The Monthly Number That Never Grew Up With the Business

There is a number in most small businesses that nobody quite owns. It sits in the management accounts under IT, or maybe under office costs, or maybe inside the director's loan account because that is where the last laptop went. It was probably set when the business had fewer staff, no hybrid working and a server in the cupboard. It has not grown up with the company. It is a guessed monthly figure, and it shows.

This is not a criticism of small business owners. Budgeting is hard, and IT is one of those costs that is easy to ignore until something breaks. But the gap between a guessed number and the real cost of running IT now turns up in very visible ways: laptops that take four minutes to open Outlook, subscription creep across three different tools that do the same job, and a cyber insurance questionnaire that asks about MFA, backups and endpoint protection while you quietly hope nobody asks for evidence.

The guessed number problem

A guessed IT budget usually starts with a reasonable intention. Someone says we will spend about fifty quid a month per person, or two hundred a month for the office, and that becomes the number. It gets renewed each year because nobody wants to have the awkward conversation about whether it is still right. Meanwhile, Microsoft 365 licences went up, the team grew, the old server was replaced with cloud storage, and the backup tool that came free with something else stopped being free.

The result is reactive spending. Nothing gets replaced until it dies. Security tooling gets bought after a scare rather than as part of the plan. The business ends up paying more per year in emergency purchases and lost time than it would have paid for a steady refresh. And when the insurer asks whether you have tested backups or enforced MFA, the answer is a shrug and a promise to look into it.

IT is a cost of running the company, like rent, insurance or wages. It is not a hobby, and it is not a single line that can be frozen for three years without consequences.

Four lines that actually drive the number

You do not need a forty-tab spreadsheet. You need four honest lines.

1. Per-seat subscriptions

This is the easy one to underestimate because it arrives as lots of small direct debits. Microsoft 365 or Google Workspace, email security, password management, accounting software, CRM, design tools, project management, backup per user, maybe a phone system. Count the actual seats you pay for and compare that to the actual people who work there. Leavers are a classic source of waste. So are duplicate tools bought by different teams.

Do not downgrade the security essentials to save a few pounds, but do check whether everyone needs the top tier. A licence review once a year is boring and worthwhile.

2. Hardware refresh cycles

Laptops and desktops usually last four to five years in a working business. Servers and network kit may last five to seven. Monitors, docks and headsets have their own slow death. The mistake is pretending hardware lasts forever and then buying five laptops in one panicked week when three fail.

Make an asset register. List the device, the person using it, the purchase date, the warranty end date and the replacement cost. Then work out an annual refresh allowance by dividing the replacement cost by the lifecycle. If you have twenty laptops at roughly a thousand pounds each and you replace them every four years, that is about five thousand pounds a year, or just over four hundred a month. Set that aside. It is not glamorous, but it stops the panic.

3. Backup and security tooling

This line has grown because the threats and the insurance requirements have grown. Backup for Microsoft 365 is a good example: retention in the cloud is not the same as a backup you control. Endpoint protection, email filtering, MFA, patching and logging all cost something, whether it is a subscription or someone's time.

Your cyber insurer will often tell you what it expects. Use the questionnaire as a checklist rather than a nuisance. If it asks about MFA, backups, incident response or staff training, those items need a budget line and an owner. Buying the cheapest possible cover and hoping the questionnaire does not get checked is not a strategy.

4. Someone to call

This is the line people try to remove first. A support retainer or helpdesk agreement is not just a bill for fixing broken things. It is the cost of having someone who knows the setup, patches the machines, handles joiners and leavers, answers the awkward security questions and tells you when a proposed purchase is a waste of money. Break-fix support feels cheaper until you need it urgently on a Friday afternoon.

If the business relies on a friendly nephew or the most patient person in the office, budget for the risk. That arrangement works until it does not, and then it is expensive in a different way.

A worksheet for 2026 that will not cause a panic

Start with a simple list, not a grand plan.

1. List every IT subscription, the number of seats, the renewal date and the monthly cost. Include annual bills divided by twelve.
2. Build the asset register for laptops, desktops, servers, network kit and phones. Add purchase date, warranty end and replacement cost.
3. Add a security and backup line based on what your insurer and your actual risk require. Include MFA, email security, endpoint protection and a backup you can restore from.
4. Add the support retainer or helpdesk cost.
5. Add a contingency of ten to fifteen per cent for the thing nobody predicted.
6. Divide the annual total by twelve and compare it to what you spend now.

If the new number is higher, that is not a failure. It is information. A low number that ignores hardware refresh and security is not a budget; it is a delay. Fix the security gaps first, replace the oldest hardware next, and renegotiate the subscriptions you do not use. Spread the hardware refresh over the year rather than buying everything at once.

Review the number every quarter, not every five years. Senders change, staff change, insurers change and software renewals creep. The monthly number should grow up with the business, even if that means having an uncomfortable conversation once a year. It is still cheaper than discovering the gap when a laptop dies, a spoofed invoice lands or the insurer asks a question you cannot answer.