"How much should we be spending on IT?" is one of the questions I'm asked most. Most small business owners either guess too low (and end up firefighting every month) or too high (because their current provider charges for everything on an ad-hoc basis). Neither is comfortable.

Here's how I break a sensible IT budget down for a small UK business. These are the real numbers I use when I quote new clients, not made-up benchmarks.

Before the numbers: what "IT budget" actually covers

A proper IT budget should include everything that keeps your business's digital side running. That means:

• Microsoft 365 or Google Workspace licences
• Line-of-business software (your CRM, accounting package, practice management system)
• Hardware (laptops, monitors, phones, network kit)
• Connectivity (broadband, mobile SIMs, WiFi)
• Cyber security (antivirus, backup, MFA tooling, training)
• IT support (in-house time or a managed IT support contract)
• Occasional projects (office move, new phone system, a migration)

If your current "IT budget" is just a line for your support provider, you're hiding the other 70% somewhere else.

The rough rule of thumb: £100-£200 per employee per month

For most Kent small businesses (5-50 staff), IT running costs land somewhere between £100 and £200 per employee per month, all in. Below that you're usually underspending and paying for it in risk and downtime. Above that, and you're either in a regulated industry (accountants, solicitors, medical) or buying more than you need.

At the lower end, you typically get: M365 Business Standard, a managed support contract, basic cyber security, and a modest hardware refresh cycle. At the higher end you add: Business Premium licensing, layered security tools, VoIP, more frequent hardware replacement, and perhaps a compliance-focused audit.

The numbers, broken out

For a typical 10-person Kent office, reasonable annual figures look like this:

• Microsoft 365 licences: £20-£30 per user per month. For 10 staff, around £3,000/year.
• Managed IT support: £40-£70 per user per month. For 10 staff, around £6,000-£8,500/year.
• Cyber security add-ons (extra backup, security training, password manager): £5-£15 per user per month. Around £1,000-£1,800/year.
• Hardware refresh: budget for a third of your laptops to be replaced each year (so each machine lasts 3-4 years). At £1,100 per laptop, roughly £3,500-£4,000/year for 10 staff.
• Connectivity: business broadband £50-£100/month, plus a backup line. £1,500-£2,500/year.
• Line-of-business software: varies wildly. Be honest about what you actually spend on Xero, Sage, your CRM, Adobe, etc.
• Projects contingency: 10% of the total, for the unexpected.

For a 10-person professional services business, the "baseline" number usually lands around £20,000-£25,000 a year. That sounds like a lot until you compare it to what one day of downtime, one serious phishing incident, or one botched office move can cost.

The line items people forget

In most budgets I review, these get missed:

• Onboarding and offboarding costs. Every new starter needs kit, licences, setup. Every leaver needs access revoked properly. Budget for staff churn.
• Cyber insurance. Increasingly required, and the insurer will want proof of MFA, backups, and patching. Not doing these costs you on the premium too.
• Security training. A platform like Hook Security or KnowBe4 is a few pounds per user per month and is the single best anti-phishing investment.
• Password manager. £3-£7 per user per month. Pays for itself the first time someone leaves.
• Cloud backup of Microsoft 365. Microsoft do not back up your data. A third-party tool does. Roughly £3-£5 per user per month.
• Domain and SSL renewals. Tiny amounts, but embarrassing when they expire.

Capex vs opex: spread the spending, not the stress

One thing I encourage all my clients to do: move as much IT as possible from big, lumpy capital spend to smooth, predictable monthly cost. Leasing laptops, subscribing to cloud backup, paying monthly for a managed support contract. Your cash flow is more predictable, you always run on reasonably current kit, and you don't get ambushed by a £15,000 server replacement bill every five years.

How to use this

Print your current invoices for the last year (support, hardware, software, cloud, phones, broadband). Put them in the categories above. Divide the total by 12 and by the number of staff. Compare to the £100-£200 per employee per month range.

If you're well under that, you're almost certainly carrying risk you haven't priced in. If you're well over, there's probably duplication or legacy contracts to clean up.

One final thought

A good IT budget isn't about spending as little as possible. It's about spending enough, predictably, on the right things, so the business doesn't wobble when something inevitably breaks. Done well, IT becomes a quiet line item, not an emergency.

If you'd like a no-obligation review of what your current IT actually costs and where the gaps are, have a look at the services I offer or get in touch and I'll come and sit down with the numbers.