NetBooks Targets ‘True’ Small Businesses

For some small businesses, QuickBooks, Microsoft Outlook and maybe another application or two is all the business management software they’ll need.

If you fall into that camp, the launch of NetBooks may not be of much interest. But if, like many businesses, you’re looking for a single application that integrates bookkeeping, invoicing, inventory management, sales, marketing and customer relationship management, the new Web-based service may be worth checking out.

NetBooks goes beyond bookkeeping and provides CRM features as part of its small business suite. (Click for larger image)

“If all you need is bookkeeping, QuickBooks is a good product,” NetBooks founder and CEO Ridgely Evers said. Of course, Evers may be a bit biased there. The self-professed father of QuickBooks is the man behind the new online small business suite.

While NetBooks is new to small businesses; the company is isn’t so new. Evers said NetBooks has been quietly at work on the application suite for five years.

What sets NetBooks apart other small business financial software is the full business management approach of the Web-based software. And What sets it apart from other business suites, Evers said, is the focus on what he describes as “true small businesses.”

The addition of “true” before small business is key to how Evers position NetBooks.

A true small business has anywhere from two to about 25 employees (or at the most 50), is owner-managed and does not have a professional-management layer of vendor capital (i.e., growth is organic). NetBooks claims that according to the U.S. Census, IRS and Small Business Administration numbers there are 5.1 million true small businesses in the country.

A true small business is very different from a small enterprise, Evers said. For example, while NetBooks has 40 employees, Evers said his company isn’t a true small businesses between it’s planning to grow much bigger. In fact, he said, NetBooks uses Netsuite to run its business.

But just because a business doesn’t plan to grow beyond 50 employees doesn’t mean the owner doesn’t want, or need, to control all aspects of his or her business through one centralized dashboard. Typically, small businesses patch together applications for bookkeeping, sales, inventory management, invoicing and so on and devote man-hours to make it all work. However, Evers said, small business owners are finding that every part of the business is interconnected, and they are looking to automate everything.

On-demand, or software as a service (SaaS), applications are now within the grasp of most small businesses, Evers said. “What’s really helped is broadband for small businesses.” Going with SaaS, not only eliminates hardware and related IT costs, but also, according to Evers, it ensures a more secure environment for business data.

Security is a big risk for small businesses, Evers said, whether the risk comes from disgruntled employees or hard drive failures. “It’s almost irresponsible to keep your data on your computers.” NetBooks data, he said, is protected in a hosting facility that features bank-grade security, redundant infrastructure and continuous data backup.

The NetBooks suites currently include bookkeeping, sales-, customer-, inventory-, shipping-, production-, marketing-, and compliance-management applications, according to the company. Evers said that NetBooks works with each business to set up the service and then provides ongoing support. “Support is always handled internally, and everyone on our support staff has bookkeeping experience.” The company offers chat support but it doesn’t resolve the problem online. “They [the support people] call you,” he said.

NetBooks is designed offer a single interface to generate sales orders and customer invoices. (Click images for larger screens)

Pricing for NetBooks for $200 per month for up to five people, and accounts for your bookkeeper or accountant are free. You can add additional employees for $20 a month each. Evers promises that you will never pay more than the price you paid when you originally signed up. So if you subscribe at $200 a month, and the company raises its price to $250 a month in 2008, for example, you continue to pay $200.

The only additional fee would be for services offered through the company’s various partners. For example, NetBooks is integrated with PayCycle for payroll, UPS for shipping and VerticalResponse for e-mail marketing.

To help you get up and running with NetBooks, Evers said, the company employs dedicated concierges, each with at least 10 years of bookkeeping experience, to assist with your transition to NetBooks. “We won’t bring on new customers that we can’t support,”he said.

Is NetBooks the Real Deal?
Are small businesses ready to give up their QuickBooks and jump to an online suite of applications? Gary Chen, a senior analyst with the Yankee Group, said the timing may be right for on-demand applications.

“QuickBooks Online has been signing up customers at a pretty good clip. Putting financials on an SaaS platform has good points. Some people are comfortable, some aren’t,” Chen said. “You have to be careful with hosted stuff. What’s behind it? Having data centers on both coasts, having full redundancy costs a lot of money.”

Chen added that an integrated approach also has plusses and minuses. “Integrated solutions are easier to use. The downside is it’s hard to build everything and get it all right.”

That said, Chen noted that NetBooks seems to be taking the right approach by focusing on owner-run, family businesses that don’t have a lot of layers. “NetBooks has something to offer. It’s similar to Netsuite, but that’s not a good fit for this segment.”

“There’s a gap,” Chen said. “Maybe NetBooks will be the one to fill it.”

Dan Muse is executive editor of internet.com’s Small Business Channel, EarthWeb’s Networking Channel and ServerWatch.