Microsoft 365 plans explained for small business: Basic, Standard and Premium compared on price, apps and security, with a clear pick for most teams.
Most small businesses need Microsoft 365 Business Standard, at around $18 per user a month, because it includes the installed desktop Office apps. Any business holding client financial, legal or health data should step up to Business Premium (around $33) for the security. Business Basic only suits a very tight budget that can live entirely in a web browser.
There are three small business plans and the names do not make the differences obvious. Here is what actually separates them and how to choose without overthinking it.
What are the three Microsoft 365 Business plans?
Microsoft sells three plans to businesses under 300 staff: Business Basic, Business Standard and Business Premium. They stack, so each one includes everything below it and adds more.
| Plan | Approx price (per user/month) | Desktop Office apps? | Advanced security? | Best for |
|---|---|---|---|---|
| Business Basic | ~$8 | No, web and mobile only | No | Budget teams that work in a browser |
| Business Standard | ~$18 | Yes | No | Most small businesses |
| Business Premium | ~$33 | Yes | Yes | Client data and compliance |
All three include business email, 1TB of OneDrive storage per person, Teams and SharePoint. The differences are the installed apps and the security layer. Microsoft lists the full feature grid on learn.microsoft.com.
What is the difference between Basic and Standard?
The difference is the installed desktop Office apps. Business Basic gives you Word, Excel and Outlook only in a web browser or mobile app, while Business Standard installs the full versions on your computers.
For most people that gap matters. Heavy Excel work, tracked changes in Word, and working offline all need the desktop apps. The extra $10 a month per person is usually the easiest yes in this whole decision.
Best practice: Put most of the team on Business Standard, since the installed desktop apps it adds over Basic matter the moment anyone does heavy Excel work or needs to work offline.
When do you actually need Business Premium?
You need Business Premium when you hold data that would hurt a client if it leaked - financial records, legal files, health information, anything covered by privacy obligations. Premium adds the security and device-management tools that protect that data.
Warning: If a client would be harmed by a leak of financial, legal or health data, Basic and Standard leave a gap that only Premium's security and device controls close.
Premium's extras include advanced threat protection against dodgy links and attachments, the ability to wipe a lost or stolen laptop or phone remotely, and tighter control over who can access what. If you are an accountant, a law firm or an allied health practice, this is the plan. We explain why in the cyber security essentials guide, and multi-factor authentication, included on every plan, is covered in what is MFA.
Can you mix plans across your team?
Yes, and you often should. You can put your admin and finance staff on Business Premium and casual or field staff on Basic or Standard, all in the same account.
Tip: You can upgrade a single user to Premium at any time from the admin centre, so start people where they sit today and lift them as their access to sensitive data grows.
A common setup: directors and anyone touching client data on Premium, everyone else on Standard. You only pay Premium prices for the people who need it, which keeps the bill sensible without cutting corners where it counts.
The short version
Start with Business Standard for the team, move anyone handling sensitive client data to Business Premium, and only use Basic where budget genuinely forces it. When in doubt, Standard is the safe default, and you can upgrade individual users any time. For the full picture, see our Microsoft 365 small business guide.
Frequently asked questions
Which Microsoft 365 plan is best for a small business?
Business Standard is best for most small businesses because it includes the installed desktop Office apps at around $18 per user a month. Businesses holding sensitive client data should choose Business Premium instead.
Is Business Premium worth the extra cost?
Yes, if you hold client financial, legal or health data. Premium's advanced security and remote device wipe are worth far more than the extra cost the first time a laptop goes missing or an account is targeted.
Can I change Microsoft 365 plans later?
Yes, you can upgrade or downgrade individual users at any time from the admin centre, and billing adjusts automatically. Your email and files stay exactly where they are through the change.
Do all the plans include email?
Yes, all three Business plans include business email on your own domain, 1TB of OneDrive storage, Teams and SharePoint. The differences are the desktop apps and the security layer, not email.
What about businesses with more than 300 staff?
Businesses over 300 users move to the Microsoft 365 Enterprise plans, which are priced and structured differently. Nearly every small business in professional services sits comfortably under that limit.
Not sure which plan you are actually on, or paying for seats you do not use? We will review your Microsoft 365 setup and tell you straight.