Most small to midsize businesses today are constantly under pressure to upgrade their information technology (IT). Whether it’s new software, a better way to use the cloud or a means to strengthen cybersecurity, there’s always something to spend more money on.

If your company keeps blowing its IT budget, rest assured — you’re not alone. The good news is that you and your leadership team may be able to control these costs better through various proactive measures.

Set a philosophy and exercise governance

Assuming your company hasn’t already, establish a coherent IT philosophy. Depending on its industry and mission, your business may need to spend relatively aggressively on technology to keep up with competitors. Or maybe it doesn’t. You could decide to follow a more cautious spending approach until these costs are under control.

Once you’ve set your philosophy, develop clear IT governance policies and procedures for purchases, upgrades and usage. These should, for example, mandate and establish approval workflows and budgetary oversight. You want to ensure that every dollar spent aligns with current strategic objectives and will likely result in a positive return on investment (ROI).

Beware of shiny new toys! Many businesses exceed their IT budgets when one or two decision-makers can’t control their enthusiasm for the latest and greatest solutions. Grant final approval for major purchases, or even a series of minor ones, only after carefully analyzing the technology you have in place and identifying legitimate gaps or shortcomings.

Also, remember that overspending on technology is often driven by undertrained employees. Teach and remind your users to adhere to your IT policies and follow procedures. Doing so can help prevent costly operational mistakes and cybersecurity breaches.

Conduct regular audits

You can’t control costs in any business area unless you know precisely what they are. To get the information you need, regularly conduct IT audits. These are formal, systematic reviews of your IT infrastructure, policies, procedures and usage. IT audits often reveal budget drainers such as:

• Redundant subscriptions for software or other tech services,
• Underused or forgotten software licenses, and
• Outdated or abandoned hardware.

You may discover, for instance, that you’re paying for several different software products with overlapping functionalities. Choosing one and discarding the others could generate substantial savings.

As you search for overspending, also look for examples of IT expenditures delivering a good ROI. You want to be able to refine and repeat whatever decision-making process led you to those wins.

Keep an eye on the cloud

One specific type of IT expense that plagues many businesses relates to cloud services. Like many companies, yours probably uses a “pay as you go” subscription model that includes discounts or rate reductions for lower usage. However, if you don’t monitor your actual cloud usage and claim those discounts or cheaper rates, you can wind up overpaying for months or even years without realizing it.

To avoid this sad fate, ensure that at least one person within your business is well-acquainted with your cloud services contract. Assign this individual (usually a technology executive) the responsibility of making sure the company claims all discounts or rate adjustments it’s entitled to.

One best practice to strongly consider is setting up weekly cloud cost reports that go to the leadership team. Also, be prepared to occasionally renegotiate your cloud services contract so it’s as straightforward as possible and optimally suited to your business’s needs.

Don’t give up

To be clear, controlling IT costs should never mean cutting corners or scrimping on mission-critical technology expenses — particularly those related to cybersecurity. That said, you also should never give up on managing your IT budget. We can help you develop a tailored cost-control strategy that keeps your technology current and supports your business objectives.

© 2025

Most small to midsize businesses today operate in tough, competitive environments. That means it’s imperative to identify and reach the right customers and prospects.

However, unlike large companies, your business probably doesn’t have a massive marketing department with seemingly limitless resources. You’ve got to pursue savvy campaigns while also controlling costs. Here are three fundamental ways to get more bang for your marketing bucks.

1. Set a budget, rinse, repeat

Many companies, particularly start-ups and small businesses, engage in “marketing by desperation.” That is, they throw money at the problem haphazardly and hope for good results. A better strategy is to take a step back and set a realistic marketing budget based on factors such as:

• Projected annual revenue (one rule of thumb is to allocate 5% to 10% of annual gross revenue to marketing, but this may not always be applicable),
• Industry benchmarks (such as what similar-sized businesses in your industry spend on marketing), and
• Growth goals (more aggressive growth may call for more dollars allocated).

Unfortunately, you can’t take a “set-it-and-forget-it” approach to your marketing budget. Every quarter, or at least at year end, compare your “marketing spend” to return on investment (ROI) using clear, verifiable financial metrics. Look for both 1) wasteful spending that you can eliminate or reallocate to other parts of the business, and 2) successful spending strategies that you can use for future campaigns. Regular budgetary reviews and adjustments will help your company adapt to industry and market changes without over- or underfunding marketing efforts.

2. Use metrics and technology to assess campaigns

One of the great things about marketing today is that many different metrics can help fine-tune your efforts. Examples include number of leads generated, lead conversion rate and customer acquisition cost. An analytics-driven approach allows you to precisely measure the performance of your marketing campaigns.

Calculating these and other metrics shouldn’t involve pen and paper! You can use various technology tools to gather data, generate reports and track progress. For example, if you use Google Business, it offers Google Analytics. This tool helps businesses track and analyze website traffic and visitor behavior. Other platforms, including most social media apps, offer similar functionality.

To take things to the next level, assuming you haven’t already, consider investing in customer relationship management software. Carefully selected and implemented, one of these solutions can allow you to input, gather, track and analyze massive amounts of data to support marketing campaigns.

3. Avoid common mistakes

As you look to increase marketing ROI, watch out for common mistakes. First, don’t ignore the importance of meticulously defining your target audience. Although casting a wide net may seem like a good idea, doing so often leads to inconsistent results and wasted spending.

Second, don’t go overboard on paid ads. There are many forms of these online — including ads associated with search engines, websites, social media platforms and video channels. On the plus side, they may yield quick results. However, they can also drain your marketing budget if you don’t manage them diligently. A best practice is to start with a small number of paid ads (even just one), test different ways to use them and scale up based on positive results.

Last, never lose sight of the power of referrals. Word of mouth remains perhaps the most cost-effective way to market your business. Encourage satisfied customers to leave positive reviews on your website and social media channels. Consider offering discounts or freebies for referrals or online shout-outs.

Maximize positive impact

At the end of the day, getting a solid ROI from marketing is much more than simply cutting costs. You have to maximize the positive impact of your spending. Contact us for help creating and maintaining marketing budgets that align with your strategic goals and integrate well with your company’s other operational areas.

Every business needs a budget, but not every budget looks the same. Some companies have intricately detailed ones, others rely on simple templates generated with off-the shelf software, and still others forego formal budgets in favor of a “fly by the seat of your pants” approach. (That last option isn’t recommended.)

Because budgeting is such an essential part of running a business, it’s easy to take for granted. You may fall into a routine that, over time, doesn’t keep up with your company’s evolving needs. To identify areas of improvement, here are six key elements of a business budget and some best practices to consider:

1. Current overview. You may think you’ve created a sound budget, but its usefulness will be limited if it’s based on what your business looked like and how it operated five years ago. Compose an up-to-date description of your business. This should include its strategic goals, sales targets, the state of your industry and market, and impactful economic factors.

2. Budget rationale. Explain in clear language how the budget supports your company’s mission, vision, values, goals and objectives. To be included in the budget, every line item (see below) must support all five of those factors. If one doesn’t, question its merit.

3. Detailed line items. Naturally, the “meat” of every budget is its line items. These typically include:

• Revenue, such as sales income and interest income,
• Expenses, such as salaries and wages, rent, and utilities,
• Capital expenditures, such as equipment purchases and property improvements, and
• Contingency funds, such as a cash reserve.

An important question to ask is: Are we including everything the business spends money on? Although maintaining a detailed budget can be tedious, it’s imperative to managing cash flow.

4. Selected performance metrics. Among the primary purposes of a budget is to compare projected spending to actual spending — making adjustments as necessary. As part of the budgeting process, establish precisely which metrics you’ll use to determine whether you’re making, breaking or beating the budget.

5. Supporting appendices. Discuss with your leadership team whether your budget would be more useful with additional information. Commonly attached supporting appendices include historical budget and results analyses, department spending summaries, tables and graphs depicting market and cost trends, organizational charts, and glossaries of terminology.

6. Executive summary. This brief written snapshot, which usually appears at the very top of the budget report, is intended to provide a concise overview of the chief objectives and major sections of the budget. If you’re not already using one, consider it. For you and other internal users, an executive summary can serve as a quick reference and help you set your expectations. Perhaps more important, it can make your budget easier to understand for outside parties such as lenders and investors.

Your current budget may not include all six of these elements — and that’s OK. As mentioned, companies are free to create budgets in whatever format suits their size and needs. But you should approach budgeting with an eye on continuous improvement. And to that end, please contact us. We can assess your budgeting process from start to finish and suggest ways to perform this critical business function more efficiently and effectively.

© 2024

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