1. It's an emerging technology. Talk with people who are implementing RFID, and it becomes clear that we still don't know a lot about this new technology, and what we do know changes from one day to the next. When Gregg Steiner, vice president for Emjay Labs, a Cleveland-based cosmetics company, started looking into RFID, he realized that he needed to get up to speed on tagging, and quickly. "I had been reading about it all the time — especially in my industry," he says. So he joined an RFID industry association. (One leading trade group, the Association for Automatic Identification and Mobility, or AIM, has 14 chapters. You can check out its Web site at www.rfid.org).Another strategy that Steiner has used is plying his manufacturer for more information, and help, in getting going. "I think the biggest mistake a business can make when it comes to RFID is not being educated," he says.

2. It can become an expensive commitment. "If you are running a small business, it is important to know that RFID technology is an investment that requires a significant amount of engineering and testing," says Douglas Singer, president of Grantex, a Grand Rapids, Mich., apparel company, who has had extensive RFID experience. An RFID reader typically sells for about $1,000, and passive tags can cost up to $1 each in small quantities and 20 cents in larger quantities, according to Ronald E. Quirk, Jr., an attorney with Venable LLP, a Washington, D.C., law firm that specializes in RFID issues. And that doesn't include software (Microsoft has announced plans to support RFID technology in its Windows XP Embedded operating system for retailers). "Fortunately, RFID costs — particularly tags — are coming down," he says.

3. But it can offer a competitive advantage. That's the assessment of Garman Honaman, RFID product marketing manager at NCR, the Dayton, Ohio, technology solutions provider. "New technologies like RFID can offer as much a competitive advantage to the early movers and followers as it offers a competitive disadvantage to those who wait," she says.But Honaman says small businesses shouldn't rush into things. "It would be a mistake to blindly accept the hype surrounding RFID and attempt to implement it without fully exploring the initiative specific to your environment," she cautions. Before you consider implementing an RFID solution, consider the expected benefits, associated business process changes, measurement methods, and infrastructure requirements. "First," she says, "isn't always best."

4. Implemented correctly, it can yield a measurable return on investment. A lot of organizations regard RFID as a pure expense. That's shortsighted, says Philip Calderbank, vice president at RFID Seeburger, an Atlanta business integration company. "With some careful planning, RFID can soon show an attractive return on investment," he adds. Like what? One of the key benefits of an RFID implementation is the data and knowledge it provides decision-makers. But beyond that, it can benefit your clients and boost customer retention rates — whether it's ensuring each widget shipment gets to its destination or making it easier for gas station customers to buy fuel.RFID could offer a significant return on investment for even the smallest of small businesses, according to Tim McIntyre, vice president of sales at Primary Marking System, a St. Louis value-added reseller. How small? Consider the task of controlling and managing data at a three-person catering shop. "RFID technology would make sure the food was delivered to the right client," he says. By scanning orders, the business could ensure that the right person gets the right sandwich. (For more on what RFID can do for retailers, see this article.)

5. Warning: There's a learning curve with RFID. There's a long list of errors that small businesses make when implementing RFID, according to Manish Bhuptani, president of Cleritec Systems, a San Jose, Calif., RFID solutions provider. Among them: lack of cost-benefit analysis (especially focusing only on the tag cost and not on support and long-term maintenance), not hiring an adviser or consultant, deploying RFID throughout the supply chain without first testing it internally, and building a system from scratch instead of considering buying or renting options. In the long run, Bhuptani believes RFID will be as "prevalent as computers are in business today." But, like that journey, businesses will make many errors getting there.