The 5 most costly computer mistakes small businesses make.

• Author: O'Donnal, Trevor
• Position: Smallbusinessadvisor

COMPUTERS can increase productivity, expand a business' bottom line and make molehills out of mountains. However, small to medium-sized businesses commonly make several mistakes that hamper, if not eliminate altogether, the benefits of using today's technology in the workplace. Here are the top five mistakes to watch out for.

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Mistake #1: Purchasing the wrong computer

Many businesses make this mistake by purchasing the lowest priced computer available. Don't! By purchasing computers based solely on low price, one usually ends up with systems built using sub-standard parts, and which aren't reliable. You may save money on the initial purchase only to end up spending everything you saved, and more, to repair your systems.

Just as bad is spending thousands of dollars for the most expensive system on the market. Usually, you end up with some really nice computers with lots of options that will never get used, or worse, be misused (i.e., employees watching the latest action film on their new DVD drives on company time).

I suggest finding a local dealer who specializes in custom-designed business computer systems with a proven reputation. Don't go with the dealer that has the lowest price. Find one willing to make on-site service calls should anything go wrong. A decent, reliable computer system should cost $1,200 to $1,400.

I also recommend small businesses stay away from namebrand computers. These tend to use "proprietary hardware" custom-designed for that company's systems and available only from their factory. This creates a problem if your system fails and you can't get the part for five days or a week. Local dealers generally have replacement parts readily available.

Mistake #2: Buying computers with unnecessary options

When purchasing new computers, it's often tempting to get all the latest gadgets. DVD, CD burners, Serial ATA hard drives, etc. are all great ... but think: What are you going to use your computer for? Word processing? E-mail? Customer tracking? Chances are you don't need all those options. A computer for your receptionist, mainly used for typing letters and sending correspondence, definitely doesn't need a CD burner or a DVD drive. You can save a few hundred dollars by leaving these options out. Don't buy the latest high-performance parts if all you're doing is word processing. You won't see much benefit for the cost.

Mistake #3: Having no backup strategy

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