It is late October, which means somewhere between the day job and the Christmas rush, you are probably sketching out what next year looks like. For most small businesses, every line of that plan gets proper attention except one: IT, which gets last year's number plus a bit, and a hope that nothing breaks.
That approach works right up until it does not. So here is a better way to build the IT line of your 2027 budget, in plain English, including two costs that are specific to next year and will catch out anyone who misses them.
What actually belongs in an IT budget
Six categories cover almost everything. If your budget has a single line called "IT", splitting it into these is half the job done:
- Support. Whoever keeps it all running, whether that is a provider, a person, or currently nobody (which is also a choice, just an expensive one deferred). We have written before about what IT support actually costs.
- Licences and subscriptions. Microsoft 365, your line-of-business software, security tools. The quiet grower in most budgets.
- Connectivity and phones. Broadband or leased line, failover, and the phone system.
- Security and backup. A line of its own, not a sub-bullet of support. More below.
- Hardware replacement. The one everyone skips, then feels in year three.
- A contingency. Something will happen that nobody predicted. A modest buffer turns a crisis into a line item.
The two 2027 costs people will miss
First: the analogue switch-off lands in January. Openreach turns off the old phone network on 31 January 2027. If your business has not yet moved off traditional lines, that is not a mid-year maybe, it is a cost in the first month of the year, and the engineering calendar around the deadline will be chaos. We have a full guide to choosing the replacement system. If you have already moved, budget the saving instead: the copper line rental stops.
Second: the hardware that quietly aged. A lot of businesses bought machines in a burst a few years ago and have replaced nothing since. Those machines hit their slow, unreliable years together. Which brings us to the next point.
Budget hardware as a cycle, not a crisis
The expensive way to buy hardware is all at once, every five or six years, when everything fails together. The cheap way is a steady cycle: replace roughly a fifth to a quarter of your machines each year, oldest first. The spend becomes flat and predictable, nobody works on a machine past its useful life, and you never face a single eye-watering invoice.
A machine limping through its sixth year rarely shows its cost on an invoice. It shows up as minutes lost to every slow start-up, multiplied by every working day, usually costing more in wages than the replacement would.
Audit the licences before you renew them
Subscriptions only ever drift upwards. Licences added for starters and never removed for leavers, plans a tier bigger than anyone uses, tools someone trialled in 2024 and nobody cancelled. We covered this in our guide to cloud IT services, and the advice stands: an hour spent auditing licences before the renewal date is routinely the easiest money a business saves all year. Do it before the budget is set, not after.
Security is a budget line, not a leftover
If 2027 is the year your business takes security seriously, the budget is where that decision actually happens. The core items are not expensive, but they are real: multi-factor authentication everywhere, a Cyber Essentials certification (increasingly demanded by insurers and contracts), proper backup including Microsoft 365, and a tested recovery plan. We wrote recently about what happens to businesses that skip that last one. Pricing the basics into the plan beats pricing the incident into the aftermath.
The real goal: no surprises
A good IT budget is boring. The test is not whether the number is big or small, it is whether anything that happens next year was unpriced. That is also the honest case for fixed-price managed support: it converts IT from a series of surprises into something closer to a utility bill, one number, known in advance, covering the lot. Whether that is with us or anyone else, it makes the budget conversation dramatically shorter.
The question to ask before December
Whoever looks after your IT, ask them this while the 2027 plan is still a draft:
"What is coming next year that we should be budgeting for now?"
A good provider has a real answer: which machines are due, which licences renew, what the switch-off means for you, what security gaps are still open. If the answer is silence, that is worth knowing before January rather than during it.
How we help
For the businesses we support, this is a standing part of the service: a managed IT relationship includes a roadmap, so the budget conversation happens with a list of what is actually coming rather than a guess. If you would like a second pair of eyes on your 2027 IT numbers, or you do not have a number at all yet, we are happy to walk through it with you. It takes an hour, and it is a far better hour than the one spent explaining a surprise invoice in March.