Friends ask me all the time: how much would it cost to start a business from an IT perspective, as in get a website, get email, phone numbers, an ERP system, a CRM system, some basic automation, etc. This makes non-techies very nervous when just starting out on the cheap. Word on the street is that these things cost millions. Interestingly enough, most people don’t know that they can do most of that expensive stuff for next to nothing, and a little elbow grease.
This article is not meant as an in depth how-to but more as an example of what you can get done with a little knowledge when just starting out.
Starting Out Cheap
Starting out cheap is a very appropriate title. When you are starting out, you just want to get things done. You want to look like you know what you’re doing without breaking the bank. Things that are important for a medium to big business just don’t matter as much to you. Very often, the things that cost the most when looking for a software package to get business done are the exact same features you couldn’t care less about…yet (you hopefully will at some point or another, if things go well for you). Tech savvy programmers and IT professionals will usually start singing the praises of open source software right about now (myself included). Open source software is built by community using the internet and often offered free of charge. If you have the skills for it, by all means, I would encourage you to go all out on open source. If you don’t, open source will be expensive to you because you have to spend money on talent, and talent is not cheap, especially in the USA. I can build you a company’s entire IT infrastructure from all open source free software, but I’ll have to charge you $50-$100 an hour for at least 30 hours. You’ll be out $3000 on my talent alone, and then I’ll have to charge you to train you in using the different software packages, some of which come with a steep learning curve. I think we’ve already established that you are not very tech savvy and therefor we’re probably talking about a lot of hours in training. When something goes wrong with my elaborate setup, guess what, you’ll need to pay me more hours to fix it.
This is not what I mean by cheap. When I say cheap, I mean under $1000 total. I know, I know, this sounds like a totally arbitrary number I just made up. Why $1000? Well, it’s because while most people could spend more on starting a business, they probably don’t want to spend it on IT. $1000 is about what it costs to buy a decent computer with a legal copy of some basic software. You can do it for less if you have access to a decent computer with a software office suite you are familiar with, and some reliable removable storage. Buying a computer for business makes it a business expense taxable as such. If you have one you purchased this year, go dig out that receipt!
What you will need
Get a pen and paper (or copy and paste): here are your IT must haves to start any business:
- One Recent model laptop computer. (This should not exceed 50% or your IT budget for now)
- Internet Access (broadband preferred, but any access should do).
- Several USB Flash memory sticks from a reputable brand.
Now this is the part where we need to get to know you a little. You can’t just go out and buy the latest and greatest software, or you’ll be wasting so much time on learning to use what you bought that you’ll probably give up and curse me for ever writing this article. Be honest with yourself. You want a system that works for you. If the thought of writing Excel formulas wrenches your guts, don’t jump into building an Excel based accounting system. Better yet, if you are no accountant, don’t complicate your accounting. Likewise for sales. The KISS principle (Keep it simple stupid) very much applies here.
If you have used MS Office 2007 at work, you’re pretty comfortable with the new menu system, and you’re pretty good at using Excel, Word, and Powerpoint, then get yourself MS Office Small Business 2007. It comes with most everything you need to start a business.
If you are more comfortable with the older 2003 package, you can still find the small business edition at used computer stores and recyclers. They’ll probably sell it to you at a discount.
If you don’t know anything about MS Office, and even touching a computer gives you the creeps, then move along, there is nothing to see here…just kidding. What you need is to spend your first buckaroos on some basic computer training. Go for community colleges which offer such classes very cheap. DO NOT buy gimmicky do it yourself computer training products! This is an invaluable investment into your business. Nothing else you spend money on will bring you the kinds of returns this will. I am a Business Systems Analyst by trade, and more than 50% of my solutions to business problems come in the form of user training for an existing system.
Let’s get started!
I am just guessing here, but I think you might want the following features in your IT system:
- Email: Hotmail or Yahoo won’t do! I wouldn’t do business with you on your hotmail email address!
- A website: In this day and age, few businesses can get away with not having one.
- Phone service: preferably with your business name on the called ID.
- Invoicing: If you can’t invoice, you can’t sell tangibles (physical goods, as opposed to software or services).
- Paying Bills: Accounts payable as in cutting checks to pay the bills.
- Getting paid: Accounts receivable, it let’s you know what you’re owed and by whom.
- Some CRM: you’ve gotta sell to somebody, right? That’s customer relationship management.
- Payroll: assuming you have anyone to pay (we’ll save this one for last)
You are strapped for cash. Don’t cobble together some old computers and start installing MS Exchange or some Linux alternative. Unless that’s your core business, you should not be wasting time on it. Also, read this whole article, before you go off and execute on any of this. Some of these things are cheaper and easier if purchased together from the same vendor.
First, let’s talk about your email address. You really need to work on this one. You need a domain name. You need to lease an internet address that is easy to remember for your clients and relates to your business. This will be yours for a number of years so think of a good one. My personal domain name is yacine.org because, well, it’s my name. If you have a business name already, try finding a domain name close to it. So how do you go about this domain name thing anyway? Well, the internet relies on these monster “phone books” we call DNS or domain name servers. For your “phone book” entry to point to your website and email, everyone of these phone book servers on the internet needs to agree that that’s what that name means. The way you do that is by “registering” a domain name. You essentially pay a company to register that name for you with their own DNS which will in turn be copied from by other DNS and so on. That process is called propagation and takes 1-3 days once you register a domain name. You pay for a domain name on a yearly basis. A name that ends with .com will cost you around $10/year. Many sites will let you search for available domain names, just know that most will put a temporary hold on that name when you search for it so that you can’t buy it from one of their competitors for a few days. A quick Google search for “domain name” will reveal thousands of companies waiting to register your domain name. I repeat, don’t do this yet until you’re done reading at least through section 2 of this article!
The easiest way to get started with your professional grade email system is to get yourself a decent hosting provider. This is calles SAAS or Software As A Service. It means companies specializing in hosting are giving you room on their Exchange Servers for a monthly stipend. These people are professionals who hold Microsoft Certifications, and have an extensive infrastructure to keep the service running 24/7. Better yet, they often give you a support hotline to help you get up and running with their service. What you are looking for is “Exchange Hosting“. You can splurge and pay up to $15/month on this, but the prevalent price seems to be around $10 a month per user for hosted MS Exchange 2007.
So let’s recap:
- Get a domain name (~$10/year)
- Get 1 or several hosted MS Exchange accounts (~$10/month).
2. Your website
I won’t lie to you, this is a pickle. This could get complicated, so if you have a cousin, niece, distant relative, or friend who can handle this for you, now is the time to call in a favor. If not, fasten your seatbelt!
Let’s get to know your business a little better. Will you be selling goods through the internet? Will you have a physical store. Will you be maintaining a catalog of your products online or just an intro to your business? These decisions will greatly vary the cost and complexity of your website. Start small if you can, don’t get over ambitious with your initial website. Vey few companies are proud of their first website unless it is their core expertise. You would not be reading this if it were.Â So let’s assume you’ll be starting with a simple website, 2-5 pages max. Most businesses will want to have an “About Us” page, a products or services page, and a location/contact us form/page to get some sales leads.
Now you get to select a vendor to serve your website needs. Ideally, this would be the same vendor serving your email hosting needs, and your domain registration needs. There is a slight discount to this, not to mention the invaluable advantage, for a non techie, that your domain name will be connected to your email and your website from the get go. If you just start googling web site hosting, you will be overwhelmed with jargon. Every hosting provider out there touts their extensive list of features to whomever wants to read it. You won’t need a fifth of it. All you want for now is a place to put a few simple web pages and forms. In the old days, you could get a Geocities (I know, nostalgic much?) account and you’re done. You can change web hosting providers every few days if you so wanted. Don’t spend too much time over analyzing which host would be just perfect. Get a host that has what you want right now, don’t commit to a lengthy contract, and move on. There are many review sites on web hosting. Pick one that seems a good fit to your level of skill. If you are not a web designer, pick one that offers an easy to use interface to build a website. If you don’t like your host, and if they have bad support or bad manners, switch to a different web host.
What you want so far:
- Good support.
- Easy website builder interface.
- Domain name registration.
- Ideally, exchange hosting tied to your domain.
- Call them before you buy, they might set it all up for you better than a confusing website. If they are too busy to answer the phone, they don’t deserve your business.
Let’s recap your shopping list so far:
- You want a domain name. (~$10/year)
- A web hosting account (less than $10/month).
- An Exchange hosting account. (~$10/month)
- Preferably (though not necessary) all with the same vendor.
OK! By now, you are starting to look like a real business, at least as far as the internet frontend goes. But you still can’t do any “real” business. Part 2 will start delving into your business internals: handling orders, invoicing, tracking your orders, and tracking your customers.