Microsoft 365 is the backbone of how most small businesses work. Email, documents, Teams meetings, shared files, the lot. Yet almost every new client I take on is either on the wrong plan or is paying for seats they don't use.

The two plans most small businesses end up choosing between are Business Standard and Business Premium. They look similar on the surface, but the difference is significant, and it's not really about features. It's about security.

What you get on both plans

Both Business Standard and Business Premium give you the familiar Microsoft 365 apps: Outlook, Word, Excel, PowerPoint, OneDrive, SharePoint and Teams. Both include the web, desktop and mobile versions of the Office apps, and both include 1 TB of OneDrive storage per user and business-class email with a 50 GB mailbox.

If you only need email, documents and Teams meetings, Business Standard does the job. At the time of writing, it's around £10.30 per user per month on an annual commitment.

What Business Premium adds

Business Premium sits about £16 higher per user per month (£26 total at time of writing), and almost all of that extra cost is spent on security and device management. Specifically, you get:

• Microsoft Defender for Business. Proper endpoint protection against malware, ransomware and phishing, centrally managed.
• Intune device management. Enforce passwords, encryption and security policies on every laptop and phone that accesses your business data.
• Azure AD Premium P1. Conditional access rules, risk-based multi-factor authentication, and self-service password reset.
• Information protection. Classify and protect sensitive documents so they can't be forwarded outside the business.
• Windows 11 Pro upgrade rights. If your team is still on Home editions, Premium includes the upgrade.

So which do you actually need?

The honest answer is that almost every small business handling client data, customer records or financial information should be on Business Premium. The extra £16 per user per month buys you the controls that keep you out of trouble when, not if, a security incident happens.

The three questions I ask new clients are:

• Do your staff use their own phones or laptops to access work email?
• Do you hold personal data about clients, customers or patients?
• Would a ransomware attack or a lost laptop seriously disrupt your operations?

If the answer to any of those is yes, Business Premium is the right plan. You're not paying for bells and whistles; you're paying for the lock on the door.

Where Business Standard still makes sense

Business Standard is a reasonable choice if you are a small team, not handling sensitive data, and using only company-managed devices. The classic example is a small professional services business with two or three staff, no client data beyond basic contact details, and a simple working pattern. Even then, I'd usually recommend mixing Standard for some users and Premium for others rather than putting everyone on the cheaper plan.

The upgrade mistake I see most often

Many businesses upgrade by turning on Premium but never actually configure any of the security features. They end up paying for Premium and getting Standard's protection. If you do move to Premium, it needs setting up properly: conditional access policies, Defender rollout, device compliance rules, the lot. Otherwise the extra £16 a month is simply lost.

What to do next

If you're not sure which plan you're on, or whether the security features are configured, I offer a free Microsoft 365 review. I'll check your current licensing, identify any unused seats, and tell you honestly whether you're on the right plan. It takes about 30 minutes.

ClearPath IT Services provides Microsoft 365 support for small businesses across Kent, Medway and South East London. Find out more about our Microsoft 365 support.