A budget is a crucial aspect of running a business.
When a company's budgeting is done correctly, management can ensure that there is enough money to cover costs.
Every company should have an IT budget, even if it's small. That's because IT is not just about apps and websites, but rather every part of your business and how it runs on a daily basis.
So what does an IT budget look like? What are the expenses? And, most importantly: Are there ways to categorize the budget?
In this article, I have explained what a budget is, why having one is necessary, the related advantages and hazards, as well as some budgeting advice.
Five reasons why your business should maintain an IT budget
Let's start with what is a budget. It's a plan where you write down what you need, when you need it, and how much it will cost. That is your budget.
Most leaders avoid budgeting. They don't see the value, they see the work.
There's a tremendous strategic value if you take the time to create this and use it. It simply allows you to plan out when you're gonna spend money, what you're gonna spend it on.
So let's start and let's talk about what you are going to spend this money on.
What are the categories of this IT budget?
There are eight categories.
- Hardware - server workstations, networking equipment.
- Connectivity - your internet data, voice. Keep in mind with voice, you have your office phones, you have your mobile phones, you have whatever else it is that you need to connect. You also may be paying for remote workers and what they have in their homes or wherever those offices are.
- Security - Separate standalone topic. How will you protect your organization, your people, software services, testing, compliance.
- Websites - whatever you're doing there with the marketing, whether your sites are brochure ware, if you're spending for additional marketing automation software, you could also categorize software in a separate category, but we're trying to, which comes up.
- Line of business applications - So, this is a critical piece for most organizations. They understand the main line of business application or the financial package that they're running. Many times they don't realize all these other little satellite applications that departments run that are software as a service that they sign up for and they're small amounts of money when they start, they may grow to large amounts of money. Before you know it, you have 'em all over the place.
- Backup & Disaster recovery - What do you want? What are you backing up and how are you gonna recover in case something happens?
- People and the providers - who are supporting the companies like NSI that provide you this outsourced managed IT service. Some of you have people internally, some people you have externally. So that's what you have to do in the budget.
So the next thing is, you know, how do you start this? So I'm gonna show you, I'm gonna call up a sample budget.
So I went and I looked online. You could simply Google it.
I actually found this budget from 2017 that we had created as a template to utilize with some of our clients. So if you look at this simply, it's got a little, a few different categories, but the point is, it starts to break these things down and it gives you the ability to go punch these things in.
So this one's pretty cool because it gives you the year and you have the different categories. You could do October, November, right? You can plan it out for the entire year. It'll pick up.
You could set this and adjust it to whatever it's gonna be, but you got these different categories. So you can look at personnel expenses, consultants, you can look at training, not something I even talked about cuz people don't even think about it that much anymore.
It's got office supplies on here.
We didn't even talk about printing, telecommunications.
Your equipment, are you gonna replace it? What's gonna happen with that?
Peripheral expenses, software expenses. The point of this is that this is a simple budget that you can modify. It's an Excel spreadsheet. Everybody can fill it out. It's not too complicated. It's relatively easy to get started. So this is a template. If you'd like a copy of it, we'd be happy to provide that for you.
I appreciate you giving me a couple minutes here to go through this with you.
Certainly NSI is here to help you. If there's anything that you need, we're very focused on this for our clients. and that's it.
Again, my name's Tom McDonald. I'm a small MSP called NSI. We'd love to be able to help you control costs, reduce expenses, and help you grow your business. Our focus is on our customer success. So anything we could do for them to make them better, makes us better. And that's what we do. Thanks for your time today. Bye.