Dennis Zink: Fred, if you're starting a new business what kind of technology do you really need?
Fred Dunayer: That's a broad question because technology can consist of everything from automatic door locks to point of sale systems. I think it's helpful to start out by thinking about what technology is in a small business and it basically serves two purposes. One is data processing. For example, recording accounting records, keeping track of inventory, that sort of thing. The other is communications. Communications with your customers, communications with your vendors and internal communications with your employees.
The need for technology covers a lot of territory and as far as what computer equipment you actually need, it depends on the type and the size of business. We're not going to talk about really large businesses here because it's a major topic that could certainly deserve not only its own podcast but its own day. We're going to talk about what's typically called SOHO or small office and home office. Anywhere from maybe one to a half a dozen to a dozen employees. The first question people always ask is what kind of computer I should buy and it really depends on the type of business. If you're a professional and you're doing a lot of word processing and you're doing some basic accounting that's one thing. If you're doing manufacturing that might be a different case.
In general there's three different kinds of computers you can look at. One is the traditional desktop, the second is a laptop and the third would be a tablet. Tablets aren't really ready for prime time as far as running businesses are concerned, that may change in the next couple of years but typical tablet operating systems are not oriented towards running businesses. There is an exception to that, something called the Chrome Book which is a tablet on steroids. It runs an operating system called Chrome that is meant to do that but there's some special issues with that and we can talk about that in a minute.
Laptops have been replacing desktops quite a bit. The speeds are almost the same as desktops, you don't have quite as much capacity typically and quite as much performance but computers can ... you can run a business on a laptop. Typically though you're still going to use a desktop for at least one of the computers in your office simply because of the connectivity options. The ability to beef it up and the ability to put a lot of software and data on it.
As you get bigger you might want to be able to put in a local area network. You might already have a local area network at home just for you and your kids and who's ever using a computer and then some sort of network attached storage called a NAS. A NAS is basically a server that has disc drives in it and some special software that allows you to share data between multiple computers and you can say who has access to which data and who doesn't.
As far as the basic computer's concerned what you have at home, if you have a good size computer at home it's probably going to do the job if you're just doing basic office work. It's when you get into more complex things that you need to beef it up and get more. Of course the other thing you need, you need a telephone, a telephone system is another subject that can have it's own podcast so we won't get too far into that but you typically need a good telephone system. Then third and the thing that Tom's going to talk a bit about is you printer and the term printer I think is obsolete because these devices do a lot more than printing and they do a lot more important things than printing. We'll get into that in a few minutes.
The other question people get into when you're starting a business, let's say you have the computer or you buy the computer, is what kind of software do you need? There's basically five basic pieces of software that you need depending again on the business but this is typical for most businesses. The first thing is some basic accounting software. The eight hundred pound gorilla in the room is Quick Books. Most accountants are familiar with it, you can get training in it from all over the place, there's consultants and Quick Books is really popular. There are other packages though and I wouldn't want to rule them out but it is the eight hundred pound gorilla.
Another thing you might need is a basic word processing. Windows computers and Mac computers com with some word processing software on them but the gold standard there is Microsoft Office. Their product, Word and Excel and maybe you do presentations, PowerPoint. Those packages are all very useful for people that are in a business that needs those things. Obviously if you're a hairdresser or something you may not need that but then again you might still want something like that.
The third one is contact management. That's where you record information regarding customers. Maybe even suppliers and other people. The idea there is to be able to track your contacts if your a hairdresser you may want to use something like contact management to record appointments to keep track of information about what you do for these customers and it's a great marketing tool. When you go into a business and you see a sign-up sheet, list your email and we'll send you information about specials and that sort of thing. All that information goes into a contact management system.
Something else you'll want is anti-virus and that's for personal or business because you don't want to get infected with a virus that could wipe out your data and put you in a bad situation having lost all the work you've done. Related to that is backup software. You can backup onto a separate disc. If you have a network attached storage you can have a backup disc attached to that you can even have redundancy of copies of discs inside that unit. You can use subscriptions. You can get those things backed up so that you lose the risk of losing all of your data.
Finally, software that's special to your business. If you're a manufacturer you may need manufacturing software that tracks your work and process, you inventory and your finished goods and that sort of thing. If you're a retailer you might need a point of sale system and the place to find out about that is typically something like trade associations or trade publications. There will be ads in the back for software that'll do all kinds of things but the whole main point of all this is that you want to be able to work on your business instead of in your business. The whole point of all these computers is to improve your productivity in your business so that you don't have to spend as much time doing drudge work as you spend doing the things that your needs to have done.
Dennis Zink: How can you use this technology to grow your business?
Fred Dunayer: As I mentioned in marketing, contact management software is really good for being able to track your customers and knowing your customers is probably the most important thing. The other thing you can do is financial analysis. For example, in the restaurant industry there's a certain ratio of food costs to sale price and if you don't do financial analysis which is much easier to do with a computer you may not know what those costs are. To maintain your profitability you want to be able to you use that information that's stored in that computer to help you manage your costs and therefore stay profitable.
Dennis Zink: Tom, I understand that Brother has a long history with facsimile and as it relates to plain paper, is that correct?
Tom Monska: That's right. It goes back to Brother was one of the companies that was instrumental in putting plain paper fax machines on the market and believe it or not to this day it's actually still part of our product portfolio and we do offer stand-alone fax machines. As Fred alluded to before we do also offer stand-alone printers. What's becoming more and more popular now is integrating everything into an all in one. The idea being that there still is a need for stand-alone fax, printing or certain other capabilities such as scanning but to have all of this functionality in one device is really one of the driving forces in the market. What I'd like to do is speak a little bit about what are the purchase drivers in order to select the appropriate machine for your business.
A lot of small businesses may start out with using a home based machine and then they find out that eventually their needs outgrow the potential that that machine offers. One way to look at it is as print volume increases usually that's the determining factor of a need to step up to a more business capable machine. A good reference point and good way to measure print volume is to think about a ream of paper. A ream of paper is five hundred sheets and then that's a good baseline for your usage. For example, one ream of paper per month means five hundred sheets of print volume per month.
What we can also do is look at different categories of technology. Once a business owner identifies the need to step up to more of a business grade machine, let's say there's a need for the all in one that offers print, copy, scan and fax functionality. Then there's the choice of ink jet versus laser. On the ink jet side we can go into a little bit more detail, as a quick summary, ink jets are great for I would say small to medium level business volume. That one ream of paper per month or five hundred sheets per month, that could be a good reference point for a good fit for an ink jet model. When we look at laser machines, laser is a different technology. These are designed for higher volumes and lasers are offered as single function or as we mentioned the multi-function machines that offer print, copy, scan and fax.
When we look at laser what they offer is the ability to print higher volume. That's one of their big advantages and also the speed and they can provide cost savings as the volume increases. In the long run when we look at total cost analysis of the machine which is the overall cost of owning the device, hardware plus the supplies that are needed to run the machine. When we go into a higher volume the laser could be a great fit because it's specifically designed to address the needs of that business user whereas on that more small to medium size of business usage the ink jet product could be a great fit.