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Business Case: The Cost of IT for a Small Business in the UK

Business revenue to IT budget.......

Before we talk about the cost of IT Service we should look at how much you should be allocating to your IT budget each year as a percentage of overall revenue. The average across all business sectors, a SMB (Small Business) will spend about 6-7% of its revenue on Information Technology.


Average Price List for Small Business IT Support in the UK

You might be wondering how to calculate IT support costs. However, there is no easy and quick IT Services costs calculator.


The given price list includes average costs based on hourly and monthly IT support costs from experienced and certified suppliers.

1) Ad-Hoc IT support costs – £75/hour Approx. (plus call out)

Ad hoc business IT support is the most common model. It can be delivered via on-site visits delivered by an IT engineer coming to your business, or sometimes it can be remote support. This is always a reactive service. Costs Ad Hoc support costs typically start at around £60 per hour but cost around £75 per hour is an average. If calling the service provider out for on-site work, there may also be “call-out” charges to cover the travel expenses. Pros There are no ongoing costs of this IT support service, and you will only pay for them carrying out the fix. You can switch provider easier as there is usually no contractual agreement. Cons Ad-hoc support services lack preventative maintenance, little strategic alignment with your business needs, no monitoring, and higher effective billable rate, just to name but a few. The statistics also suggest it is also in the interest of the suppliers for things to go wrong and take a long time to fix.

2) Pre-paid IT support costs – £80/hour Approx. (bundled, purchased in advance)

3) Fixed-rate IT support contract – £25 per computer, per month Approx.

4) Fully Managed IT Support – £30 per user, per month Approx.

The Cost of IT to a Small Business in the UK

The cost of IT services for small to medium (SMB) businesses can fluctuate across the UK, and every IT Services company has its own pricing policy and services or products it delivers.

Your budget should be around £150 per user per month for a Managed IT Service plan from a reputable company.


This cost is an approximation, and business IT requirements can vary depending on the type of products and services your business needs, business vertical and size of your business.

Let us explore some factors which influence the costs of your business IT requirements.

If you are researching SMB IT service costs, then you will havealso considered the cost of hiring your own in-house IT person.


Thats never a simple task to hire an IT employee for a SMB, keeping in mind the cost of an IT person may be in the £30,000 to £80,000 range per annum, depending on the skill levels required and their experience.


Then there is the scenario of illness, the one person you were counting on is out for a day or a week. There is also the scenario of empire building, which happens often as most business owners do not understand IT or want to understand IT.


The truth of the matter? You just need more than one technician that is not going to impact on operational costs. Most small companies either do not have the budget, or just cannot afford to hire even an IT employee. For this, most small businesses move to the IT company market to try and find a reliable and affordable IT Services company.





What Is the Cost of IT Services for a Small Business in The UK?

The average hourly rate for IT services in the UK can vary, but it is common to expect to pay anywhere between £50 to £150 per hour.


On average, a self-employed technician can charge anywhere between £40-£80 per hour, but a professional and experienced IT company will charge more in the range of £80-£150.


The average cost of IT support services can vary from region to region, but overall, these numbers will work when looking at computer repair and break & fix services.


How Much Should You Pay for Ad-Hoc IT Support Services?

The two main price models that are widely used by IT support companies are known as “Break & Fix “, and the other is called “Managed IT Services “.


You will pay around £70-£100 for an hour for “Break & Fix” services and about £150 per user for fully “Managed IT Services”.


Managed IT Services are cost-effective and are commonly preferred by SMB’s since they have money saving built into them the more you require the service or as the business grows or contracts.


There is a significant difference between Break & Fix and managed IT Services

Break & Fix is when you need an IT support company for IT issues. Although a Break & Fix seems like a cost-saving model, it has its drawbacks too. This is usually a reactive service.


Firstly, you can stop expenditure quicker using the Break & Fix approach. However, your costs more difficult to predict or to calculate your IT costs or budget, and you will not have any ongoing protection and monitoring for your systems.


Let us suppose you own a veterinary business with 15 employees. You need to call an IT company a few times a week to fix ongoing small computer issues and one big problem weekly.


Let us suppose again that you consumed 20 hours of support and Break & Fix services for the week. Using the average rate of £75 per hour, you need to expect to pay a total bill of £1500 for just one week.





Conclusion

From the first paragraph you can see approximatly how much an SMB should be budgeting for IT when compared to overall business revenue. You can see from the above analysis there is a requirement for all types of support depending on business requirements.


A managed service does give a business owner more time to focus on whats important to their business and not lose time with IT management or issues, this will come at a price, but how much does IT take a key staff member away from the daily duties.

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