Drafting a solid IT budget for the upcoming year is an essential process for small businesses. A well-planned IT budget protects your business against unexpected challenges and facilitates opportunities for growth and efficiency. This article will help your company to develop a strategic IT budget that supports your overall business objectives and positions you for success in the coming year.

IT budgetary priorities

  1. Evaluate Current Hardware Needs: Your first step is to take inventory of the existing hardware. You should assess the condition of computers, servers, networking equipment, and peripherals, considering the age and performance of each item. If any devices are nearing the end of their lifecycle or are dragging productivity down, you’ll want to plan for replacements in the new year. Remember: If you expect to hire more staff or expand operations in 2025, be sure to budget for the hardware you’ll need to support those changes.
  2. Review Software Licenses and Subscriptions: Software expenses can accumulate quickly, especially with multiple subscriptions in place. Take this opportunity to review your current software portfolio – identify which budgetary applications are essential and which can be replaced with more cost-effective solutions (or eliminated completely.) Pay attention to renewal dates for licenses and take note of any potential price increases. You will also want to consider investment in additional tools, such as project management software or customer relationship management (CRM) systems, to enhance productivity.
  3. Prioritize Cybersecurity: In an environment of increasing cyber threats, robust cybersecurity measures are essential. You’ll want to allocate a portion of your budget for vital security tools, including firewalls, antivirus software, and intrusion detection systems. Additionally, employee training programs to raise awareness about phishing and other security risks represent a necessary strategy. A cybersecurity audit to identify vulnerabilities and provide insight for improvements is a productive use of funds.
  4. Cloud Services Management: As businesses increasingly rely on cloud-based solutions, it’s important to review your cloud services regularly. Begin by analyzing usage patterns to identify underutilized resources, then investigate options for consolidating services or moving to more economical pricing tiers. Keep an eye out for potential hidden costs, such as data transfer fees or storage limits, and make sure your budget reflects the reality of expenses associated with the cloud.
  5. IT Support and Maintenance: One of the biggest decisions in modern companies is whether to maintain in-house IT services or outsource the support. In-house IT teams can provide tailored support but may come with higher fixed costs. Outsourcing and managed services can be cost-effective, especially for small businesses that don’t require full-time staff. Whatever your choice, budget for ongoing maintenance agreements to ensure that your systems remain operational and up-to-date. This could include software updates, hardware repairs, and emergency support.
  6. Backup Solutions: A data breach that results in data loss can be catastrophic for any business. Therefore, it’s necessary to invest in reliable backup solutions in the next year. Companies should budget for both onsite and offsite backups to protect against data loss from hardware failures, cyberattacks, or natural disasters. Consider the cost of cloud backup services or physical storage solutions, ensuring that your backup strategy aligns with your business continuity plans.
  7. Invest in Emerging Technologies: Staying competitive often requires adopting new technologies that can transform your business. Designate a portion of your budget for exploring emerging technologies, such as automation tools, artificial intelligence, or enhanced data analytics. This not only fosters innovation but also positions your business for future growth.
  8. Employee Training and Development: Technology is only as effective as the people using it. In the new year, invest in training for your staff to ensure they can utilize software and tools efficiently. Allocate funds for workshops, online courses, or certifications to improve productivity and reduce the risk of costly mistakes.
  9. Establish a Budgetary Contingency Fund: Unforeseen expenses can arise at any time, so it’s wise to establish a contingency fund within your IT budget. Set aside approximately 10% of your budget to cover emergency repairs, unexpected upgrades, or additional support services.
  10. Review and Optimize: Finally, regularly reviewing your IT budget is an essential part of the budgetary process. Be sure to assess your spending and performance against your goals throughout the year. Identify areas where you can cut costs, optimize resources, or reallocate funds to better align with your business needs.

Alliance IT helps SMBs to assess their current inventory and evaluate their emerging needs, providing solutions that make sense practically and financially.