How To Budget Your IT

Small and medium-sized businesses have to be very careful with their budget. In fact, I would make an educated guess that practically every decision made within an SMB is analyzed from a budgetary standpoint. It makes perfect sense, because at the end of the day a business needs to be coming out ahead (or at least breaking even) in order to be successful and remain in business.

In an earlier blog post, 3 Things to Remember When Planning Your IT Budget, we talked about three important factors you need to consider when you are working up your IT budget- hardware upgrades, software upgrades, and the “just-in-case” fund. Now, we want to expand a little on the process you can go through to figure out what your IT budget needs to be every year.

Step 1: Analyze

This is going to be the most important thing you do when budgeting your IT- it will also take the most time. But it is essential to invest this time, because if you don’t know the status of your IT now, how will you know what you need in order to continue moving forward?

When you sit down to analyze your IT from the past year, here some important questions you need to ask:

– What hardware does the company as a whole use? (firewalls, servers, etc.)

– What hardware does each individual employee use that is company owned?

– What software does the company use?

– How is the software delivered?
(Is it a cloud-based monthly subscription or do we need to buy the disks?)

– Will any hardware or software need an upgrade over the next year?

– How many new employees are we planning to hire over the next year? What is the cost of hiring one (hardware needs, software needs, etc.)?

– How much do we currently pay for our IT support? Will that change if we hire new people? If so, by how much?

– How often do we call up our IT support?

– Are there any major IT projects we would like to (or need to) complete over the next year? What is their estimated cost?

Step 2: Take a look at your budget

Now that you have a clearer picture of how much you currently pay for your IT, put it aside for a minute. Sit down with the rest of your budget for the next year, and determine how much you are reasonably able to spend on your IT. It’s great if you decide this is the year you want to virtualize your network, but if the money isn’t there you might need to wait a year.

Step 3: Talk to your IT Support

You know your budget, they know your IT. Make sure you talk to each other! Set a time to have them do a complete audit of your system (which they should be doing at no extra cost to you. If they do charge something, let us do it instead, we’ll do it for free). Make sure they include a number of important factors in their report such as which pieces of hardware will need to be replaced over the next year, which warranties will expire over the next year, etc.

Once you have that audit report, sit down with your IT professionals. Review with them your own analysis of your IT, their assessment report, and your budget for the year. Together, you should be able to plan out a reasonable IT plan that will fit within your budget.

Money and Technology- two aspects of business that are essential these days for any company to run. By working closely with your IT support professionals, you are going to be able to not only make sure that you have an IT network that will help your business grow, but also one that actually fits within your budget.

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Time and experience has helped us develop best practices and workflow procedures around a proactive philosophy designed to keep your focus on your business, not your technology.

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