Technology is only effective when you know how to buy it and use it.  Though small businesses constantly look to technology to support business growth, technology can become yet another expense that puts small business owners in a pinch.  Here are a few tips on how to keep your technology costs down while getting the most for your money:

First things first – budget right.   Make an accurate list of your monthly business income and expenses. Take a look at how much money you have left over after all the bills are paid.  Can you afford to purchase technology now or do you need to save over the next few months? 

Second, figure out what technology you actually need. If you need to buy a computer, do you just need basic word processing and database software to handle day-to-day operations?  If so, look for cheaper base models or used computers with pre-installed software. The same goes for designing a web page – a computer whiz at your local community college can probably design a reasonable website for you at a significant savings to a professional graphic designer.  

Third, make specific goals of how technology will help your business, such as cleaning up your point-of-sale process, tracking inventory, or marketing through the Internet.

Lastly, look into your financing options.  The best way to purchase technology is to plan ahead, save from business cash flow, and use your own funds.  If this isn’t an option, check with your technology vendor about leasing options where you can use, but don’t own, equipment for a monthly payment.  Also, check out funding resources in your community.  City governments and local nonprofits may run microloan or grant programs specifically for technology purposes.  For example, the eBay Foundation began its Techquity Grant Program through the Association for Enterprise Opportunity, a national network of organizations providing entrepreneurial education, access to capital, and support to aspiring and active low-income entrepreneurs.  The eBay Techquity Grants provide funds to entrepreneurs for the purchase of software, printers, laptops, and more to help them compete in today’s economy.

Evelyn Huang is the Microloan Program Manager at Lenders for Community Development, a non-profit lending agency and eBay Techquity partner in San Jose, CA.