How to Start a Cyber Security Business

It’s unsurprising that cybercrime is on the increase in an increasingly digital society. The financial toll on enterprises is also increasing dramatically. According to a 2019 IBM research, the typical data breach costs $3.92 million.

These substantial financial stakes have resulted in a surge in demand for cybersecurity services. Large firms have the financial resources to recruit cybersecurity personnel. However, small and medium-sized enterprises often lack the resources to hire full-time cybersecurity staff.

This is the point at which your cybersecurity skills may be transformed into a profitable security solutions firm.

You can assist these smaller businesses in defending themselves against cyber dangers such as data breaches, cyberattacks, malware, phishing scams, and other digital threats.

PayScale research indicates that organizations are paying skilled cybersecurity consultants $150 per hour or more to assist in defending systems and networks against cybercrime.

If you’re considering launching a cybersecurity business, you can use your expertise and seize a piece of this lucrative industry. However, you need first take the following actions to establish the basis for a successful company.

Acquire the necessary professional qualifications

Before someone will employ you, they must have confidence in your ability to do the task correctly. A bachelor’s degree in information technology, computer science, or a related discipline demonstrates that you possess the necessary skills to launch a cybersecurity or information technology-related firm.

However, degrees do not give customers with the real-world experience they need. Certifications are another approach to establish your reputation and demonstrate that your talents are applicable and useful.

Several of the most popular cybersecurity certifications include the following:

  • Certified Ethical Hacker Certification: The EC-Council awards this credential to cybersecurity experts that conduct penetration tests on networks or systems in order to identify security flaws. The test is $100, has 125 questions, and should take around four hours to complete.
  • GIAC Security Essentials Certification (GSEC): Offered by Global Information Assurance Certification (GIAC), this certification verifies an IT professional’s expertise of information security. The exam is around five hours long, has 180 questions, and costs $150.
  • Certified Information Systems Security Professional (CISSP): (ISC)2 awards the CISSP to those who demonstrate their competence to plan, manage, and maintain an effective cybersecurity program and security systems. The exam is limited to 150 questions, lasts three hours, and is priced at $699.
  • Certified Cloud Security Professional (CCSP): The (ISC)2 also offers this certification, which demonstrates to prospective customers that you possess the necessary abilities for designing, maintaining, and securing cloud data, applications, and infrastructure. This test is $599 and comprises of 125 questions. It will take around four hours to finish.
  • CompTIA Cybersecurity Analyst (CompTIA CySA+): The CompTIA CySA+ exam measures candidates’ threat detection capabilities, their ability to evaluate and comprehend data, and their ability to identify security vulnerabilities. The examination lasts little less than three hours, contains up to 85 questions, and costs $359.
  • ISACA’s Certified in the Governance of Enterprise IT (CGEIT) certification: The CGEIT credential validates the capacity of test takers to audit, govern, and safeguard information systems. The exam costs $760 for non-ISACA members and $575 for ISACA members. The test is four hours long and contains 150 questions.
  • ISACA’s Certified Information Security Manager (CISM) certification: ISACA also certifies individuals as CISMs. This certification demonstrates that you possess the technical skills necessary to manage information systems and information technology security. For nonmembers, the exam costs $760; for members, the fee is $575. It has 150 questions and is designed to be completed in four hours.

While qualifications and skills are crucial, they are just one component of a successful plan for beginning a cybersecurity firm. Additionally, you must develop and implement a business strategy.

Create a cybersecurity-specific business strategy.

A business strategy serves as the foundation for your venture. It should include information on your company’s structure, strategy, goals, and budget. The United States Small Business Administration (SBA) has produced the following relevant suggestions for what should be included in your business plan:

  • an executive summary describing your cybersecurity business and why it will succeed – a detailed description of your company – a competitive market analysis defining your target market and identifying your competitors, who may be dedicated cybersecurity consultants or providers of general information technology services
  • a company structure – the items or services you want to sell – a marketing and sales strategy – a funding/budget plan
  • financial estimates for the day when your business will achieve profitability

Consider some of the important components of this business plan in further detail.

Define and assess your target market

Initially, you must decide on the emphasis of your cybersecurity firm.

Certain firms seek to establish themselves as an expert in a certain subject or industry. For instance, are you interested in a certain sector, such as banking or healthcare?

Others prefer to specialize in a certain area of cybersecurity. Regardless of business, they may like to be renowned for their extensive understanding of access control or network security.

This selection should be made not just on the basis of your skill set, but also on the basis of a market study. Knowing your competitors enables you to spot prospective possibilities.

Inc. has selected the following essential questions to aid in your competition evaluation:

  • Who are your direct rivals at the moment?
  • What are the strengths and shortcomings of your competitors?
  • How do you distinguish yourself from the competition?
  • How can you displace rivals’ market share?
  • How are rivals likely to respond if you join the market?

Additionally, you may do a SWOT analysis, where SWOT stands for strengths, weaknesses, opportunities, and threats. This is a time-tested technique for evaluating a business, product, or service in the marketplace. It’s similar to doing a risk evaluation for your newly acquired cybersecurity products.

Following your target selection and competitor analysis, you must choose a legal structure for your organization.

Select the legal structure for your business.

Your business’s legal framework is crucial. It has an effect on every aspect of business, from everyday operations to taxes and financial hazards. According to the SBA, the following are the five most popular business structures:

  • Sole proprietorship: This is the simplest form and the simplest to establish, since there is little to establish. It is a sole proprietorship in which the proprietor declares the proprietor’s earnings and losses on his or her individual tax return. However, since there is no legal distinction between you and your company, you might be held personally accountable for the debts and liabilities of the business.
  • Partnership: This is the simplest organizational form for businesses owned by two or more individuals. Profits are reported on individual tax returns. Limited partnerships (LPs) and limited liability partnerships (LLPs) are the two most prevalent forms of partnerships (LLP).
  • Except for at least one general partner, the majority of participants in limited partnerships may have limited responsibility. However, limited liability partners also have limited power. Each partner in an LLP has limited responsibility and is insulated from the partnership’s debts.
  • Limited liability company (LLC): An LLC is a kind of partnership that is a cross between a sole proprietorship and a corporation. It minimizes owners’ liability and segregates personal and corporate assets. However, owners must record all company revenue and costs on their personal income tax return.
  • S company: An S corporation allows you to pay yourself a salary and is entirely liable for payroll taxes. Profits left after distributions may be paid to the owner(s). The benefit is that distributions are taxed at a reduced rate, but this choice entails more expenditures, restrictions, and paperwork.
  • C corporation: A corporation is a distinct legal entity that may generate a profit, be taxed, and be held legally accountable under this structure. It may have an unlimited number of shareholders who are not personally liable for the company’s debts, but who are taxed on any profits.

Before deciding on a structure, it’s a good idea to consult with business counselors, accountants, and lawyers to determine which structure is the greatest fit for you.

Obtain a business license, a business bank account, and a credit card for the business.

You’ll need to contact state and local licensing and permitting authorities to determine whether business licenses or permissions are necessary to launch your cybersecurity firm. Unlike many other occupations, you are not required to get a government license (yet).

Additionally, many jurisdictions require you to have general liability insurance before issuing you a license. Additionally, if you hire others, you must maintain workers’ compensation insurance.

When creating a company bank account, you may be tempted to just use your personal bank account. Not so quickly!

Consider fee-free bank accounts offered by internet, national, or local institutions. NerdWallet is an excellent resource for locating economical business bank accounts that can assist you in saving every dime.

Additionally, you may choose to explore a company credit card, which may assist you in keeping your business and personal funds distinct.

A corporate credit card often has better conditions and a bigger credit limit than a personal credit card. It provides you with a revolving line of credit and often includes advantages such as rewards points and cash back offers.

Any small firm, regardless of its legal status, may apply for a business credit card. However, the cards and offers accessible to single proprietors and the majority of new firms are determined by your personal credit score.

Obtain money and establish a budget

Numerous financial alternatives are available to assist you in getting your firm off the ground. Apart from your own funds, you might look into loans, grants, and angel investors.

Numerous cyber businesses take advantage of these opportunities. Indeed, a recent research indicated that cybersecurity startups received $5.3 billion in venture capital financing.

These investors represent themselves as looking to invest in cybersecurity startups.

  • TenEleven Ventures
  • Strategic Cyber Ventures
  • ForgePoint Capital
  • AllegisCyber Capital
  • Cyber Capital Partners
  • Intel Capital

Budgeting is also crucial when launching a new cybersecurity business. The Balance provides excellent money management ideas, including the following:

  • Establish revenue targets for sales.
  • Gain a firm grasp on your running expenditures.
  • Maintain an eye on your financial flow.
  • Establish an emergency fund.

Locate the proper place

Fortunately, businesses around the nation need cybersecurity services. Of course, Hawaii can only accommodate a limited number of cybersecurity specialists.

Apart from your preferred location, you should consider your start-up money, hiring requirements, and the kind of your company when determining where to locate. Among your alternatives are the following:

  • Working from home: There are several benefits for small company owners that go this approach. There is no long commute or interruptions associated with a traditional office, and you benefit from a better work-life balance. However, it might be lonely, and maintaining focus demands self-discipline.
  • Co-working spaces: This alternative provides flexibility in addition to several advantages and conveniences, as well as the business culture that working from home lacks. However, the scheduled hours, lack of privacy, and restricted growth space may not meet your objectives.
  • Leasing or purchasing office space: While leasing or purchasing office space provides tax advantages and fixed expenses for your firm, the upfront fees might be substantial. Additionally, this choice does not provide the same degree of flexibility as a home office or co-working space.

If you do decide to rent or lease a place, you must also get commercial property insurance. This coverage is often required by the leasing agreement and covers the building, furniture, supplies, and equipment of your company.

Regardless matter where your cybersecurity business is located, you may need commercial vehicle insurance if you or your staff go to the offices of your customers to provide on-site services. If you also use your car for business, your personal auto insurance may not be sufficient protection.

Promote your services.

Customers are the one thing that will ensure the survival of your firm. And marketing is the vehicle through which they are delivered.

If you do not intend to advertise your business yourself, consider hiring or outsourcing marketing to industry specialists. You’ll need their assistance in launching your product, brand, and services.

Before you move too deep into marketing, it’s a good idea to start with the fundamentals. And a well-designed website is the starting point for every cybersecurity organization.

Because your online presence is likely your most valuable marketing tool, you must do it correctly. Avoid these typical website mistakes. Additionally, you’ll need to choose the appropriate domain name, design an interesting user experience, and optimize the site for search engines.

If you’re not interested in completing the job yourself, your in-house or outsourced marketer may advise you. If you’re willing to roll up your sleeves on this one, Google can be your best friend.

Your website may be found by potential clients through search engines and your social media networks. You may build an active presence on social networking networks such as LinkedIn, Facebook, and Twitter. Utilize them to market your own company and to distribute cybersecurity-related news and articles. If your budget permits, you can consider hiring a content consultant to assist you in writing a blog.

Even organizations specializing in cybersecurity need include offline marketing. Networking is a necessary component of every new company. Cybersecurity conferences are excellent venues for meeting prospective partners and customers.

Security Magazine publishes an annual list of the most significant cybersecurity conferences. Perhaps you’ll find success at conferences such as RSA, Women in Cybersecurity, InfoSec World, or the National Cyber Summit.

Prepare meticulously drafted client contracts

Always execute a customer service agreement prior to beginning any new job. This contract should clearly outline your and your client’s expectations. Without legal protection, one bad project might destroy your career in the sector, even if it was not your fault.

To avoid litigation, the agreement should clearly define the scope of work, intellectual property ownership, payment conditions, and liabilities/indemnification. Assure that an attorney assists you in reviewing or drafting client contracts to safeguard both parties.

Numerous client contracts may require you to obtain cyber liability insurance to protect yourself against possible damages in the event of a data breach.

Even if the contract does not specify it, you may choose to seek technological errors and omissions (E&O) insurance. This policy will protect you if you are sued for a work-related error. Cyber liability insurance is currently included in the majority of technology E&O plans.

Appoint competent personnel

Congratulations on expanding your business to the point where you can recruit staff! The SBA provides useful advice for setting up your employee onboarding process without the assistance of your HR representative.

Conduct comprehensive interviews and background checks on prospective candidates to ascertain their qualifications and expertise. Ensure that you comply with all applicable federal and state laws throughout these evaluations. Once you hire employees, you’ll need workers’ compensation insurance to cover both you and your employees.

Additionally, you may choose to obtain fidelity bonds to guard against employee theft, fraud, or unauthorized data access.

Protege votre investissement et votre avenir

Establishing a new company is an investment in your future self. We specialize in assisting cybersecurity firms in protecting themselves and mitigating risk. Our qualified insurance agents are delighted to review your business’s circumstances and provide the best coverage alternatives.

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