Creating an Effective Tech Budget For Your Small Business

Creating an Effective Tech Budget For Your Small Business

If the thought of creating another budget has you panicking, take a deep breath. We’re talking about a tech budget and it’s a necessity for your small business’s success. Think about it: everything from managing inventory to accepting customer payments and paying employees involves technology—this is a budget you don’t want to ignore.

You also don’t want to skimp on the budget, but there’s also no reason to go overboard. If allocating resources for IT budget management has you confused? You’re not alone. Here are some tips that can help you create an effective tech budget.

What to Include in a Tech Budget

When you think about things to include in a tech budget, equipment generally comes to mind. Now you’re browsing through catalogs checking out the latest devices. Go ahead and have fun. You may even find a new must-have device for personal use. However, before you start adding items to your online cart, it’s a good idea to know what you need and can afford to spend.

So, what goes into a tech budget? While it varies from business to business, some items are pretty much the same.

Employee Costs

These aren’t necessarily your upfront employees. You should have a separate budget for employee costs. Your tech budget covers the staff responsible for maintaining your infrastructure. Even if your infrastructure only consists of a single server and a few connected devices, someone still needs to manage the system. After all, if a component goes down do you have time to wait for a random repair person?

Even small businesses will need at least one dedicated IT staff member and this means an added cost outside of your employee budget.

Hardware and Software Costs

Okay, you’re going to need gear and this can get pricey. However, don’t start focusing on the expense. Instead, look at these costs as an investment in your business. So, your hardware costs are those associated with purchasing the equipment. Software costs are the licensing fees you pay to install and use the software.

You may be able to pay the software costs on a monthly basis, think of it as a subscription fee. However, you can also pay annually or a one-time price. While the number may be higher, you’re probably saving money in the long run.

Most software subscription services charge higher monthly fees and reduce the price when you pay for everything upfront. This is something else to consider as you’re planning out your tech budget.

Networking Costs

Yep, this expense should be included in your budget, which basically refers to your internet costs. If your facility is already wired for service, this cost is mammal. Most internet providers also offer pretty good business discounts so it’s a good idea to shop around for the best deal.

However, check the provider’s reliability. Saving money on internet service doesn’t make a lot of sense if you can’t connect your devices.

Telecommunication Costs

Even if your business has decided against installing a landline, you’re still going to need some type of phone service, which means comparing mobile phone service plans. Once again, most mobile phone providers offer deals for business owners.

These costs will vary depending on the number of phones and type of plan. Don’t forget to include long-distance phone capabilities in your budget.

Additional Costs

Before you start adding up the estimated tech costs, take a minute to think about anything else you may need. Do you need IT training? What about the ability to send and receive e-files? Don’t forget about cyber security.

If your business is handling personal information, even a consumer’s credit card info, you’re going to need to implement adequate cybersecurity protocols. This means doing more than locking the information in a password-protected file.

What about the cloud? Are you considering cloud computing? This is another cost to add in.

Reducing Tech Costs without Sacrificing Quality

Chances are you’re panicking a little over your estimated tech budget. Try not to have a fit, you may be able to reduce some costs without sacrificing quality or cybersecurity. Remember, most mobile phone and internet providers offer plans geared specifically for businesses—this can ultimately significantly reduce your long-term tech costs.

Don’t be afraid to take advantage of sales on hardware and software. Yes, even software manufacturers occasionally have specials. Saving a little bit here and there can quickly add up, making your tech budget a little less daunting. Remember, while saving money is always great, don’t sacrifice quality just to lower costs.

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Creating an Effective Tech Budget For Your Small Business

by Mohit Rajora time to read: 3 min