A brief definition of some fundamentals of microcomputers and of the ways they may be used in small businesses can help potential buyers make informed purchases. Hardware (the mechanical devices from which computers are made) described here are the video display, keyboard, central processing unit, "random access" and "read only" memories, cassette and disk drive storage devices, and printer. Programs purchased off the shelf or custom designed for particular business uses are called software. Software described includes word processing, the electronic filing system, and the spread sheet. Four important computer uses in business are data management (quickly and comprehensively provides the maximum of information to businesses), communications (linkages with powerful time sharing computers outside the office), data processing (ways of moving and rearranging stored information), and office systems (including word processing, electronic mail, and business graphics). The report includes descriptions of four businesses that might benefit from being computerized and, in an appendix, a checklist/questionnaire to be used by prospective microcomputer buyers as a guide to determining their need for a microcomputer. (PB)