From the August 1998 issue of Entrepreneur

Should you buy a PC directly from a manufacturer? Custom configure one to suit your specific tastes? Lease or buy? Today, you have numerous options when it comes to purchasing a PC. Traditional computer manufacturers are beefing up their built-to-order capabilities, retail stores such as CompUSA are expanding their customer service centers to draw in more business customers, and myriad companies are rolling out new and improved leasing programs.

Bombarded with an ever-growing number of choices, how should a small business go about selecting a PC? Clearly, the answer depends on your needs, level of computer expertise and budget. But no matter what your situation, experts say the first step is to accurately assess your technology needs. Begin by determining exactly what you want to accomplish: Do you need a computer for general office productivity, or to run a specialized accounting package specific to your industry? Only after you have a thorough understanding of your needs should you make your next move toward buying a PC.

Get The Scoop

After assessing your needs, doing some research is a must. Online resources should be your first stop. A number of Web sites can be quite useful for finding out about PC products and their prices, making it easy to comparison-shop online. Some computer manufacturers even have small-business Web sites showcasing products designed specifically for small companies so you don't have to sift through consumer models to get to what you need. In addition, most of these Web sites will let you order PCs directly online.

Try Hewlett-Packard's Small Business Home Page (http://www.hp.com/sbso): Click on the Helping You Choose feature within the Business Toolkit to access a listing, by type, of Hewlett-Packard's entire line of small-business products. Clicking on the type of PC you're interested in aligns similar models side by side for an easy comparison. There's also a Best Offers area that lists the best deals Hewlett-Packard has to offer.

Computer Discount Warehouse (http://www.cdw.com) has a CDW Compare feature that lets you compare and contrast up to five systems simultaneously. Select a class of products and a price range, click on Compare, and you'll get a look at all the PC models that meet your specifications, complete with links to the latest magazine reviews of these products. What's more, a Hot Deals section gives you the scoop on companies offering rebates, savvy bundling offers and dirt-cheap prices.

In addition to online information, sound out your peers and ask for their opinions on computer manufacturers, models and methods of purchase.

To The Source

When it comes to purchasing a PC, there are a number of sources to investigate, including retail, buying direct from the manufacturer or going through a reseller (also called a value-added reseller). Whom you purchase from should largely depend on the level of service you want and your budget.

If you need hands-on service or want to speak with someone in person, consider a retail store. Retail outlets such as CompUSA offer a broad selection of products you can test out before you buy. They also usually have tech support service centers nearby, so you can take your PC in for service should you experience any problems.

Some experts, however, caution small businesses against buying via retail. For one thing, they say, prices are typically higher than those of other sources. What's more, salespeople at retail outlets typically only recommend what's in stock, which could lead you to purchase products that don't suit your needs. "It doesn't make sense for small businesses on tight budgets to pay for features, functions and capabilities they don't need," says Patrick T. Somers, president of Business First Inc., an IT consulting firm in Exton, Pennsylvania.

Companies providing direct sales, such as Gateway and Dell, offer consumers the freedom to pick up the phone and order state-of-the-art machines at prices that are often hundreds of dollars less than retail. These companies will also let you configure a machine to your exact specifications, so you can get a larger hard drive or better monitor, for instance. Also, many manufacturers offer models designed specifically for small businesses, so you won't pay for multimedia speakers or a sound card you don't need.

On the downside, buying direct often means you sacrifice local tech support. Also, your choice of products may be more limited, so it's even more important to investigate several companies to find out which one has the best products for you.

Small businesses in need of very personalized service should consider buying from a reseller that can custom-design computer solutions, install equipment and really get to know your computer and your business inside and out. While they're generally more expensive, they offer an extra level of service. "What [computer resellers] bring to the table is the big picture," says Stephen Allen, president of Integrated Technology Systems, a computer consulting firm in New York City. "We're able to design a complete solution for companies that involves hardware, software and [addresses] your general business concerns." (For more information on computer resellers, see "Bytes," May.)

On Second Thought . . .

There's a lot more to good buying habits than selecting a source--you should also consider what brand would be best for you. Sticking with well-known computer companies is a wise move. While off-brand equipment manufacturers offer very tempting deals, it's probably best to go with a name you recognize. "We tell clients to stick with well-known names because they're running a small business and don't have time to be concerned with computer systems that don't work," Somers says. "If you stick with a bigger brand, you'll pay a slight premium, but your chances of having a problem are much lower."

With software companies continuing to release programs that take up increasing amounts of hard-drive space, another good idea is to purchase a system that gives you room to grow. Buy a computer that's a little better than you need today, so you can use the computer for at least two years and know your software will continue to perform well.

Service has become an important factor as well. In an age of hefty data storage and multiple components like modems and scanners, computer problems can easily arise. That's why experts generally recommend purchasing at least a basic service contract. Consider it money well spent--it's generally a small price to pay compared to what it would cost your company if your PC went on the blink. What's more, the price of materials and labor for repairing your computer can easily run much higher than a basic service contract.

When considering a service contract, make sure it offers a warranty, on-site service and technical support. One year will fly by, so look for a three-year contract with at least one year of on-site support. Somers recommends getting three years of on-site service if you can afford it.

Finally, consider leasing a PC. A lease lets you spread out the payments, so if you're low on cash, you don't have to scrimp to get what you need. Many leasing companies are simplifying lease terms and speeding up approvals, making them all the more attractive. Furthermore, leasing keeps the latest equipment in your hands. Instead of risking obsolescence, you can return the PC in two or three years for a brand-new model that runs the latest software. Remember: It's always a good idea to have your accountant look over your leasing contract before you sign on the dotted line.

To get the best deals, analyze your business needs, service requirements and range of purchasing options. It takes time to investigate the alternatives, poll peers and negotiate the best arrangement. But in the end, covering all your bases is time well spent if you want to avoid getting stuck with a PC that doesn't fit your needs.

Shopping Guide

Ready to go PC shopping? Here are some important questions you'll want to ask:

1. What are the PC's basic components? Find out about processor speed (we suggest starting at no less than 233 MHz), memory (get as much as you can possibly afford) and hard-drive size (3GB minimum). What extras does the PC come with?

2. Is upgradability an option? You'll be able to extend the life of your equipment if you can install additional hard drives and memory. Find out exactly how much you'll be able to upgrade your machine.

3. What kind of communication capabilities does the PC have? Ask if it comes with a modem (if so, what speed?) and any special communications software.

4. What about additional capabilities? For instance, find out about specifications for interfacing with external devices, slots for installing such extras as a network or sound card, etc.

5. What kind of service contract is available? You'll want to know what company is offering the service and the basic contract terms, including length of service, type of service (on-site, phone support, etc.) and the costs for purchasing additional service.

Contact Sources

Business First Inc., 120 E. Uwchlan Ave., Exton, PA 19341, (610) 280-7960

Integrated Technology Systems, (212) 750-5420, sallen@itsnyc.com