We've all heard of the cloud, but what is it?

The cloud provides a place for users to store their files, from Word documents to graphics. Instead of using servers to save and access information, you use a public or private off-site data warehouse. Cloud computing offers you the option to get rid of that bulky equipment and use a sleek, online storage solution. However, it's not ideal for everyone, so it's important to consider your choices.

Flexibility is key
For small business owners, the cloud offers flexibility that hardware can't. When you're first starting up, you won't need as much space as a large company. Cloud computing provides you with the option to choose how much space to buy and allows you to expand or scale down storage as you see fit, Entrepreneur explained. Cloud computing fits into your financial plan perfectly since you don't need to purchase a set amount of storage.

Cloud computing also takes pressure off your business banking because it's all managed off site by your provider. While one or two IT professionals are useful to help with computer problems, you don't need an entire staff with the cloud, according to Tech in Mind. With fewer employees, you'll have more money to spend on other aspects of your business. Your cloud provider will fix any issues you encounter.

If your employees work on several projects together, the cloud is also great for collaboration. With all your company's files in the cloud, it makes it easy for anyone to open and edit them, the source explained. Since everything is stored online, your employees can collaborate with one another no matter where they are.

Relying on others for access
While there are many benefits to cloud computing, there are also just as many disadvantages. Security remains a primary issue for companies considering making the switch. While there are protocols put in place by cloud providers, there are still opportunities for hackers to get into the system. However, your information is just as much at risk on your servers as it is on the cloud, except your provider has strategies in place to keep your data safe, according to Entrepreneur. Some cloud providers are coming up with solutions to ensure that even they cannot access your information without your permission.

There is also the problem of outages when it comes to cloud computing. It's one thing when you have control over getting the servers fixed ASAP. It's another story when you have to rely on someone off-site to get the cloud back up and running, Tech in Mind explained.

Cloud computing also relies heavily on the Internet, which means if you lose connection, you lose access to your files. Slow connectivity can also affect how well you can open documents on the cloud.

While using the cloud for storage can be useful, it also comes with its faults. Before switching to cloud computing, weigh the pros and cons to ensure you have the best system to run your small business.