Join GoDaddy and Adam Griggs, CEO & Founder of CLARAfi.io, for our January 26th virtual meetup, as Adam shares his top recommend apps and how they can help you to be more successful in your business.
The moment you decided to start your small business, you became a Jack-of-all-trades by default. Besides carrying out your core responsibilities — whether that’s running a tutoring company or consulting agency — you will also deal with accounting, recruiting, administrative duties, etc. And an inevitable part of every entrepreneur’s life is creating budgets for all of these tasks. In this article, we will have a look at one of the most difficult budgeting segments, IT cost planning, and how you can make it easier with an IT budgeting template.
How to create an IT budgeting template
Ready? IT Budgeting Template overview.
Steady! Get your template.
Go! Create your structure.
Let’s dig into the nitty-gritty of what you should include in your IT budgeting template.
1. Ready? Here’s an IT Budgeting Template overview.
Keeping accurate, current financial records is an essential step in tracking your IT expenses.
The document that contains all information about original IT budget estimates and actual costs is called an IT budgeting template.
Before creating your IT budgeting template, you need to collect and analyze the data about your tech-side expenses. To do that, think about the past, present and future.
You need information about your expenses during the past year. You’ll want to ensure you have all of your bills, documents and cheques together. By calculating how much money you spend on IT-related services throughout the year, you’ll develop an accurate picture of your costs and avoid making unnecessary purchases.
Make a list of tech tools you use every day in your company. Find out what software, licenses and equipment you buy regularly, including recurring payments. Fixed expenses will be your main budget item.
Software licensing costs, recurring payments and other expenses add up quickly.
Keeping good records will help you identify your fixed costs.
You can’t plan your budget without setting a goal for your business. Are you going to hire more employees? Do you need to increase your security, or move your documents to the cloud? Don’t forget to note these expenditures in your IT budgeting template.
2. Steady! Get your template.
When you’ve finished preparing your records and planning your strategy, it’s time to draw up a budget that will serve as a step-by-step expense guide for your small business. To save time, you can download ready-to-use documents. Here are the top free IT budgeting templates:
Turbonomic’s designed an IT budgeting template that has five budgeting tabs and allows you to track your expenditures over three years. Both aspiring entrepreneurs and experienced business owners will benefit from its intuitive and user-friendly structure.
WebJunction offers a spreadsheet that includes items such as staffing, services, hardware and software. The advantage of this template is that it shows a five-year budget term and can be used for large companies with up to 120 employees, so you don’t need to change it when your business grows.
Axia’s Excel worksheet
The Excel worksheet by Axia includes a brief set of instructions. The document contains paragraphs for various needs — like networking, training, data costs, etc. — but you can customize it according to your requirements.
Editor’s note: Excel is included in Microsoft Office 365 from GoDaddy.
3. Go! Create your structure.
Structure is king.
A well-structured IT budgeting template lets you store information about all technology-related expenses in a single document, significantly reducing the time you spend on accounting. Although you get a template, you need to customize it according to your business plans. The core components of any IT budget include:
- Staff expenditures
- Administrative costs
- IT services and support
These broad categories can cover many components, so we need to get more detailed and divide our plan into subcategories.
If you have an in-house IT department, aside from salaries you must also fund bonuses, office perks, recruitment and retention. When you outsource IT, including hiring remote workers, you will avoid paying full-time employees, although contractors’ fees should be indicated in the IT budgeting template.
- Bonuses and perks
- Staff augmentation
In this section of your IT budgeting template, you’ll list all the gear you require for your company to run smoothly. Indicate the cost of your devices as well as repair and replacement expenses in case they get broken.
- Devices — laptops, PCs, tablets, etc.
- Replacement and repair
Hardware without software is just a pile of plastic and metal. Your office manager needs a licensed copy of Microsoft Office, programmers need access to tools and platforms, and some application updates are also paid. If you don’t want to use low-quality, fishy apps, include software in your budget.
Include everything you purchase to ensure your office operates comfortably and smoothly, such as utility bills and internet connectivity fees. Don’t forget rent costs.
- Office rental charges
- Office supplies
- Telecommunication bills
IT services and support
This part of your IT budgeting template is dedicated to all the third-party services your business uses. Enter the data about your payments for web hosting, security measures, maintenance and repairs.
Speaking of distributing funds, salaries usually take about 50 percent of your gross revenue, according to the Society for Human Resource Management. About 15 percent of your budget will be spent on hardware and software. Allocate about 25 percent of IT budgeting on office needs. Consulting, various services and telecommunication cost an additional five percent, and keep the rest for risks and unplanned purchases.
On the homestretch: Why plan your IT budget?
So, why is it so important to plan your IT budget using an IT budgeting template?
Avoid extra expenditures
IT budgeting allows you to manage your funds wisely. When you have to pay your team bonuses for their great performance, you won’t rush to buy the latest Mac computer for yourself.
Reveal your needs
Have a look at your IT budgeting template to understand where you’re spending too much, and how you can make better investments. Your completed document will reveal whether you should stay the course or make adjustments.
Make expenses predictable
Although you cannot foresee everything, every successful business owner knows they must plan well. Controlling expenses on every stage makes your financial affairs transparent and allows you to save more money, or invest funds back into your company.
Monitor net profit
Are you profiting from the hard work you put in or not receiving any return on your investments? You’ll find the answer when you plan your budget.
Ideally, your budget will be focused on meeting the demands of your business.
Buying expensive equipment just for the sake of purchasing it won’t make your company profitable. If you invest in IT, make sure it helps you make money.
Shape your strategy
Budgeting lets business owners better plan a strategy, and consequently, build relations with clients, investors and vendors as well as set sales plans.
The future is in technology, and the world’s largest corporations are investing significantly in artificial intelligence, big data, and the Internet of Things. Whether you’re dreaming of taking advantage of the many ready-to-use tech solutions, developing an app or becoming the new SpaceX, starting with a solid IT budget is a must!