The real cost of IT Support for SMEs

“We’re thinking about bringing IT in-house. It’ll be cheaper.”

I’ve lost count of the number of times I’ve heard this in client meetings. The conversation usually starts with a simple calculation that seems logical on the surface. However, understanding IT support costs SME businesses actually face requires looking far beyond basic salary calculations.

When evaluating IT support pricing, businesses often miss critical hidden expenses that can double or triple their actual investment. Most discussions about IT support costs SME leaders have focus only on the obvious expenses, creating a dangerous blind spot that leads to costly miscalculations.

The reality is that choosing the right IT support small business model can save thousands annually, but only when you understand the complete cost picture. This guide reveals why the traditional approach to calculating IT costs is fundamentally flawed and what you should consider instead.

Why IT support costs for small business calculations go wrong

The salary trap: what most SMEs miss

When businesses consider bringing IT support in-house, they typically make a critical mistake: they only count salaries. It’s an understandable error since salaries are the obvious cost—they’re what you see on job advertisements and what you budget for in your headcount planning.

For a typical 75-person UK SME, the baseline staffing requirements look like this:

• IT Support Specialist (L1/L2): £28,000 – £40,000
• Senior Engineer/Systems Admin (L3): £45,000 – £65,000
• IT Manager: £55,000 – £75,000+

That’s your baseline team of three people to cover day-to-day support, complex technical issues, and strategic planning. Base salaries total £128,000 – £180,000 annually.

But here’s where most IT support costs for small business calculations go wrong, salaries represent less than half of the true cost.

Breaking down real IT support pricing

Hidden expenses that catch everyone out

Many SMEs overlook hidden IT costs, but government resources such as SME technology adoption and support resources can help businesses better understand and manage their technology investments.

This is where most businesses get blindsided by the true IT support pricing reality:

• Recruitment costs: When someone leaves (not if, but when), you’re looking at agency fees of 15-20% of first-year salary. That’s £7,000 – £15,000 per hire, plus the productivity loss during the 3-6 month recruitment and onboarding period. You can handle recruitment internally, but consider the time and effort required to manage the entire process effectively.
• Ongoing training: Technology doesn’t stand still, and neither should your team. Your staff need continuous training to remain effective with Microsoft, AWS, cybersecurity, and other critical technologies. Budget £2,000 – £5,000 per person annually if you want them to stay current and competitive.
• Tools and software: An MSP spreads these costs across all their clients. You bear the full burden:
  • Service desk platform (ConnectWise, Jira): £3,000 – £10,000+ annually
  • Remote monitoring and management tools: £2,000 – £7,000+ annually
  • Security tools (EDR, SIEM): £5,000 – £20,000+ annually
• Absence cover: Here’s a critical question—when your IT Manager takes two weeks of holiday, what happens? When your senior engineer calls in sick? You either operate at risk or pay contractor rates of £400-£700 per day to maintain coverage.
• Management overhead: Your in-house team doesn’t manage itself. Someone needs to handle performance reviews, HR issues, career development, and general line management responsibilities.

The real annual Total Cost of Ownership for that three-person team? North of £180,000. This gives you 8/5 coverage with limited specialist skills and no redundancy when people are unavailable.

Hidden IT costs SMEs often miss

• Salaries are just the start: only ~40% of total cost.
• Recruitment fees: 15-20% of first-year salary per new hire.
• Training & certifications: £2,000-£5,000 annually per employee.
• Tools & Software Licenses: £10,000+ per year for enterprise platforms.
• Absence cover costs: £400-£700/day for contractors.
• Management overhead: Time and cost to manage the team.
• Holiday and sick pay: Adds a significant percentage to salaries.

How much does IT support for small business actually cost?

Understanding MSP economics

Here’s where the conversation becomes interesting, because IT support for small business through managed service providers operates on completely different economics.

An MSP operates on economies of scale. They’ve already made massive upfront investments in people, tools, and infrastructure. They spread these costs across dozens of clients, allowing you to benefit without bearing the full burden.

For that same 75-person business, transparent monthly IT support contract pricing typically runs £50-£95 per user per month, depending on service levels. Using £95 per user per month as a realistic figure for solid, comprehensive service:

75 users × £95 = £7,125 per month
Annual cost: £85,500

Compare that to the £180,000+ for the in-house team. That’s a £94,500 annual saving, but the value proposition extends far beyond simple cost reduction.

What you’re actually buying

Breadth of expertise: You’re not getting three generalists. You’re accessing a team of 20-50 specialists, including:

• L1 specialists for first-line support
• L2/L3 specialists for complex technical issues
• Cybersecurity experts who live and breathe threat intelligence
• Cloud architects who design and optimise infrastructure
• Strategic advisors who help plan technology roadmaps

Try hiring all those skills in-house at any realistic budget—it’s simply not feasible.

24/7  coverage: Building a 24/7 in-house rota requires at least 5-6 full-time people. With an MSP, comprehensive coverage is often included or available as a reasonable add-on, because they’ve already built the shift patterns and coverage models.

Enterprise-crade tools: That monitoring platform costing £50,000+ to implement? The security stack requiring £30,000+ annually? The service desk system with full ITSM capabilities? All included. The MSP has already made these investments, and you benefit immediately.

Understanding outsourced IT support costs vs in-house

Risk transfer and predictability

When evaluating outsourced IT support costs, consider the risk transfer element. When someone leaves, gets sick, or goes on holiday, it’s not your problem. The MSP maintains service levels regardless. When technology changes or new threats emerge, they handle training and skill development. You get predictable service for predictable costs.

Flexibility and scalability

Need to scale up quickly? Onboard 10 new staff next month? With an in-house team, you’re months away from adequate support. With managed services, you adjust the user count and service scales immediately.

Annual cost progression chart data

IT Support ROI for SMEs: The value question nobody asks

Here’s the part that goes beyond pure cost analysis—what do you actually want your technology function to achieve?

If your in-house team constantly firefights, handles password resets, fixes support issues, and manages day-to-day tickets, when do they find time for strategic work? When do they:

• Plan and execute cloud migration strategies?
• Design and implement cybersecurity roadmaps?
• Evaluate new technologies for competitive advantage?
• Drive digital transformation initiatives like analytics or AI?

The reality is, they don’t. They’re too busy keeping the lights on.

With an MSP handling operational heavy lifting, you can focus internal resources on work that actually moves your business forward—creating value rather than just preventing problems. You can even leverage MSP skills and capabilities for transformation initiatives.

When does in-house IT for small business make sense?

I’m not suggesting outsourcing is always the right answer. There are scenarios where in-house makes sense:

• Very large organisations (500+ employees) where economies of scale work in your favor
• Highly specialised, proprietary systems requiring deep institutional knowledge developed over time
• Budget for teams of 10+ people where you can build real depth, skills, and resilience

But for most SMEs, the numbers simply don’t work, and the value proposition for managed services is compelling.

Frequently Asked Questions (FAQ’s)

Q: How much does IT support cost for a small business in the UK?

A: IT support costs for small business typically range from £50-£95 per user per month for managed services, compared to £180,000+ annually for a basic three-person in-house team. The managed service option provides broader expertise, better coverage, and enterprise-grade tools.

Q: What factors influence small business IT support pricing?

A: Key factors include number of users, complexity of infrastructure, security requirements, compliance needs, and service level expectations. Monthly IT support contract pricing varies based on whether you need basic support or comprehensive managed services including cybersecurity and strategic planning.

Q: Is outsourced IT support really cheaper than in-house?

A: For most SMEs, yes. When you account for salaries, benefits, training, tools, recruitment, and management overhead, in-house teams cost significantly more while providing limited coverage and expertise compared to managed service providers.

Q: What’s included in affordable IT support for SMEs?

A: Comprehensive managed IT services typically include 24/7 monitoring, help desk support, security management, backup and disaster recovery, strategic planning, and access to specialist expertise across multiple technology domains.

The bottom line

Building an in-house IT team isn’t just about salaries. It’s about Total Cost of Ownership, hidden expenses, opportunity costs, and the real value of your investment.

For a typical 75-person UK SME, that three-person in-house team that “should cost £120,000” actually costs closer to £180,000+ when you account for everything. This gets you 8/5 coverage, limited specialist skills, and significant risk when people are unavailable.

The equivalent outsourced service costs £85,500 annually while providing comprehensive support, access to deep specialist expertise, enterprise-grade tools, and predictable service levels with no single points of failure.

That’s not just a £94,500 saving, it’s a fundamentally better service model.

The question isn’t really whether outsourcing is cheaper. It demonstrably is for most SMEs. The real question is: what do you want your technology function to achieve, and what’s the most effective way to get there?

For most businesses, the answer is clear.

Ready to understand what a properly structured managed services partnership could look like for your business? Let’s have an honest conversation about what makes sense for your specific situation.