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It takes real guts to launch a bank in the middle of a credit crisis. Yet that's exactly what Michael Carleton is about to do.

Carleton, executive vice president and chief operating officer of Heritage Bank, located in midtown Manhattan, aims to lend to small and mid-sized businesses neglected by the larger (and now struggling) commercial banks. The typical retail bank model is based on opening hundreds of branches that cater to customers who open up $500 checking accounts while at the same time serving the needs of big companies. "Our technology and staff is optimized to deliver to clients the kind of service relationships that suit mid-sized businesses," says Carleton.

In Pictures: 31 Computer Networking Terms You Should Know

A pillar of that strategy: a nimble, customer-friendly computer network powered by Cisco (nasdaq: CSCO - news - people ), featuring: 1) a spare wi-fi network (so customers can stay plugged in while they bank); 2) an Internet-based telephone system (to save costs); and 3) a company Intranet to cut down on all those reams of paper. Indeed, networks are so critical in this business that when a bank is initially capitalized, the first so-called "at-risk" dollars go toward meeting infrastructure requirements to meet regulatory approval.

Building a bank's computer network--one robust enough to withstand the scrutiny of the feds--demands a lot more than most small business owners need or can afford. Still, in a networked world every small company needs a decent grasp on technology in order to compete.

That's why, with help from the smart folks at technology publisher O'Reilly Media, we've assembled a glossary of computer networking tech terms that every entrepreneur should know. And you don't have to be Cisco's engineering chief to fathom the implications these issues have on strategy and budgeting.

The guts of any dependable, secure computing network are the hubs, switchesand routers that propel and direct information among a series of servers and workstations. These components are lashed together using one of three standards of communication: Ethernet, wi-fi (a wireless standard) or even fiber-optic cabling (or FIoS).

Most small businesses probably need a 1U, 2U or 4U server to share files. These boxes handle e-mail, calendars and other processes. But you don't need to shell out $10,000 to buy and install them. Instead, you can opt for a "co-location" (or "colo") setup, in which you rent the crunching power of a server sitting elsewhere. Colo contracts cost a fraction of owning an exchange server--about $10 per user per month. Better yet, you don't have to deal with all the security patches, virus protection, spam filtering and the like.

Setting up a wi-fi network--simply plugging in a wireless router and ensuring users' machines are wi-fi-enabled--is the quickest and cheapest way to get an office up and running. But unless you're on an extremely tight budget (or have an unusual faith in cyber-crooks' ineptitude), wired networks work best.

Most pre-wired office spaces will likely have Cat-5 (or "megabit ethernet") cable stock. This will provide more speed than most small businesses will ever need to harness. Those seeking even faster connections, or who need to wire a space from scratch, should opt for gigabit ethernet, which can be up to 10 times faster than megabit ethernet and costs about the same to install. Fiber optics promise speeds of five to 50 times that of megabit ethernet, but they also cost a whopping $2 per foot of cable for starters.

Oddly enough, Heritage first stared with wi-fi. "It suited our small team just fine during the build-out," says Carleton. "But you can bet that a wireless network isn't something that's feasible once the paint dries."

Heritage decided to leave the wireless network up for vendors making media presentations and visiting clients wanting to check their e-mails. That network uses WPA, a security standard likely stronger than that used by your local coffee house, but not nearly strong enough to protect a bank's network.

"I don't want anyone getting onto our [internal] network," says Nicholas Schiralli, senior vice president for information technology at Heritage, who reconciled dueling computer networks throughout 11 mergers in 13 years at North Fork Bank. "We keep a completely wireless scenario so that everyone is separate and able to do his own thing."

Heritage also uses its network to make and receive phone calls. Rather than traditional phone lines, the bank uses voice over Internet Protocol (or VOIP) technology, which allows calls to travel over the Internet. VOIP reduces expenses by using one set of wires to carry voice messages and computer data.

"We're already running a Cat-5 cable to each desktop," says Schiralli. "There's definite convergence between data and telephony--it's not unheard of anymore to bundle them in a corporate environment. Because we're a new bank, we didn't have all the baggage behind us."

Savings? The VOIP system's initial set-up costs approached $200,000--about half the price of running new phone lines. An old IT hand, Schiralli knew that pricey network upgrades and maintenance are inevitable after the first year. "We didn't want to be saddled with unnecessary telephone costs, too," he says.

Then there's the company Intranet. Carleton wanted to do away with as much paper as possible--from basic wire transfer forms to company phone lists. "Our Intranet is a banking toolbox for employees,” says Carleton. "It's got telephone numbers, branch information and essentially serves as a work-flow engine for transfers and call centers." And it all happens far from prying eyes, within the company firewall.

Carleton is a 20-year veteran of the banking industry, rising through the ranks of both Republic National Bank and Signature Bank (nasdaq: SBNY - news - people ). His backers at Heritage include high net-worth individuals and a few private equity funds. The bank officially opens for business on Nov. 3; a public offering on the American Stock Exchange is in the works.

Carleton and company will have their work cut out in the financial maelstrom. One thing's certain: Tweaking their network will always be a high priority. "You need to keep an open mind and understand where you are and where you need to get to," says Schiralli. "Computer networking is a constant migration process."