Managed Networks vs. DIY IT: The True Cost Comparison for Small Businesses
Most small business owners think managed network services are a luxury—something larger companies with bigger budgets use. The reality is almost the opposite. Small businesses can't afford not to have professional network management. The economics are different at your scale, and the risks are higher.
Here's why: when your network goes down, you go down. A 100-person enterprise has IT staff who can handle outages and redundancy built into their infrastructure. A 15-person business often has one person—maybe someone who's decent with computers but not actually an IT professional—trying to manage everything. When something breaks, that person is scrambling, customers aren't being served, and revenue stops.
This post breaks down the real cost of managed network services cost compared to DIY IT approaches. The numbers might surprise you.
The Hidden Costs of DIY IT
Let's start with what most small business owners see: the cost of DIY IT seems lower because there's no external invoice. But here's what you're actually paying:
Your employee's salary (partially): Let's say you have someone in your office who's "the tech person." Maybe they're your office manager, or your operations person, or someone from your team who's just good with computers. They spend an estimated 10-15 hours per week handling IT issues. That's not their job description, but someone has to do it.
If that person makes $50,000/year (a reasonable office manager salary), you're allocating roughly $12,000-18,000 of their annual salary to IT work. They're not billing those hours to clients. They're not managing operations. They're not doing the work they were actually hired to do. That's the hidden labor cost.
Downtime costs: When something breaks—a server fails, the WiFi network goes down, someone's computer gets infected—how long does it take to resolve? With DIY IT, you're probably looking at a response time of hours, not minutes. If you're in a service business, that's lost billable time. If you're in retail or restaurants, that's lost sales.
Let's calculate downtime conservatively. Assume one network outage per quarter lasting 3 hours on average. In a 10-person business where people charge $100/hour for their work, that's 30 hours of lost productivity per year. That's $3,000 in direct lost revenue. Add in customers who experience service disruption and don't come back, and the number is higher.
Over three years, your outage costs alone are likely $10,000-15,000.
Security breaches: DIY IT networks are more vulnerable to security incidents. You're probably not running regular security scans, patches aren't being applied systematically, employee devices aren't being monitored for malware, and backups aren't being tested regularly.
When (not if) a breach happens—ransomware, data theft, compromised customer information—the cost is devastating. A typical ransomware attack on a small business costs $5,000-$20,000 in recovery and downtime, plus potential legal liability if customer data is exposed. We've seen cases where a small business paid $50,000 in ransom plus another $50,000 in recovery and forensics.
A single serious security incident can wipe out years of "savings" from DIY IT.
Inefficient tool choices: When IT decisions are made by someone who isn't an IT professional, you often end up with a fragmented stack of tools that don't integrate. You're paying for three different file storage solutions when one would work for all. You're manually exporting data from one system and importing it to another. You're using outdated software because the IT person doesn't know there's a better option.
Over a three-year period, tool inefficiency can easily cost $5,000-10,000 in wasted subscriptions and lost productivity.
Scaling problems: As you grow, DIY IT breaks. Your "tech person" can handle 5 people but can't handle 20. You outgrow your WiFi network, or your internet connection, or your backup systems. When you finally realize you need professional IT, you're usually in crisis mode and have to build infrastructure quickly (expensively) instead of planning it properly.
Total cost of DIY IT (rough estimate for a 15-person business over 3 years):
- Hidden salary allocation: $36,000-54,000
- Downtime costs: $10,000-15,000
- Security incident recovery: $5,000-50,000 (worst case)
- Tool inefficiency: $5,000-10,000
- Total: $56,000-129,000
And that assumes you don't have a major breach, which is honestly optimistic.
The Real Cost of Managed Network Services
Managed network services sound more expensive because you write a check every month. Let's be transparent about what that costs and what you're actually getting.
Pricing models: Most managed service providers (MSPs) charge based on the number of devices you have, the services included, or a flat monthly rate. For a 15-person company with basic managed network services, you're typically looking at $2,000-4,000/month depending on what's included. That's $24,000-48,000/year.
For some business owners, that sticker shock is real. But let's look at what's actually included:
24/7 monitoring and support: Your network is monitored 24 hours a day. If something's going wrong, your MSP knows about it before your users do. Issues are often resolved automatically (like restarting a service) before anyone even notices. The average response time to a critical issue is 15-30 minutes, not hours.
Proactive maintenance: Instead of waiting for something to break, a good MSP is constantly updating software, patching vulnerabilities, testing backups, and making sure your infrastructure is healthy. This prevents most outages before they happen.
Professional-grade infrastructure: You get professional WiFi (not consumer routers), properly managed network equipment, redundancy and failover systems, and infrastructure designed to handle growth.
Security: This is where managed services shine. Your network is monitored for threats. Patches are applied systematically and on schedule. Backups are tested regularly. If a threat is detected, your MSP investigates and responds. This is the thing that prevents ransomware attacks from costing you $50,000.
Strategic guidance: A good MSP doesn't just keep your network running—they help you make better technology decisions. What tool should we use for X? Should we upgrade to a cloud-based system? How should we set up our infrastructure for growth? These conversations save you money because you're not making expensive mistakes.
Scalability: As you grow from 15 people to 30 to 50, your MSP adjusts your infrastructure and support accordingly. There's no crisis—it's planned.
Cost comparison for managed services (3-year perspective):
- Monthly managed services: $2,500/month × 36 months = $90,000
- Reduction in downtime (less frequent, less severe): -$10,000
- Prevention of a serious security incident: Priceless, but conservatively saves you $10,000-50,000
- Better tool decisions and efficiency: -$3,000-5,000
- Net cost over 3 years: $25,000-70,000
(The wide range depends on whether you have a major security incident with DIY IT and how inefficient your tool stack is.)
The Head-to-Head Comparison
Let's compare apples to apples—the total cost of ownership of your network infrastructure over three years:
DIY IT approach:
- Hidden salary allocation: $36,000-54,000
- Downtime costs: $10,000-15,000
- Potential security costs: $5,000-50,000
- Tool inefficiency: $5,000-10,000
- Manual backup/monitoring equipment: $5,000
- Total: $61,000-129,000
- Plus: No strategic guidance, reactive problem-solving, high stress, uncertain security posture
Managed network services approach:
- Monthly managed services (good provider): $72,000-120,000
- Professional infrastructure: $5,000-10,000 (initial setup)
- Total: $77,000-130,000
- Plus: 24/7 monitoring, proactive maintenance, professional infrastructure, security monitoring, strategic guidance, scalability, peace of mind
Here's the key insight: The costs are nearly identical. But with managed services, you get a predictable cost, professional infrastructure, strategic guidance, and security monitoring. With DIY IT, you get stress, reactive problem-solving, and hope that nothing serious goes wrong.
The Specific Cost of Downtime
Let's go deeper on one factor because it matters so much: downtime.
Scenario 1: e-commerce business (selling online) If your website or order system goes down for 3 hours and you lose revenue, that's a direct financial hit. A 20-person ecommerce business doing $2 million in annual revenue is averaging roughly $8,000/day. A 3-hour outage costs you $1,000 in direct lost sales, plus more if customers get frustrated and never return.
Scenario 2: Service business (consulting, design, etc.) Your people are billable. If a network outage prevents someone from working for 3 hours, and they bill $100/hour, that's $300 in direct lost revenue per person. If you have 10 billable employees, that's $3,000 lost per outage.
Scenario 3: Retail or restaurant During peak times, a 3-hour outage is catastrophic. A 50-seat restaurant does $150-200/hour in peak dining times. A 3-hour dinner shift outage costs you $450-600 in lost revenue, plus customers who won't return.
With DIY IT, you might have one serious outage per quarter. With managed services, you might have one every two years (or fewer). That difference alone—preventing 2-4 outages per year—is worth $2,000-10,000 per year depending on your business model.
When DIY IT Actually Makes Sense
We're not saying managed services are right for every business. There are narrow cases where DIY IT is reasonable:
You're a very small business (3-5 people) with minimal technology needs, simple cloud-based tools, and no sensitive data. Even then, you should have automated backups and basic security monitoring.
You're a technology consulting company with someone on staff who's an actual IT professional. You're paying them to do IT anyway, so DIY makes sense.
You're willing to accept significant risk and downtime in exchange for lower costs. This is occasionally true for businesses with very thin margins.
For everyone else—growing businesses, businesses handling customer data, businesses where downtime has a real cost—managed networks make financial sense.
How to Evaluate a Managed Network Provider
If you're considering managed services, here's how to evaluate a provider:
Ask about SLAs (Service Level Agreements): A real MSP puts their money where their mouth is. Ask what uptime they guarantee and what they'll credit you if they miss it. Good providers guarantee 99.5%-99.9% uptime.
Ask about their monitoring and response process: Do they monitor your network 24/7? What's their average response time? Do they have a ticketing system so you can track issues? Can you see network performance data anytime?
Ask about security measures: What patches do they apply and how often? Do they conduct security scans? How is data backed up and tested? Do they have a documented incident response plan if you're breached?
Ask for references: Talk to 2-3 current clients of similar size. Ask them how responsive the provider is and whether they've experienced unplanned downtime.
Understand what's included: Some MSPs charge separately for things like backup monitoring, security scanning, or user training. Make sure you understand the full cost.
Make sure you can talk to someone: You should be able to reach a human at your MSP when you have a problem, not just automated support.
The Sandbar Systems Approach
We've been helping small businesses in the 10-50 person range design and manage their networks for 15+ years. We approach managed networks differently than some providers:
We don't pretend your network is all we'll ever help with. We use network management as the foundation, but we also advise on broader technology strategy, IT infrastructure planning, and business continuity. We work with clients in hospitality, e-commerce, professional services, and manufacturing—industries where network reliability directly impacts revenue.
Our goal is to make sure you don't experience the false economy of DIY IT. We want your infrastructure to be reliable, secure, and scalable as you grow. We offer several levels of service so you pay for what you need:
- Managed WiFi + Monitoring: Just the network infrastructure and monitoring piece for businesses with straightforward IT needs
- Managed Business Networks: Full network management including WiFi, internet, backups, security monitoring, and basic support
- Managed Networks + Growth Officer: Network management plus fractional growth leadership for businesses looking to scale
Most of our clients have been with us for 5+ years because the ROI is real and the peace of mind is valuable.
Making the Decision
When you're evaluating DIY IT vs. managed services, remember:
DIY IT appears cheaper but rarely is when you account for downtime, security risk, and the opportunity cost of having talented employees doing IT work instead of core business work.
Managed services have a predictable cost and remove uncertainty. You know what you're paying and what you're getting.
The risk of DIY IT increases as you grow. What worked at 5 people breaks at 20. Planning for growth with a managed provider is smarter than panicking when you outgrow your DIY setup.
Security incidents are expensive. The single biggest reason to move from DIY IT to managed services is that a professional MSP dramatically reduces your breach risk.
Ready to Evaluate Your Options?
If you're currently running DIY IT and wondering if it's time to upgrade, or if you want a professional assessment of whether managed services would benefit your business, we can help.
We'll assess your current situation—your current infrastructure, your needs, and your growth plans—and provide a transparent quote for what managed services would cost for your business. No obligation, no sales pitch.
Call us: (804) 510-9224 | Email: info@sandbarsys.com
We've helped dozens of small businesses transition from DIY IT to managed networks and the feedback is consistent: "We should have done this years ago."