How to Start a Cybersecurity Company

Part 1 - How to start a Cybersecurity Company business - Background

Technological advances over the last few decades have made it possible for organizations to conduct business without the boundaries of time and space. Consumers can purchase life insurance online. Retailers can reach customers on the other side of the world. 

Now, physicians are even conducting telehealth visits, eliminating the need for patients to travel to the office for routine visits. While this has broadened our horizons, both as consumers and business owners, it has also presented us with a new set of problems: protecting our information from online attacks. Cybersecurity companies help small, mid-size, and large corporations identify any chinks in their armor that could lead to costly data breaches.

Our guide is in 3 parts:

• Part 1 - How to start a Cybersecurity business - Background
• Part 2 - Our planner tool to see if this idea is the right fit for you
• Part 3 - Action plan to get started

What are the costs involved in opening a Cybersecurity Company?

While you may not realize it, you have already made the first investment in your business — your education. As mentioned, most potential clients will look beyond your formal education, placing stock in certifications. While just one certification can set you back $1,000, the return on your investment will prove invaluable in the long run.

Once you have the education and experience needed to launch a cybersecurity company, you will need to invest in a few other things:

• Office space — Many small business owners start out working from a home office or co-working space. While these options will reduce initial costs and ongoing expenses, they are limiting. Once your business starts to expand and you find you need to hire additional staff, it will be necessary for you to purchase or lease a dedicated office space.

• Computer systems and software — This investment will be used to manage the day-to-day activities in your business. You will also need a variety of hardware and software tools to assist in identifying new potential threats and testing new patches and/or security tools.

• Website and marketing strategy — While your website doesn’t need to be complicated, it should be educational and secure. Remember, every client considering hiring your company will visit your website and will partially base their decision on what they see.

• Insurance and licensing — Startup business owners are encouraged to work with an insurance agent, attorney, and/or financial advisor to ensure their investment is adequately protected against potential losses.

• Transportation — Your work will often require travel to client offices for on-site work.

Industry leaders recommend an initial investment of between $100,000 and $350,000. This budget covers all upfront costs, as well as payroll and ongoing expenses, for the first year while you work to bring on paying customers.

What are the ongoing expenses for a Cybersecurity Company?

Given the dynamic nature of this industry, you will want to continue to invest in your (and your team’s) education through certifications and continued education. Additionally, your ongoing expenses budget should include payroll costs, insurance, upgrades, maintenance, and hardware and software repair. Transportation and travel expenses to clients and for networking events should also be budgeted for.

Who is the target market?

Research indicates that 58% of all malware attacks target small businesses. This, coupled with the fact that most corporations have their own cybersecurity teams on staff, makes small to medium-sized companies your target market. 

From there, you will need to decide where your team’s knowledge and experience could prove most beneficial. Do you want to be known for your extensive knowledge in network security or access control? Did your market analysis reveal that a particular industry’s cybersecurity needs aren’t being met?

How does a Cybersecurity Company make money?

Cybersecurity companies offer a variety of security services for a fee. These services include systems auditing, technology support, pen testing, vulnerability analysis, and consulting. Some specialize in one or two services, while others offer a full suite of solutions. Some choose to cater to the needs of one particular industry while others utilize their skills to service businesses spanning every industry.

How much can you charge customers?

Cybersecurity rates vary depending upon location, client budgets, and the scope of each project. On average, businesses are paying cybersecurity consultants $150 an hour or more to defend their networks against cyberattacks.

How much profit can a Cybersecurity Company make?

Large cybersecurity firms that service corporations report profits in the millions. With a vision and a targeted marketing strategy, businesses focusing on the individual market have this same earning potential.

How can you make your business more profitable?

Building a sustainable, scalable business in this industry requires innovation and a talented workforce. To maximize profits, surround yourself with the brightest talent and continually strive to introduce new solutions that fill this industry’s dynamic needs.

Day-to-Day and Growth

What happens during a typical day at a Cybersecurity Company?

You and your cybersecurity team will be responsible for ensuring your clients’ unique security needs are met. Because this is a very dynamic industry, no two days will be alike. Common duties include:

• Research and identify emerging online threats.

• Review clients’ apps, operating systems, and networks to identify any weaknesses

• Develop new patches that protect your clients’ systems and data from attack

• Provide customer support through multiple channels, including telephone, online, and in-person services

• Repair servers, networks, hardware, and software that have been attacked

• Stay up to date on new programming languages, network architecture, devices, firmware, and software.

• Research industry needs and market accordingly

• Perform sales pitches and onboard new clients

• Attend new certification classes and industry-related conferences

Additionally, you, or a member of your staff, will need to perform administrative duties and continually seek out innovative ways to market the business.

What are some skills and experiences that will help you build a successful Cybersecurity Company?

Education and hands-on experience will lay the foundation for your business. Team members should have a degree in computer science, information technology, or a related field. Degrees, however, will not be enough to prove you have what it takes to protect your clients against cyber attacks. Certifications through reputable organizations such as EC-Council, ISACA, and Global Information Assurance Certification will build industry credibility and help you gain a competitive edge over the competition.

While education and certifications will help you get your foot in the door, they won’t be enough to lead your business to long-term success. Attention to detail, interpersonal skills, and the ability to communicate with individuals from varying backgrounds will all be essential to building your business. A business or marketing background would also prove beneficial. As the leader of your company, you must be able to examine your strengths and weaknesses and surround yourself with team members who fill in any gaps.

What is the growth potential for a Cybersecurity Company?

From the small mom-and-pop retail store to the large hospital down the street, virtually every company relies on computers, software, and the internet to conduct everyday business. Hackers understand and prey on our reliance on technology. As soon as experts identify and combat one attack, two more pop up in its place. 

While this is bad news for business owners, it has led to a thriving cybersecurity market. By 2022, the industry is expected to grow to almost $225 billion in annual revenue. And, since more and more organizations are beginning to realize the value in preventing an attack before it happens, this number is expected to increase significantly over the next decade.

What are some insider tips for jump starting a Cybersecurity Company?

It is important to keep in mind that, for most clients, cybersecurity is a sensitive and intimidating subject. While they understand that the cost to clean up after a cyberattack is far greater than protecting themselves on the front end, many are hesitant to make that initial investment. Therefore, your ability to prove your value will be put to the test from the start. While it may be tempting to be an industry jack-of-all-trades, leaders caution against doing so. Instead, start by carving out a niche based on your experience and market needs. Once you’ve built a solid foundation and reputation in the industry, you can start to add additional services and specialties.

Due to the sensitive nature of this business, it is recommended that you have a client service agreement signed before starting any project. The agreement should outline client expectations, payment terms, ownership of intellectual property, and liabilities/indemnification. Failure to do so could result in a lawsuit that can cause irreparable damage.

How and when to build a team

Many start-up businesses find it difficult to gauge when it is time to hire additional staff. While performing all the work yourself may save you money initially, it could stifle long-term growth and profits. If you find it is difficult to adequately service your existing clients or you are turning away business due to lack of time, it is time to build your team.

Due to the sensitive nature of this business, proper vetting and background checks are critical. The Small Business Administration offers helpful guidelines regarding the onboarding process. Each new employee should go through extensive training regarding your business’s procedures and industry best practices. Additionally, you will want to consider purchasing a fidelity bond to protect you against illegal data access, fraud, and theft.

Part 2 - Is a Cybersecurity Company business the right fit for you?

Part 3 - Action plan to launch your Cybersecurity Company business in 90 days