 (Eleventh instalment of the
upcoming book Natural Enterprise.
List of previous instalments here.)
A lot of readers of How to Save the World will probably be disappointed with this chapter in my upcoming book Natural Enterprise
for two reasons: I'm not going to plug any specific vendors of
technology for small business (although I've identified quite a few,
including some regular readers), because by the time the book comes out
this information could well be obsolete. (When the book comes out there
will be a companion website with a list
of recommended vendors of technology, though, so don't despair). And
although buying technology is one of the most fun parts of new
enterprise formation, my advice is to buy as little as you can get by
on. Most entrepreneurs, in my experience, go overboard.
There is no blueprint 'best answer' for what technology a new
entrepreneurial business needs. It depends on the industry in which you
operate, the number and location of your customers and products,
whether your product or service can or should be effectively offered
online, and a host of other factors.
So the first thing to do is develop a Technology Plan. Although you can hire a consultant to do this with you (don't let them do it for
you), you can also develop the draft plan yourself and then run it by
tech-savvy people you know, and (more importantly) other, established
entrepreneurs you know with businesses of a similar type and style to
yours. The entrepreneurs who've already gone through this process can
tell you what you really need, and how to avoid the missteps they made,
and this can really save you money and grief. You also need to talk to
some prospective customers about your Technology Plan, because if it's
inadequate to meet their expectations you'll need to re-think it. And
if they shrug and say it doesn't matter much to them, that probably
means your technologies are mostly internal, back-office tools: Avoid
spending too much on toys your customers (who ultimately pay for them)
don't see or benefit from.
The Technology Plan need not be long, but it does need to be carefully
thought through. Here's a checklist of the types of technology it
should address. For each type, you'll need to assess whether you need
it at all (some manual alternatives work just fine, and will do so even
when your business scales up), identify and evaluate the alternative
tools available (including an increasing number of free alternatives),
and budget when to buy and how and how much to pay for each.
Telephony:
Most telephone companies offer packages designed for entrepreneurial
businesses. It's essential that your telephone system, often the first
point of contact with new customers, be reliable and professional.
Consider voice messaging, call waiting and call routing needs. Look at
them from the customer's viewpoint. Consider VoIP alternatives
including free (but not yet ubiquitous) solutions like Skype.
Fax: I keep thinking fax is dead. It isn't, yet. Avoid the hokey systems that require customers to call twice to send you a fax.
E-mail:
If you want to be taken seriously, you need your own e-mail/web domain,
even if you don't have a website. Make sure it's short and easy to
spell. Shop carefully -- prices are all over the map. Cardinal rule of
e-mail: If you give your e-mail address to customers, check your e-mail
very frequently (route it to someone else in the business if you can't)
and respond to customers immediately.
Public Website:
Depending on your business, this may be the most critical technology
you buy, or you may not need one at all. Talk to as many others as you
can before deciding what you need and who to buy from. You will
probably need someone to host your website, and the package the host
provides will probably include software to build and maintain your web
pages, and limit the size of the site and the volume of traffic (beyond
which you pay extra). Most hosts also offer scalable additions for
e-commerce at an additional price: Product catalogue, shopping cart,
order management and credit-card handling etc. Beyond that, the sky's
the limit: You can add functionality to do online surveys, offer
multimedia presentations, provide help-desk support for your products,
and many other business applications. As with telephony, think this
through from the customer viewpoint: What do they want, what do they
need, what might they actually not want to see on your site. Keep it as simple as possible, easy to use, clean-looking, and professional in appearance. If you're not
taking orders for your products over the Internet, it's unlikely that
putting marketing information on your website will produce much
benefit: Focus your site content instead on educating your site's readers. If you give people useful information 'free', they're more likely to want to buy from you. Exception:
Put a few, enthusiastic, signed customer testimonials at the top of
your site (but get the customers' permission first). And make sure your
contact information is up there with it, and that you're there to take
the calls when they come in. And give your customers a simple way to
give you feedback, good and bad, on your site. The good feedback can be
the basis for testimonials and viral marketing. If you don't give them
a simple way to vent bad feedback to you directly, they'll vent to
others (including potential customers) instead.
Financial Information System:
Depending on the nature of your business, you will have certain
statutory reporting and filing requirements for your business.
Technology can automate these somewhat, but unless you have a lot of
small transactions (purchases, payments, sales and cash receipts), or a
lot of different products and services that you need to track and
inventory separately, technology isn't going to reduce your paperwork
burden that much or tell you anything you don't already know. Find a
financial system that meets your needs, not the government's. That probably means a system that will allow you to budget, forecast and monitor cash flow
day-to-day, easily. Don't buy a huge, complex accounting package with
thousands of General Ledger accounts and reports you don't use to
manage your business. Again, thinking of the customer first, you want
invoices and other financial paperwork that is visible to the customer
to look professional. If you have a lot of employees, consider
outsourcing payroll and HR records management -- it's usually the most
cost-effective application for small enterprises to farm out.
Customer Information System:
If you have (or hope to have) a lot of customers your first database
application will probably be a customer information system, listing
contact information, sales calls (held and scheduled) and successes. A
simple spreadsheet application (free over the Internet) will probably
suffice until you get more than, say, 100 customers.
Order and Inventory Management System:
Depending on volume and nature of your business, you may need
Point-of-Sale (POS) and Inventory Management software to keep track of
what and how much you've sold. Most entrepreneurs don't have enough
distinct products or enough individual transactions to require this,
and some accounting packages include rudimentary invoicing and
inventory management capability.
Intranet:
Once you reach a certain size, or if your organization is virtual (i.e.
your people are physically scattered), you'll probably need some kind
of internal website, a space behind a firewall where your people can
communicate and collaborate. Don't design it in a laboratory -- get the
people who will use it to design it with you. Possible applications
are: Scheduling and calendaring, Document- and file-sharing, Internal
e-mail and instant messaging, Internal newsletters, Housing databases
purchased from outsiders used by all employees, Hosting collaboration
and project 'spaces' and tools. Your work colleagues will tell you what
they need, what makes sense to share, and to what extent (e.g. setting
up meetings automatically for other colleagues) they're willing to
allow technology to impose on and make some decisions for them.
Desktop Publishing and Marketing tools:
Unless others have told you that you have a real flair for this, or
it's your business, this is best left to professionals. If you're
relying on viral marketing you need very, very little marketing
material. A business card, a brochure, a simple website -- that's
probably it. Get some one-time professional input on these, and then
leave them alone. I know, designing these things yourself is fun. But
it's not the best use of your time. And the results can be truly ugly.
Computers, Mobile Devices and Local Area Networks for the Front Line:
Let the users specify what they need, hardware, network and software.
Consider free alternatives to the major business software packages.
Stress connectivity applications over processing power, memory and
multimedia applications -- they're the ones with payback. For
applications essential to your business, make sure you have backups for
everything -- the data, the hardware, the customer connectivity. Even
the smallest business needs some redundancy and security systems.
Customers just won't tolerate 'down time' anymore. But the more
sophisticated your systems, the more costly the redundancy and security
systems become -- think about this before you go for wireless
networking.
Weblogs & Social Networking Applications:
I am of course biased about these technologies, but I'm the first to
admit that they aren't the easiest to use, they aren't for everyone,
and they aren't yet ready for prime time business application. If your
colleagues are weblog-savvy, consider them for specific business
purposes: Capturing valuable business lessons, Archiving subject matter
expertise, and as a Substitute for internal newsletters. And consider
running a weblog as an adjunct to your public website -- they can be
informative and engaging for customers and prospective customers, at
minimal cost. And keep a close eye on the burgeoning world of social
software: There is a burning need for better tools and databases that
can help entrepreneurs find partners, colleagues, advice, information
in context, and even customers. Someone's going to figure out how to
meet this need.
Once you have your Technology Plan completed and vetted by users,
customers and other entrepreneurs, you have one more critical decision
to make: Lease vs. Buy. This
decision is getting more difficult as the number of creative financing
alternatives increases. There is a new phenomenon called "pay as you go
computing" that looks at most or all of the above technologies as a
single computing 'utility'. There are companies that now offer
'utility' computing packages, where you outsource all of the purchasing
and maintenance of the technology of your business to a third party, in
return for a single monthly payment that varies with your usage. The
big computer companies are likely to offer 'utility' computing by the
end of this year, though probably on a less extensive and less flexible
basis. Unless you're a whiz with numbers it may be hard to figure out
whether to go for such a plan or not. My advice: Gather up all the
costs and the leasing, financing and 'utility' computing quotes, buy
your friendly accountant lunch and have him compute what's the best
deal. That goes as well for any lease vs. buy decision in your
business: Cars, premises, and machinery. The calculations are
complicated but straightforward -- if you're an expert in Present Value computations and discounting variable cash flow streams.
Not only is the array of technology choices dizzying, it's changing
daily. That's why the key is to leverage the Wisdom of Crowds: Talk to
a lot of people, especially other entrepreneurs, who are usually all
too willing to tell you their technology success stories and horror
stories. It's all part of the homework for building a Natural
Enterprise.
OK, dear readers, this
is the chapter of Natural Enterprise that I feel least confident, and
competent, writing. So please tell me: What's missing, and what have I
got wrong? Remember that this book is for the novice, so I've tried to
keep it simple and jargon-free. This chapter will get the last re-write
just before the book goes to press, but I'm still worried it will be
obsolete by the time the book hits the stores. What do you think?
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