Don't Pay Until It Works
Buying his first network was a disaster for Joe Alloway, owner and founder of Credit Union Marketing, in Mount Pleasant, Mich. The idea was to link writers, designers and typesetters and enhance efficiency. The $4 million business publishes 150 newsletters.
Alloway kicks himself now for his failure to realize that when he bought the local area network (LAN), both he and the vendor, Computerland, were out of their league. At least Alloway had the smarts to ask for a written performance guarantee from Computerland. The parties agreed that he would pay one-third of the $27,000 price tag on delivery and the remainder when the network was up and running. He realized just how smart he had been as soon as a slew of problems beset his LAN.
According to Alloway, the network never stayed up for more than a day or two at a time. And whenever it went down, Computerland's solution was to add a new piece of hardware or software--at Alloway's expense.
"It was such a disaster that the business went on hold for a year," says Alloway. In fact, he blames the network problems for an embarrassing printing error (a misplaced decimal point in an annual report) that cost him one of his most important clients. "That was $40,000 a year lost, right there," he says. Thanks to his contract, Alloway was able to withhold payment, finally ending his relationship with Computerland and selecting a new network vendor.