There are few bigger risks than starting a small business. Of the small businesses founded in 2011, only 51 percent survived to see their fifth birthdays. If starting a business is a gamble, investing in new tech might feel like Russian roulette.
Since small businesses can be short on cash —and IT departments— it’s tempting to think that you can’t spend as much as your corporate competitors; buying new software might seem like a luxury you can’t afford. But research from Gartner disproves that theory.
Gartner’s 2017 forecast for Small-and-Midsize-Business External IT Spending (available for clients) shows that SMBs don’t shy away from spending money on IT. Instead, they’re projected to spend $1 trillion on external IT by 2018. That means they’re shopping for the best tools to help those small businesses celebrate more birthdays.
Why does external IT make a difference? At its best, software helps you do more in less time. It automates redundant tasks and stores important data, which gives you more time to build your business.
External IT doesn’t have to cost a fortune: as Gartner’s small business spending statistics show, SMBs will spend much more on software and cloud services over the next four years.
Cloud software is often priced on a monthly or annual subscription basis. That means it lacks the costly upfront licensing fees of on-premise solutions.
This isn’t to say that cloud software’s not expensive —it can end up costing more than on-premise solutions over time— but aside from being cheaper upfront, cloud software:
- Doesn’t demand spending more on hardware;
- Provides more continuous updates;
- Takes less time to deploy;
- Is more mobile-friendly.
These advantages give small business owners more of what they need most: time. So if you don’t plan to invest in external IT, that could give your competitors an edge.
Some small business spending statistics
Still not sure if your own small business can afford the risk? The infographic below shares some small business spending statistics that might change your mind. Each statistic can be found in Gartner’s 2017 Small-and-Midsize-Business External IT Spending report, which is referenced above.
We use Gartner’s definitions of a small business (99 or fewer employees) and midsize business (999 or fewer employees). These numbers reference North American businesses since Gartner says their business practices have a larger scale than SMBs in other regions.