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Starting a Home Business - Part 3 of 3

9. Computer Equipment
Luckily for work at home business owners, the costs associated with outfitting your home with the appropriate computer equipment has plummeted over the past year. The generally low system requirements for typical office productivity applications means that even today's entry point desktops are for the most part suitable for what you need – if on a budget. If you have more money to allocate to hardware, today’s mid-range desktops and notebooks will perform well for years with the applications of today. The equipment you purchase will much depend on the type of work your business will perform on it...

  • General Business (generally under $1000 per workstation)
    A Pentium 4 processor based computer with a minimum of 256 or 512 megabytes of memory, a motherboard integrated or mid-range graphics card, and at least 30 gigabytes of hard drive space will suffice for all of your word processing, spreadsheet, email, internet and other such programs.

  • Development and Programming (generally between $1000 - $2000)
    For companies that will be involved in development web sites, application programming, and other such work, the specifications will be higher. For some programming it requires as little as a Windows notepad and a simple command line parameter. For others it requires expansive amounts of memory and processing power. Only your program requirements will be able to guide you to the right system. Typically if you will be doing development in such environments as Web Sphere, Microsoft .Net, or other complex development environments, a high end Pentium 4 with 1GB of memory would be recommended.

  • Graphics and Multimedia (generally $3000 and upward)
    This category is by far the most demanding on a workstation. High end processing, memory, storage, video cards, audio processing and imaging / video capturing equipment will most likely be on your list of things you need. All of which commend a high price for their elite performance. The specifications of this type of workstation would also be tightly integrated into the requirements of the tools you will be using.

  • Network Server
    If you will be having multiple employees working with you in the same location, you may wish to consider a network server. Depending on the number of people you have as part of your business will determine the specifications of your server. For the most part, for a small business to operate, requires not as much of an investment as you may have thought. Prices of servers and workstations have plummeted over the past year and your typical office applications simply do not require specifications beyond today’s entry to mid range desktops. Then, depending on the configuration of your network, you will need to invest in some cabling and a router and / or hub to allow the computers on your network to talk with one another. This is very typically low cost equipment and can be implemented without the help of external computer experts.

  • Printing and Scanning
    No matter how paperless you want your office to be, it is still advisable to at least have one printer around in the even you need to print off such things as documentation, a letter to a client, marketing materials, handouts for presentations and many other uses. Today, the ultimate solution for home and small businesses are called "all-in-one" multifunction devices. These single box solutions have the functionality of a Printer, Scanner, Photocopier and even Fax machine, all in one nifty unit - and the cost of these things is unbelievably cheap. Most small businesses have to cope with less than their desirable space to work with, these units bring a number of important business machine together into one compact unit. They also only require a single connection to your computer, versus the many required if all of these functions were handled by individual machines. Just keep in mind, if your business category falls more under the "graphics and marketing" role, the print and scan quality and resolution of these all-in-one units will most likely not be sufficient for your needs - a dedicated printer and flatbed scanner will be required.


10. Employees or Contractors

When deciding how your company will handle the people aspect of business, it is important for a small businesses to weigh the differences between hiring employees or hiring contractors to do the work needed.

  • Contractors
    Contractors are a great way of paying for the employee power that you need for any given time or any given skill set, without the overheads of hiring a full time employee. Contractors are people that you hire based on a contract to perform specific tasks or to augment your team for a pre-determined period of time that is renewable based on performance. While their hourly rate is typically higher than that of an employee - they have many benefits. Based on the contract agreed to by both parties (contractor and your business), you have the ability to determine how long the individual stays with your company thus reducing bench time that employees sometimes experience. You are not required to offer any benefits such as medical, dental, etc. You are not responsible for their taxation, or other government related issues for the most part. Their billing is as easy a multiplying their hourly unit cost by the number of hours worked, cutting them a check at the end of the month or term, and that is it! An excellent aspect of today's economy is that many large firms are culling their staff by the thousands, leaving highly experienced people out of a job. The more entrepreneurial of these individuals, go off and become contractors. Therefore you are getting the process driven skill set and expertise of someone who originally worked at a large international company, to be part of your team. Which brings with it all of the experience and training that is typically obtained through the large companies. Over time you will find that contractors, especially in small business environments can be very loyal and place importance on the wellbeing and progress of the company.

  • Employees
    The great part about Employees is that they are now part of your business's "family". Therefore, the loyalty will be higher, and they could potentially have a stronger interest in the wellbeing of the company's long term growth and well being, especially in a small business environment. The negative aspect of employees is that they take significantly more effort and have more ongoing costs than a contractor. With employees you must handle such things as employee taxation, liability, benefits, insurance, government regulations regarding employees and their safety. All of this adds costs and man hours to manage. Also, the process of removing them from your company is not as easy as with a contractor, with regulations that must be adhered to. So there are both positive and somewhat negative aspects about employees that must be carefully compared against contracting. Depending on the complexity of the work needing to be performed, hiring an eager and "ready to go" part time high school or college student may be an excellent idea. Typically they are very strong in their computer proficiency, are eager to prove themselves and can be very cost effective for your business. There are also many school and government based programs that promote such employment or co-op type arrangements that are extremely cost effective. The best part about it is that they will learn much about business, grow with your business, and over time may become an integral part of your business. Although there is a downfall of a steep learning curve and training time, the long term rewards may offset this.

11. Web Site
In this day and age it is absolutely expected for business both big and small, whether 100,000 employees or 1 employee, to have a web site. It is important early on in the development of your business, to get at least the domain name that best represents your company branding registered so that even if you decide to build a web site later on down the road, that you have the domain name kept safe from anyone else registering it and using it. If someone already has it, but they don't look like they are using it for anything too important, you may wish to approach the owner of domain and request to purchase it. Carefully not mentioning that it will be used for business purposes - otherwise they will try to obtain as much money as possible from you as they will determine its importance to you. Now that the whole domain name hording fad is gone, and people are tired of having to pay for renewal of these domains, their value has plummeted and it is an excellent time to approach those who have domains that you want. Web sites should contain your company background, contact details, information about your products and services and any other relevant information your customers would typically want to know, or be presented with in your regular marketing materials. It is also important that it maintains consistency with the rest of your marketing materials so that it can be used to further concrete your branding and overall service. If you do not have the in-house expertise to make a professional looking web site that can represent your company - it is highly recommended that you look for a suitable web design and development company that can produce one for you. In the price range of a small business, there are basically two types of web development services out there, template and original.

  • Template Based Web Development
    Typically when you see ads online advertising unbelievably cheap web design packages such as "$199 for your own custom web site!" or "$99 for complete web site!", they are typically using templates that they use for hundreds of other web sites, to make putting your web page together -faster. They will simply use the template as a basis of the site, stick your logo, contact details and content into it and that is it. Not recommended. That means that your brand will have a web site that looks the same as potentially thousands of other sites that may not even be related to your field. They their design shares little in common with your business or products.

  • Original Custom Web Development
    The ultimate solution is to have a web page that specifically matches your brand, company values, marketing material and expectations of your customers. This can only be achieved by having a web site made from the ground up, specific to your needs. Although this will be significantly more money, it will be well worth the long term investment.

12. Ongoing Costs & Expenditures
This is a checklist of some of the ongoing costs and expenses that you may incur running a home or small business. Some items may not be applicable to all business, and some businesses will most likely have more.

Telecommunications
(phone, fax, cell phones, pagers, long distance)
Monthly
Internet
(broadband connections, dial-up)
Monthly
Web Site Hosting
(domain names, server space)
Monthly
Computer Equipment
(computers, printers, upgrades, projectors)
As Needed
Software
(applications, upgrades)
As Needed
Incorporation Renewal
(government fees, lawyer)
Depending on Term
Trademark Renewal
(government fees, lawyer)
Depending on Term
Consumables
(paper, pens, staples, envelopes, etc)
As Needed
Computer Consumables
(printer refills, mouse / wrist pads)
As Needed
Lawyer Fees
(legal advice and issues)
As Needed
Accountant
(filing corporate tax, book keeping)
Monthly / Yearly
Real Estate, Rent, Lease
(office space)
Monthly
Utilities
(electricity, water, gas)
Monthly
Company Vehicles
(lease, insurance, maintenance, fuel)
Monthly
Employees
(payments, salary, benefits plan if applicable)
Monthly
Marketing
(newspaper, radio, television, internet, sponsor)
As Needed
Office Furniture
(chairs, bookshelves, desks)
As Needed
Kitchen Supplies
(coffee, crème, purified water, juice, candies)
As Needed
Entertainment
(client meetings, presentations)
As Needed
Postage
(mail, couriers, international parcels)
As Needed
Petty Cash
(immediate needs)
As Needed
Taxation
(corporate tax, employee tax if applicable)
Monthly / Yearly
Travel Expenses
(transportation, hotel, meal allowance)
As Needed

This concludes this three part series.

About The Author
Jon Deragon is president and founder of Visca Consulting, a firm specializing in web site design, development and usability for businesses of all sizes. He welcomes any questions or comments you may have regarding this article or interest in the services available from Visca Consulting.
 


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