IT Budget Planning: The Importance For Small Business

January 22, 2020


For small-business owners, budgeting is an everyday activity. However, most of them will agree that IT budget planning is a completely different story. Small business IT budget planning is unique. Often, as a small business begins, technology planning is not top of mind. Getting your business off the ground is your priority, and IT can fall by the wayside.

Why IT Budget Planning

When it comes time to make IT a priority, the state of your tech can be pretty out of hand. We’ve seen it all from employee-owned devices and expired licenses to operating on End of Life systems. 

What organizations come to realize at a certain point is that their IT and the state of their technology could be holding them back from the growth they are aspiring to. The right technology planning can help an organization meet its goals and increase efficiency. When your tech is a mess, it can hold you back. 

IT budget planning also ensures you are ready for the future and can avoid one heavy hit to your budget for technology all at once. For instance, if you don’t plan for hardware updates, you could face a situation where you have to update a larget number of machines at once. This can be costly. If you are forced to replace these machines with inferior hardware, you could doom your team to technology issues and inefficiency for years to come. 

Getting Started 

Getting started down the road to cleaner technology should start with an IT audit. Knowing where you are is important. From there, you can begin putting your budget together. Throwing a number out and sticking to it isn’t enough, however. Here are a few questions that can guide your budget planning. 

  • How many desktops will need replacement over the course of a year?
  • How expensive will the software upgrades be to keep the system up and running?
  • What are our most essential applications? 
  • How much would downtime cost our organization?
  • Do we have the right infrastructure to support our goals?

Key Aspects 

Unless you’re an IT professional, you’ll most likely have no idea how to answer the above questions. That’s not your area of expertise. Your area of expertise is running your small business. That requires you to be a jack of all trades, oftentimes, but when it comes to your technology, passing off the responsibility could be the key to moving forward. 

To make this challenging activity a little easier, we suggest you consider these key aspects when planning your IT budget:

  • Hardware upgrades. Nobody likes the idea of having to replace their PCs, servers, networks, and other IT infrastructure components. But the truth is that after three to four years, the equipment that hasn’t been replaced starts to run slow and becomes expensive to repair. To avoid this, it’s recommendable to include a hardware refresh in the IT budget every three years.
  • Maintenance. Even if you think your systems are functioning smoothly or without major interruptions, you should always allocate extra funds for network monitoring and update. Cyber criminals are becoming more sophisticated, and you don’t want to expose your company’s valuable information to data breaches.
  • Data backup. If yours is like the average business, you’re probably generating more data year after year, so backing up this information to an off-site location or the cloud will be essential for your organization’s continued success. Try to budget a fixed amount for this annual backup by taking into consideration potential increases over the ensuing years.
  • Expansion: As your company grows, you’ll need CRM systems and other applications to let you efficiently manage the increased workload. Due to the uniqueness of each of these applications—along with your specific type of business— it’ll be hard to predict the exact amount you’ll need to spend yearly. Regardless, make sure you include future software purchases and updates to your IT budget.

The Right Investment

Whether your small business is formed by ten employees or you have a bigger team, an IT budget plan will help you align your company’s objectives to your technology requirements. Pragmatic planning will allow you to invest where you need it the most, which will ultimately help you expand your business. Investing in your technology can exist on a sliding scale. The right investment for your organization will be the investment that allows you to get the most out of your employees, prepare for the future, and meet your objectives without breaking the bank. 

For assistance or further information on planning your IT budget, contact GadellNet!