Sunday, 17 July 2011

Small Business? Think Big

If you are a small business, the last thing you need to worry about is how much reserves and capital you need to keep on hand to expand. If the opportunity presents itself, you just want to take advantage of it.

I have bleated on about The Cloud and so it is best to illustrate how to organise your IT so that you don't have to worry about it as you grow. You just add users as and when you need to rather than having to worry about whether you have enough storage and dedicated servers to run your business. It also practical advice on how to secure your data from the most common threat - forget hacking, it's good old theft.

So here's a heads up on a few recommendations. I started my small business using TASBooks software. It's a great, easy to use package and even a non-skilled finance person like me can easily keep my books up to date. I farm out my payroll to a professional who for £150 per quarter does the payroll calculation, sends the necessary filing to HMRC, calculates my VAT and does the same and my P60 once a year. It's a good service. Because I have some international customers, I now use TASBooks 2 which has multi-currency. I have needed some support so I now pay £372 a year for support which I use infrequently, but when I do I need it badly! So it's a no brainer, I have to have it and it at least gives me the odd upgrade too.

Then I pay an accountant once a year to do my return plus produce my accounts. That's around £1,800. In total then, I spend around £372 plus £600 plus £1,800 just for accounting which for the financially minded is £2,772. I could shave a bit here and there if I tried but that's the sum of it to date and it make me feel reasonably secure.

What are the limitations? Well the TASBooks requires a PC to run the software and I need to back up all the files which are not big. So I have Acronis software and 500Gb pocket drive. This means I have to be attached to the unit to do the nightly back ups but they get done. Goodness knows how I would restore but let's just assume I can. The backups often fail - I don't know why but I get error messages which I don't understand and I don't have time to check. I just hope the next night it works.

My laptop is my work machine and so it runs the TASBooks and the back up manager - and if I want to do any accounting stuff on the fly in some down time, then that's the machine I have to use. If I am on the road, I can't back up - pure and simple.

I used to run ACT from Sage as well and keep a support contract which last time I paid was £180 per year. I found I didn't need much support but I could never get functions like group mailings working. Also, it requires back ups and it runs on my laptop.

I actually have a hosted Exchange Server at Fasthosts for around £90 a year and I host my domain there too for another fee and I get around 2Gb of mail storage space there in the deal. My website is controlled by en external contractor and consequently it hasn't been updated for at least 3 years.

I am a small businessman on the road. The issue for me is if I am on business and either my laptop breaks down or I get robbed, my entire business fails. It's that weak a set up.
Only my email is half resilient as I could start up again with a new machine quickly and Fasthosts have all my mail data safely on their data centre site in Gloucester and their tech support is pretty good. People try to sell me PC maintenance but you cannot replace data and applications too. If they are lost it is a nightmare trying to piece it all back together. And as a small businessman, I haven't the time or money to think about building in resilience. There is the nightmare of reloading all those little programs I use too like PDF complete. My business is billing clients.

So here's an alternative. Either host your Exchange server as I do or go with a Cloud based solution. Microsoft 365 at £15.75 on their absurd charging levels is the starting point of choice and grin and bear the lunacy of running it locally, having a SharePoint back end that you will have to work around but at least you are resilient. Google Apps is another alternative at $50 per user per year but for those working in Government areas the servers are unlikely to hold your data in this country while if you work a lot with MS Office people you may find annoyances around compatibility of files. But the advantage is that you can access your mail and files from any device including a smartphone.

Then your accounts. I am now looking at going with It has a starting price of £69 per month and this not just gives you online accounting software backed up in The Cloud and accessed anywhere via the web but it also gives you, in the cost, all the bits that I have detailed I outsource as above. An accountant at hand to do your filing, VAT returns, and your end of year accounts plus payroll. That's just £828 per year all in. That's a saving of £1,944 for me.

I have also gone for my CRM and that was on a deal at £120 for the year. Now I can group email to my heart's content but all my data is backed up online and I can access the program from my iPad and laptop or any machine anywhere, any time. That's a saving on annual costs of ACT of around £60 but with the data automatically cared for.

Then there is Evernote of which I am a huge fan. At base level this is free. It allows you to keep multiple note books on things like projects into which you can pile web pages of research, files, emails - anything. It's all online so it's automatically backed up each time you add something and it is synchronised over Android and iPad if you want so these notepads are available to all, automatically as well as working offline. The premium version which gives more space is £26 a year. Microsoft OneNote, it's big competitor which I bought and never used, is a few hundred pounds.

It's my end of year this month, so I am thinking about these things as I am faced with an upgrade dilemma on my excellent Lenovo X200 laptop. I am on Windows XP and Office 2007 although the Exchange Server is actually Office 2003. I now do around 80% of my work on my iPad and love it as it is convenient for emails and note taking plus working in I have to go back to the PC for things like accounts and presentations as everyone works in PowerPoint and I need to project things which the iPad is weak on and printing is not a good solution yet.

But to upgrade it will cost me £134 for Windows 7 and £350 for Office 2010 and I am not sure it will work with my hosted Exchange. I have trialled MS Office 365 and Google Apps and on cost and usability Google wins but it's a Microsoft world and I cannot be an island of incompatibility with my clients - or just risk it. But MS 365 is so annoyingly clunky and not simple - it just peeves me that this is the best that the largest software company can produce with all those vast resources of brilliant people at their fingertips. Think customer, for goodness sake!

Rant over, I have to work out which way to go and it's likely to be MS 365 at £15.75 per month. While I just have to sort out the main back up and retrieval software as Acronis is ok but I want something more flexible. Of course, my data is sensitive and I don't want Americans snooping at it, as one comment was made to my blog yesterday, but our mails and data can be monitored any time if so desired so get real. Phones can be hacked too easily and banking details can be blagged simply as we have all just learned. I argue strongly that for the small businessperson it is far too hard to be as secure as the major vendors in terms of data control and security. We don't have the money, the scale and the time to do it as good as Microsoft or Google. So a solution outsourced to either, in my terms, is far more secure than what I have today.
If someone steals my laptop, they have everything. If someone hacks a server in an office or gets a back up tape or a stray USB or someone leaves a laptop on a train with the customer database on it, then they have the crown jewels. When it's all on the web, the laptop is a useless to them on that front.

So in my above examples, I would save a considerable amount of money if I go to online accounts. I have already saved going with and Evernote. And it's likely I will succumb to Office 365 which also gives me a new website although I am toying restarting using WordPress as it is so simple, associated with blogs which I do all the time, and it's darn cheap (plus there is a free app on the iPad so I can update it on the fly).

Just with some simple thoughts, I can off load all my IT worries to The Cloud, save money, get security and resilience, avoid expensive one off upgrades and scale up if I need to at a smooth monthly cost. I even replace my very nice accountant which is the only downside.

But business is business.

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