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Factors Determining The Costs of Small Business IT Systems

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Budgeting for information technology (IT) services can be a challenge for small businesses. While many people may imagine an IT department as a team of nerds answering computer questions, what IT system looks like differs from business to business. In general, IT systems can include: providing employee technical support for devices (desktop computers, laptops, and mobile phones), securely storing data in the cloud, monitoring devices for security threats, upgrading devices as needed, maintaining servers, implementing new software and training employees to use it. The level of IT support that a small business needs depends on the nature of the data they are storing, the number of employees they have, and their need for software upgrades.

To support the critical tasks of IT systems, small businesses can choose from a variety of IT services solutions. Cloud storage solutions from Amazon and Microsoft may be sufficient for a small business with in-house technical know-how. However, some small businesses may require internal servers and support for employee devices. These businesses can choose to hire an in-house IT specialist or outsource IT services to another company. In-house IT specialists are typically hired on salary at a rate of $46,000 USD per year, according to PayScale. In contrast, IT services outsourcing can be purchased on an as-needed basis and expand as the company’s needs grow. Depending on the company’s needs, an in-house specialist may be cheaper or more expensive than outsourcing IT tasks. Although the appropriate choice depends on the business case, there are some benefits to outsourcing.

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Benefits of IT Services Outsourcing

Companies that choose to outsource IT services may benefit from being able to redirect resources. Maintaining security and data is a full-time job for at least one employee at a small business. If a company chooses to outsource, that employee or department can be redirected to develop software solutions. As the Massage Envy Spa CIO explains in Forbes, outsourcing the company’s IT systems allowed his group to implement new processes, like massage sharing. The team was able to add value to the customer instead of simply chasing down IT issues. This resource allocation can also help smaller companies. A single internal developer that spends his time installing firewalls may instead be able to build value-adding code if relieved of IT systems duties. IT services outsourcing also puts a whole company of experts at a small business’s disposal. Although small businesses should choose their IT services solutions provider with care, most outsourced or “managed” IT providers can provide more expertise than a single in-house person.

Managed IT systems can also scale with a growing small business more easily than an in-house IT department. As more support is needed, the business can purchase more customer support hours from the IT solutions provider. Increasing the number of support hours is typically simpler than going through the process of hiring and training an IT department. While there are many benefits to IT services outsourcing, small businesses should be aware of the potential costs associated with this essential service. The budget should include funding for two different types of services, recurring and one-time. Recurring costs are expenses that occur on a regular basis, like maintaining firewalls. One-time costs only occur once. An example is the setup of Microsoft Office 365. Once it is set up for the small business, no more costs are incurred. Both types of costs should be included in the budget for outsourcing IT services.

Recurring IT Systems Costs

Determining the monthly IT services solutions cost for a small business is a bit more complicated than purchasing a monthly subscription. Each business has unique requirements, and the IT service is matched to the business’s needs. However, most IT services providers take into account at least three items:

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  • Number of Devices (Desktops, Laptop, Mobile Phones, and Tablets)
  • Number of Servers
  • Amount of Data to be Stored

To determine the cost, IT service providers estimate the number of support hours required for each item. A company that has more devices is likely to incur more support hours than a company with fewer devices. One IT systems calculator estimates the cost of one device or server to be 25 hours per year. IT services providers often charge upward of $100 per hour. Therefore, small businesses can estimate the minimum cost of device support per year using the following formula. (Number of Devices + Number of Servers) * 25 support hours per year * $100/hr Costs may be higher than this estimate because it depends on how much the IT solutions provider charges per service hour. However, it is likely that device support will be the bulk of the recurring costs. As the cost of storage data securely shrinks, the amount of data to be stored affects the price less. Backing up 500 GB may cost only $100 per year! However, storing more data will cost more money. Storing and backing up 10,000 GB may be more like $2500 per year. However, this number is still often much less than the device support. Supporting one desktop will cost the same as storing and maintaining 10,000 GB ($2500 per year).

As a general rule, small businesses can estimate the yearly cost of cloud storage using the following formula. (Amount of Data to be Stored in GB) / 5 Most companies that choose to use outsourced IT system services spend between $1000 and $9000 per month. The number of employees and the need for servers are the main drivers of these recurring costs. In comparison, an in-house IT person will cost about $3800 per month. However, this employee will also receive company benefits and likely be limited to 40 hours per week. For many companies, it is cheaper and easier to outsource the recurring IT costs.

One Time IT Systems Costs

Although recurring costs are more likely to impact the budget than one-time costs, small businesses should account for one-time expenses. Completing the initial setup of the programs that the company needs can be a large expense. At the very least, small businesses should budget for setting up email accounts, a software program to create and share documents and accounting software, like Quicken. Sometimes setup can be completed by the small business owner. However, outsourcing can be a better use of resources. Installation and setup can be time intensive. Estimates for outsourcing these costs should include at least 25 customer support hours at a cost of $100 per hour for a total of $2500 minimum. However, small businesses should contact an IT solutions provider for a quote for their specific software setup needs.

Methods of Payment

Small businesses have two common means of purchasing IT service support hours from a provider: buy as-needed or in bulk. As an example of buying as-needed, if an employee needs two hours of help for a computer setup, the company pays for two hours. This can be a great option if the small business is testing out an IT services provider or learning its IT needs. However, it can also be a more expensive option. Purchasing as-needed is typically more expensive per hour than purchasing in bulk. For example, it may cost $150 per hour for customer support hours as needed but only $100 per hour if 20 hours minimum are purchased. The reduced cost per hour is the benefit of buying in bulk.

However, if a small business is not sure about the IT provider or the number of hours required, these bulk purchases may not be refunded if not used. Small businesses should decide how many hours to purchase (and using what method) based upon company needs and the relationship with the IT services provider. IT system services are essential to many small businesses. Fortunately, storing and maintaining data is a key component that can be easily outsourced to a trusted IT solutions provider. These providers can also support employee questions regarding software.

For many small businesses, outsourcing the IT department relieves the burden from internal employees; they can focus on value-adding tasks instead of maintenance. However, small businesses should take the cost of services into account. Much of the cost is due to recurring support hours, which are used to answer employee questions and maintain devices and data. These costs can range from $1000 to $9000 per month, depending on the size of the small business. Budgets should also allocate additional funding for one-time IT services, such as the installation and setup of a new email program. The final cost is dependent on the business. However, some businesses can save on IT service provider costs by purchasing support hours in bulk. Outsourcing IT systems requires careful budgeting, but it has many advantages.

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FINANCIAL INTELLIGENCE

14 Ways To Earn Passive Income In 2021

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passive income

By: Claire Makoni

Earn Songwriting Royalties

If you love to write music, you can create passive income by recording your songs and then publishing them through a variety of channels. You earn royalties anytime your music is played on streaming services like Apple Music, or Spotify, or played on the radio. You can even license your music for TV, movies, and videos without the backing of a major record label.

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Purchase Music Royalties

Perhaps your talent isn’t to write music. That’s ok, you can still get into the music royalty game by purchasing the rights to song catalogues owned by other artists. Royalty Exchange is an online auction that allows you to bid on existing music catalogues. These are songs that are already earning regular, passive income for their current owners. When you purchase music royalties, you’re buying the future cash flow, which is purely passive income.

Photo Licensing

Photographers can build passive income by selling stock photos online. You’ll need to produce lots of content to earn a decent amount of money, but it can be a nice supplement to other, more labor-intensive work, like wedding or family photography. One benefit to stock photo licensing is that you can sell the same pictures to many different buyers. There is no shortage of stock photo websites where you can sell your work. Dreamstime and Snapwire are just two of the more popular stock photo sites out there.

Record an Audiobook

One of the best ways for content creators to increase their income is by releasing their content in as many formats as possible. For example, if you’ve written a paperback book or even an ebook, you’ll want to consider recording an audiobook version. There is no shortage of people who prefer listening to books instead of reading them. You can record the audio yourself, or pay someone else to do it for you. Once your audiobook is ready to go, it can be available for purchase online for years, making it the ideal passive income source.

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Buy and Sell Domain Names

Buying and selling domain names is a bit like trading on the stock market. The goal is to buy low and sell high, but there can be some risk involved. There are people who earn good money buying domain names that they believe will increase in value over time, with the hopes of selling at a profit.

Start a Blog

Over time, it’s possible to create multiple passive income streams with a blog, through affiliate marketing, or display advertising, for example. But building a blog from scratch is anything but passive. You’ll need to be consistent in creating new content, and spend time promoting your blog. One of the best things about blogging is the low barrier of entry. If you have a computer and a wifi connection, you can get started for as little as a few dollars per month.

Start a Podcast

It seems everyone has a podcast these days, and while many people do it out of pure enjoyment, there’s a lot of money that can be made. As you build a reliable following, you can begin selling advertising via sponsorships to brands that wish to get in front of your audience. Make no mistake, there’s a lot of work involved in finding guests and conducting interviews, but the opportunity to build a passive income stream is there.

Start a YouTube Channel

If you can consistently create videos that people want to watch, you can build an audience on Youtube. This is important because, with an audience, you can begin to make money, by joining the YouTube Partner Program. Most of your earnings will come from ads, which are aired within your video content, however, there are more ways to make money. YouTube can also drive traffic to your website and social media channels, making passive income opportunities endless.

Sell Digital Products/Downloadables

Thousands of people earn passive income by creating digital products that people can download and use. From spreadsheets to productivity tools, calendars, and checklists, the possibilities are endless. Once you’ve created your winning product, you can make it available for download on your own website, or through a third-party platform.

Develop an Online Course

If you have expertise in a specific area, rest assured there’s someone out there willing to pay you for your knowledge. You can create an ebook on the topic, or develop an online course, and then sell it on your own website, or on an online learning marketplace like Udemy. No skill is too small to share with others. You could sell a course on creating a killer resume, starting a podcast, or how to travel hack a trip to Europe. With online courses, most of the hard work happens early on, when you’re creating the content. From there, with an effective marketing strategy, you’ll have yourself a nice, passive income stream.

Run Website Display Ads

If you have your own website, you can sign up to have ads displayed within the content on your site. The most well-known ad service is Google Adsense. Adsense displays ads that are relevant to your site content and that match your visitor’s preferences. When guests engage with an ad, you make money. Also, the higher your site traffic, the higher your income.

Affiliate Marketing

If you have your own blog or website, one of the best ways to make passive income is through affiliate marketing. Affiliate marketing involves promoting someone else’s product or service, and earning a commission whenever a sale is generated directly from your recommendation. The most well-known affiliate program may be the one run by online retail giant Amazon, but there are thousands of other companies with programs of their own. Affiliate income takes time to build, but if you’re successful, it can be one of the best ways to make passive income.

Dropshipping

Dropshipping is a form of e-commerce where the seller doesn’t hold the product, instead, it’s shipped to the customer directly from the supplier. The seller’s job is to find products to buy at a wholesale price, and then sell them at the retail price, by advertising them through an e-commerce store, like Shopify. When orders are placed, they go directly to the supplier who ships the product to the customer. The seller profits from the spread between the retail and wholesale price. Dropshipping has become very competitive, but if you can find a product that people want, and sell it at a profit, there’s lots of passive income to be made.

Learn to Outsource

If you’re an entrepreneur, chances are you have a tendency to want to control all aspects of your business. After all, no one else understands it as you do, nor is anyone else as invested as you are. But the problem with doing everything yourself is that the money you make becomes anything but passive.

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SUCCESS STORIES

Dr. Vere’s Coat of Many Colours

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By Gilbert Sikanyika

Doctor Kudzanai Vere belongs to the group of African young Turks determined to conquer the world and leave permanent foot-steps on the sands of life.

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I have known Dr. Vere through social interactions over the years and I have come to know him as a pragmatic, hard-working, and purpose-driven person. He sets high goals and when he attains those goals, he sets even higher goals. He places a high premium on his aspirations. He challenges himself to challenge challenges in his life. He does not take “no” for an answer…He knocks, knocks, and keeps knocking until doors of opportunities fling open before him. He is tenacious and aggressive in his daily operations. He does not wait for opportunities; instead, he creates opportunities for himself. He is a workaholic if ever there was one.

He was compelled to stop school in form 4 due to family financial constraints but that could not deter him from pursuing his dreams. He started working as a Receiving and Costing Clerk at Redstar in Nyanga in Zimbabwe and he rose through the ranks to become Branch Manager within a spell of three years. He was arguably the youngest Branch Manager heading a Blue Chips Company when he was only 22 years old.

Doctor Vere has “A coat of many colours.” He is an entrepreneur, Author, and Speaker of international repute. He enjoys developing people in areas such as Entrepreneurship, Personal Development, Practical Business Management, Organizational Development, Financial Literacy, and Leadership Development.

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Just what makes him tick

He gets inspiration from motivating himself and others. His life gets better when he impacts lives in Business related issues. He was born in a family of 10 in a remote area of Zimbabwe in Nyanga. He went to Maereka primary school, Nyatate school, and Mapako High School. He has also attended: Zimbabwe Open University, British College Of Professional Management, Coppetstone University among others. He has:

  • Diploma in Accounting
  • Diploma In Accounting In Business Management
  • Bcom Accounting
  • Certified Public Accountancy
    -Master of Arts in Leadeship and Management
    -Registered Public Accounting
    -Certified Forensic
    -Doctorate in Phylosophy in Entrepreneurship among others.

Dr. Vere is also a notable and versatile writer whose books such as Becoming A Person Of Impact and Exceed Beyond The Ordinary have blessed multitudes of people. It seems he is a “Jack of all trades and master of everything.”

His books have impacted the hordes of people from all walks of life because of the nuggets of life they carry. His presence is being felt almost everywhere and so far so good. Although he never completed formal education, he is a self-made man who has managed to school himself and has acquired a string of diplomas and degrees and was recently conferred with a Doctorial degree in recognition of his teachings and passion for entrepreneurship.


“The whole of my adult life I have been learning business at times passively and at other times actively. I have vast years of business management, ” he said. His ultimate goal in life is to become an oasis of inspiration in Business circles. He is married to a lovely lady Fortune who is the Managing Director of the family business empire. Doctor Vere is also blessed with a wife and five children.

Gilbert Sikanyika is a Writing Prophet based in Zambia

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OPPORTUNITIES

Developers/ Programmers (Graduate Trainees) Wanted X 3 : YPPZ

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Young People’s Program Zimbabwe Youth Association (YPPZ) is recruiting graduate trainees from the following disciplines:

  • Information Technology & Information Systems
  • Software Engineering
  • Computer Sciences

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