Information System in Small Businesses

According to “18 Amazing Facts About Small Businesses In America” by Aimee Groth and Kim Bhasin (Business Insider, August 24th 2011), there are 28 million small businesses in the US, which outnumber corporations 1162 to 1. Some say that it is very easy to record business transactions in small businesses. However, since small businesses always run on low budget while tremendous marketing and the planning and implementation are required also, information system in small businesses are not usually given enough attention. Today, even small businesses that need only the owners to run have a lot of information that cannot be relied on manual processes. In order to help small businesses’ owners in making right and quick decisions, they need to adapt proper information system for their businesses.

My cousin has a hair salon with five stylists. She doesn’t work there but she has a manager to take care of the shop. She got a very good soft-ware to record all the transactions at first, but then it got so complicated when her employees quit and she had to hire new people. They just have a high rate of employee turnover in hair salons in general. Plus at her salon, she doesn’t have a receptionist to record transactions but every stylist needs to do it by her/himself when checking out a client. Low budget keeps her from having someone who can do it and save time for the stylists. Now the manager finds that training new employees to use the software is frustrated, my cousin decides to go back to manual recording. With all the data they put on paper, my cousin has to record it to the system by the end of day. It is not only time consuming but also a risk of making mistake since the data got transferred twice.

There is no need to discuss about how helpful the information system is to businesses. However, when consider adapting one for a small business, the owner needs to figure all the costs included. It may seem to be one-time cost, but it actually is not. Small business computer system design begins with a need of assessment of the technology expenditures that will be required to create an effective, reliable and expandable system. This needs of assessment will include hardware, software, upgrades and office staff training. Apparently, upgrades and training don’t sound like one-time cost. Upgrades will be fix-cost since the supplier will notice you when you need one, usually in 3 months or 6 months to keep up with changes in technology. Training may be one-time cost to the supplier when you buy the system, but then you still have to train new employees. Even if you train them yourself or have other staffs to train them, it is still a cost to your business as an opportunity cost since the time for training can be used to make revenue/ profit for the business. Finally, there one other cost that has not been counting yet: using cost. When you have somebody to use the software, there is the cost of hiring them to record information. Back to my cousin’s hair salon. She doesn’t have enough money to hire one more person to record transactions, so she takes the risk of recording data wrongly. Mistakes may be made from her employees by putting the wrong data manually or from herself by recording it again by the end of day. It should not be that way if the cost of training and using the system were considered when she set up the salon’s information system.

In conclusion, in today’s increasingly complex and competitive market place, small businesses often face many of the same information technology challenges as much as larger business enterprises, and getting a proper information system in small businesses should be considered seriously in order to help owners with right and quick decision making.