Three ways to run IT in a small business, and the comparison is usually made on the wrong basis — the monthly figure — while the costs that actually differ sit outside it.
Here is a fuller costing for a twenty-person UK business.
Break-fix
The model. You call somebody when something breaks. They charge for the time.
The visible cost. £75 to £120 an hour. A business of twenty might spend £4,000 to £8,000 a year, which looks excellent next to the alternatives.
What is not in that figure:
- Nothing is prevented. Patching is nobody's job. Monitoring does not exist. Problems are discovered by users, at the worst moment.
- Downtime. Response depends on the provider's availability, and you are competing with their contracted clients, who come first.
- Misaligned incentives. The provider earns more when your systems are unreliable. Most are honest about this, and the incentive still does not point where you want it to.
- Security drifts. Nobody owns it, so it decays. This is the cost that eventually arrives all at once.
- No documentation. Each visit solves a symptom and nobody holds the whole picture.
Where it works: businesses under about five people with very simple setups and a high tolerance for disruption. Genuinely — for a two-person consultancy on Microsoft 365 with no servers, this is a reasonable choice.
Where it stops working: above about eight people, or the moment you hold client data anybody cares about.
In-house
The model. Employ somebody.
The visible cost. £32,000 to £45,000 for a capable IT generalist in the UK outside London.
The real cost:
- Salary at £38,000
- Employer National Insurance and pension: roughly £6,000
- Recruitment: £4,000 to £7,000, amortised
- Training and certification: £2,000 a year
- Tooling — monitoring, remote access, patching, backup software: £3,000 to £6,000 a year
Roughly £51,000 to £54,000 a year.
What is still not covered:
- Holiday, sickness and departure. One person cannot cover themselves, and their notice period is a genuine business risk.
- Out of hours. Either they are permanently on call, which is unsustainable and eventually they leave, or you are uncovered.
- Breadth. Nobody is simultaneously strong at networking, Microsoft 365, security, backup and line-of-business applications. You get a specialist plus gaps.
- Isolation. A lone IT person has nobody to check their thinking against, which is a quality risk as much as a wellbeing one.
Where it works: above roughly 40 to 80 staff, depending on complexity.
Managed IT
The model. A fixed monthly fee covering support, monitoring, patching, security and backup.
The cost. £35 to £75 per user per month. For twenty users, £8,400 to £18,000 a year.
What is included that the others are not:
- Proactive monitoring and patching, so problems are prevented rather than reported
- A team rather than a person, so holiday and illness are not your problem
- Multiple specialisms available when needed
- Tooling included rather than purchased separately
- Security managed continuously rather than when somebody remembers
- Documentation maintained as part of the service
- Aligned incentives — a provider on a fixed fee benefits from your systems staying up
Where it works: roughly five to eighty people, which covers most UK small businesses.
Where it needs care: the quality range is wide, and a poor managed provider is worse value than a good break-fix one. The questions worth asking are in what good IT support looks like.
The honest comparison is not £14,000 against £52,000. It is £14,000 against £52,000 plus the weeks nobody covers and the specialisms one person cannot hold.
The hybrid
For businesses above about forty people, frequently the best arrangement.
An internal person handles user support, knows the business, sits in the room and picks up the things that need context. A managed provider covers infrastructure, security, out-of-hours, project work and the specialisms one person cannot maintain.
Cost sits between the two and the coverage is better than either alone. It also removes the single point of failure, which is the in-house model's real weakness.
How to decide
Four questions:
- What does an hour of downtime cost you? If it is significant, prevention is worth paying for and break-fix is not viable.
- Do clients ask about your security? If yes, somebody needs to own it continuously.
- How many people? Under 8: break-fix may do. 8 to 40: managed. 40 to 80: managed or hybrid. Over 80: hybrid or in-house team.
- How complex is your environment? Servers, line-of-business applications and multiple sites push you towards managed regardless of headcount.
If you would like an honest view of which model fits your business — including being told that you do not need us — our managed IT team is happy to have that conversation. Get in touch.
