What is the average IT budget for small business owner from their business revenue

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What is the average IT budget for small business owner from their business revenue

Hello! Thanks for your question about the average IT budget for small business owners as a part of their business revenue. The most useful sources I found to answer your question are: searchcio.techtarget.com and techvera.com. The short answer to your question is that small business owners in the US spend on average around 6.9% of their revenue on IT, where a small business is defined as having revenues below $50 million. I was not able to find statistics that were specifically related to small businesses in the state of Florida, however since these numbers relate to publicly traded US companies I have assumed that on average these would also apply to businesses in Florida. Below is a deep dive of my findings.

BACKGROUND
How much to spend on IT is a question that is asked by many business leaders. There is no straight forward response to that question as the answer depends on a number of variables such as, but not limited to, the economy, the sector in which the business operates and its financial position. On average, businesses spend around 4-6% of their revenue on IT and this is also recommended by CIO magazine. Small businesses generally spend higher than larger ones.

In a study on IT spending for publicly traded companies in the US it was reported that small businesses, those with revenues below $50 million, spend 6.9% of their revenue on IT. Medium sized companies (with revenues between $50 million and $2 billion) spend around 4.1% and large sized companies (with revenues greater than $2 billion) spend around 3.2% of their revenue on IT.

SPENDING TRENDS
Most of the IT spend has moved to 3 main areas, which include: the Cloud, Mobile accessibility and Virtualization. In a survey of over 1,100 small businesses it was reported that the top IT changes implemented by businesses in 2016 included updating of network security, upgrading of networks and computer hardware replacement. Among small businesses it was reported that 57% of larger small business (with 101 - 499 employees) use or were planning to use web-based or subscription-based software compared to 38% of smaller businesses (with 5 -10 employees).

GROWTH IN IT SPEND
In general, the global estimates for IT spend in 2016 were expected to remain flat. For North America in particular it was expected that 69% of IT organisations were planning to increase their operational IT spend, however capital spending on IT was expected to remain flat while there were expected to be only minor increases in IT headcount. However, in contrast to the overall flat trend in 2016, 42% of small businesses are expected to increase their IT spend in 2017.

CONCLUSION
To wrap up, small businesses in the US, with revenues less than $50 million, spend on average 6.9% of their revenue on IT. Additionally, 42% of small businesses are expected to increase their IT spend in 2017. Although we could not find specific IT spend data on small businesses in Florida we can assume that the same percentage on average would also apply to them. Thanks for using Wonder! Please let us know if we can help with anything else!
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