Tackling Technology in Your Business Plan
Planning Your Technology Needs
Every business needs technology. Even if your company makes old-fashioned chocolate chip cookies, you'll rely on technology to handle most routine business operations, from maintaining financial records, to processing orders, to staying in contact with suppliers and customers. Because technology is so central to running a business today, you need to plan what technology you will use and how you will use it.
Many decisions you make about your technology, such as the choice of your database program, may be costly or cumbersome to change later. When outlining your technology plan, keep in mind how your company might grow or change; try to choose technology that is flexible enough to grow and change with you. As much as possible, choose technology that, while meeting your needs, is simpler rather than overly complex. All those extra "features" may just make your technology (whether it be a software program or a telephone) harder to use.
Some industries have vendors who produce specialized software or hardware to meet industry-specific demands. Your trade association can help you identify vendors of such industry-specific technology, and you can typically find many sources exhibiting at industry trade shows. Although these products may be more expensive than general off-the-shelf software, these products may better suit your company's specific needs, and they're less expensive than having software created specifically for you. Check, however, to see how compatible these industry-specific items are with common software or hardware; you'll probably want to use some off-the-shelf products.
Planning for Technology Businesses:
If you are preparing a business plan for a company that is heavily dependent on technology -- such as an e-commerce company, expect some potential funders, especially venture capitalists, to scrutinize your technology plan in fairly great detail.
In companies where technology is essentially the core business, potential investors want detailed information about the nature of your technology. This description can be included as part of the section of your business plan describing "Products and Services," or it can be a separate section of your plan. It should describe the basic concept and features of your technology with a level of detail geared to the expertise of the potential reader.
Be careful, however, about how you provide the necessary data. You'll need to show the viability of your concept without revealing extremely sensitive company secrets (which should not be put in a written business plan).
When you examine your business operations, look at which functions require or could benefit from technology. Common business needs that utilize technology:
- Accounting, taxes, finances
- Order taking and tracking
- Order fulfillment/shipping
- Inventory management
- Database management: customer, product, supplier, inventory, etc.
- Mailing lists
- Communication with customers
- Internal communication
- Desktop publishing/graphics
- Personnel/human resources management
- Production: design, cost-tracking, supply management, etc.
- Internet marketing/Web site/e-mail
- Internet sales
Key issues when choosing technology include:
- Ease of use
- Ability to be upgraded and/or expanded
- Integration with existing data, technology, systems, etc.
- What features do you absolutely need?
- What features would be helpful, although they are not absolutely essential?
- How often will you need to change or update computer software?
- Does your equipment have to be compatible with other equipment or lots of software
- With equipment that uses "consumables," such as ink cartridges for printers, are replacement supplies readily available?
- Do you do tasks like design, desktop publishing, presentations? If so, go for the latest equipment. Those types of software programs eat up lots of memory and processing speed.
- If you are operating internationally, what do you need to integrate different systems, etc. (e.g., paper size, electrical current, currency exchange/reporting)?
- How cool do you want to be?
Excerpted from The Successful Business Plan: Secrets & Strategies, by Rhonda Abrams (Running 'R' Media, 2000, Palo Alto, Calif., $27.95).
Rhonda Abrams writes a widely read column on entrepreneurship and small business. Abrams is also the author of the well-regarded business plan guide The Successful Business Plan: Secrets & Strategies. She has started and built three companies, including her publishing company, Running 'R' Media, and her newest enterprise, RhondaWorks, which plans to offer a comprehensive online interactive business planning center. Visit Abrams at www.RhondaOnline.com.
Copyright © 2000 Rhonda Abrams