Especially if you consider yourself something of a Luddite or technophobe, it is easy to think of IT as a mysterious and confusing land which only those adepts with the right training can enter. But even if you’re a bona fide tech wizard, it might make sense to take on some extra hands (whether full-time, part-time or outsourced) to take the IT burden off your shoulders while you’re concentrating on growing your company.
When thinking about recruiting IT staff, it is essential to work out what your needs are and what they are likely to be – because “IT” isn’t one discipline but a huge number of different elements, and an expert in one of these may have little or no capability in another. Ensuring that all your requirements are being satisfied while not paying out a fortune (IT staff tend not to come cheap) is crucial for the success of your business.
Most start-ups will probably have as top IT priority the maintenance of business-critical hardware and programmes, so recruiting staff who can, in basic terms, maintain and fix the machines and keep the software the business needs operating smoothly will be crucial. These are very different skills, of course, from something like software development: you may indeed want new software programmes developed as part of your business but think long and hard about whether or not this is something you need to do in-house, or via recruiting someone full-time.
You obviously don’t want to take on a full-time employee for a job that may only last a month or two; for temporary work it will be well worth investigating the several online networks such as Freelancer.com, oDesk.com and Elance.com which connect people wanting work done to people around the world who can do it. You can outsource tasks to people in low-wage countries for a fraction of the cost you’d incur by taking someone on in the UK – make sure you have a good understanding of how to quality-check the work prior to commitment, however.
There are many reasons a business may fail, and a lot of them are wholly out of the business owner’s hands – but of all those that aren’t, collapsing because your IT goes down and you haven’t backed up your business-critical data has got to be near the top of the “Aaagh!” list.
If – as most businesses do – you keep your customer databases, correspondence history, accounts and everything else primarily in electronic form, you are gaining a great deal in simplicity and efficiency – but exposing yourself to the danger of a catastrophic IT failure. If your computer network goes down and you lose everything stored on your hard drive/s, you need to be in a position to restore as much as possible, as quickly as possible. This means making regular – ie daily – back-ups; you are advised to store the back-up disks off-site (so that in case of fire, burglary etc you can recover everything you need to keep the business running). Some insurance companies, and many investors, will require evidence of multi-level back-ups before supporting your business.
The history of modern business is littered with the corpses of those who suffered disasters and hadn’t backed up their data: make sure yours isn’t among them!
Cost effective IT solutions
IT costs may have come down in real terms as the technology has become more and more advanced, but rightly or wrongly the prospect of paying for tech still tends to send a shiver down the spine of even the most battle-hardened MD. Especially at the start-up stage it’s vital to find the right balance between delivering the hardware your business needs to thrive, and keeping a lid on your costs.
The first thing to do is to form as full a plan as possible of what your IT requirements will be over a set period. You need to include absolutely everything here – email, web, office requirements etc – as only if you have a complete understanding of what you need can you get to grips with what it will cost you (and how to keep those costs down); remember too that the decisions you make now may well chart your course for the indefinite future (for example, if you choose a cloud computing option – for some of your systems and processes, moving them at a later date off the cloud to a more traditional on-site set-up will involve having to shell out for new hardware and software) so try to be as prescient as you can about your future requirements.
Having outlined your requirements, you should then go through every item and assess how much it will cost to deliver the bare minimum of what you require, and then assess whether your business can afford to take the affordable option – ie, will you lose out in other ways, or in the long-term, by gaining economically in the short-term by taking the cheapest option? For example, you can run your entire email system for free by taking one of any number of webmail options (Gmail, Hotmail etc) – but are you going to lose potential customers who don’t feel confident engaging with a business that doesn’t have its own email account? Likewise you may be able to pick up a low-capability PC extremely cheaply but if it doesn’t have the processing power you need to carry out the tasks you’re demanding of it, and takes several minutes to do things which a more powerful machine could do in a couple of seconds, you’re going to waste a great deal of valuable time (and may endanger your health through rage-induced stress!). You may also already have broadband internet as a consumer and be hesitant about taking a commercial account – but is your consumer connection going to take the strain when you build up a large customer base all scrabbling for your bandwidth?
It may well be that having carried out this analysis you realise that you can in fact run your business’s IT at very little cost – especially if you are a sole trader and already have a personal computer with some office-facing software (spreadsheet, word processor etc). It may be that the nature of your business is such that any large-scale investment in IT is totally pointless: your website can be hosted elsewhere, you can run email via the web and you already have sufficient machines for all your company’s employees (which at this stage might just be yourself). If this is the case, and you’re confident that you have retained the flexibility to let you adapt as and when your business grows, don’t make any unnecessary investments: spend your money elsewhere in the business at this stage.
However, it’s more likely that you will have to make at least some investment into IT and perhaps that you will also have to allocate resources for ongoing maintenance, development etc. If this is the case, of course you will need to secure the best bargain you can – but you also need to bear in mind how rapidly things change in the IT industry and how quickly hardware becomes obsolete. When calculating your business’s assets you will of course have some understanding of the resale value and ongoing depreciation; in IT many things (hardware especially) depreciate remarkably quickly, and it may well be that certain items which are initially more expensive than others end up being economically better buys because they are able to be resold at a better price as and when you come to upgrade your system when your business grows.
Another area you need to pay close attention to is software licensing. Much of your business software will be licensed to you either as a one-off cost or on an annual basis; not keeping up with the license requirements (ie, paying to renew the license) could leave you short of software support or in some cases actually breaking the law, so factor in ongoing costs to your software budget – in many cases your spending requirements don’t cease when you buy the product initially.
Working the web
The web provides a virtual window of opportunity for any business; and for small businesses in particular, the net allows you to compete with the big names – which is essential when you’re trying to make a name for yourself.
Your business website is likely to be many customers’ first port of call if they want to know more about your product or service – or even order online – and it’s therefore crucial that your site walks the walk as well as talks the talk. The modern consumer is becoming increasingly web-savvy; so don’t try and cut corners, as your customers will not be impressed. And don’t forget the value of online – particularly social – marketing platforms that are now critical for small businesses to succeed on the net.
Words: Jamie Liddell
This article was first published in Your Business with James Caan in January 2012.