Managed IT vs Break-Fix: Which Is Cheaper for a 10-Person Business?

Somewhere around the eight-to-fifteen employee mark, most businesses hit the same crossroads. Calling someone when things break has started to feel expensive and chaotic, but a monthly retainer feels like paying for something you might not use. Here is how the two models actually compare when you run the numbers on a real business.

The two models, plainly stated

Break-fix means you pay for time when you have a problem. No monthly commitment, no minimum. You are buying repairs.

Managed services means a fixed monthly fee for ongoing monitoring, patching, security, backup management and a defined level of support. You are buying uptime.

The critical difference is the incentive. Under break-fix, the provider earns more when things break. Under a managed agreement, the provider earns the same either way, so preventing problems is directly in their interest. Neither model makes a provider good or bad, but it does shape behaviour.

Running the numbers on a ten-person business

Take a business with ten staff, roughly twenty devices once you count laptops, desktops and shared equipment, Microsoft 365 for email and files, and no on-premise server.

The break-fix year

A realistic year for a business this size, based on what we actually see:

• Two or three significant incidents — a failed drive, a malware clean-up, an email compromise. Call it 12–20 hours combined including onsite attendance.
• Ongoing small stuff — printer problems, a new starter setup, a password lockout, a laptop that won't wake. Perhaps 1–2 hours a month.
• One or two half-day projects — a new device rollout, an email migration hiccup.

At $99 per hour remote and $149 onsite, that lands somewhere in the region of $4,000–$7,000 for the year in labour alone. Add hardware replacement and it climbs.

But labour is not the real cost. The real cost is the downtime around it. If a significant incident takes a day and a half to resolve and half your team is unproductive during it, you have lost more in wages and missed revenue than the invoice shows.

The managed year

A managed plan for the same business — monitoring, patching, endpoint security, backup management, and included support — would typically be quoted somewhere between roughly $300 and $1,500 per month depending on how much is included and how much security tooling comes with it. Real IT Consulting's managed IT service starts at $299 per month.

Annualised, that is a comparable or slightly higher number than the break-fix year. Which is exactly why the decision confuses people.

So why does anyone choose managed?

Because the two years are not equivalent, even when the invoices total something similar.

Fewer incidents happen at all

A meaningful share of break-fix incidents are preventable. Drives fail with warning signs that monitoring catches weeks in advance. Malware overwhelmingly enters through unpatched software and accounts without multi-factor authentication. Backup failures are silent until you need the backup. Under a managed arrangement these are caught by process rather than by crisis.

The bill stops being a surprise

Break-fix costs arrive unevenly and always at inconvenient times. Managed costs are predictable and budgetable. For a business with tight cash flow, predictability has value independent of the total.

Response is faster

Under break-fix you are competing for a technician's availability with every other client having a bad day. Managed clients typically have contracted response times.

Somebody actually owns your IT

The most underrated benefit. Under break-fix, nobody holds the whole picture. Licences lapse, warranties expire unnoticed, one laptop quietly stops backing up, an ex-employee's account stays active for eighteen months. Under a managed arrangement someone is responsible for noticing.

Security posture improves as a side effect

Patching, MFA enforcement, endpoint protection and backup verification are the unglamorous controls that prevent most real-world incidents. They are bundled into managed services because they are cheap to do continuously and expensive to do reactively.

When break-fix is genuinely the right call

We will happily tell a business it does not need a monthly plan. Break-fix makes sense when:

• You have fewer than about five people and a simple, cloud-only setup
• Your hardware is new and under warranty
• You could work offline for a day without real loss
• You have someone internally who is genuinely capable and has time
• Your data is already backing up automatically to a service you trust and you have tested a restore

A two-person consultancy with two-year-old laptops and everything in the cloud does not need a managed plan. It needs someone to call twice a year.

When you have outgrown break-fix

The signals are fairly consistent:

• You are calling for support more than about once a month
• An outage now costs you real money by the hour — retail, hospitality, clinics, anything transactional
• You have staff working from multiple locations or from home
• You handle customer data that would matter if it leaked
• You have compliance or client contractual obligations around security
• Nobody in the business can confidently say when the last backup was tested
• Your hardware is aging and the failures are starting to cluster

That last one deserves emphasis. Hardware failure rates rise sharply after about four to five years. A business running a fleet of five-year-old laptops on break-fix is heading for an expensive year regardless of which model it chooses.

The middle ground people forget about

It is not strictly binary. Several arrangements sit between the two:

• Monitoring-only plans. A small monthly fee covers automated monitoring, patching and backup checks, with actual support billed hourly. Cheap insurance against the silent failures.
• Blocks of prepaid hours. Discounted rate, no ongoing commitment, priority over ad-hoc callers.
• Managed security only. Endpoint protection, MFA and backup managed for you, with everything else handled as you go.

For many businesses in the awkward middle, monitoring-only is the sensible first step. It catches the failures that actually hurt without committing to a full retainer.

How to decide

Do this exercise honestly. Pull your IT invoices from the last twelve months and add them up. Then add an estimate of downtime cost: hours lost, multiplied by average wage, plus any revenue you could not earn. Compare that total against a managed quote.

If the numbers are close, choose based on how much you value predictability and how much risk you are comfortable carrying. If break-fix is dramatically cheaper, stay where you are and revisit in a year. If it is dramatically more expensive, you already have your answer and have probably known it for a while.

Real IT Consulting offers both models — $99 per hour remote and $149 per hour onsite for ad-hoc work, or managed IT from $299 per month — across the Gold Coast, Brisbane, Logan, Pimpama and Sydney. Call 0489 940 359 and we will look at your actual numbers rather than push you toward whichever suits us.