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How to Reduce IT Costs in a Small Business

How to Reduce IT Costs in a Small Business

Purchasing, installing, and managing technology in a small business can be prohibitively expensive, especially if you don’t have much experience in IT management. So what steps can the average small business owner take to keep these costs low while simultaneously maximizing productivity with the best technology they can afford?

Work With a Managed IT Services Provider

One of the best strategies is working with a managed IT services provider. These types of companies essentially serve as an external arm of your IT department. They can help you plan and brainstorm, they can help you analyze your current needs, they can identify areas of overspending, they can improve your security, and they can ultimately boost the efficiency of your organization.

The downside here is that managed IT services cost money. Each month, you’ll pay a fee to continue utilizing their services. But don’t be mistaken; this is not just an additional expense. In fact, utilizing managed IT services can save you money in the long run, and in several ways.


  • Eliminating the need to hire a team. If you work with an IT services provider, you won’t have to hire your own in-house team. Employees can be very expensive, and if you’re forced to recruit, interview, and deal with turnover on a regular basis, those costs only escalate. Instead, you can get all the manpower you need for a predictable, reasonable fee.
  • Building an efficient IT infrastructure. IT experts can also help you build an efficient IT infrastructure. They can help you figure out exactly what your needs are, exactly which products and services you need to meet your goals, and how to scale in the future. You’ll see far less waste and your organization will be able to operate much more productively.
  • Minimizing expenses. Your managed IT services provider can also work with you to keep expenses low. From making strategic cuts to practicing more efficient sourcing, they can make recommendations so you stay within your budget.
  • Preventing costly mistakes. In the IT world, even small mistakes can be extremely costly, especially when those mistakes lead to a catastrophic incident like a data breach. With smart planning and effective prioritization, your external IT department can keep these risks to a minimum.

Don’t Fall for the Sunk Cost Fallacy


The sunk cost fallacy is a common cognitive bias that causes people to double down on bad investments. For example, if you subscribe to a piece of software thinking it’s going to help you increase sales, and you continue paying for it for six months, you might be inclined to keep paying for it so you can at least justify what you’ve already spent.

Generally, this is a bad idea. While it may be hard and it may go against your instincts, it’s important to cut spending on products and services that aren’t providing you with a return on your investment – no matter how much you’ve spent or how long you’ve used them.

Switch to the Cloud


Many businesses can save money by switching to the cloud. Instead of buying and maintaining your own in-house servers, you can rely on external servers that are managed on your behalf. Cloud-based services tend to be more accessible, more scalable, more flexible, and even more secure, so they’re at least worth considering.

Shop Used

When it comes to devices and hardware, consider shopping used. Used and refurbished devices from the past year or two are just as good as new ones in most cases, But they’re probably available for a steep discount. It’s a relatively small step that could save you thousands of dollars as you continue buying new equipment.

Reduce and Eliminate, Rather Than Freezing

Some business owners are attempted to freeze or temporarily pause certain expenses related to IT. While this can help you out of an immediate financial crisis, it’s not going to help you maintain sustainable financial practices. It’s usually better to reduce or eliminate those expenses permanently, finding substitutes if necessary.

Rely on Open-Source Software


Open-source software is software that’s been made available for free, for both personal and commercial applications. There are pros and cons to using open-source software, but if you’re trying to save as much money as possible, you should definitely consider using open-source versions of the platforms you need. Just make sure you do your due diligence and you know what you’re getting into; since the code is openly available, you can figure out exactly how each platform works.

IT needs will always be expensive to meet, but with the right strategies, you can keep your costs low without sacrificing productivity or security. Work with a team of professionals so you can accurately estimate your return on investment for each financial move.

Miljan Radovanovic

Hi, I am Miljan. As a content editor at PirateBrowser, I'm the one who polishes and publishes captivating blog content that helps us shine online. Beyond work, you'll often find me on the tennis court or reminiscing about my football days, where I learned valuable lessons in discipline, strategy, and teamwork.

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