Small business owners spent 1.2 billion dollars last year on database software. With that in mind, I think it’s time we started asking a few questions. Just what is a database, why are databases important, and do you need to spend a lot of money on one? The answers to these questions may surprise you, and that’s why the big software companies like Microsoft, SAP, Oracle, & IBM would rather you stay in the dark. To answer the first question, a database is simply a compilation of information. If you have a spreadsheet listing all of your customers, then that is a database. If you have a cocktail napkin with more than 1 phone number on it, then THAT IS A DATABASE! Of course, generally, when databases are mentioned, you tend to think of a rather large & expensive program that keeps track of multiple types of data, and possibly even spits out some neat looking reports. That is NOT A DATABASE! Sorry for all the yelling, but it really drives me crazy. In any case, what that sales guy with the cheesy tie is referring to here, is what we call a DBMS, or Database Management System. SAP, Oracle, even Microsoft Access are all DBMS’s. These are pieces of software that help you interact with your data, whether they allow you to create forms & reports, or they just present the data in a meaningful structure.

So, why do you need a database? The answer to that one is simple. You need information. You need to know who your target customer is. What do they like, what do they need? How much money have they spent in the past? How can you contact them about that big sale coming up? Face it, you need a database. What you may not need is a high priced DBMS. For many small businesses, a series of simple spreadsheets is enough, however, there are simple and cost effective alternatives to the high priced & unnecessarily complex Database Management Systems out there.

Over the next few weeks, I’ll be presenting some ideas on how to create, maintain & grow your database of strategic information. Whether you need a complete inventory tracking system, or just want a customer contact list, then I’ll be exploring some ideas & some low cost (or free) software that you can use. In my next posting, I’ll begin exploring some of the features of OpenOffice.org Base, a full featured desktop database management system that just happens to be completely free (& open source, but we’ll talk about that later) & runs on Windows, Mac & Linux.