The Benchmark
Across industries, small and mid-sized businesses spend 4–7% of revenue on IT. Professional services and financial firms trend higher (6–9%); retail and hospitality trend lower (2–4%).
A useful per-employee sanity check:
If you're spending less than the "basic" band, you're almost certainly carrying hidden risk — usually in backups, security, or vendor sprawl.
Where the Money Goes
Four Line Items Owners Underestimate
1. Cybersecurity insurance. Premiums have doubled in the last three years. Most policies now *require* MFA, EDR, and offline backups — without them, claims get denied.
2. Backup that actually works. Cloud file sync (OneDrive, Google Drive) is not a backup. You need immutable, off-site, tested restore.
3. Offboarding. Every departing employee touches 40–80 SaaS apps on average. Without a process, ex-employees keep access for months.
4. Shadow IT. Departments buy their own SaaS on credit cards. In most SMBs we audit, the real SaaS spend is 30–50% higher than finance thinks.
How to Right-Size Your Budget
Start with an audit: total IT spend (all departments, not just IT's budget) ÷ revenue. If you're under 3% or over 10%, something is off.
Get a free IT spend benchmark — we'll compare your numbers to companies your size in your industry and flag the gaps.
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