How to create an IT budget for small business.

by Jon Lober | NOC Technology

The three pieces of every IT budget.

Instead of being techno-firefighters, NOC Technology takes on the role of IT fire marshals. Instead of putting fires out, we take a proactive approach to prevent them from happening in the first place whenever possible.

A well-built IT strategy, complete with a technology roadmap, set of IT policies, and dedicated IT budget, is crucial to keep businesses safe from digital disasters. In today’s modern business world, we are continually shocked to discover that many businesses are able to effectively forecast market growth and protecting themselves from physical threats without ever developing the most basic elements of an IT strategy.

 

Legacy businesses without strong tech roots and small businesses without a long-term approach to IT budgeting are far more likely to expose their bottom lines to unnecessary risks. Strategic budgeting should ensure that your business includes its IT needs as a critical part of its business plan, instead of an afterthought once all other needs have been covered. IT budgeting recognizes expenditures as investments in the security and efficiency of the business, as well as an opportunity to gain a competitive advantage over less forward-thinking competition.

 

Before you budget.

In order to manage your business’s IT needs, will your business outsource to an MSP, use in-house resources, or take a co-managed approach (in-house +MSP support)?

 

Hopefully your IT policy has already answered this question, but if it has not, now is the time. No other decision will have a greater impact on your budgeting process or the final budget. Each approach has advantages and disadvantages and unique impacts on your budget.

 

  • In-house IT gives you the greatest control over your IT needs, but also requires the greatest amount of internal oversight. Staff expenses, phone service, internet service, and software subscriptions generate operational expenses, while computer purchases, network upgrades, and tech hardware necessitate capital outlays.
  • Outsourced IT can provide the same level of support as in-house IT, or even much greater, since high-quality managed service providers (MSPs) retain experts in diverse IT areas. Some MSPs can even help you develop internal IT policies and a long-term IT strategy, while rolling all of your tech expenses (including phone, internet, software, services, and hardware) into a single, monthly bill.
  • Co-managed Support gives you the best of both worlds. MSPs provide support to high-quality internal IT personnel wherever they are needed: daily help desk support, hardware upgrades, long-term strategy development, or pretty much anywhere else!

 

Our previous post takes a much closer look at the pros and cons of each IT management approach—as well as their impact on your budget.

 

Elements of a basic IT budget

Every IT budget can be reduced to the following three key elements: staffing, software and services, and hardware.

 

1. Staffing.

 

Whether outsourced or in-house, your business needs someone to manage the network, purchase and update hardware and software, troubleshoot tech gremlins, upgrade servers, perform cloud migrations, identify and address cybersecurity risks, and ensure consistent internet connections. Even if you have no internal IT staff or contractors, someone in your business is using their time to manage your IT needs, since every company is now a tech company.

 

Total cost of staffing will be largely dependent on the amount of support you need, which is in turn determined by how many of your employees work with business technology. Beyond the size of the company, the type of support (internal vs external) will also have a large impact on the final amount needed. In a 40-person company, the average in-house IT department (plus an average amount of consultant support) costs approximately $390 per computer-using employee per month, whereas MSP staffing support will cost roughly half that amount, between $200-$250 per user per month.

 

2. Services and Software

 

Most modern businesses could not operate a single day without their essential tech services—and the total number of vital services and subscriptions continue to grow: phone, internet, cybersecurity, point of sale (POS) systems, remote collaboration tools, inventory management, data backup and recovery, business VoIP, email, cloud computing, company websites, online advertising, and ecommerce platforms.

 

The list goes on; modern business software is just as essential as the tech services! Word processors, spreadsheets and analytical programs, operating systems, security software, project management tools, HR and payroll software, customer relationship management (CRM), and accounting software form the backbone of efficient small businesses across the country.

 

Added together, business software and services can represent a significant chunk of the budget. Although not all users may appreciate subscription-based software and services, subscriptions and cloud-based software (versus one-time purchase, installed software) enable more predictable budgeting since the monthly expense is usually fairly consistent.

 

3. Hardware

 

Most accountants and managers are well-suited to calculate staffing, services, and software expenses, and most can predict these operational expenses with an acceptable degree of accuracy. However, in our experience, most IT budgets fail in the area of hardware. Without the input of knowledgeable and forward-looking IT experts, most businesses grossly underbudget for hardware—putting their businesses at high-risk for some of the most serious IT disasters: data breaches, ransomware attacks, extended network downtime, backup failures, and complete data loss.

 

A single day without internet or network access can easily up to tens of thousands of dollars in lost productivity and revenue for small businesses, and those expenses pale in comparison to the financial costs of cyberattacks and data loss. Regular hardware updates can mitigate these painful possibilities. IT equipment lifecycle policies can help businesses with in-house IT teams project capital expenses up to 10 years in advance. For those that prefer to avoid capital expenses entirely, a Hardware-as-a-Service (HaaS) arrangement with an MSP provides an excellent opportunity to consolidate all IT expenses into a single, monthly payment.

Tech upgrades that will boost employee safety in sheltered workshops
By Jon Lober April 15, 2025
At NOC Technology, we've worked with Missouri sheltered workshops for over seven years, and I've witnessed firsthand how the right technological implementations can transform sheltered workshop environments. Today, I'd like to share some insights on leveraging modern technology to create safer workspaces while maintaining the dignity and privacy of all participants. The Unique Safety Challenges of Sheltered Workshops Sheltered workshops provide valuable employment opportunities for individuals with disabilities, but they also present unique safety considerations. Workers may have varying levels of physical mobility, cognitive processing, and sensory perception—all of which can impact how they respond to traditional safety measures. Additionally, the production environments often involve machinery, tools, and materials that require careful monitoring and management. The Role of Smart Technology in Safety Advancements in smart technology provide real-time safety monitoring, immediate alerts for potential hazards, and improved emergency response times. Let’s explore some key technologies and their benefits in sheltered workshop environments. Personalized Alert Systems Traditional emergency alarms can be overwhelming for individuals with sensory sensitivities. Smart alert systems can deliver personalized notifications through: Vibrating wristbands that alert workers without auditory overload Visual notification systems with customizable colors and patterns Tablet-based communication for workers who benefit from visual cues Location-specific alerts that only notify those in affected areas We recently implemented a multi-modal alert system at a workshop in central Missouri that reduced anxiety-related incidents during emergency drills by 65% . Environmental Monitoring Maintaining optimal environmental conditions is crucial for both safety and productivity: Temperature and humidity sensors that automatically adjust HVAC systems Air quality monitors that detect potentially harmful particulates Noise level monitoring to prevent sensory overload Automated ventilation systems that activate when chemical levels exceed thresholds These systems not only protect workers but also provide documented compliance with OSHA regulations. Enhanced Supervision through Smart Cameras Security cameras have evolved beyond simple surveillance. Modern systems can: Detect unusual patterns that might indicate a worker in distress Monitor restricted areas without constant staff presence Identify when machinery is being used incorrectly Alert supervisors to potential safety hazards Important note: All camera systems should be implemented with strict privacy protocols and transparent policies. Workers and guardians should be fully informed about what is being monitored and why. In many cases, audio cannot be recorded, and the camera system must be configured to meet this requirement. Wearable Safety Technology Wearable devices offer personalized safety monitoring without stigmatization: Fall detection pendants that automatically alert staff Location tracking that helps locate workers in emergency situations Biometric monitoring for workers with health conditions Proximity sensors that prevent accidental entry into hazardous areas These wearables can be designed to look like standard ID badges or watches, preserving dignity while enhancing safety. Implementation Best Practices Successfully integrating smart technology into sheltered workshops requires careful planning: Involve all stakeholders: Workers, guardians, and staff should participate in selecting and implementing new technologies. Prioritize simplicity: Choose solutions that require minimal training and maintenance. Phase in gradually: Introduce new technologies in stages to allow everyone time to adapt. Balance automation with human oversight: Technology should supplement, not replace, trained staff. Respect privacy: Collect only essential data and maintain strong security protocols.
Could your sheltered workshop benefit from grant funding for new technology?
By Jon Lober April 7, 2025
As a sheltered workshop, you play a crucial role in providing meaningful employment opportunities for individuals with disabilities. However, like any organization, securing funding for technology upgrades can be a challenge. While investing in the right tools can improve efficiency, security, and overall productivity—that’s all only if you can afford the tools in the first place.
best office pranks for April Fools 2025
By Jon Lober March 31, 2025
Need April Fools pranks for your office? This list is technically harmless, but great fun. Happy pranking!
More Articles
Share by: