How small businesses should budget for IT expenses

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Bob Milliken

By Bob Milliken

Bob Milliken
Bob Milliken
A question that seems to come up a lot lately with clients, in some form or fashion, is “How should I properly budget for IT expenses?” While this is a great question, there are a lot of variables that determine the answer, so I can’t provide a “one-size-fits-all,” simple answer. However, below are some general guidelines that should help you figure this out:
Hardware Refresh. No one likes the cost of a network upgrade, but it IS necessary approximately once every 3 to 4 years. PCs and servers older than that tend to run slow, crash frequently and generally become more expensive to fix and support than to replace. Therefore, your budget should include an IT refresh of all equipment approximately every 3 years to be on the safe side.
Maintenance. There is no “set it and forget it” when it comes to network maintenance. With cyber criminals becoming more sophisticated and aggressive, you MUST constantly monitor and update your network against cyber-attacks, malware, data loss, etc. A good general rule of thumb is $400 per month for each server and $125 per month per workstation.
Data Backup. Another expense you must account for is backing up your data to an offsite location (often called “cloud backup”). Since all businesses generate MORE data year after year, the backup will grow. Start by assessing the growth of your data over the last couple of years to uncover a trend. From there, forecast those additional expenses going forward at the same rate (don’t expect this to stay static year after year).
Expansion. Another factor for your IT budget is upgrading software, line of business applications, CRM systems and accounting packages that can no longer support your growing company. As your company grows, systems, processes and data become more complex requiring more sophisticated (and often more expensive) software and systems. Make sure you are looking ahead year upon year to see this coming and to properly budget for it. There’s no “magic” formula for this because the timing and cost of your upgrade is unique to your company, situation and what you are trying to accomplish.
Fortunately most small business owners recognize the need to budget for their IT expenses and have opted for IT support service programs that make it easy to budget with fixed, monthly fees.

If you still have questions or are unsure about how to best budget for your IT services, don’t hesitate to give us a call.
Bob Milliken is the president of Cascadia Systems Group.
Connect with Bob at TheITguy@CascadiaSystemsGroup.com, or give us a call – 604.270.1730.
Your comments are appreciated – ComputerCents@CascadiaSystemsGroup.com

Shiny new gadget of the month
Starting with January, we have added a new feature – the “Shiny New Gadget Of The Month. The feature will appear in the 1st edition each month and will feature new interesting gadgets that are making their way into the marketplace.
This month’s gadget is so new, it isn’t even off the assembly line. Meet Prizm — a small, pyramid-shaped device designed to make your home-audio experience as hands-off as humanly possible. The device was recently backed on Kickstarter this past November. The French company behind the audio device wanted to create an intuitive music experience that brings users new music, while learning what they really love to listen to.
The device streams music from cloud services such as Deezer, Spotify and SoundCloud, with more services planned in the future. It works by accessing your WiFi network. It doesn’t contain any speakers, so you’ll have to supply your own (it connects via Bluetooth, 3.5 mm stereo jack and optical audio). And despite being called hands-off, the device sports buttons to let you like or skip songs to customize your listening experience.
It can currently be pre-ordered from www.meetprizm.com for $139 (US).
Your comments are appreciated – ShinyNewGadget@CascadiaSystemsGroup.com