If your business is ready to expand, one of the first things you’ll need to address is workplace technology. But how do you know you’re getting the best bang for your buck, WITHOUT breaking the bank?
Today, let’s break down the step-by-step process for creating (and sticking to!) a small business technology budget.
Step 1: Take inventory.
Before you start crunching numbers, take stock of all tech you currently have at your command. This means work laptops and desktops, but it also means things like printers, tablets, mobile devices, and that ancient MacBook that’s been gathering dust in your server room since 2008.
Write down a formal inventory of all of your current technology, including information like serial numbers, operating systems, the current user, and where it’s stored. If you lead a team, it’s also a good idea to ask your team members about any tech headaches they’re currently experiencing. This will come in handy when you’re budgeting for upgrades.
Step 2: Assess your current revenue.
How much of your business budget should you spend on IT? According to Techvera, the average small business spends about 6.9% of their revenue on IT, while mid-sized businesses spend about 4.1%.
By taking a look at your average revenue over the last six months (or expected revenue, if you’re starting a new business), you can get a good idea of the amount of money you can comfortably spend on IT. It’s a good idea to break this number down into monthly, quarterly, semi-annual, and annual budgets. That way, when you start spending money, you can compare your numbers to your overall budget.
Step 3: Prioritize your current and future technology needs.
Next, it’s time to take a look at what your business actually needs. Sure, your intern might not be happy with a three-year-old laptop, but it’s unlikely you’ll need to drop five grand on a single desktop unless you employ an army of data analysts.
When you’re considering your technology needs, think about what would help your business grow right now versus what might come in handy six or twelve months down the line. Identify opportunities for growth in your IT practices (better computers, stronger security procedures, more flexible cloud storage, etc.) and prioritize them in order from “this might come in handy at some point” to “I need this YESTERDAY!”
Step 4: Identify one-time purchases and recurring payments.
An antivirus subscription won’t cost you as much as a brand new laptop, but you do have to keep paying for it. Now that you’ve figured out your top priorities, identify the items you only have to buy once, like new hardware and one-time software installations.
Make a similar list of subscriptions or services that you pay for annually or monthly, like antivirus and antimalware programs, the retainer for your managed service provider, and cloud storage subscriptions.
Step 5: Find opportunities for bundles and other discounts.
Can you buy a corporate subscription to Adobe Creative Cloud instead of individual subscriptions to Photoshop and InDesign? Can you get a discount from your internet service provider by bundling your Internet service and office phone service? Are you getting the best deal possible on your security services, or can you bundle them all in a service like GTS O365 Guardian?
A few hours’ research or phone time can make a LOT of room in your annual technology budget. (Bonus: If you don’t want to go to bat with your IT vendors, we’re happy to help! Grand Technology Solutions has top-notch relationships with ISPs, security services, online communication providers, and other small-business vendors. We’re happy to go to bat for you so you don’t have to!)
Step 6: Do the math.
Now that you’ve identified your recurring IT costs, your one-time IT costs, and the amount of revenue you can dedicate to your technology needs, all that’s left is a few button punches on a calculator. Calculate the base amount of revenue you can healthily spend on IT, then divvy that up into percentages and individual budgets for recurring needs, big spends, and future projects that you aren’t prioritizing just yet
As the year goes on, keep a close eye on how much you’re spending on IT: keeping track of your current spend as it relates to your monthly, quarterly, and annual budget will help you grow your business without breaking the bank.
Step 7: Speak with your managed service provider.
If you work with a managed service provider like Grand Technology Solutions, it’s a good idea to compare notes once you’ve finished your budget. Your MSP can help you identify opportunities for growth or discounts that you didn’t see for yourself, and advise you on difficult decisions (like whether or not that new laptop really needs an i9 processor).
When you’re starting or growing a small business, technology can be one of the more confusing aspects of your growth process. If you’re not sure how to get started, give us a call at (904) 606-6011 or email email@example.com. We can schedule a FREE, onsite 15-point technology check to take stock of your current hardware, software, and procedures, and help you find opportunities to save money or improve your systems.