How to plan an IT budget for a small practice

Start with the recurring cost, in one number

Add up what you pay every month today: your managed IT plan or support agreements, Microsoft 365 licences, your line-of-business software, internet, phones and any backup or security subscriptions. That total is your baseline, and it is the number a practice owner should know by heart — not because it cannot change, but because a decision about IT is really a decision about this number.

• Managed services — usually per user, per device or per site
• Licences — Microsoft 365, your practice-management or EHR software, industry tools
• Connectivity and telephony — internet, phones, any site-to-site links
• Continuity — backup, offsite copies, and the security tooling you rely on

Then the lifecycle: what dies this year

Hardware has a useful life, and the honest way to budget for it is to list it. A workstation is normally good for four to six years; a server for five to seven; network gear for five to seven with the occasional battery or power supply in between. Write the purchase year next to each item and you can predict replacements instead of discovering them on a Tuesday morning.

This is the single most useful thing a vCIO conversation produces: a spreadsheet with three columns — what you own, when it was bought, when it is expected to be replaced — and a cost per year that stops being a surprise.

Separate the three kinds of spend

Practices get into trouble when these are mixed together in one line, because the trade-offs disappear.

• Keep it running — support, monitoring, patching, licences, backup. Non-negotiable; the cost of having no IT department.
• Keep it safe — security tooling, email protection, training, and the compliance work that goes with your industry.
• Move it forward — projects: a migration, a new office, a software rollout, a network refresh. Optional, and priced before it starts.

Leave a contingency, and write the assumptions down

A budget with no contingency is a wish. Ten to fifteen percent of the annual figure is a reasonable place to start, and it is spent on the order of events nobody predicted — which is most of them.

Finally, record the assumptions: how many staff you expect, whether you are opening or closing a site, whether a software renewal is coming. A budget is only as good as the assumptions written beside it, and a provider who will not show you theirs is a provider who is guessing.