Planning Your First Security Budget: A $25,000 Example
- Start with the systems, data and customer commitments your budget needs to support.
- Include the time required to introduce tools, maintain controls and fix issues found during testing.
- Keep some funding available for work that becomes clear during the year.
Your first security budget may bring together spending that has previously sat in several places: IT subscriptions, engineering time, customer audits and occasional consulting. Putting it into one plan makes it easier to see what is covered and where you need help.
There is no single amount that suits every small business. A software company processing sensitive customer records will have different needs from a company with a simple website and a few internal applications.
The $25,000 example below shows how one small software company might allocate external spending. It is a planning illustration, with figures in USD. Actual quotes, existing controls and internal staffing needs will determine your own budget.
Review what you already have
Before buying anything, check the capabilities included in your current services and whether they are being used. Identity, cloud and development platforms may already provide some of the controls you need.
A useful initial review covers MFA, software updates, access removal, backup recovery and an inventory of important systems. CISA's small-business guidance provides a starting point for these foundational measures.
For each gap, record the likely effort, any additional licence cost and who would do the work. Existing features can reduce new spending, but configuration and maintenance still take staff time.
Also check upcoming commitments. A customer requirement, renewal date or planned product launch may affect when a test or assessment needs to happen.
An illustrative $25,000 allocation
This example assumes a company with one main software product, an existing engineering team and some basic controls already operating. Internal salaries and a full certification or audit engagement are outside the figures shown.
| Category | Share | Allocation | Possible use |
|---|---|---|---|
| Independent testing | 40% | $10,000 | A scoped product assessment and agreed follow-up |
| Security tooling | 25% | $6,250 | Device management, monitoring or development checks that fill identified gaps |
| Compliance preparation | 15% | $3,750 | Help documenting controls and organising evidence for customer or audit requirements |
| Training | 5% | $1,250 | Relevant staff training and practical reporting exercises |
| Reserve | 15% | $3,750 | Additional testing, specialist advice or other unplanned needs |
| Total | 100% | $25,000 |
These allocations are starting assumptions to test against quotes. For example, if your company already has suitable tools but needs more help with an audit, you could move funding between those categories.
Define what you need from testing
Testing can help you understand how weaknesses in an application could affect customer data or business operations. Its value depends on the scope, the quality of the work and your ability to address the findings.
Describe the application, important workflows, user roles and customer boundaries you want assessed. For a product used by several customer organisations, access between those organisations is a useful area to include.
When comparing proposals, check:
- Which systems and workflows are included, with any exclusions.
- How the provider combines automated checks and manual investigation.
- What evidence and remediation advice the report will contain.
- Whether retesting is included and how long you have to request it.
- What happens if the agreed scope changes.
A fixed price can make planning easier once the scope is clear. A time-based engagement may suit exploratory work, provided you agree a limit and a way to review progress.
Reserve engineering capacity for remediation. Some findings may require design decisions or changes across several services, so the provider's fee is only part of the commitment.
Choose tools your team can use and maintain
For each proposed tool, describe the problem it addresses and how the team will use it. It may reduce manual work, improve visibility or add a control you currently lack.
Device management, for example, can help you check encryption and update status across company laptops. Centralised logging can make investigations easier if the right events are collected and retained. Single sign-on can simplify access management, while offboarding still needs to cover separate accounts, sessions and credentials.
Consider the ongoing work as well as the subscription. Who reviews alerts? Who updates the configuration? How will you know the tool is still covering the systems that matter?
A trial with a defined task can help answer those questions. Ask the person who will operate the tool to take part in the evaluation and estimate the time it will need each month.
Link compliance spending to a requirement
If customers are asking for a particular report or certification, establish what they need and by when. That gives you a basis for deciding which preparation work to fund.
Preparation may include documenting responsibilities, collecting access review records, formalising policies or checking whether controls operate as described. Requirements differ between assessments, so confirm the scope and evidence expectations with the relevant provider before committing to an audit schedule.
Where there is no immediate assessment planned, keep the documentation proportionate to the business. Records from work you already do, such as patching, access reviews and recovery tests, can support future reviews.
Make training relevant to everyday work
Staff need to know how to recognise and report a suspicious message, request access and handle customer information. Developers may also need training on the security patterns used in your application.
Combine suitable training material with your own procedures. A short exercise showing where to report a lost device can be useful alongside a broader course. Include new starters and make the guidance easy to find afterwards.
Plan how the reserve can be used
An unplanned product change or customer request may require extra testing or specialist advice. Agree who can approve reserve spending and review the remaining amount during the year.
The example reserve would cover only limited outside assistance. Assess incident response arrangements separately if your company needs guaranteed availability or more substantial support.
Related reading: Understanding penetration testing costs - When to arrange a penetration test - A security checklist for growing companies
Frequently asked questions
Is $25,000 enough?
That depends on your starting point, scope and obligations. Use the example to structure a discussion, then replace the figures with estimates and quotes for your company.
Should we fund testing or compliance first?
Look at the outstanding risks and any firm requirements or deadlines. You may need both, with a schedule that leaves time to address findings.
What can we do with very little external budget?
Review the controls available in your current services, prioritise gaps and assign time to address them. Keep a record of the work that requires additional resources.
How should we review the budget later?
Compare actual spending and staff time with the plan. Discuss which gaps were addressed, what remains open and whether new requirements change the priorities.