When starting a new business, there are many variables to consider. One area of your business that is essential to budget for is IT and tech. With technology constantly evolving, and current technology needing to be maintained to keep serving your business smoothly and efficiently, having a disproportionate IT budget can cost your business dearly.
Identify What You’re Spending Money On
The first step in budgeting is to get a clear picture of what you’re spending your money on. Do a detailed inventory of everything tech-related that you’re currently paying for or have purchased. Look at subscriptions, programs, hardware, and tools. Writing all of this out and organizing it is the best way to get a basic understanding of your yearly spending, and gives you a great starting point to plan your new budget for
Cut Out What’s Unnecessary
Now that you’ve fully assessed your spending habits, it’s a good idea to consider those things that may be unnecessary. Subscriptions you don’t use, programs, and upkeep for devices that aren’t as necessary as you thought they would be. By Decluttering your current technology system, you can start saving and getting more proactive with what you have.
Identify What is Necessary
After identifying what you don’t use or need, the next step would be to plan on what you absolutely do need. There are many categories businesses should consider when looking at their IT budget. Some of these categories are:
- Support and Maintenance — You’ll want to add a category within your budget to pay for the support services and maintenance your IT infrastructure would inevitably require throughout the year.
- Software — Software is continuously changing, and many business-related software programs have yearly subscriptions. You’ll want to budget for the costs associated with the programs you use and have some money leftover in the budget for new useful software as it hits the market.
- Hardware — If you’re leasing your equipment, you’ll want to add that cost to your budget. If you own your equipment, you’ll want to budget for an affordable computer or laptop repairs, and any other hardware costs that may occur throughout the year.
- Recovery and Backup — Budgeting for recovery and backup services can save your business thousands of dollars, or possibly your entire business. If the systems or hardware crash and you lose all the data related to your business, that loss can be devastating to the company. Plan to have recovery and backup services within your IT budget to ensure your business’ files are protected.
- Cloud Services — Cloud services can be data or software related to your business, operating on the cloud means the data is saved on cloud-based servers and not within any on-site hardware or server. If you’re using cloud services, your programs and files tend to be a bit more protected. However, quality cloud services are pricey, and it’s essential to add them to your IT budget.
- New Projects — Having a budget for new projects and new technology is vital for the future of any business. There should always be a section of the budget set aside for new ideas and more efficient technology to keep your business running smoothly.
- Emergency Funds — If a disaster does occur, and data is lost, or hardware fails, it’s important to have an emergency fund within your IT budget. This will ensure your company can get back up and running as quickly and as smoothly as possible.
How to Save Money
Setting up a clear budget and sticking to it is the ultimate way to save money on your technology needs. Sticking to your budget will help ensure you don’t overspend and save money on the areas you may have invested in unnecessarily. Depending on your business platform, you may find having on-site technicians for your IT department is beneficial. In some cases, you may want to outsource your IT needs by hiring an external company. Knowing where your business stands and how much attention to technology your business needs is an integral part of saving money and budgeting.
Having a Solid Plan for Your Technology Needs
The most crucial part of budgeting for your technology needs is proper planning. When you take the time to consider every aspect of your business’s IT infrastructure and needs, you’ll have a better understanding of where you’re overspending and what kind of budget you can afford. By holding yearly or quarterly budget meetings, your company can save tons of money and continue making a positive progression.