How to Keep Your IT Costs Low
Posted in: Business Technology | March 16th, 2008
With the possibility of an economic recession looming in the not-to-distant future, many small business owners are taking a preemptive look at the way they do business with the goal being to maximize their operations while simultaneously reducing expenses. Since IT is often a major cost center, knowing how to effectively reduce expenses while still getting necessary hardware and software systems is an essential element in recession-proofing a small business. Here are a few tips on how you can keep your IT costs under control:
- Get advice. Seek the advice of a professional IT consultant or any person who has experience either in your industry or in the technology you want to acquire. This is especially important if you yourself are not so tech savvy or if you do not have the time to research your options.
- Plan ahead. Get equipment that has the capacity to handle future growth or that can be easily upgraded.
- Evaluate and prioritize. In order to streamline your IT expenses, you will need to periodically reevaluate the equipment needs of your business versus your available resources. Where possible, you could consolidate equipment, as for example in server virtualization, or set up a system of rotating equipment among employees.
- Look into leasing. Instead of tying up precious capital in the purchase of new equipment, you could try leasing. With leasing, usually only a small initial down payment is needed and the cost is spread out over several months or years. Moreover, many leases come with option to upgrade at the end of the term. This allows a small business to get the equipment it needs even as its needs change.
- Maximize tax deductions. With the planned purchase or lease of new equipment, you can take advantage of several tax breaks. Section 179 of the tax code, for example,gives a small business the option to entirely write off most of its new equipment and furniture in the year that it is put into service rather than depreciating it over a few years.
- Consider outsourcing. Some technology solutions, such as IP communications and network security, can be outsourced to a professional service provider who can design, implement and maintain the technology solution for your business. The service provider will either host the equipment on their premises or support and maintain the equipment at your site.
