How Much Should a Small Business Budget for IT?
The line items that belong in an IT budget, and the ones owners forget.
A workable small business IT budget breaks into five buckets: people or provider, subscriptions, hardware lifecycle, security, and projects. Most budgets go wrong not because the total is too low but because two or three of those buckets were never written down.
The five buckets
- Support. Your managed IT agreement or internal staff. See how much managed IT services cost.
- Subscriptions. Microsoft 365, line-of-business software, phone system, backup, security tools, domain and hosting. These grow quietly as you hire.
- Hardware lifecycle. Workstations, laptops, servers, firewalls, switches and access points all have a replacement cycle. Budget a fraction of the fleet every year instead of the whole fleet in one bad year. IT lifecycle management explains the cadence.
- Security and compliance. Advanced protections, penetration testing, cyber insurance premiums, and any audit or assessment your industry requires.
- Projects. The office move, the cloud migration, the phone system replacement. Planned projects are far cheaper than emergency ones.
Things owners forget
- Licenses for people who left (cancel them).
- Software that reaches end of support and must be upgraded.
- Internet redundancy for locations that cannot afford to be offline.
- Training and onboarding time.
- A contingency for the incident nobody planned for.
How to build it
Start from an accurate inventory of what you have, then let a technology roadmap set the timing. A good vCIO turns the roadmap into a three-year forecast so the budget conversation happens once a year instead of every time something breaks.
Mentis Group's vCIOs build this forecast for every Fully Managed IT client. Our Education page also has budgeting resources you can download.
Have a question about your own environment? Schedule a consultation with Mentis Group or call (866) 901-7808.