It is one of the first questions business owners ask, and one that rarely gets a straight answer: what should we be spending on IT?
You will find figures quoted as a percentage of revenue, and they vary a lot from one industry to the next. They aren’t useless, but they answer the wrong question. The better question is not how much, but on what and in what order.
Here is how we would approach it.
First: the floor
There is a minimum below which you are not saving money so much as borrowing it from a future crisis. Whatever your size, the floor includes:
- Working, tested backups of anything you couldn’t operate without
- Two-step login (MFA) on every account that touches company data
- Supported software: if your operating system or key apps have stopped getting security updates, you are running on borrowed time
- A way to get help that doesn’t depend on one specific person being available
If any of those are missing, that is where the next pound goes. Nothing else in this post matters until the floor is in place.
Second: spend where downtime hurts
Work out your cost of downtime: roughly, what an hour without your systems costs in wages and lost sales. Our downtime calculator does the sums in a few seconds. A ten-person office losing email for an hour is an irritation, while a business that can’t take payments for an hour is losing real money in real time.
That number tells you where resilience is worth buying: a backup internet line, a spare payment terminal, cloud systems that keep working when the office doesn’t. Spend on resilience in proportion to what failure actually costs you, rather than on gut feel.
Third: audit before adding
Before any new spending, look at what you already pay for. A careful look through the bills often turns up:
- Licences for staff who left months ago
- Two tools doing the same job because nobody joined the dots
- Premium tiers bought “to be safe” and never used
- Features already included in existing licences, bought again as separate products
Sometimes those savings go a long way towards paying for whatever improvement was needed, and freeing up money you are already spending is always easier than finding new budget.
Fourth: buy outcomes, not kit
The most expensive IT decisions tend to be distress purchases and shiny new tools, and the cheapest tend to be the planned ones. A simple 12-month roadmap (what gets replaced when, what gets improved next quarter and what you are deliberately not doing) turns IT spend from a series of surprises into a line item you control.
That is also the honest answer to the percentage question: a business with a plan tends to spend less over time than one without, because it stops paying the premium that comes with buying in a panic.
The short version
- Fix the floor: backups, two-step login, supported software and reliable help.
- Buy resilience in proportion to your real cost of downtime.
- Audit existing spend before adding anything new.
- Plan a year ahead so nothing becomes a distress purchase.
If you would like to know where your business stands against that list, including anything you are paying for that you don’t need, our free 30-minute IT health check is the quickest way to find out.