Cost Planning Tool

Technology Due Diligence Cost Estimator

Estimate first-year IT remediation and modernization costs for SMB acquisitions. Plan your post-close technology budget with confidence before you sign the LOI.

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How to Use This Guide

These are typical first-year cost ranges for SMB acquisitions ($1M-$10M revenue). Actual costs vary by business size, industry, current IT maturity, and regulatory requirements. Treat these figures as planning estimates - a proper technology due diligence assessment will refine them for your specific deal.

First-Year Cost Categories

Six categories that make up the bulk of post-acquisition IT spending. Each card shows low, mid, and high-end estimates.

Hardware Refresh

Critical

Months 1-3

Low

$5,000

Mid

$15,000

High

$30,000+

Common Items

Server replacement

Workstation upgrades

Network equipment

UPS / backup power

Security Stack

Critical

Month 1 (immediate)

Low

$8,000/yr

Mid

$20,000/yr

High

$40,000+/yr

Common Items

Next-gen firewall ($2-5K)

EDR/MDR ($5-15/endpoint/mo)

Email protection ($3-8/user/mo)

MFA ($3-6/user/mo)

Security awareness training ($2-4/user/mo)

Software Licensing

Critical

At close or within 90 days

Low

$5,000

Mid

$25,000

High

$100,000+

Common Items

Microsoft 365 licensing

Non-transferable license repurchase

Audit remediation

Version upgrades

Cloud Migration

Important

Months 2-6

Low

$10,000

Mid

$30,000

High

$75,000+

Common Items

Email migration

File server to SharePoint

Application hosting

Backup / DR setup

Technical Debt Remediation

Varies

Months 1-12

Low

$15,000

Mid

$50,000

High

$150,000+

Common Items

OS upgrades

Database migration

Application modernization

Documentation creation

Compliance & Insurance

Important

Within 60 days

Low

$3,000/yr

Mid

$8,000/yr

High

$20,000+/yr

Common Items

Cyber insurance premiums

Compliance assessments

Policy development

Employee training

Total First-Year IT Budget

Aggregated ranges across all six categories for a typical SMB acquisition

Conservative

$46K - $75K

Minimal remediation needed

Moderate

$148K - $200K

Typical acquisition scenario

Significant Remediation

$400K+

Legacy systems, major gaps

Purchase Price Impact

These costs represent 2-10% of a typical $1-5M acquisition price. Identifying them before close allows you to negotiate purchase price adjustments or escrow holdbacks. A $5,000-$10,000 technology due diligence assessment can surface $50,000-$200,000 in hidden IT liability.

What You'll Spend vs. What It Costs If You Don't

Planned investment always costs less than crisis response

Planned IT Investment

$50K - $150K

Cyber-insurable from day one

Scalable infrastructure for growth

Fully documented environment

Predictable monthly IT spend

Clean audit trail for future exit

Reduced deal risk during diligence

Unplanned Crisis Costs

$200K - $500K+

Data breach response and legal fees

Extended downtime during recovery

Regulatory fines and audit penalties

Uninsurable or dropped coverage

Emergency vendor rates (2-3x normal)

Lost customer trust and revenue

Get Exact Numbers for Your Deal

Our M&A technology advisory team will assess the target company's IT environment and deliver a detailed cost report you can use in negotiations.

Schedule a Consultation Call (336) 886-3282

37+ years advising North Carolina businesses on technology decisions - Preferred Data Corporation, High Point, NC