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Could Cutting IT Costs Save Your Startup?

There are some things that are inevitable when you’re starting up in business. You’re going to be spending much more money than you probably anticipated – and a lot of that money is likely to be going on IT expenses.


Painful right?

The thing is, there’s a workaround that doesn’t compromise on anything. If you’re looking at IT staff salaries and wondering if you’re in the wrong line of work, you’ll be pleased to know that you don’t have to build your own IT team. You’ll also be pleased to hear that deciding against building your own IT team isn’t going to compromise on what you get from IT.

The secret is – finding a good managed IT service provider.

If you can, you’ll save yourself the enormous amount of money and hassle that’s involved with nurturing your own IT team – and you’ll be bringing onboard an expert group of professionals that can potentially push your business in directions you didn’t know you could go.

What’s wrong with in-house IT?

On the surface, it perhaps sounds like an in-house IT team is bad news. In actual fact, that’s definitely not the case. IT teams can be the oil that keeps a very large and complex machine moving. The question isn’t whether or not in-house IT teams are valuable and talented – it’s more about whether or not now is the right time for you to be building that team.

Think about it this way:

The recruitment of one staff member is going to cost you somewhere between $3,000 and $5,000. Now, that’s assuming you only need one person to run your entire IT infrastructure. More realistically, small startups generally require 2-3 people to get their IT systems into place and keep them running.

So, that’s more like $12,000 – $15,000.

Even if you’re sitting on that kind of money right now, don’t forget – this is recruitment cost. You haven’t paid a salary yet.

Add your recruitment cost to the cost of training, accreditations, and baseline monthly staffing cost – and you’re suddenly looking at a figure that’s potentially $25,000 or more.

IT is the backbone of your business

In many cases, this kind of cost is somewhat justified – after all, IT is going to be the foundation that most modern businesses are based on. Get this right and you’ll have solid systems that’ll take you from your humble beginnings to your first million-dollar year.

The thing is, you can get this kind of service without the outlay. In fact, you can probably get a service that’s far superior.

While there are some financially secure IT managers and general staff that may think your startup is worth them taking a risk for – the majority won’t think this way. Not because you’re not talented or you have a poor business plan – simply because they’ve got bills to pay – and startups are not a sure thing.

So, you might not get the cream of the crop.

Great IT service providers do get the cream of the crop though. They can pay well, they can keep people up to date with costly accreditations, and they can promise a dynamic and unique working environment where the scope to learn a huge amount about the systems that power countless startups and enterprises. What’s more, if half of those startups fold, they’ve still got plenty of customers – so there’s solid security too.

Where would you go if you were an IT professional?

In short, talking to a managed service provider isn’t just going to save you money – it’s going to buy you an outstanding team that’s at the cutting edge of their field.

What’s the payoff?

We’re talking now about a world-class IT team that’s going to cost you significantly less than building your own.

Where’s the catch?

Well, depending on how you look at it, the minor catch is that they’re not sitting next to you all the time. For many startups, that’s actually a bonus – especially considering the cost of the real estate you’d need to house a quickly growing team.

So, you need to pick up the phone if you want to talk to your IT team. You’ll also need to book meetings in advance – and you probably won’t have an unlimited amount of time to pitch your ideas to them. In reality though, this isn’t going to be a problem – since this is a team that’s going to be bringing best practice to you.

Whether you’re looking for innovative ways to reduce your networking operation costs; hoping to implement a next-generation SD WAN solution; planning on harnessing the full potential of cloud infrastructure – or any one of thousands of other possible IT solutions that’ll drive your business forward, your provider will already be up to speed – ready to tell you what’s possible.

The downsides of outsourcing your IT are very few – especially when you consider quite how many benefits they bring to the table.

Saving your business?

We started this article with the tantalizing prospect that by cutting your IT costs, you might actually save your startup – and it’s a sentiment we stand by.

Take a look at these statistics from CBinsights on why startups fail:

  • 29% fail because they run out of cash.
  • 42% fail because there’s no market need for their product.
  • 23% fail because they don’t have the right team

Not only will working with a managed IT service provider save you cash – it’s cash that can be spent on driving research and development. A managed service provider also offers an objective set of eyes over systems that will be fundamental to your business – an opinion from outside your team.

Sure, there’s no saying that a managed IT provider would have solved all of those issues that cause startups to fail – but there’s a good chance they could make a big difference.

Before you put your hand in your pocket and start the recruitment process. Talk to some managed service providers about what they can do with your IT. One thing’s for certain; you’re going to save yourself a lot of time, money, and effort – and let’s face it, they’re all things you need in abundance if your business is going to fly.

Author : Kait Walrath

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