How Much Does Small Business IT Support Cost in London?

How Much Does Small Business IT Cost?

The average cost of IT support for a small business can vary greatly across London. In this article, we’ve tried to lay out all the options we think you should consider, with pros and cons for each and what the approximate cost is likely to be. As you’ll see below, there’s a good number of options available to you, and with so many options available, price ranges can vary drastically.

 

Is your business at a stage where you’ve decided that to continue to grow effectively, you need to delegate responsibility of some or all your IT to a person or team that specialises in supporting and managing IT systems? If that’s you, firstly congratulations!  Launching and growing a business is more challenging than ever, so to be in the position where you’re considering making an investment which, if successful, will help your business to achieve its next phase of growth is worth some recognition. Kudos to you.

But if you have never hired an IT specialist before, one of your first questions is likely to be “How much is IT support going to cost me?”

 

Do I actually need an IT person or department??

This is an important first question to ask because the tools, applications and platforms available in this modern age make it relatively straightforward for some businesses to grow from start-up to a reasonable size (10 to 50 employees) without any real or perceived need to consider hiring an internal IT person or seeking external IT help. In fact, we’ve come across companies that have managed to grow to 40-60 staff without any dedicated IT resource.

There are so many factors that will determine whether a particular company in a particular sector might have a greater or lesser need for an IT specialist to pick up the reigns, allowing the focus to remain on business growth as opposed to tech distractions. That said, we’ve worked with many customers who had between 10 and 20 staff when they first engaged us (some with less than 10), but who were about to embark on a steep growth plan and wanted to make sure their IT house was in order and would be able to cope with the impending rocket-fuelled growth trajectory they were planning.1

If your business appears to be ticking along with minimal IT issues, you might want to consider the first option…

 

Option 1 – Handle IT yourself

For the reasons mentioned above this is a valid option especially as, at face value, it appears to be the cheapest because no additional outlay is required.

You might be able to keep on top of things and revert to our good friends Google or YouTube when you get stuck and try to find a solution that some kind person has posted online.

Costs:

This is tricky to calculate because you’re not going to be spending any money as such, but we’ll try to show you the hidden costs involved.

We’re going to assume you’re at management or director level so your salary, or worth is £50,000 – £150,000 per annum (This conservatively places your day rate at approx. £210 – £625 per day – based on you working 20 days a month for 12 months per year)

If dealing with IT issues (purchasing hardware, setting up new devices, configuring software, dealing with IT vendors and being the go-to person when staff have an IT problem) takes up an average of 5 hours per week, that’s taking up around 260 hours of your time per year. That’s 32.5 hours based on an 8-hour day.

So that’s between £570 – £1,695 per month.

Make sure you add to this the opportunity cost of your time which could have been better spent on something more in keeping with your value to the business!

Pros:Pros:

  • Zero additional outlay


  • Limited depth/breadth of IT knowledge

  • You’re probably not an IT expert, so finding fixes may take a lot longer

  • Your ‘fix’ may not be the best fix!

  • You lose out on time you could be working on your core business

Option 2 – Delegate IT to an Existing Employee

You might have one or more existing members of staff who have a decent level of aptitude with IT and are willing to help troubleshoot technology issues for you and their colleagues.

They may have a good understanding of a broad base of IT issues and a clear plan on how to address them. Not only that, they are confident that they can handle the proactive and reactive elements to supporting and managing IT in parallel with carrying out their day job(s). None of this is impossible, but it would prove a challenge for anyone stepping up to take on this additional responsibility.

Costs:

As with Option 1 above, we’ll assume there’s no additional outlay and whoever you delegate this work to will not get a pay increase.

Average staff salaries are £20,000 – £40,000 per annum (Assuming they work 20 days a month for 12 months per year, their equivalent day rate is approx. £85 – £170 per day)

If they are spending an average of 5 hours per week on IT related issues, that equates to around 260 hours of their time per year. That’s 32.5 hours based on an 8-hour day.

So, the cost comes to between £230 – £460 per month

Again, don’t forget to add the opportunity cost of their time which could have been spent working on their core role which they’re likely best skilled to perform.

Pros:Cons:

  • Zero additional outlay

  • No need to hunt for a new employee or service provider


  • Limited depth/breadth of IT knowledge

  • Dealing with IT issues is a distraction from your employee’s main role

  • What if your go-to person is ill or on leave?

  • Difficult for employee to stay up to date with technology changes

  • Potential internal tensions when other staff view their IT issue being more important than the employee’s principle tasks!


 

Option 3 – Hire an IT Support Person (or team)

You might not have enough IT savvy internally for you or one of your team be able to confidently take responsibility for IT. If this is the case, you may want to consider hiring one or more IT staff as employees.

If you hire well, you’ll benefit from having a person or team that is a capable IT professional and, over time, builds a strong understanding of your business and its goals. Having an effective go-to person or team on-site that your staff can turn to when they have an IT issue will pay dividends. Your staff will be happy that issues get resolved quickly so their productivity is not affected.

However, as you’ll know, the hiring process can be fraught with challenges. You might be asking:

  • “What skills should I be looking for?”
  • “How do I write a good job description?”
  • “How am I supposed tell a good candidate from a bad one based on their CV?”
  • “What questions should I ask them at interview?”
  • “How can I be sure I pick the right candidate from the shortlist?”.

These questions are universal, regardless of whether you are hiring for technical staff. Then there’s also the cultural fit to consider!

There are different approaches to advertising the role. Some are free, like approaching your network of contacts, posting on social media, or placing ads on free job boards. Some involve varying degrees of cost, from buying a paid advert (online and/or offline), paying a fixed fee recruitment company or a traditional recruitment agency who may charge between 10% to 25% of your hire’s first years’ salary.

Costs:

Typical range from £30,000 to £60,000 per annum, depending on the level of experience and technical skills.

Additional Costs to Factor In
Approaching Business Network:£0
Posting on Social Media:£0
Fixed Fee Recruiter:£500 - £2,000
Recruitment Agency:£3,000 - £15,000

To compare like for like with the monthly costs of Options 1 & 2, you’re looking at a minimum of £2,500 – £5,000+ per month per head

Other ‘Hidden’ Costs

Don’t forget the other hidden costs of hiring staff. Things like Employers NI, Paid Leave, Pension, Healthcare and other possible benefits. Also, you’ll need to make sure each IT person attends regular training courses to keep up to date with the fast-paced developments in technology.

Pros:Cons:

  • Employee(s) whose dedicated role is to support IT

  • Go-to person on site to deal with IT issues

  • IT issues get resolved quicker

  • Appropriate IT kit is purchased

  • An IT strategy or roadmap is implemented


  • IT knowledge is limited to what the individual knows. They only know what they know. How do they deal with stuff outside their skillset?

  • Cost of hire. But you might get lucky and find someone through by posting the job for free on LinkedIn post, LinkedIn job ad, Indeed.com, Job.com, etc.

  • Who do you turn to when they are ill or on holiday?

  • Training costs for maintaining, extending technical skillset


 

Option 4 – Outsource Your IT to a Freelancer or Contractor

This may feel like a lower risk option than biting the bullet and hiring someone.

With a contractor or freelancer, although you may be paying a premium daily rate for their services, it is easier to cancel their contract than if you needed to terminate an employee for any reason. Also, you only pay for the days you use them. If they’re sick or on holiday, you don’t pay. This gives you a greater degree of control on spend.

You still do not overcome the same issue you face with a permanent employee; in that you’re limited to their knowledge or skillset. Technical problems which fall outside of their expertise will take them longer to solve, and you’ll be paying for the time it takes them to learn or fix the issue.

Costs:

Typical IT Support contract rates in London, range from £110 to £410 per day, depending on the level of experience and technical skills. The median rate is currently £193 per day.

If you source this contractor via a recruitment agency, you’ll typically be charged another 10-20% per day on top for the privilege – increasing the day rate to £120 to £455 per day.

This equates to a cost of £2,400 – £9,100 per month based on you needing the IT contractor for 20 days per month – hopefully this would be highly unlikely!

Pros:Cons:

  • Access to ‘expert’ skills

  • Can use services on an as-needed basis

  • Only pay for hours/days hired for


  • May only have a surface knowledge of your IT environment, or business needs

  • Expensive

  • Might not be available when you need them (might be on another gig)


 

Option 5 – Outsourcing Your IT to an IT Support Company

IT Support Companies come in different shapes and sizes and offer varying degrees of services to their business customers.

Break/Fix

‘Old school’ IT support companies offer what they term as a “Break/Fix” model. This means that you don’t pay them any ongoing monthly fee (however some do insist on charging you a small retainer) and they will visit your site if you call them to tell them something is broken and work to fix that issue as soon as they can. They will then bill you for the hours it took to fix the problem(s), including travel time to and from your site. Not unlike your local car garage, they may also bill their time in 15-minute, 30-minute or 1-hour blocks (always rounding up of course!)

This might sound attractive if you do not want to commit to any IT spend unless you absolutely must. However, there are a few flaws with this arrangement.

  • Firstly, and most importantly, if your systems are down or something is broken, the likelihood is that one or more of your staff are not able to do their work. This lack of productivity costs your business money.
  • Secondly, there will be uncertainty as to how long you will have to wait before the issue is resolved. Will it be hours or days or weeks? – and you could find your bill racking up the longer it takes to resolve the issue.
  • An unintentional, but valid issue from this type of arrangement is that the break/fix IT Support company only makes money when you are in crisis! The more issues you have, the more money they earn! What’s their incentive to deliver solutions that reduce your ongoing need for their services? And with each issue comes more disruption and downtime.

Still, this could be a viable option for you if you believe you only have a few IT issues a month/year. But remember, if you don’t have issues, they don’t get paid!

Costs:

Expect to be charged £25 – £100 per hour for ad-hoc IT fixes (Double these fees for emergency or out-of-hours work)

Assuming an average of 5 hours per week (20 hours per month) of support needs, you can expect to pay £500- £2,000 per month

Pros:Cons:

  • Only pay for IT when there’s a problem

  • No contractual commitment


  • Downtime when waiting for engineer to arrive

  • Reactive IT support means you’re paying for time spent investigating the potential issue

  • You don’t know how long it will take to fix the issue. All the while your bill is racking up

  • They profit from your crises


 

Block Hours

Some IT support companies might offer you a block of support hours that you pay for up front.

This might mean the equivalent cost per hour you pay may be lower than the break/fix hourly fee above, saving you a little bit of money. Still, there is a degree of uncertainty as to how many issues you will get fixed before you’ve eaten into all the hours you purchased in your block.

The block hours are either issued in standalone blocks where there is no commitment beyond the size of block you purchase, or you can have a contract where you buy a rolling monthly block. These are normally issued on a ‘use it or lose it’ basis – like a mobile phone plan: if you exceed the purchase hours, you will get billed an hourly fee for the overage. If you don’t use up the hours – they won’t be rolled over to the next month.

This charging model is difficult for you and your IT Support provider to get right. It may be a case of putting your finger in the air to guess at what number of hours support you may need based on the historic number of issues you’ve had.  This can be tricky and doesn’t account for unexpected big issues that may take you well over the allotted time in a month, and thereby proving to be quite costly.

Costs:

Assuming you purchased a monthly block of 20 hours, you can expect to pay £400- £1,800 per month

Pros:Cons:

  • Some certainty of access to IT support when you need it

  • Good if you’re confident of how many support hours you’ll need in each month, or on a rolling monthly basis


  • The equivalent cost per hour increases if you don’t use all the support hours

  • Any unused hours do not roll over to the next month

  • Any excess hours used are chargeable, typically at a premium


 

Option 6 – Outsourcing Your IT to a Managed Service Provider (MSP)

An MSP may look like an IT Support company. They are both IT service organisations that small to medium sized businesses and enterprises (SMBs/SMEs) outsource their IT needs to. However, there is a key difference in that MSPs take a proactive approach to IT.

Rather than waiting for something to break or shut down, MSPs ensure a customer’s IT can avoid most tech issues in the first place. This is huge, because IT related downtime can have a devastating impact on revenue and reputation—especially for smaller businesses trying to grow.

MSPs are often viewed as the guardians of IT, delivering ongoing monitoring and management of customer applications (email, web site, security, etc.) and IT infrastructure remotely. This is typically accomplished through remote monitoring services, which allows them to keep tabs on the health of their customers’ IT environments, change and update systems, and troubleshoot problems. MSPs closely monitor a wide variety of IT solutions a business has implemented, including web apps, desktop and server management software, backup and disaster recovery, storage management tools and security software.

Their prime objective is to ensure all their customers’ business systems, operations and networks remain up and running. To be confident that they can do this, MSPs typically audit a new customer’s systems to check it meets minimum standards. If for whatever reason they fall short, some project work might need to be undertaken to get their devices, licences, operating systems, networks, etc. up to scratch. The cost of this will depend on the customer and how antiquated, poorly designed, or insecure their current set up is.

With your IT environment achieving at least the minimum standard, an MSP will be able to provide the ongoing monitoring and management of your applications and IT infrastructure. You will be charged a fixed per-device or per-user amount per month for the provision of this service. Within that fixed monthly fee, you should expect several service elements to be included and for there to be no limits on the amount of support provided each month, giving you peace of mind that your IT is covered as well as financial predictability. Your monthly fee can vary depending on the number of ‘included’ services provided. You should expect your MSP to provide you a suite of services tailored to your business needs and/or sector.

Some common service examples include, but are not limited to:

  • Application monitoring/management
  • Helpdesk
  • E-mail
  • Security
  • Storage
  • Backup and Disaster Recovery

Of course, the purchase of new IT hardware and any non-business as usual projects you wish to undertake would attract additional charges.

Costs:

Monthly fees range from £25 – £100 per user per month. As mentioned above, this mainly comes down to the blend of services that are included in your contract. Expect a more comprehensive package the higher up the scale you go.

  • So, a 10-employee company could pay between £250 – £1,000 per month to obtain the services of an MSP. However, beware the MSP that offers low cost services to win your business; they often then struggle to deliver a valuable service, inevitably costing their customers more money, causing reputational damage or risking their security.

A 20-employee company can expect to pay £500 – £2,000 per month.

Pros:Cons:

  • Peace of mind that your IT systems are being monitored 24/7

  • Depth and breadth of IT knowledge

  • SLA backed support means you will not be affected by sickness, holidays or absenteeism

  • Comprehensive support covering devices, email, cloud services, cyber security, etc.

  • Predictable fees

  • Scalable team of IT engineers that grows as you grow

  • Service Level Agreements in place for response and resolution time for issues

  • Work well with your in-house IT Teams

  • You and your staff can focus on your core business


  • Support will be delivered remotely. If you have an issue that can only be fixed onsite, you’ll wait for an engineer to get to you

  • The support team will not have as in-depth knowledge of your environment when compared to onsite IT staff. (Comprehensive documentation normally helps to overcome this).


 

Option 7 – Get a Friend with IT Skills to Help for a Favour

We’ve come to the aid of businesses who knew a ‘mate’ who volunteered to help look after IT for free or an exchange of services, or something similar.

This arrangement often seems like a good idea initially and might not prove to be an issue…if there are no real issues. But the proverbial s**t has hit the fan when major problems occur and that mate has not been available to assist, or the issue has been bigger than the mate can handle. On the flip side, we’ve found that staff build up an inertia to contacting the IT person because they become accustomed to not getting prompt or suitable resolution to their issues, so they take the default position of just muddling through.

 

In short, you shouldn’t risk your business (or your friendship) on someone that you can’t necessarily rely on. Would you have any reasonable grounds to complain if they aren’t available when you need them, or if they make a mistake? They may argue that you can’t complain as you’re not paying them…awkward!

We apologise that our view on this option is a bit biased, but there have been too many instances where we have had to pick up the pieces…

Costs:

In theory, it costs you nothing (maybe the occasional beer). It could cost you your business! And no, we’re not being over-dramatic!

Pros:Cons:

  • Costs you nothing


  • Can cost you everything