September 7, 2023

IT budgeting tips for local businesses

How to create a realistic IT budget that aligns with your local business’s goals


2023 IT budgets will increase by an average of 4.8% compared to 2022. The IT budget as a percentage of revenue is now 4.2% on average. [1] Creating a realistic IT budget for a local business ensures that your technology investments align with your goals and financial capabilities. Continue reading to discover our tips to help you develop an adequate IT budget.


#1: Understand your business goals

Start by identifying your business objectives and how technology can support them as the foundation of your IT budget.


#2:  Assess current IT infrastructure

Take stock of your existing IT assets and infrastructure. What hardware, software, and services do you currently have? Determine their condition, lifespan, and compatibility with your goals.


Related Resource:
What to consider before buying new business technology


#3:  Prioritize your IT needs and plan for scalability

Categorize your IT needs into essential and non-essential categories. Prioritize investments that directly impact your core business operations and long-term goals.

IT budgets should not be set in stone. Review and adjust your budget annually to reflect changes in technology, business goals, and financial performance. Anticipate future growth and ensure your IT budget accommodates scalability needs. 


IT priorities 2023 infographic

Image source: Metrics 2023 IT Agenda


#4:  Involve key stakeholders

Collaborate with department heads and employees who rely on IT systems. Their input can help you identify specific needs and pain points. Ensure that your team understands the IT budget and its implications. Encourage responsible spending and adherence to the budget.


#5: Research technology trends

Stay informed about the latest technology trends and how they can benefit your business. Consider the potential ROI of adopting new technologies. When making technology investments, consider the total cost, including the initial purchase and ongoing operating and maintenance costs.


IT spending projections infographic

Image source: Gartner, IDC


Related Resource:
Five ways a managed IT partner can bring cost savings to your business


#6: Consider cloud services and factor in security

Evaluate the cost savings and flexibility of cloud-based solutions. They can reduce the need for expensive on-premises hardware. Cloud computing is expected to grow at a compound annual growth rate of 17.5% by 2025.[2]

Allocate a portion of your budget to cybersecurity measures. Protecting your data and systems is essential in the digital age.


Related Resource:

Our top 10 cyber security tips to keep your business safe


#7: Create a contingency fund and invest in training 

Set aside a portion of your budget for unforeseen IT emergencies or urgent upgrades. Having a contingency fund can prevent financial strain.

Allocate employee training and education funds to ensure your team can effectively utilize new technologies.


Related Resource:

Three IT cost reduction strategies to turn to during economic downturns


#8. Seek expert advice

If you need assistance on certain technology investments or budgeting decisions, consider consulting with IT experts or hiring an experienced managed IT company.

They can help you compare your IT budget with industry benchmarks or similar businesses. This can provide insights into whether your budget is realistic.

By following these tips and tailoring them to your local business’s unique needs, you can create a realistic IT budget that helps you achieve your goals while effectively managing your technology expenses. Flexibility and adaptability are essential to successful budgeting in the ever-evolving technology landscape.


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We offer a wide range of services and packages, including our managed IT, professional IT, legal IT, and medical IT.


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1: Metrics Maturity | IT budgets 2023 grow at a slower pace

2: Comptia | 25 Crucial Information Technology Statistics and Facts to Know

3: Comptia | IT Industry Outlook 2023

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