How much should a small business spend on software each month?

Updated October 2026 · How we answer

Typical ranges

Software spending varies widely. A solo freelancer might spend $20–$100 per month on accounting, email, and a website. A small retail shop with a few employees might spend $200–$500 per month on point-of-sale, inventory, and payroll. A professional services firm with 10 employees could spend $1,000–$3,000 per month across CRM, project management, and collaboration tools.

These are rough ranges, not rules. The right amount is what you can afford while still getting clear value—saving time, reducing errors, or increasing sales. If a tool costs $50 per month but saves you five hours of work, it is likely worth it.

• Solo: $20–$100 per month
• Micro (2–5 employees): $100–$500 per month
• Small (6–20 employees): $500–$2,000 per month
• Larger small business (20+): $2,000+ per month

How to set your budget

Start by listing the tools you already pay for and what each one does. Cancel anything you have not used in the last month. Then, for new tools, estimate the time or money they will save and compare that to the cost. A common guideline is to keep total software spending under 5–10% of revenue, but that varies by industry—tech companies often spend more, while service businesses may spend less.

Review your subscriptions every quarter. Prices change, and you may find you are paying for features you no longer need. Many vendors offer annual discounts, but only commit if you are sure you will use the tool for a year.

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