Technology budgets for small business start-ups

    Technology budgets for small business start-ups


    If you are contemplating a startup and researching business plan templates, I need to warn you – most plans leave out a key-essential-priority-must-have-important section – technology.  Most young companies try to limit their expenditures in that area, and that is a shame, since technology is an easy tool for start-ups to differentiate themselves from competitors.

    Having a solid technology plan will not only quickly save you money across other areas, it will also put you on the path to success, give you an immediate edge, and leave your competition behind - out of the gate. Simply put – [Tweet "Technology is a critical component to a successful start-up"].

    Everyone plans on starting with laptops and computers, right?  Since only 20% of the cost of computers are from the initial purchase, it is critical to get a business class system.  The other 80% are indirect costs.  Expect to pay $700 to $1,500 per unit.  Don’t be tempted by the $200 to $400 home systems.  Sure, they are cheaper up front but you’ll spend more time trying to keep them operating.  Nothing is more frustrating to new start-up employees than malfunctioning computers.

    Here is good sample start-up budget for a small business:


    Laptops/Tablets/Computers                      $700 to $1500      per person

    Network Printer/Scanner                            $500                       per office

    Wireless Office                                               $500                       per office

    Network hardware                                        $1000                     per office

    Office digital phone system                         $400                       per person



    Internet (Business)                                       $300                       per month

    Office digital phone service                         $60                         per month

    Applications/backup/support                    $400                       per person per year

    Server or cloud (if needed)                          $250                       per month

    Support services                                            $40                         per person per employee


    So, how much do businesses spend on technology after initial start-up purchase?  Here is the break-down by industry and size as a % of revenue:


    By Size

    • 3.2% Enterprise
    • 4.1 % Medium
    • 6.9 % Small

    By Type

    • 3.3%      Average business
    • 4.7%      Education
    • 1.5%      Retail
    • 6.3%      Financial
    • 1.7%      Manufacturing
    • 4.2%      Health care                                                                                               Source: CIO Magazine


    Of course, this is just the basic stuff to get you started.  Many new businesses are making technology part of their core business to distinguish themselves from competitors.  This Digital Transformation allows small businesses to move quickly and take advantage of new digital products, services, marketing, fulfillment, and an enhanced customer experience.


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