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7 Steps to Create an IT Budget for your Small Business

7 Steps to Create an IT Budget for your Small Business

  1. Know your company growth
  2. Know what systems you need for the growth
  3. Know your business processes
  4. Create your Core System ecosystem
  5. Find a good IT Partner – use our article here and here
  6. Team buy-in
  7. Create a Budget

IT budgets are a daunting process for small businesses that are looking to expand. It poses all sorts of challenges like, new hardware for employees, a server, website development, email, internet, and various other application costs. This process doesn’t have to be complex, in this article I’ll share with you the 7 steps that will help you plan your budgets for your business growth phase.

 

First and foremost – how much growth are you expecting in the next 3 years? I understand that this is a hard question and there are all sorts of challenges with assessing growth, but you must have some idea of where your company is heading and how many employees you plan on hiring. Once you have an estimate of how many employees you plan to take on, it will help direct the rest of the IT systems. I’m usually ambitious about the growth – aim for around 30%.

The other big question for your business is what systems does it need to operate efficiently? The three main categories I like to divide this into are, Communication, Documentation, and Operation.

  • Communication systems define how you’re going to talk with your clients, whether it’s email, marketing, or phone systems.
  • Documentation – this will define how you store the information, things like proposals, documents, and processes.
  • Operation – this involves how you store your customer information and how you process the information; Customer Relationship Management (CRM) database, accounting package, and any other subscriptions. Put all your systems on paper and have two columns next to them and answer these key questions: What can it scale to? What will it cost ongoing per user? What is the capital cost?

3. Business processes that require technology – these are crucial to growth in your business. Business processes define the method you will use to replicate each area of the business with the use of your team. Write down all the departments in your business and define which system/application they use to make it happen.

4. Create Your Core Technology Ecosystem. What systems does it need to run itself? You want to create a map of all your systems in use in each department, along with the name of the application.

5. Finding an IT partner is like marriage, if you marry at first sight, you’re heading for a disaster. The values of their business needs to match closely with yours, someone that will partner with you rather than just restart your PCs every month for Windows updates. In the end the result you want out of them is productivity for your business, whether it’s applications, procedures, upgrades, network reliability, or storage capacity. You want your IT provider to think about how to deliver a support service that never gets utilised. Read this article if you want to dig deeper into how to choose one. link¬†

6. Let’s face it, it’s your employees that run your business, not you. Without them, you’d still be by yourself! Your team is the centre of your growth strategy. So having them on board with your systems, processes, technology, and procedures is going to play an important role in your work culture. No point having an application that everyone in the team complains about; let them decide which application would suit them best and one they can rave about (rather than swear at the screen when they lose their work). Asking for employee feedback about your systems will help you make better decisions about your future. Have a team meeting about your technology plans and ask them to contribute their thoughts and past findings. If not, alter your plans and factor them in step two.

7. Budget – by the time you get to this step, you will have defined 90% of it. Now all you need to do is plug all your numbers in and complete your budget. Typically these budgets are only one year; IT changes so fast that it makes it hard to set budgets for longer than a year. Once you have all the costs for all your systems, divide them by the number of users you currently have (full-time or part-time) and come up with your holy grail for IT costs – the cost of your entire technology fleet per user. This cost will have two parts, CAPex and Opex; capital expenditure will include all the one off setup costs, like PCs, phones, headsets, etc. and operating expenditure will have all the subscription costs like, ongoing licences for email, CRM, HR, etc.

 

By the end of this exercise you should have a good idea how much you’re currently spending and what it’s going to cost to put the building blocks in place to grow your business from the technology stand point. We have included a worksheet to make this process even easier for you. Bear in mind that this is only as accurate as you make it.

If you don’t want to go through the process yourself, simply give our team a call and we can do the process for you!

  • May 1, 2019