How Much Should a Small Business Spend on Software?
If you’re a small business owner, software costs can sneak up on you fast. A tool here, a subscription there — and suddenly you’re spending $300/month on software you barely use.
So what’s the right number? Here’s a practical framework for thinking about small business software spend.
👉 Not sure what you actually need? Take our free 2-minute quiz and get matched with the right tool for your business: softwareoverkill.com
The General Rule of Thumb
Most small business advisors suggest keeping software costs between 5% and 10% of your monthly revenue.
So if you’re bringing in $3,000/month, a reasonable software budget is $150–$300/month. If you’re at $10,000/month, you have more room — but that still doesn’t mean you should be wasteful.
Where Small Businesses Overspend on Software
The most common traps:
Paying for features you don’t use. QuickBooks has dozens of features. Most solopreneurs use three of them.
Overlapping tools. Paying for both HoneyBook and a separate invoicing tool when HoneyBook already does invoicing.
“Just in case” subscriptions. Tools you signed up for and forgot about.
Upgrading too early. Moving to a paid plan before you’ve outgrown the free one.
A Simple Software Stack for a One-Person Business
Here’s what a lean, functional setup looks like for under $50/month:
Invoicing: Wave (free)
Payments: Stripe (no monthly fee, pay per transaction)
Email: Google Workspace ($6/month)
Scheduling: Calendly free plan
Storage: Google Drive (included with Workspace)
Total: around $6–$10/month for most solopreneurs.
How to Audit Your Current Software Spend
Once a quarter, pull up your bank or credit card statement and list every software subscription. For each one, ask:
Did I use this in the last 30 days? If no, cancel it.
Could a free version do the same job? If yes, downgrade.
Am I paying for this twice through another tool? If yes, cancel the duplicate.
Most small business owners find $50–$150/month in savings the first time they do this.
Find Out If You’re Overpaying Right Now
Take the free 2-minute quiz at softwareoverkill.com. Tell us what you’re using and what you need — we’ll show you a right-sized software stack and how much you could save.