A founder doing three crore in revenue with six to twelve staff has a defensible software budget of one-point-two to two-point-five percent of revenue. The allocation matters more than the absolute number.
By Mohammad Jamnagarwala · Simply Five Studio
A founder doing three-and-a-half crore in revenue, with a team of nine, asked us in early 2026 how much he should be spending on software. He had drifted, year on year, into a stack of monthly subscriptions that totalled about thirty-two thousand rupees per month, roughly one-point-one percent of revenue. He thought he was under-spending. He also thought he was paying too much. Both could be true, and in his case both were. The total was reasonable. The allocation was not.
This essay is the allocation question. For a founder doing two to five crore in revenue with six to twelve staff, what should the software budget be, where should it go, and what to avoid spending on. The numbers are specific because the question is specific. The ranges are tighter than the consultant industry typically presents them.
A defensible software budget for a founder at this revenue band is one-point-two to two-point-five percent of annual revenue. For a three-crore firm, that is three-point-six to seven-and-a-half lakh per year, or thirty thousand to sixty-two thousand per month.
The lower end of the range is the cost of running a basic but honest stack. Accounting (Tally), a few SaaS tools the firm cannot operate without, hosting and domain, communications, and a small allocation for ad spend tooling. The higher end is the stack that supports active operational software and meaningful performance marketing. The middle is where most firms sit comfortably.
Below one-point-two percent, the firm is starving the operation. The team is paying for the gap in time and friction. Above two-point-five percent, the firm is over-tooling. The team is using a stack that exceeds what the operation needs to capture, and the return on each marginal subscription is falling.
The exact figure inside the range depends on the firm's growth trajectory and operational complexity. A firm growing thirty percent year-on-year should be at the top of the range. A firm in a steady state can sit at the bottom. A firm with high SKU complexity or multi-channel sales needs the top of the range to handle the volume. A firm with a single product line and a focused customer base can hold the bottom.
The split that holds, across the firms we work with at this scale, is roughly the following.
Operational systems take about fifty percent. ERP, inventory, CRM, order management, customer portal. This is the substrate the business runs on day to day. The firm cannot under-invest here without paying the cost in team time.
Marketing technology takes about twenty-five percent. The ad platforms themselves are spend, not software cost, but the tooling around them (analytics, attribution, landing pages, CRM integration, retargeting infrastructure) sits inside the software budget. For a firm with active digital acquisition, this allocation is real and durable.
Accounting takes about fifteen percent. Tally remains, plus the add-ons (TDS, GST filing tools, the CA's office's preferred extensions). This is the smallest line item that produces the largest perceived value because the firm cannot file returns without it.
Miscellaneous takes about ten percent. HR and payroll software, team communications (Slack, Google Workspace, Microsoft 365), e-signature, shipping integrations, the occasional one-off tool. This is the line that drifts upward without management. Founders should review it twice a year.
For AKSD, the allocation looks exactly like this. The operational layer, custom-built and maintained under partnership, is the largest line. The marketing stack, supporting active digital acquisition, is the second. Tally sits at fifteen percent, supporting the CA's office on familiar ground. The misc line is held tight and reviewed annually.
For Car Seat Wala, the allocation skews slightly toward operations because the firm's inventory complexity and customer customisation workflow demands a thicker operational system. The marketing line is smaller because the firm acquires through a different channel mix. The structure of the allocation, however, is the same.
The line items that consistently produce poor returns at this revenue band are recognisable. A founder should not be paying for them, and if they appear on the monthly subscription list, the review should ask why.
The first is enterprise CRM subscriptions sized for a fifty-person sales team when the actual team is four. The pricing tier carries features the team does not use, and the implementation overhead exceeds the value the team extracts. A focused CRM, or the CRM embedded in the operational system, serves the actual workload.
The second is "all-in-one" platform subscriptions that promise to replace several tools. The promise is rarely delivered. The platform usually does one or two things well and the rest adequately, and the firm ends up running the platform plus the specific tools it failed to replace. The cost is paid twice.
The third is marketing automation tools sized for B2C scale when the business is B2B with a hundred active customers. The sophistication of the automation does not match the volume of the list. A simpler tool, or the CRM's native automation, is sufficient.
The fourth is collaboration and project-management tools that the team installed during a sprint and never adopted. These show up on the subscription list and produce no operational value. The fix is a quarterly review and a hard cancellation of anything unused for sixty days.
The fifth is AI subscriptions that have not been mapped to a specific workflow. The recent appetite for adding AI tools is strong. Most of them add no measurable productivity at the team's current scale, because the team has not redesigned a workflow around them. The right path is to add the AI tool only when a specific workflow has been identified and the tool's value hypothesis is testable. The longer treatment of this question is in the AI essay.
For founders past the three-crore mark, the question of whether to build replaces some of the subscription line. The answer depends on which subscription. The operational systems line is the most common candidate. The firm has outgrown the off-the-shelf CRM or the generic ERP, and the custom build delivers a system that fits plus removes the subscription. The math takes the operational line from a recurring monthly cost to a one-time build plus a maintenance retainer, and the total over five years is usually lower.
The accounting line should not be the candidate. Tally is honest software at honest pricing. The build conversation should not target the financial system of record. The longer treatment of this distinction is in the Tally diagnostic essay.
The marketing line is usually too small and too channel-specific to be a build target. The firm rents the platforms; the firm should also rent the tooling around them. The firm's investment sits in the data layer that connects the marketing tooling to the operational system, which is where decision infrastructure for revenue lives.
The work we do under the internal systems practice is structured for the founder who has decided the operational line is the build candidate. The work under performance marketing sits next to it, linking the rented marketing platforms to the owned operational substrate.
The founder should sit with the subscription list once a year, in the same way the founder sits with the vendor list. The question to ask each line item is short. What is this for. Who in the team uses it. What would break if we cancelled it tomorrow. If the answer to the third question is "nothing", the line item should go. The annual review usually returns ten to twenty percent of the software spend to the firm with no operational impact.
The longer treatment of the build-versus-buy decision sits in this essay. The diagnostic for when accounting software is the bottleneck sits in the Tally essay.
For a founder doing three crore in revenue, the software budget is not the place to save money by under-investing. It is also not the place to demonstrate seriousness by over-investing. The right number is one-point-two to two-point-five percent, allocated in the proportions above, reviewed annually, and treated as the cost of the substrate the firm runs on.
If you want a working assessment of your current software stack against the allocation above, Start a Conversation.
Accounting software produces statutory output. ERP automates the workflows of a generic business. Neither is the same as the structured truth a founder needs to run a specific business. That third thing is decision infrastructure, and it is what founder-led firms eventually outgrow SaaS to acquire.
Every six months a founder asks why they need another system when Tally already runs the books. The honest answer is a diagnostic, not a sales pitch. Here is how to run one on your own business.
Tally is the financial system of record. An ERP is the operational system of record. Most founders buy one and assume it is also the other. The confusion costs years.
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