitoring isoften enough, especially for employees who aren’tvery computer savvy. Remember, however, that thepeople in your IT department, along with a handful ofother knowledgeable workers, may discover on theirown whether these products are in use.

180

As your business expands,you may find yourself running out ofspace—not in your office, but on yourservers. Databases are designed to storedata in the most efficient way possible,but if you keep transaction records foreverything you buy and sell, cross-referenced with customer and supplierinformation, then referenced again withyour electronic bookkeeping, employeerecords—you get the idea. That’s a lotof bits and bytes to keep track of.

As you grow, you can easily addhard drives to your server to help takeup the slack—an 80-GB hard drive costsabout $200, and will probably doublethe storage available on most servers.Any more than that, however, and you’llhave to start looking at “storage solu-tions”—special storage devices thatattach to your server and can cost nearlyas much as the server itself—or “datawarehousing,” a service performed byconsultants and other companies. Essen-

tially, they take your old data—lastyear’s transactions, for example—andstore it for you on their servers whilestill giving you unhindered access to itvia the Internet.

Unless you’re logging thousandsof individual transactions every day,chances are you won’t need either ofthose options. If you are running out ofspace, however, I suggest getting a sepa-rate storage unit, which costs around$1,000. This storage unit, packed withhard drives, is the 21st-century equiva-lent of the shoebox you used to storeold receipts in. This time, though, thereare hundreds of thousands of receipts.

Hewlett-Packard, Compaq, Dell,and other major computer companiesprovide storage solutions; your IT personwill know where to get the best deal.Instructions for doing it yourself arebeyond the purview of this book—andattempting to do it is not advised ifyou’re not an IT person yourself.

STORAGE: Where Do I Put All This Data?

■ A clear warning that misuse of these resources can leadto punishment, up to and including termination of em-ployment. Again, this warning gives the employer lee-way in dealing with various infractions.

In practice, most employers simply leave it at that,and don’t bother installing monitoring software unlessthey’re first made aware of problems through nontech-nological means. Furthermore, the vast majority of em-ployers don’t mind if employees check e-mail, surf a bit,or even engage in a little private e-commerce on compa-ny time. Indeed, some employers believe that if employ-ees can use Internet resources at work, there’s lessreason for the employees to rush home at quittingtime—thus, the employees stick around the officelonger and, it is hoped, work longer. On the flip side,some companies say that their policies are relaxed butthey will use the Internet usage policy against workerswho are already in trouble, or those whom the employersimply no longer wants to keep.

As you can imagine, there’s bad news for you on ei-ther side of this issue: Either your employees believeyou to be too permissive and get nothing done, or theyfind you paranoid. Despite the facts that the computersthey’re working on aren’t really theirs and all work pro-duced on a workstation—including any e-mails that anemployee sends, as well as passwords for server access—is generally considered the property of the company,many employees resent any monitoring of their worksta-tions. Some simply feel that monitoring indicates a lackof trust on your part, while a few may feel guilty becausethey know that they are using their computers for agreat deal of non-work-related activity. I’ll leave it to youto walk that line and find your own comfort zone.

Once you’ve made your policies clear youcould…do nothing. Seriously, you have far better thingsto do than ensuring that your administrative assistantisn’t responding to a personals ad. Any good boss shouldbe able to tell when an employee is slacking. If you seethat happening, and if it continues, then check out theworker’s computer if you feel the need.

181



Managing InventoryLet’s get back to something more uplifting—using yourtechnology to manage inventory better. Again, mostbusinesses simply use inventory tracking software to seewhat supplies or products are low so that they can orderor produce more—usually a predetermined amount thatvaries only seasonally. And again, that’s a shame, becausededicated inventory tracking software often can improvemanagers’ perspective on their inventory use, productiv-ity, and work flow.

The amount of information you can gather withyour inventory database, however, depends on the kindof software you have. You may be able to do much of thework yourself, or you may need to have your IT consul-tant or in-house techie do it for you, at least initially. Ei-ther way, in the end you’ll want your people to be able todo these analyses for themselves.

So what can you learn by analyzing your inventoryuse? Tying it to the date is the easiest method of analysis,and in so doing you’ll discover a lot more about invento-ry use than simply figuring out the seasonal rush. Youmay find that certain items are used more on Tuesdaysthan Thursdays, or at the first of the month rather thanthe end, or in March than in April. You can even pin-point heavy-use times during a single day and use thatinformation to refine your work process—say, by posi-

182

data mining: a piece of soft-ware, or sometimes a service performedby consultants, that looks for otherwisehidden correlations in the informationcontained within a database or multipledatabases. True data-mining softwarepresents previously unknown relation-ships among the data.

ASP: short for application service provider.

This term is used for companies that pro-vide software to companies on a “rental”basis; instead of buying expensive soft-ware outright, a business can use anASP to have access to that software morecheaply, usually via the Internet. However,the business will be at the ASP’s mercyfor downtime and maintenance, and musthope that its Internet service providernever goes down.

Tech Terms

tioning that inventory closer to your front lines to makeit easier on your workers.

You can also measure productivity and efficiency-based on the use of inventory, say, by work shifts; for ex-ample, you might find that your second shift worksharder than the first.

Taking an example from earlier this chapter, you cantie use of inventory to individual workstations and logins.From there, your inventory managers can look at workschedules and make projections of inventory usagebased on who’s working that week.

Data Mining: Weaving Disparate Threads of InformationLet’s say you want to mesh your inventory informationwith your sales receipts, or match your customer pur-chases to a particular sales representative, in conjunc-tion with times and dates. Or maybe, you just want totoss all your data into a computer and see what relation-ships develop, the way the casinos described earlier inthis chapter do.

This process is called data mining, and it’s a fairlyimpressive undertaking. Large corporations often en-gage in data mining, purchasing custom data-miningsoftware or outsourcing the process to an ASP. Eitherway, the process can cost tens of thousands of dollars,but the results can be eye-opening. For examples of howlarger companies have used data mining to increasesales or gain efficiencies, I suggest surfing over to a com-pany called DigiMine (www.digimine.com), run by theman who used to head the data-mining efforts at Mi-crosoft Research.

You, however, probably don’t have or want to spendthat kind of money. Thus, data mining will be, at best, anoccasional process for your business—at most perhapsonce a year or even once every few years. For data min-ing to be worthwhile, you have to have a number of dif-

183



ferent databases of information—customer contacts, in-ventory, sales, purchases, personnel, and benefits. If youonly have two or three of these, you can easily run com-parisons among the various databases with the softwareyou have. But if a boutique interior decorator, say, has acustomer database, project database, purchasing, sales,personnel, contractors, and other information, data min-ing could find a relationship between a certain color andpattern, provided by a certain supplier, that happens tobe popular in a certain neighborhood during the spring.Next spring, the design firm knows what to pitch to itscustomers, and knows it can do the job faster because ithas already ordered the extra materials.

APower Solutions (www.apower.com) is a nationalconsulting firm that provides data-mining services forsmall businesses; such services may, however, cost sever-al thousand dollars, depending on the number of data-bases and the amount of data you have.

I recommend asking your consultant or IT specialistto determine whether your business could benefit fromdata mining.

A Final Word on Business IntelligenceAs you can see, the data that your business generates cando amazing things to help you run a better business—ifyou know how and where to look. But there’s one otherkey to success here worth mentioning.

Many companies get rid of data that they considerunnecessary in order to free up space on their hard dri-ves. Sure, they may keep reports based on this data, butthe hard data itself ends up erased, and the hard copiestossed in the dumpster or shredder. That’s a bad idea.

Data becomes more valuable with time, especiallyas more data is added to it. As you get years of experi-ence 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 perspec-tive on the cyclical nature, if any, of your business, and

184

may remind you of the last time you tried that reallyneat idea that never quite worked.

So buy the extra storage space, get some extra harddrives, and save all data your business generates.

185


How to ScaleYour Technology

187

CHAPTER

8

f you were to interview dozens of business ownersaround the country about their experiences with buy-ing technology, as I have done, you would find thatthe possibilities for making a mistake are nearly end-less. Although many mistakes in buying technology

come from purchases that neither fulfill your needs normeet your expectations, you can also lose plenty of yourhard-earned capital by buying too much or too little, orat the wrong time or from the wrong vendor, or with thewrong license or tech support plan.

And to make things more difficult, there’s no onecorrect way to make these decisions. Two businesses inthe same field and of the same size may have totally dif-ferent technology needs, because the entrepreneurshave different approaches to their work and differenttalents and skills. When you get right down to it, manag-ing your technology, like most other aspects of yourbusiness, is more art than science. You need to get a feelfor how quickly or slowly your business is growing, de-cide how to best leverage your existing technology tomake do, and, finally, plan for future purchases.

This chapter, in which I’ve distilled the hard-wonlessons of dozens of entrepreneurs, can help you devel-op that feel. I do not discuss specific technologies orforce you to come to grips with a lot of techie terms. In-stead, now that you know about the various technologiesavailable to your business, I discuss how to purchasethem, how to scale your system up—and down—andhow to determine when it’s time for outside help withthose tasks.

Summary

■ Hardware Growth■ Replacement

Schedules■ Software Upgrades■ When to Bring

in the Experts■ Hiring Your

First IT Specialist■ Scaling Down■ Cost Breakdowns

I


Managing HardwareGrowthWhen you’re first starting out, chances are you’ll workout of your home or some inexpensive office space. It’salso safe to assume that working capital is at a premium.Thus, you’ll probably use the personal computer andother technologies you already have in your home. Thatmakes sense; after all, buying a new computer for yourbusiness is impractical when you already have one athome. However, as your business grows and you moveout of the nest, you’ll have to start thinking about com-puter purchases.

As you hire new personnel, you should determinewhich ones will need a computer and take technologycosts into account for every hire. Even if you don’t ex-pect a new employee to sit at a desktop computer, youshould still figure out how to integrate that person’s pay-roll, benefits, and personnel records into your existingcomputer system. Some businesses in which e-mail isextensively used for contact with customers but whoseworkers don’t otherwise require computer access fortheir jobs, have added a couple of computer worksta-tions to break rooms or other areas to enable their em-ployees to keep track of e-mail. These machines can alsobe configured to surf the Web—a perk that many em-ployees will appreciate during break time. Whether youwant to add an Internet filter to block employees’ accessto your choice of offensive online material is up to you.

I tend to recommend brand-name computers forhome users and readers of my work in Kiplinger’s Per-sonal Finance magazine, because they offer far betterservice and support for home users. However, smallbusinesses don’t have to pay as much as Dell, Gateway,Compaq, and the other big-name manufacturers of PCsfor the consumer market charge for their products. For-tunately, you have a number of options.

Begin by setting a price limit on each computer youwill purchase. Unless you’re using sophisticated and spe-cialized software that will need more processing power

188

Tip

Check the classifieds forreconditioned machinesbeing sold by computerrefurbishers and localrepair shops looking tounload older machines.Unlike private sellers,many of the shops willsell you additional war-ranties that will coverbreakdowns.

or better graphics capabilities, the overall price for acomputer, including the monitor, shouldn’t top $1,000.

THE USED PC MARKETIf you’re simply using e-mail, spreadsheets, word pro-cessing, and financial software, you can probably makedo with a reconditioned computer that’s up to threeyears old. The classifieds are a decent venue for findingthese machines, because most of the ads are placed bycomputer refurbishers and local repair shops looking tounload older machines. I recommend buying from theseoutfits rather than from private sellers, because many ofthe shops will sell you additional warranties that willcover breakdowns. A year should be sufficient on mostextra 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 findgood equipment. Computer makers like IBM are start-ing to unload overstock and extra inventory through vari-ous auction sites; so are many repair shops and localretailers. You can pick up great deals on nearly newequipment here. As mentioned in the discussion of e-commerce in Chapter 5, the sellers with the best eBay-user ratings are serious about the business, so keep asharp eye out for them; they’ll stand behind their prod-ucts should something go wrong.

Finally, many businesses, online and off, build theirown computers from individual components. You can getan excellent computer, with either an Intel Pentium 4 orAdvance Micro Device’s Athlon XP microprocessor—both top-of-the-line microprocessors—for hundreds ofdollars less than for a similar product from Dell. Most ofthese shops advertise in national computer publicationslike Computer User, local editions of which can be foundin newspaper boxes around most major cities. If you doopt for this cheaper route, look for local computer manu-facturers who will be close at hand when questions ortechnical problems arise.

BULK DEALSIf you’re hiring many new employees at once and they

189

CHAPTER 8 How to Scale Your Technology


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

Replacement SchedulesTechnology, unfortunately, burns out rather quickly;newer, faster computers are constantly being produced.Over the past six years microprocessor speeds alonehave ramped up by a factor of ten, average RAM sizeshave increased by more than 16 times, and the size ofthe average hard drive has increased by six to ten times.Those improvements are pretty hefty ones, and what’smost important, the software running these machineshas kept pace.

The average lifespan of a computer is said to bethree years because new software will eventually requiremore computing power than the hardware can provide.Consider that the Windows XP program released in2001 won’t even run on a computer that was producedwhen Windows 98 was introduced. In addition, afterfour years, the parts inside hard drives can deteriorateand start losing data.

That said, however, you shouldn’t feel the need toconstantly keep up with the ever-improving personalcomputer. The computers you buy should be more thanenough for your needs for the next three to four years—three years for workers whose computers are their pri-mary tools, and four years for workers who use theircomputers for only e-mail and Web surfing.

Also keep in mind that computer monitors don’t be-

190

come outdated so quickly as the computers themselves,and they generally age better as well. You should be ableto keep your monitors for approximately twice as long asyour desktop computers, and you can save $100 to $300per workstation on any interim computer purchases.Those space-saving and attractive flat-panel monitorswon’t be practical for most small, growing businessesuntil the price comes down to around $200—somethingI 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 atleast one spare computer and one spare monitor in thestoreroom. That way, if a computer goes on the fritz,the worker can continue working while you have theoriginal workstation repaired. If you have 25 or moreworkstations, you should keep at least two of each itemin reserve—or let your IT person decide what quantityis 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 costseven lower, although you can get a slower, older, andeven cheaper machine as a spare if need be.

If you frequently use contractors onsite or have visi-tors or clients in your office and have the necessaryspace, it’s a good idea to keep a spare workstation set upand connected to your office network, so that these visi-tors can have a place to work and access necessary filesand e-mail while they’re with you. It’s a $1,000 conve-nience, but if you can afford it, you’ll find that frequentvisitors, clients, and contractors will all go the extra milefor you down the road. Moreover, your “visitor” comput-er makes a good emergency workstation for your em-ployees as well.

Managing Software UpgradesSoftware is far more expensive than hardware; I haveseen $800 computers loaded with $3,000 worth of soft-

191


Tip

When you plan yourpurchases, considerkeeping at least onespare computer andone spare monitor inthe storeroom. That way,if a computer goes onthe fritz, the worker cancontinue working whileyou have the originalworkstation repaired.


ware. In addition, installing upgrades, and managingthem, is a far more complex task than installing hard-ware. Manufacturers of software critical to your busi-ness are likely to upgrade it at least every 18months—necessitating regular purchases by you. Soft-ware will probably be your largest, ongoing purchase,especially as you grow and have multiple workstationsto contend with. But there are ways to manage theprocess so that you don’t break the bank every timePhotoShop comes out with an upgrade.

DON’T UPGRADE YOUR OPERATING SYSTEMFirst, 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 andI’m in the business of saving you money. Thus, youshould never purchase an operating-system upgrade foran existing workstation in your business. Not every OSupgrade is a must—indeed, most aren’t. Aside from theintroduction of XP in 2001, the vast majority of Mi-crosoft’s upgrades since 1993 have provided additionalfeatures, not necessarily a major improvement in operat-ing-system technology.

As you replace old desktop computers, the newones you buy will already have the latest operating sys-tem on board. For example, new personal computerscome with Windows XP already installed. XP is very sta-ble (it crashes less frequently than its predecessors) andit’s based on computer code that won’t really change formany years. The same goes for other operating systems.In 2001 Apple made its move to OS X, which, like XP, isa more stable, reliable version of the Apple operatingsystem. Mac OS X will be the standard for Apple prod-ucts for the next four to five years, so the only operating-system upgrades you’ll need are the ones that wouldcome with new hardware anyway.

As for Linux, this software is being upgraded all thetime, and it’s free for download in a dozen differentplaces on the Internet. If you’re running Linux on yourservers, your consultant or IT person can easily upgradeyour operating system as needed, with little cost to you.

192

193


DO UPGRADE OPERATING-SYSTEM SECURITYYou will, however, need to check regularly with Mi-crosoft (or Apple, or Red Hat, which is the largest dis-tributor of the Linux operating system), or whoevermade your OS, for security upgrades. In late 2001, forexample, hackers found a way to take over every singlefunction of a personal computer through a security flawin a Windows XP feature called Universal-Plug-and-Play. This was the biggest flaw ever in a Microsoft prod-uct, and it came in a version of Windows that was toutedas the most secure operating system the company hadever produced. Thus, at least once a month, you shouldmake sure that you and every employee run WindowsUpdate on your machines to get the latest securitydownloads. (If you have an IT person in your office, heor she will—or should—regularly send these securityupdates to computers across your network.)

Windows Update, by the way, is a feature Microsoftintroduced during the past few years as a quick, do-it-yourself upgrade mechanism. It’s easily found on theWindows Start menu, and clicking on it takes you to aWeb site, where Microsoft recommends a batch ofdownloads for security and software upgrades. Applehas no such mechanism for its Mac OS, but you can eas-ily find security patches on Apple’s Web site atwww.apple.com. The Mac OS needs far fewer patchesand upgrades because it has a better security trackrecord. Security upgrades and some new features aremade available free of charge and require no other soft-ware to install. Other upgrades, however, will require anoperating-system purchase, depending on what Mi-crosoft and Apple want to promote.

DON’T UPDATE OFFICE WITH BELLS AND WHISTLESNow let’s tackle applications, the most popular of whichis Microsoft Office. Again, at the risk of irking thebiggest software company on the planet, I recommendthat you not bother upgrading before you buy a new ma-chine altogether. Then you can get Microsoft Office ineither its Professional or the more expensive Profession-

Tip

At least once a month,you should make surethat you and everyemployee run WindowsUpdate on your ma-chines to get the latestsecurity downloads.


al Special Edition version. The only substantial differ-ence between the two versions is that the current Spe-cial Edition is loaded with Front Page 2002(Web-editing software) and collaboration software thatlets your workers share files via the World Wide Web. Ifyou publish your Web site directly from your desktop orhave workers in many different locales, you may alreadybe running Special Edition; if you don’t, forget aboutupgrading to the Special Edition.

Like Windows, the every-other-year Office up-grades tend to be more about bells and whistles thanabout improving core technologies. My work computerstill uses Word 97, for example, and it interacts seam-lessly with other computers that have Word 2000 orWord XP—and even with my book editor’s computer,which uses Word 6.0 for Mac. In other words, if it ain’tbroke, don’t fix it. At the same time, when you buy a newcomputer, your vendor should already be loading the lat-est (or if necessary for greater savings, even a previousversion) of Office. It’ll be cheaper than buying the up-grade at the store and installing it yourself. The samegoes for the various e-mail programs available, such asLotus Notes, and other basic business productivity soft-ware, and even basic financial software like Quicken.

DO UPDATE YOUR SPECIALIZED APPLICATIONS WITH BIG NEW FEATURESNow we get to the specialized applications your businessuses. For small publishing houses, these are PhotoShopand Quark or Pagemaker. Legal firms, architectural en-terprises, even construction businesses all have theirown special software as well. In addition, your account-ing department probably uses QuickBooks or other pro-grams, and the personnel department has its own suiteof software. And at some point, upgrades will appear forall of these. How do you manage them?

First, minor upgrades come out all the time. Ifyou’ve already purchased ten copies of LegalEdge’s LawFirm Suite of software for legal case management, forexample, the company will, at the very least, providenecessary security upgrades and service free of charge

194

Tip

Major application up-grades are somethingyou should always bud-get for, but you don’tneed to buy every one.How do you decide?Get a list of featuresfrom the company, pos-sibly along with a 30-day trial of the software,and then ask your em-ployees what they think.

or as part of your licensing agreement. You should de-cide case by case on the usefulness of minor upgrades,such as those that tweak one feature of one program in asuite of software. If none of your employees really usethe feature, don’t worry about it. If some do use it andthe lack of the upgrade is limiting their productivity,then buy the upgrade.

On average, major software applications are signifi-cantly upgraded every 18 months. Big new features areadded to individual programs, and entire new programsare added to software suites; there is an effort to makethe various programs work well with each other. Theseupgrades are something you should always budget for,but you don’t need to buy every one. How do you de-cide? Get a list of features from the company, possiblyalong with a 30-day trial of the software, and then askyour employees what they think. They’re the ones usingthe software, after all. If they feel that the upgrade willimprove their work, buy the upgrade. If not, you’vesaved some money in your budget for that year.

Also be sure to download any security patches foryour business software as they become available. Be-cause your software is probably registered with the man-ufacturer, it will e-mail a notice to you or your IT personwhen the patches are available.

BEWARE THE PITFALLS OFSOFTWARE LICENSING SCHEMESSoftware licenses are, without a doubt, written by an un-holy combination of sales people and lawyers. When youbuy software, you’re technically purchasing the right touse the software in your business for a specified lengthof time—anywhere from a year to forever—for a speci-fied number of users or machines.

However, licenses are primarily a way for the soft-ware company to continue making money off of youafter the original purchase and installation. When youbuy a license, chances are you’ll be asked to pay addi-tional annual or monthly maintenance or upgrade feesto continue receiving customer support and minor up-grades from the software company. In some cases, you’ll

195



receive discounts on the next major upgrade of the soft-ware in question.

I would agree to a full licensing agreement only witha company that provides software for which upgradesand continued support are critical to your business. Oddsare that’s not the case with Microsoft Windows and Of-fice. Microsoft’s licenses have recently come under in-tense fire for their cost, requirements, and upgrade fees.It is much simpler to buy upgrades to those softwareitems as a private consumer than as a business customer,and as suggested previously, you can just include the up-grades in your next hardware purchases.

When you do have to enter into a full licenseagreement, be wary of one that requires you to up-grade in order to keep your service intact; it’s your de-cision to blow major bucks on new software, not thesoftware company’s. Also ensure that no matter whatlevel of agreement you buy, you’ll at least get importantsecurity upgrades and debugging patches as needed—free of charge.

When to Bring in the ExpertsAs a business owner and a professional in your particularfield, you’re already wearing enough hats without havingto don the weighty sombrero of technical support foryour group as well. Of course, the technical issues arefairly cut and dried when your company consists of justyou and a couple of other people, and you’re alreadyhandling the purchasing and organization of the wholeoutfit anyway. But what happens when your organizationgrows to five employees? Ten? Twenty? At some point,you’re going to want some help.

When should you hire an outside consultant orbring in a full-time IT person? The answer is, whenevermanaging your business’s technology starts to becomeoverwhelming. Unless you’re actually running a technol-ogy company, you probably aren’t an expert in this field.The smart thing to do is to defer to someone else when

196

your expertise—or your patience—runs out. Trying tosave money via the do-it-yourself mode could get youinto technical and financial trouble if you have inade-quate knowledge, are unwilling or unable to read up onthe technology yourself, and are spending valuable timemessing around with the computer system when youshould be managing your business.

Most small-business people I’ve talked to for thisproject drew the line between manageable and unman-ageable technology at from five to ten workstations andone small peer-to-peer network. Within those limits, youcan quickly and easily share information while keepingthings inexpensive and manageable. After that, however,the system starts getting complex and beyond the abili-ties of all but the most technically adept. Here are somethings to think about when deciding whether to hireyour 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 maintainingor researching the technology in your business? If youanswer more than six or seven hours, you may bespending too much time on this. Would you havebeen better off spending that time developing yourbusiness?

■ Can you easily use and understand every piece of soft-ware and hardware in use in your business? You don’tnecessarily have to know how to take your computerapart, but you should be able to use everything thatyour employees are using. If you can’t, you may bewasting your employees’ time as well as your own.

■ Have you put off expansion because you’re worriedabout the technology hassles involved? This is the topsign that you need help.

If you decide it’s time for an outside consultant,don’t assume that you must automatically retain some-one for $1,000 a month. Just as there are thousands ofconsultants in the IT business, there are many differentways to use them. If you simply want a consultant to

197



draw up a long-term plan and leave it to you to figureout the details, that’s fine. If you want someone to helpwith every new PC installation, that’s fine as well. Gen-erally, it’s a good idea to hire a consultant to get youstarted on your first server, even if it’s a simple e-mailand file-and-print server—the simplest servers can getvery complex in a hurry!

For entrepreneurs and small to midsize business-es, I recommend going with a computer consultant—aperson or firm independent of your business. For smallbusinesses, I recommend individuals or small localfirms 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, likethe Independent Computer Consultants Association orthe National Association of Computer Consultant Busi-nesses, is a big plus (see the box above for more infor-mation). The consultant or firm in question should alsobe willing to spend time with you, go over your current

198

There are a number oforganizations that represent and recog-nize information-technology consultants,especially independent ones that tendto primarily serve small businesses.The two biggest are the IndependentComputer Consultants Association andthe National Association of ComputerConsultant Businesses.

The Independent Computer ConsultantsAssociation (www.icca.org ), a non-profitorganization based in St. Louis, holdsits members to a fairly stringent codeof ethics, as well as set standards andpractices. It also serves as a support

center for education and training.

The National Association of ComputerConsultant Businesses (www.naccb.org)is a trade association that matches smallbusinesses with consultants who servethem. The Alexandria, Va.,-based organi-zation also has a statement of businessprinciples to which members are expect-ed to adhere.

Both of these groups’ Web sites offerlists of their members throughout theU.S., making it easier for you to find aqualified consultant.

RESOURCES: Computer Consulting Organizations

needs and plans, and provide some options and esti-mates—all before charging you any fees. The consultantshould also be able to handle most of the major aspectsof your business’s technology, from networks to databas-es. The only exception to this requirement would beWeb-site work, which is often left to a separate Webconsultant or design firm.

Most important, any potential consultant should bewilling to provide references, including other businessesin your area, that you can call freely to discuss the con-sultant’s performance.

Also be sure that the consultant you choose can helpyou purchase all the hardware and software necessaryfor your future IT needs. Good consultants often havedeals with major distributors and can get good prices onequipment and programs.

You should be wary of a consultant who proposes todraw up a plan but leave it to you to do all the purchas-ing. The consultant probably doesn’t have the necessarycontacts within the tech industry to ensure a steadystream of information from the company. Hence, futuresupport may be spotty.

Besides the cost of installation, the consultant’s esti-mate should include the cost of educating you or one ofyour employees—preferably you and one or two othersfor backup—about using and maintaining the technolo-gy the consultant is installing. Indeed, the ICCA Stan-dards and Practices states that consultants should“attempt to transfer the knowledge (of installed technol-ogy) to the client or else suggest that the clients secure abackup source of long-term support.” It behooves you tospend any extra time and money necessary during thesetup phase so that you don’t have to run to your consul-tant every time the network goes down.

Most consulting firms also offer long-term supportcontracts, which should provide for several years ofservice at fixed cost. Such an agreement guaranteesthat someone from the consulting firm will be on callwhenever you need to consult, and once your networkhas a server, that your server will get the regular main-tenance it needs.

199



Hiring Your First IT SpecialistIf your business doesn’t grow beyond 25 workstations, aserver, and a basic Web site, you probably won’t need tohire a full-time IT specialist. Granted, you’ll pay moreconsulting fees as you grow, but that route should still becheaper than hiring a full-time employee with benefits.Yet there may come a time when bringing on a techiewill be both time- and cost-effective. Again, here aresome questions to ask yourself:■ Do your regular consulting costs—aside from capital

improvements and routine hardware and software pur-chases—exceed $30,000 annually? If so, a full-timeemployee might eventually save you money, becausethat’s the bare minimum salary for most in-housetechies.

■ Do you spend more than a few hours a week workingwith your consultant? If so, perhaps there are enoughdecisions to be made that it’s time for someone else inyour company to make them.

■ Do you or your employees spend time daily or weekly forroutine computer maintenance? An hour once a monthisn’t bad—but an hour once a week, by a number ofemployees, adds up to lost efficiency.

■ Do you plan to bring your e-commerce Web site or yourinventory management Web operation in-house? If so,you’ll need someone on hand to maintain these criti-cal applications.

When the time is right, a good consultant will alsorecommend that you hire a full-time employee; al-though you may be paying for all its services, the con-sulting firm would rather have more shorter-term orlighter-support contracts than spend all its time at yourbusiness. Thus, you can expect your consultant to befairly honest about your need for an in-house expert.

And finally, having someone on board in house willmean that you’ll have a technology-minded person fo-cused on your business all the time, which means that

200

your organization will probably take advantage of newtechnologies and react to problems more quickly.

Before you hire, you’ll need to define what you’relooking for:■ If most of your time is taken up with creation and main-

tenance of your Web site, you’re looking for a full-timewebmaster.

■ If most of your work involves maintenance and expan-sion of your servers and PCs, a network administratoris 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 andwrite the job description for you.

Keep in mind, though, that unlike a consulting firm,which may offer a variety of resources, a single IT expertprobably won’t be able to do all of those things at a highlevel of expertise and efficiency. A network administra-tor might be able to help get a database running, butwould require additional training and time before trulybeing able to take over for your consultant. And manywebmasters may have no formal training in network ordatabase administration. Your first IT hire should ad-dress your most pressing needs, allowing you, the rest ofyour employees, and your consultant (more on this in amoment) to focus on maintaining the rest of your busi-ness’s technology.

Ideally, you should look for an in-house techie whohas a couple of years of experience working with the samehardware and software your business currently uses. Fur-thermore, job candidates should have the appropriatecertifications in various software and tools. For example, ifyour business uses Windows 2000 Server software to rune-mail servers and print-and-file sharing, your potentialnetwork administrator should have a Microsoft CertifiedSystems Administrator certificate. Similarly, the personyou hire to run your Oracle 9i database should be an Ora-cle Certified Professional Database Administrator.

However, if you have a candidate who has workedon these software programs before and otherwise

201



seems eminently qualified but doesn’t have certifica-tion, don’t fret. Each company offers exams that yourpotential employee can take to gain certification. Youcould hire the person contingent on his or her passingthe exam; $100 to $250 is a small price to pay to testand certify someone who is otherwise a well-qualifiedapplicant. These classes are held in most cities, andmany 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, andyou can hire such a worker at a reasonable price. A re-cent survey by Certification Magazine, a publication forIT workers, said that the average techie was 33 yearsold, held about four different certifications, had beenworking in IT for nearly 81/2 years, and made $55,577annually. In general, you can expect to pay between$40,000 and $60,000 a year for a network or databaseadministrator, depending on experience and certifica-tions. But webmasters tend to make less money because(at the risk of making webmasters around the worldangry) the skill requirements are somewhat less strin-gent 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 consultingfirm may even know of some people who might be inter-ested in working for you as well. Although candidatesthus referred could be exceptional, screen them careful-ly to avoid “friend of a friend” situations.

Another thing to consider in your first IT hire is lead-ership ability. If you expect that your company will contin-ue to grow, your first IT hire probably won’t be your onlyone. Thus, your first hire should have the potential to su-pervise a second employee or, ideally, run a department.Of course, if he or she doesn’t have that experience or po-tential, you can make sure that your second hire does, butbe prepared for the possibility of bruised egos.

The other main traits to look for in an IT hire aregood communication skills and patience. IT people haveto handle numerous calls every day from employees, andmany of these questions, to the IT person, appear very

202

Tip

If you expect that yourcompany will continueto grow, your first IThire probably won’t beyour only one. Thus,your first hire shouldhave the potential tosupervise a secondemployee or, ideally,run a department.

basic and possibly even bone-headed. Nevertheless, theIT person should be handle them with tact, diligence,and, perhaps most important, good humor.

Once you have an in-house IT specialist, you won’tnecessarily want to ditch your consultant, especially ifyou’ve worked with that person for a long time, becausehe or she possesses an institutional knowledge of yourtechnology and can probably still help with purchasing.If you’ve hired a network administrator, you’ll probablystill need a database administrator and a webmaster, andconsultants can continue to fill these roles. Your consult-ing fees will, of course, go down now that you’ve gotsomeone on the payroll to handle a particular function,but don’t be surprised if your overall costs go up. Call itinvesting for growth—your company’s technology willbe much more nimble with someone on the inside, andyou can still take advantage of your consultants’strengths as well. And once your company techie is dele-gated to interact more with the consultants, you shouldfind yourself with more free time to pay attention to therest of your business.

As your business grows, of course, you may find aneed for an additional person, either to assist your firstspecialist or to handle another aspect of your technologyneeds. Consider this case: One IT manager—who didn’twant to be identified so as to avoid sales calls—handlesabout 150 workstations and six different servers for acompany of about 200 people. The servers include aprint-and-file/Internet service server running NovellNetWare, a backup for the first server, a SQL (pro-nounced “sequel”) database server, a server for LotusNotes, an FTP server, and yet another backup server forthe Novell machine, which was slated for removal. Thismanager inherited a system that was slapped togetherwhen innovations such as the Internet were introducedto businesses, in about 1995. Now, he’s busy streamlin-ing the servers—only two to three are really necessary—and upgrading older workstations. Despite all the workinvolved in simply maintaining these computers, letalone upgrading them, he has only two assistants andrarely seeks outside consulting assistance. Only the com-

203


Tech Terms

FTP server: a serverthat stores and distrib-utes files through theFile Transfer Protocol.This is, simply put, aserver that makes vari-ous files available togeneral users on theInternet. FTP serverscan be password-protected and placedbehind firewalls inorder to protect thefiles from unauthorizedusers. An FTP server isdifferent from a virtualprivate network in thatthe Internet usersnever actually enteryour network. Insteadthe users access thefile in the same waythat they would accessa Web page.


pany’s Web-site hosting is outsourced. (The site has twowebmasters of its own.)

This example shows that the vast majority of yourtechnology needs can be handled in-house at somepoint. That point will vary from business to business, butyour first IT employee will no doubt be quite eager tohelp you figure it out for future hires.

Scaling DownMany businesses find themselves in a period of belt-tightening every now and then. Such a situation is al-most inevitable given the cyclical nature of the economy.How do you manage your technology during the leantimes? Scaling downward can help.

We’ve already discussed saving money on computerupgrades by keeping your computer monitors for as longas possible. If things are really tight, you should considerupgrading both your hardware and software instead ofmaking new purchases.

In the section on Cost Breakdowns that follows,we’ve budgeted for replacement PCs every other year. Itruncated the time frame there to more easily illustrategrowth costs. But if your growth is less robust than you’dlike, replacing equipment every other year would besomewhat ambitious.

In the real world, you could try replacing each ofyour computers every three to four years. I don’t recom-mend stretching things further than that, however, espe-cially for workstations used by people performing themost important functions in your business. After that,your PCs will be woefully inadequate for most uses (seealso the discussion of equipment longevity in Chapter 3).

But if you’re looking for a cheaper way to breathelife into your workstations, you may want to just upgradethe RAM on older machines. In 2000 most computerscame with 64 MB of RAM. In 2001 that figure jumpedto 128 MB. This year, 2002, most midrange computerscome with 256 MB of RAM, and some even have 512MB at very affordable prices. If you want to prolong thelife of your current machines instead of purchasing a full

204

upgrade, load them up with RAM. A computer pur-chased in 2000 can be upgraded from 64 to 256 MB ofRAM for less than $100, thereby adding perhaps anoth-er year of life.

If you find yourself with more workstations thanemployees because of downsizing, your first thoughtmight be to sell off some of the extra computers you hadon hand for backups and visitors, and possibly even todownsize your computer network overall. I’d cautionagainst either course, especially if you hope to expandagain within the next couple of years. You can keep theservers running with fewer workstations in operation,and if you do rehire in two years, you can cycle the olderworkstations back into your network. However, if yoususpect that growth is more than two years off, youmight put some money back into the business by sellingoff extra workstations.

Whatever you decide to do, be sure to keep at leastone or two extra workstations handy, just in case the turn-around happens more quickly than anticipated. The samegoes for servers, although you can keep basic serversaround for up to three or four years, especially if they’reserving a smaller network, because their operating livesare easy to prolong with extra RAM and hard drives.

Selling excess equipment is fairly simple, and yourconsultant may even buy older machines from yourcompany. If not, your trusty auction sites or local com-puter dealers are good outlets for sales. By the way, thesame goes for getting rid of older PCs when new up-grades come in, although many businesses prefer to do-nate older PCs to schools or other charities in thecommunity. This practice is good community relations,and the cost of the machine, less any depreciation you’veclaimed previously, becomes a tax write-off.

You can also save money by skipping an upgradecycle on your software. As was mentioned earlier, someupgrades are relatively cosmetic and can be easily passedover. However, you can skip even more substantive up-grades, just as long as your business is still functioningwell without them. You’ll be trading improved efficiencyfor cash in hand, but there are certainly times when this

205


Tip

If you’re looking for acheaper way to breathelife into your work-stations, you may wantto just upgrade theRAM on older machines.


is necessary. You can pick up the upgrade on the nextcycle, although you may have to pay a few dollars morethan you would have done for the earlier upgrade inorder to acquire the previous improvements as well.

Cost BreakdownsWhat follows is a scenario for a small, professional com-pany—let’s call it an architectural firm. I would havepreferred to use a real example of a small company forthese particular breakdowns, but information about thegrowth of a business is as close to a trade secret as mostsmall businesses get. The entrepreneurs I interviewedwere unwilling to discuss their growth plans on therecord. So instead, I’ve created a composite example,taking the best moves from the various firms I’ve visitedand combining them.

I realize most businesses don’t have such an intense

206

Whether your business isgrowing or shrinking, at some pointyou’re probably going to have to movefrom one location to another. Choosinga location can be tricky when you havea great deal of technology invested inyour business. You must make surethat your new building is capable ofhandling both your electrical needs andyour phone/data services. Ideally, mostoffice buildings should be fully wiredwith power outlets and Ethernet cables—or at least have ready conduits within thewalls for these wires, but it’s a good ideato check anyway. You should also bringin your tech consultant or IT specialist toreview the building’s plans, and ask howmuch additional work, if any, will have tobe done to bring things up to speed.

Ideally, you should need to installadditional electrical outlets only for yourequipment and Ethernet ports and linesfor setting up your network—anythingmore would probably be too expensivefor your business’s budget.

If you find a great deal on officespace but it lacks some infrastructure,your potential landlord may agree tocut a deal on the lease if you promiseto leave your infrastructure improve-ments, like your Ethernet cabling,intact when you leave.

Moving your servers and computersshouldn’t be more than a day’s work,and the consulting fees for the workshould be set accordingly. See ourcost breakdowns below to get an ideaof what you might have to spend.

TIP: Relocation

five-year growth spurt. Your business may be stuck onyear 1 for three years, and on year 2 for two years afterthat. On the other hand, if you’re really onto something,you might even surpass this growth!

These cost breakdowns suggest the costs involved inexpanding your company—especially technology costsas you add new people. In this example, a newly hiredarchitect requires technology purchases that average$4,349 a year over five years, not counting consultingfees, Internet service, and server and server softwareupgrades. Note the jump in costs from year 2 to year 3as well, when the first server comes in and many newpeople are hired. If you’re strapped for cash, you shouldbe very careful about crossing that threshold betweenpeer-to-peer networks and a server-based network. Afteryour user group reaches about eight or nine employees,you may encounter problems such as increased lag timein calling up files from the server because of the numberof users on the network. Your consultant may recom-mend some stopgap solutions, such as using an older PCas a stripped-down server/router for your Internet con-nection, which helps distribute data between machineswithout actually hosting any software.

You will also notice that consulting fees grow asmore complex technology is installed. In three or fouryears, especially if Smith and Jones LLC grows at thispace, it may well be time for the company to get its ownin-house techie. Most of the small companies I inter-viewed made that transition when they had 20 to 30computers, and at least two servers.

YEAR 1After spending a year “in the garage” as a partnership,Smith and Jones LLC has decided to open an office andexpand. Smith has stepped back a bit to take care of thebooks and administration, while Jones has hired twomore architects to produce the bulk of the work.They’ve also hired an administrative assistant—a combi-nation receptionist, assistant bookkeeper, and generalhelper. They’ve leased a small office that gives themroom to grow if they so choose. For argument’s sake,

207



let’s assume that Smith and Jones LLC has already cre-ated a Web site while the partners worked from home.Both Smith and Jones have brought their own PCs tothe new office from home, and both are using their per-sonal cell phones for consultation work away from theoffice while charging the service to the company.

Three new PCs @ $1,000 each $3,000New professional inkjet printer 300Small copier 400Architectural-specific software for four PCs

@ $700 each 2,800768k DSL high-speed Internet installation 300Internet service, 12 months @ $300/month 3,600Web site hosting, 12 months @ $30/month 360Cell phone service, two handsets, 12 months

@ $40 each 960Consultant installation services 1,000Consultant support services, 12 months

@ $150/month 1,800Total Annual Cost $14,520

YEAR 2This is a relatively slow ramp-up year for our new com-pany. The firm hires another architect, bringing the totalemployment roster at Smith and Jones LLC to six peo-ple, including Smith and Jones. Although there aren’tthat many changes to contend with, the personal com-puters Smith and Jones brought into the company areshowing signs of age, and some of the software programsin use at the business need upgrades. Looking at the var-ious release times of their blueprint, project manage-ment, and regulatory form software programs, they andtheir consultant decide to budget $200 a year per PC forsoftware upgrades.

One new PC $1,000Two upgrade PCs (without monitors)

@ $800 each 1,600Architectural-specific software for one

new computer 700

208

Upgrades of software for five other machines@ $200 each 1,000

Internet service, 12 months @ $300/month 3,600Web-site hosting, 12 months @ $30/month 360Cell phone service, two handsets, 12 months

@ $40 each 960Consultant support services, 12 months

@ $180/month 2,160Total Annual Cost $11,380

YEAR 3This is a big year for Smith and Jones LLC. Havingspent two years managing the business end of things,Smith has generated plenty of new business for thecompany, which means the firm will have to hire twomore architects and a project assistant. Smith, wishing tofree himself for more architectural work, has also hired abusiness manager and another administrative assistantfor the two partners. With five new employees, the peer-to-peer network that the company previously used maystart to show some wear, with regard to both increasedlag time in Internet access and difficulty in transferringfiles and database information between computers.Thus, the firm’s consultant has recommended buying asmall server to handle print-and-file sharing, e-mail, andthe company’s Web site.

The number of new users has also necessitated anupgrade to a shared T1 line for the office. Hence, the firmwill experience a boost not only in the cost of hardwareand software, but also in the price it pays for Internet ser-vice and tech support from its information-technologyconsultant. The partners also decide to cover the businessmanager’s cell phone costs. In addition, two of the threeoriginal PCs need upgrading; the third belongs to the ad-ministrative assistant, who can manage for another yearwithout a new PC because he’s doing no design work.

Five new PCs @ $1,000 each $5,000Two upgrade PCs @ $800 each 1,600Architectural-specific software for three

PCs @ $700 each 2,100

209



Business management software for one PC 350Upgrade software for six PCs @ $200 each 1,200One small all-in-one server (see Chapter 3) 1,7501,024k T1 high-speed Internet installation 750Internet subscription, 12 months

@ $1,400/month 16,800Cell phone service, three handsets,

12 months @ $40 each 1,440Consultant server installation service 3,000Consultant support services, 12 months

@ $1,000/month 12,000Total Annual Cost $45,990

YEAR 4Another “maintenance” year for Smith and Jones LLC,as everyone works steadily, but the company adds nodesign staff aside from another project assistant. How-ever, the partners decide to hire a sales specialist totake over the full-time job of attracting new clients forthe firm. Thus, they now have seven full-time archi-tects (including the founders), two project assistants, asales specialist, a business manager, and two adminis-trative assistants. As a reward and a boost to efficiency,the professional staff and specialists receive new hand-held organizers by Handspring. The company also cov-ers the cell phone bills for the sales specialist. Inaddition, the company has its consultant do some datamining on the peer-to-peer database (a feature of thearchitectural software) to gain some business intelli-gence for the sales specialist to use. If your consultantcan’t do this without help, he or she can find someoneto do it. Midway through the year, as more work comesin, the partners decide to move into a larger officebuilding, which means additional transition costs fortheir technology.

Two new PCs @ $1,000 each $2,000Three upgrade PCs @ $800 each 2,400Architectural-specific software for one new PC 700Sales-specific software for one new PC 350Upgrade software for 11 PCs @ $200 each 2,200

210

Internet subscription, 12 months@ $1,400/month 16,800

Consultant support services, 12 months@ $1,200/month 14,400

Consultant data mining service 3,000Cell phone service, four handsets, 12 months

@ $40 each 1,920Eleven Handspring Visor Pro handheld

organizers @ $249 each 2,7391,024k T1 high-speed Internet transition fee 750Consultant relocation fees 1,000Total Annual Cost $48,259

YEAR 5The data mining, now an annual event, and the hiringof the sales specialist paid off, as Smith and Jones LLClands a massive contract for a new city municipal com-plex. However, the new project necessitates new hiresand new resources. Three more architects and anotherproject assistant are hired, and the consultant recom-mends installing another server, with database software,to handle the increased workload of the project. It’s alsotime to upgrade the first server, especially as moreworkstations are added. The firm’s partners promoteone of their original architect hires, and the companycovers his cell phone contract as well. This massive in-vestment in people and technology will prove to be avery smart one down the road as the company takes onmore large-scale projects.

Four new PCs @ $1,000 each $4,000Four upgrade PCs @ $800 each 3,200Architectural-specific software for four PCs

@ $700 each 2,800Upgrade software for thirteen PCs

@ $200 each 2,600Two new servers @ $2,000 each 4,000Two server operating system licenses

@ $1,200/year each 2,400Oracle 9i Database Standard Edition

(14 named users) 4,200

211



Microsoft e-mail and Web hosting software 3,000Internet subscription, 12 months

@ $1,400/month 16,800Cell phone service, five handsets

@ $40/month 2,400Consultant installation fee 10,000Consultant data-mining service 3,000Consultant support services, 12 months

@ $2,000/month 24,000Four Handspring Visor Pro handhelds

@ $249 each 996Total Annual Cost $83,396

212

Index

213

AAccounting firm, Web

site example, 45–46

ActiveX programminglanguage, 48

Adobe software, 21Airborne Express, 133Alphanumeric pagers,

142–143Amazon.com, 121Marketplace Seller

program, 123zShops, 122–124,

137America Online, 37Analog/digital cell phones,

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

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

Macintosh operatingsystem

Application service providers,182–183

Arcara & Borczynski LLPCertified PublicAccountants, Web siteexample, 45–46

ASPs. See Applicationservice providers

Auction-Works.com, 119Auctions. See E-commerceAuctionWatch, 119, 121

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

Web site example,44–45

Brint, 24, 52Burstable T1 lines, 77–78Business intelligenceapplication service

providers, 182–183communicating your

company’s policy,179–181

customer data, 163–171

data as the basis for yourbusiness, 162–163

data mining, 182–184inside your business,

171–181managing inventory,

181–182using your financial

intelligence, 171–173using your network

intelligence, 173–179

CCable modems, 23–25Cable telephone services,

25–26

Car dealership, Web siteexample, 43–44

Cards, 6–8Cash registers, 100Casino business, business

intelligence example,161–162

Catalog.com, 41CDMA. See Code Division

Multiple AccessCell phonesanalog/digital, 144–145Code Division Multiple

Access and, 144–145cost breakdown, 159–160dual band, 145Global System for

MobileCommunications and,144–145

options needed, 143–144overseas use, 145paging capabilities, 144roaming plans, 146service plans, 145–146tax deductibility, 17wireless Web access,

144–145Channel Advisor Corp., 119City guides, online, 54Client-server networksdescription, 62, 64Ethernet lines and,

74–75Code Division Multiple

Access, 144–145Company policies, 179–181


Computer consultantsappointing someone

from within yourorganization, 82

choosing, 80–81, 196consulting organizations,

196deciding to hire, 195estimates, 197hiring someone for your

staff, 82–83keeping after hiring an

IT manager, 201responsibilities, 79, 197selling unnecessary

equipment, 79–80service components of

proposed contracts, 81support contracts, 197

Computersadd-ons, 7–8average lifespan of, 66,

188backing up and saving

files, 14building your own, 187bulk deals on, 187–188cards, 6–7connection speed, 22donating older PCs, 203downloading data, 12generic versus brand-

name, 9, 186graphics cards, 6–8hackers, 11–12handheld, 29–30hard drives, 6–7insurance for, 19keeping spare, 189laptop/desktop

comparison, 5

Macintosh operatingsystem, 1–2, 5–7

memory and storage, 8microprocessors, 6–7,

187–188monitors, 8, 188–189motherboards, 6, 73number of Americans

owning, 4“pinging,” 12purchasing

considerations,186–188

RAM, 6–7, 188, 202–203registering with the

operating systemmanufacturer, 79

replacing, 188–189, 202selling off extras, 203special offers for small

businesses, 65, 97staggering purchases of,

66–67tax deductibility, 16–17tech support, 9uploading data, 12used PCs, 187viruses, 11–12, 79warranties, 9, 187where to buy computers,

65Windows-based, 1, 5–7See also Hardware;

Networks; SoftwareCookies, 170–171Copiers, 17, 27, 29Costsbasic do-it-yourself Web

sites, 54–55basic network, 108–109budget office, 30–31

emergency pagers andcell phones, 159–160

expandable office, 31full mobility for your

sales force, 160large, hosting office

networks, 84–85large office networks, 84manufacturing network,

109professionally designed,

hosted, andwebmastered Websites, 55–56

professionally designed,hosted Web sites, 55

retail network, 109small office networks,

83–84Web sites, 54–56year 1 scenario, 205–206year 2 scenario, 206–207year 3 scenario, 207–208year 4 scenario, 208–209year 5 scenario, 209–210

CRM software. SeeCustomer relationshipmanagement software

Customer datacontact information,

165–168cookies, 170–171demographic data,

167–168e-mail lists, 169mapping software,

166–167order and shipping

information,169–170

phone numbers, 166

214

sales transactions,163–165

Web intelligence,168–171

Zip codes, 165–166Customer relationship

management softwareadd-ons, 97costs, 98–99customer service, 97fulfillment, 97options, 97–98sales management, 95

Cybersquatters, 36

DData jacks, 152Data mining, 182–184Data warehousing, 180Databasesadditional servers for, 100basic network, 105,

108–109business uses, 93–99cash registers, 100closed systems, 104, 108consultants, 101–102cost breakdowns,

108–109customer relations

management, 95, 97–99description, 89, 180docking system, 99electronic time cards,

100–101embedded systems, 92encryption, 92–93“grab and go,” 90handheld scanners,

99–100

hardware options,99–101

hiring someone tomanage, 102

IBM DB2 universaldatabase, 92

integrating auction salesinto, 119–120

inventory and, 93manufacturing network,

107, 109messaging programs, 92Microsoft SQL Server,

91–92Oracle 9i standard

database, 92–93personnel files and, 94point-of-sale systems, 100regulating access to, 103remote access, 103–104retail network, 106, 109sales tracking and, 94–95security issues, 103–108separate servers for,

103–104, 108service contracts, 102synchronizing, 99system integrators,

101–102updating, 108uses for, 89–90See also Computers;

Hardware; SoftwareDesktop computers, 5Dial-up modems, 23DigiMine, 183Digital subscriber lines, 23,

77DirectNIC, 41Docking systems, 99, 148Domains, 37

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

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

171

EE-commercealternatives to eBay, 121bidding price, 116cautions about, 135–136cookies, 170–171cost breakdowns,

136–138costs, 120–121credit cards and, 130description, 39do-it-yourself plans,

129–132Dutch auctions, 116, 118eBay, 116–118, 136–137estimating online sales,

135inventory considerations,

132–133lessons learned from

failed businesses,114–116

managing and expandingyour auction business,118–121

managing fast growth,134–135

215

Index


niche auction sites, 120online auctions, 116placing your eBay

auctions on your ownWeb site, 122

portals, 112–113reserve price, 116–118resources, 119shipping options,

133–134shopping carts, 112–113splash pages, 112–113stores, 121–122tips on what to sell

online, 115Web-based software or

services, 118–119Web design for, 126we’ll-do-it-for-you plans,

127–128we’ll-do-some-of-it-for-

you plans, 128–129Yahoo! Stores, 124–127zShops, 122–124

E-mailbenefits and pitfalls, 53customer data, 169including your address

on your Web site, 36laptops and, 147monitoring employee use

of, 177–178pagers and, 142–143personal digital assistants

and, 150spam, 40, 53value of, 22–23

Earthstores.com, 128Easi Analytic Software Inc.,

167eBay

buying computers from,187

costs, 117, 136–137description, 116–117Dutch auctions, 118getting started on, 117payment services, 117placing your eBay

auctions on your ownWeb site, 122

reserve price, 117–118stores, 121–122

eFax.com, 28802.11 protocol, 75–76Electronic timeclocks,

100–101, 176–177Embedded systems, 92Employeescommunicating company

policy to, 179–181monitoring, 177–179

Encryption, 92–93, 154, 156Entrepreneur.com, 24, 52Errors and omissions

insurance, 19Ethernet, 72–73Extensions for Web addresses,

37–39

FFairMarket Inc., 119Fax machinesall-in-one machines, 29memory, 28separate telephone line

for, 29tax deductibility, 17transmission speed, 28Web site alternatives,

28–29

Federal Express, 133Commerce Builder, 128

Firewalls, 12–13, 79, 104FreeMail, 72Freemerchant.com, 128FrontPage, 16, 51FTP servers, 201Funeral home, Web site

example, 44–45Fusion MX, 51

GGeoCities, 35–36, 49geoVue, 168Global System for Mobile

Communications,144–145

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

for MobileCommunications

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

computers, 29–30,150–151

Hard drives, 6–7Hardwaredatabase options, 99–101managing growth,

186–188network needs, 75–76for servers, 68–69

216

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

42

IIBM DB2 universal database,

92iBooks, 5ICANN. See Internet Corp.

for Assigned Namesand Numbers

iMac, 3, 5iMASS servers, 72–73Independent Computer

Consultants Association,196

Insurancebusinessowners policies,

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

19Internetbudget considerations, 78cable modems, 23–25cable telephone services,

25–26costs of Web sites, 54–56dedicated lines (T1

lines), 23–24, 59, 77designing your Web site,

42–43dial-up modems, 23

digital subscriber lines(DSLs), 23, 77

do-it-yourself Webdesign, 49–51

DSL versus cable,24–25

e-mail, 22–23extensions for Web

addresses, 37–39fax services, 28–29high-speed connections,

2–3, 12hiring a Web designer,

46–48homesteading, 35–36local newspaper Web

sites, 54measuring the

performance of your Internetconnection,175–176

mobile access, 151–154monitoring employee use

of, 177–179networked computers

and, 76–78online city guides, 54online entrepreneurial

aids, 24online phone directories,

53portals, 34, 112–113privacy policies, 46registering your business

name, 37–39search engines, 34, 52–53small-business resources,

22small-business Web site

examples, 43–46

updating your Web site, 43

URLs, 34, 36–37Web addresses, 34Web hosts, 38–40Web site content,

41–42Web sites as

complements to your business, 36

Internet Corporation forAssigned Names andNumbers, 37

Internet service providers, 23Inventorydatabases and, 93e-commerce and,

132–133using technology to

manage, 181–182IT managerscertification, 199–200description, 68hiring, 82, 194–202leadership abilities, 200traits to look for,

199–201

JJavaScript programming

language, 48Jay & Bob’s Secret Stash,

e-commerce example,111–113

KKeyGhost, 178KeyLogger, 178Keystroke tracking, 178

217

Index


LLaptopscompared with desktop

computers, 5considerations, 147–148cost, 146–147docking stations, 148most common use for,

147personal digital assistants

and, 149LegalEdge, Law Firm

Suite software,192–193

LeGrow, Bob, weddingphotography business,33–35

Liability insurance, 18Linux server operating

system, 70–72,190

Lotus Notes, 16, 192Lycos.com, 52

MM-commerce, 158Macintosh operating systemAppleTalk, 74compared with Windows,

5–7description, 2upgrading, 190

Malpractice insurance, 19Managing your technology.

See Scaling yourtechnology

Mapping software,166–167

Markheim Tropical Fish & PetStore, Web siteexample, 45

Michael Kaminer PublicRelations, networkexample, 57–60

Microprocessors, 6–7,187–188

Microsoft bCentral, 24, 52Microsoft Certified Systems

Administrator certificate,199

Microsoft Excel, 15Microsoft Exchange Server,

72Microsoft Internet Explorer,

92Microsoft Money, 20–21,

172Microsoft Office, 3, 15–16,

90–91, 191–192Microsoft Outlook, 15, 30, 98Microsoft Pocket PC, 151Microsoft SQL Server, 91–92Microsoft Word, 15Microsoft Works, 15Mobile technologiescautions, 141cell phones, 143–146cost breakdowns,

159–160data jacks, 152dial-up option, 155future of, 154identifying mobility

opportunities, 157–159integrating mobility

into your existingframework,155–157

laptops, 146–148

limiting dial-up usersaccess, 155

m-commerce, 158mobile Internet access,

151–154pagers, 141–143PCMCIA cards, 152–153personal digital

assistants, 148–151proprietary citywide

systems, 153–154short-distance wireless

networks, 153terminal servers, 154,

156–157, 177traveling or

telecommutingemployees, 155

uses, 158–159virtual private

networks, 154, 156, 177

Web-based interfaces,154–156

wireless modems,152–153

Modems, 23, 152–153Money management software,

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

example, 43–44

NNAME Web Editor, 51NameZero, 41

218

219

Index

National Association ofComputer ConsultantBusinesses, 196

Netopia, 128Netscape browsers, 92Netscape.com, 52Network Solutions, 37Networksaccess speed, 174administrators, 82–83,

199basic, 105, 108–109benchmarks, 174–175buying similar computers

for, 65–66choosing server hardware

and software, 68–69client-server, 62, 64,

74–75computer consultants,

78–83cost breakdowns, 83–85data warehousing, 180description, 61–64electronic timeclocks,

176–177hardware needed, 73–76information about your

business from, 173–179Internet access and,

76–78IT managers, 68, 82,

194–197keystroke tracking, 178management, 69manufacturing, 10, 107measuring employee

performance, 176–179measuring network usage

and performance,173–175

misconceptions about,62–63

monitoring employees,177–179

need for, 61peer-to-peer, 62–63, 74permissions, 74–75planning for upgrades,

66–68ports, 73print-and-file sharing, 62protocols, 62–63remote access, 103–104replacement work

stations, 66–67retail, 106, 109routers, 78seat licenses, 69security considerations,

79server administrators,

74–75server multitasking

performance, 174–175server operating systems,

69–73servers, 62–63short-distance wireless

networks, 153storage solutions, 180thin clients, 61Web-hosting and, 64where to buy computers,

65wireless, 75–76See also Computers;

Databases; SoftwareNewspaper Web sites, 54Nokia 5185i phones, 144Novell Netware 5.1 server

operating system, 70–71

Numeric pagers, 142

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

Database Administrator,199

Oracle 9i standard database,92–93

Oracle small business suite,24, 52

O’Reilly, Megan, businesssetup example, 1–3

Overstock.com, 99

PPageMaker, 21, 192Pagersalphanumeric, 142–143buying multiple pagers,

143costs, 159–160numeric, 142uses, 142

Palm handheld computers,29–30, 150

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

assistantsPeer-to-peer networksdescription, 62–63Ethernet lines and, 74

Permissions, 74–75


Personal digital assistantsfeatures, 149–150Handspring Visor,

150–151laptops and, 149the Palm, 150Pocket PC, 151synchronizing with

computers, 148–149Pet store, Web site

example, 45Phone directoriesonline, 53reverse-lookup, 166

PhotoShop, 21, 192“Pinging,” 12Pivotal, 98Pocket PC, 29–30, 151Point-of-sale systems, 100Portalscosts, 35description, 34, 112–113

Ports, 73POSMicro.com, 99PowerMacs, 3, 5Print-and-file sharing, 62Printers, 26–27, 29Privacy policies, Web sites,

46

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

192Quicken, 17–21, 24, 52, 98,

172, 192

RRAM, 6–7, 188, 202–203

Recordkeeping, depreciatingbusiness equipment, 17

Registering your businessname, 37–39

Registrar.com, 37Relocating your business, 204Remote access, 103–104Reserve price, 116–118Resourcese-commerce, 119e-commerce shipping

options, 133niche auction sites, 120online entrepreneurial

aids, 24search engines, 52special offers for small

businesses, 65, 97Web hosts, 41

Reverse-lookup phonedirectories, 166

Ricochet, 153–154Roaming plans for cell

phones, 146Routers, 78

SSAFECO Field, database

example, 87–89Scaling your technologycost breakdowns,

204–210downsizing, 202–204hardware growth,

186–188hiring an outside

consultant or full-timeIT manager, 194–197

relocating your business,204

replacement schedules,188–189

software upgrades,189–194

year 1 costs, 205–206year 2 costs, 206–207year 3 costs, 207–208year 4 costs, 208–209year 5 costs, 209–210

Scanners, 27–29, 99–100Search enginesbenefits, 35–36description, 34resources, 52

Seat licenses, 69Securitybacking up and saving

files, 14combination software

products, 13computer viruses, 11–12,

79databases, 103–108encryption, 92–93,

156firewalls, 12–13, 79,

104networks, 79password protection,

14–15privacy policies, 46tips on, 13ugrading, 191

Seller’s Assistant Pro, 119Server administrators, 74–75Serversdescription, 62–63FTP servers, 201lifespan, 203upgrading, 67

Setting up your office

220

budget office costs,30–31

buying your computer,4–9

copiers, 27expandable office costs,

31fax machines, 28–29handheld computers,

29–30hooking up to the

Internet, 22–26initial needs, 4multipurpose machines,

29peripheral equipment,

26–30printers, 26–27scanners, 27–28software needs, 9–22

Shopping carts, 112–113Siebel Systems, 98Small Business

Administration, 24, 52Online Women’s

Business Center, 24, 52Smallbusinesscomputing.com,

24, 52Softwareantivirus, 12–13, 79beta, 122computer security, 11–15costs, 189–190customer relations

management, 95, 97–99diagram of how different

software programswork within a computersystem, 96

do-it-yourself Webdesign, 51

firewalls, 12–13, 104inventory tracking,

181–182licenses, 193–194making copies, 10mapping software,

166–167money management,

17–21office suites, 15–17page-layout, 21photographs and images,

21–22upgrades, 10, 67–68,

189–194, 203–204Web-based software or

services for e-commerce, 118–119

See also Computers;Databases; Hardware;Macintosh operatingsystem; Networks;Windows operatingsystem

Source codes, 38–39Spam, 40, 53Stargate, 41Static IP addresses, 38–39Sun Solaris server operating

system, 70Synchronizing, 99, 148System integrators, 101–102Systems Research &

Development, businessintelligence example,161–162

TT1 linesburstable, 77–78

description, 23–24, 59

routers, 78shared, 77, 175

Tax issues, deductiblebusiness expenses,16–17

Telecommuting, 155Terminal servers, 154,

156–157, 177Thin clients, 61

UUnited Parcel Service, 133United States Postal Service,

133Universal Resource Locators.

See URLsUNIX server operating system,

70Upgradesnetworks, 66–68operating system, 190RAM, 202–203security systems, 191software, 10, 67–68,

189–194, 203–204Uploading data, 12URLscosts, 35cybersquatters, 36description, 34domains, 37getting your own address,

36–37including on business

documents, 52transferring, 49–51

U.S. Census Bureau,167–168

221

Index


VVericept, 178Verisign, 137ViewAskewniverse,

e-commerce example,111–113

Virtual private networks, 154,156, 177

Viruses, 11–12, 79VPNs. See Virtual private

networks

WWeb address extensions,

37–39Web-based interfaces,

154–156Web designdo-it-yourself, 49–51for e-commerce, 126

Web designersbackground and

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

Web hostsall-in-one hosts, 41description, 38networks and, 64selecting, 39–40

Web sites. See Internet;specific sites

Webmastersdescription, 48responsibilities, 48–49salaries, 200

WebSense, 178WebVan, 159WiFi protocol, 75–76Willett’s Auto Repair, mobile

technologies example,139–141

Windows operating systemcompared with Mac

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

Wireless modems, 152–153Wireless networks, 75–76Worker’s compensation

insurance, 19World Wide Web. See

InternetWYSIWYG, 51

XXMap Business, 166

YYahoo!, 35, 52, 121Yahoo! Storescosts, 125, 137–138description, 124–125flexibility, 126–127revenue share, 125tracking tools, 127

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

222

practical tech for your business: using today's technology to make your business more...

Documents