What Does a Great IT Budget Look Like?

It’s quite common for small businesses to cut corners on the IT department. They perceive IT as an option they can probably live without. But truth be told, IT is one of the most important foundations of a business. It keeps your organization running and your customers coming back. And since technology is integral for your business, you must have a realistic idea about how much you’re going to spend on it.

An IT partner will be a big help in this respect. That way, you can get advice about what your company needs and doesn’t need and how much money you have to shell out. For starters, here are some points to keep in mind:

Always be reasonable 

Here’s the deal: many businesses spend money on tech their businesses don’t really need. So in the long run, they allot a large amount of money, making them think that IT is a big expenditure. While the latter statement has some truth to it, most of the expenses can be minimized with proper planning.

Always get the bigger picture of your business to set a reasonable amount for your IT. Depending on the industry, most businesses will spend about 20% of their income on IT. However, it can be lower or higher; it all depends on what your business requires.

It’s predictable

The good thing about setting an IT budget is that you can actually predict a large chunk of your expenses. Having a list of what your business needs is a good start. Aside from that, you have to factor in unexpected glitches that may occur along the way. Some businesses would allot about 10% to 20% of their overall IT budget for this part.

The best guess may work sometimes, but it would be difficult to manage cash flow with this method of budgeting. Besides, you don’t necessarily have to spend up to the last cent of your established IT budget. It’s just a guide and security for your business.

It should align with your business goal

Take note that each business would have a different IT budget and plan depending on their goals. If you want to sell your products or services even better, you may need to acquire new tech.

Also, big changes in your company’s goals may mean that your IT infrastructure may also need to shift. There could be a change in customer service strategy, hardware, software, and more.

Before you invest in new hardware or software, make sure that you will earn concrete benefits from it.

What should include in your budget? 

The inclusions of an IT budget will vary company to company. This will include monthly bills for insurance, phone, rent, and the internet. It will also include new hardware or upgrades if your business is expanding.

Final words

Formulating an IT budget is a difficult task. But with proper IT consultation, you can come up with a reasonable and solid budget that will sustain your business’ needs. Just make sure that you define what your business needs and doesn’t need. From there, you can start listing your priorities.