Several studies show that often IT projects are not successful in being on-time, on-budget and include full functionality. There can be multiple causes for this, and an important factor in this context is the extent to which a company is ready for an IT project. To help understand this aspect, this paper presents a framework for analyzing the 'IT readiness' in SMEs (small and medium sized enterprises). The framework defines IT readiness with a basis in three overall dimensions (company, management, and employees), which are subdivided into different characteristics. To illustrate the framework a case study of a Danish SME is presented. Furthermore, the paper discusses how to improve the IT readiness of a company.