But, unless your business specializes in computers, it can be difficult to know how much equipment you need to handle the tasks of a normal small office situation.

Of course, as with most things, it all comes down to weighing the pros and cons of the different options and, in the end, cost.

When one location has multiple computers connected together, it is known as a local area network (LAN), or just network for short.

I have found that there are three main things businesses look to gain when setting up a local network at their location ˜ a shared Internet connection, file sharing and hardware sharing. In addition, many small business may consider hosting a Web site and e-mail since they are going through the trouble of setting up a network in the first place.

It is common to associate the term server and network together but there is a major difference. While the network refers to the system of computers and other hardware devices that are connected together, a server is simply one more computer connected to that network dedicated to sharing files or performing specific tasks related to the network.

However, having a network doesn't necessarily imply maintaining a server. In fact, file sharing, connection sharing and even hardware sharing can all be done with existing equipment that is wired together in a network.

In other words, you can have all the advantages of the network without the up front investment and ongoing maintenance of an additional machine. Not to mention the learning curve associated with working with a server as opposed to a normal desktop workstation.

How do you go about doing this? Here are the basics:

First is the Internet connection. If you are getting this serious about a network then you are probably already using or ready to commit to some kind of broadband connection. Broadband is a method of connecting to the Internet that is much faster and reliable than the old dial-up modems. The three most common options that are available in our area are DSL, cable and wireless.

Once you have your broadband connection set up at your location, you can share that connection with any other network-ready computers. To be network ready, you just need to have a network card in the computer (these can be added easily and inexpensively) and a router that has one slot to plug in the wire from the broadband modem and several other slots to plug in multiple computers using a network cable. The total investment to do this would be a maximum of a few hundred dollars.

The second most popular feature of having a network is the ability to share files between computers. If all the computers on the network run similar operating systems (Windows, for example) no additional hardware or software is needed.

With a simple network as described above, it is just a matter of configuring the file sharing utilities that come with most operating systems on your desktop computer.

And, our third feature was sharing hardware. This may sound complicated but it is the most simple of all. Usually we are talking about a shared printer, but it could be any other type of hardware device. The catch is that device must be network ready. If it is network ready then it is already loaded with the software needed so it can be used by multiple computers and it will already have a network port so it can be plugged right into your same basic network described above.

The beauty of using network printers, or other hardware devices, is you only have to purchase and maintain one of them since it can be shared by every computer at your location.

So, as you can see, by building a simple, low-cost network, most businesses will be able to perform the major tasks they require without purchasing an additional server. The exception from what we mentioned here is the ability to host and maintain a Web site and e-mail from your office location.

The reason you would want to do this would be to avoid paying a Web hosting company a monthly fee to perform that same service.

However, there are many disadvantages to taking on this responsibility yourself.

To begin with, if you host your Web site and e-mail at your location, that means anytime you send or receive e-mail, it is using your personal e-mail connection. In other words, all that information is going over your DSL, cable or wireless connection.

However, many contracts with broadband providers forbid you to host dedicated servers on their connections. Those connections that do allow dedicated server hosting usually add on major increases in pricing to support that feature.

Another concern is reliability. If your Internet connection goes down, your Web site and e-mail go down with it. That means if someone tries to e-mail you during this time the message will result in an error being returned to the sender because your local server is no longer connected to the Internet.

I can speak from experience when saying you can count on your Internet access going down in our area for short times rather often and longer outages once or twice a year. Had you been hosted by an external hosting company, your Web site would still be up and your e-mail would just be waiting for you to re-connect and access it once again.

The last thing to consider is cost. While it may seem like you are saving a monthly hosting fee each month the added cost to have a dedicated connection hosting a server and the up-front investment and ongoing maintenance involved with having our own server will usually end up costing you much more than you gain.