The days when a new business could be set up with a battered old typewriter and a couple of dusty ledgers are long gone. In today’s marketplace, the question is no longer whether you should use computers, but how best to use them. But how do you know what choices to make when the IT marketplace is moving so fast?

Many people find information technology (IT) confusing or even intimidating at first, but you should remember that, for all its many applications and occasional complexity, IT is just another tool to help you run your business. This guide is designed to highlight the factors you need to take into account when considering investing in IT for your business.

What to take into account

Before you spend money on an IT system – that is, the hardware, software, and all the attached peripherals like printers and scanners that form your basic computing set-up – it’s a good idea to ask yourself the following questions:

• Can you use your existing home computer? Obviously, if you have an office and staff you will need to invest in new kit. But if you are a sole trader, working from home, you may only need to buy new software for your existing computer.
  
• What do you want to use it for? Make a list of the tasks you want to use your new machine for, and refer to it when choosing from the available software and hardware. This will help you avoid paying for features that may sound impressive – but that you will never actually use
  
• Specialist or general? Do you need a basic business package, with a simple PC and peripherals, or do you need specialist equipment such as a printer that can handle complex forms, or a powerful designer’s computer like an Apple Mac?
  
• How will you pay for it? Computer systems are subject to favourable depreciation terms and can be financed in the same way as any other business asset, so seek advice from your accountant or bank manager.
  
• Who will maintain it? You can probably teach yourself most of the support tasks for your system but remember – while you’re fixing it, you’re not running your business. You may be wise to take out a support contract when you buy.
  
• Is now the right time to buy? Prices and specs constantly improve so, if you need cutting-edge tech, pick your moment carefully. But for basic business machines there’s no point waiting – better to buy and start reaping the benefits immediately, as whatever deal you get will inevitably be topped within months.

Who to speak to

Buying a computer is a lot easier than it first looks when you find yourself confronted in the showroom with row upon row of seemingly identical machine. Many sources of information exist to help you decide between the array of prices, brands and specifications. For instance:

• Many computer magazines review new products and rate or compare rival equipment – just beware of falling for their enthusiasm for the latest expensive gadgets when you would be fine with something more basic.
  
• Business contacts of comparable size or market sector will have their own tales of IT success and frustration – learn from them, rather than the hard way. Or you could try your local Chamber of Commerce or Business Link for advice.
  
• Talk to any professional body you belong to. Some offer cheap-rate bulk-buying schemes using suppliers familiar with the needs of businesses like yours. This may also give you more clout if you run into any problems later on.
  
• Search on the internet for reviews and comments, especially message boards where users swap experiences and answer each others’ technical problems – you’ll soon learn whether the product you’re considering is reliable or error prone.

What it will cost

The true cost of IT is not just that of the hardware, but also the software, maintenance, training and investment in time and effort required to get to know how the system works. The sum of all these elements is known as the total cost of ownership (TCO), which is the figure that you should use when calculating the potential benefits of any system. Consider the following factors:

• When you are confident you know what you want from your new IT, draw up a written specification. This will help you compare like with like when shopping around.
  
• If your business uses powerful software such as high-resolution graphics, CAD (computer-aided design), or some types of Web management, you may find the software’s requirements drive what hardware you need to buy.
  
• For most businesses, the performance of even the most basic computers on the market far exceeds the demands of the work you’ll use them for, so don’t feel compelled to choose from the most expensive models.
  
• Choose the right support package for your needs – do you really need an immediate response, or could you make do with a two-day call-out?
  
• Many PCs come with free peripherals to sweeten the deal, but you should not be sidetracked by equipment you won’t ever use. Concentrate on what you definitely need now rather than what you might need in the future.
  
• When buying hardware, don’t just look at high street stores and showrooms. Bankruptcy sales and online auctions are good sources of second-hand kit, while some of the best prices for new equipment come from companies that only sell online or by mail order.
  
• • Your software must be legal, but you don’t always have to pay a fortune for it. Much will come bundled with a new PC, while Open Source software – developed by volunteers across the world – is free and often of as high a quality as a commercial product, although it can sometimes be the complicated option.

The benefits IT can bring

• Accounting and payroll
  Often one of the first areas in business to be computerised, the use of a simple accounting package will help you to keep track of your business finances. Basic computerised book-keeping will save you accountancy fees, ease the job of tracking unpaid invoices and let you monitor the performance of your business more accurately.
  
• Office administration
  Affordable high-quality printers and office software packages, which bundle together word processors, spreadsheets, databases, simple graphics tools and presentation programmes, have revolutionised how documents are created, stored and handled. Much of this software is intuitive and simple to learn, allowing businesses to easily produce professional-looking letterheads, invoices and statements.
  
• Forecasting
  Forecasting the performance of your business, and then monitoring how the actual figures compare, gives an early indication of any variations in achievement. Software to do this can be found as part of your accounts package, specifically designed for the purpose, or built using a spreadsheet.
  
• Publicity
  Among the many tasks that IT can take out of the hands of expensive specialists and put in yours is desktop publishing (DTP). Flyers, notices and simple brochures can be designed using DTP software, often using easy pre-supplied templates to achieve a professional look.
  
• Presentation
  The days of the overhead projector have passed, as visual aids for meetings can now be made using packages that produce slide shows which can then either be projected onto a large screen or even displayed on a decent-sized computer screen. The slides can be printed out for use as a hand-out afterwards.
  
• Contact databases
  Keeping in touch with existing clients and following up leads for potential clients is vital for any business – and here is one area in which IT can make a big difference. A good client database may be fiddly to set up, but it will repay the effort from day one. Subject to Data Protection considerations (see Useful contacts below), you can track details ranging from an existing client’s order history, to the different mail shots sent to a hot prospect. Mail marketing, in particular, has been made a great deal easier through advances in IT, with the Royal Mail website offering plenty of useful advice on list buying and management, and how to integrate your database with promotional materials to keep those customers coming in.
  
• Project management On a simple level, project management has become much easier with the ability to track complex activities using specially designed software tools – for example, creating and amending complicated documents such as Gantt charts is greatly simplified. A less obvious benefit is that workers in different locations can now co-ordinate their activities using online project tools that track tasks and document flows, ensuring that everyone’s contribution is maximised.

The internet

The internet is not – as its most ardent fans sometimes seem to hint – a magic kingdom where everything imaginable might be found. But it is a vast source of information that is simple and cheap to take advantage of. Bear the following points in mind:

• If you are running a business of any appreciable size, broadband internet access is a necessity. You cannot realistically afford to be juggling phone calls and web access on the one phone line, while the size of some documents now routinely sent by email virtually precludes slow dial-up access.
  
• One of the best uses of the net is to research what your competitors are doing: their websites will tell you their services, products, area of coverage, marketing approach and possibly prices. Of course, yours will do the same for them, so stay sharp!
  
• Having your own website is desirable in all fields of business, and a necessity in many. Be prepared to invest in a proper Web address rather than relying on the convoluted one that might come with free Web space from your internet service provider – this will also give you a simpler, more professional email address.
  
• Unless you are specialising in the internet field, don’t feel compelled to spend a fortune on creating your site – Web design is a growth industry and your local Business Link may be able to put you in contact with a start-up company or hungry freelancer who will do a good job cheaply to build their portfolio.
  
• Spread your website and email addresses around on all your promotional material – the more people who see it, the more contacts you will make.
  
• Most of the major banks and building societies will allow you access to your bank accounts for a range of services, from just checking your account balance to paying bills online.
  
• Online ordering and purchasing of everything from office supplies to raw materials has helped drive down costs, while increasing convenience.
  
• The internet encourages broad thinking and new ways of looking at old problems: it has created new business models from scratch, such as trading in online auction sites. Use it to generate new ideas for how your business can grow.

Summary

IT is another tool that can help you manage and promote your business. As useful as it is, you must remember that it is still just a tool, and you shouldn’t let it dictate how you run your business – don’t get in the position where it becomes the tail wagging the dog.

Useful contacts

• For free information on the 1998 Data Protection Act, call the Information Commissioner Helpline on 01625 545745, or visit www.dataprotection.gov.uk and www.informationcommissioner.gov.uk
  
• For information on the Telecommunications (Data Protection and Privacy) (Direct Marketing) Regulations call the Telephone Preference Service on 0207 291 3320, visit the website at www.tpsonline.org.uk, or send an email with your question to tps@dma.org.uk

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