A few decades ago, many businesses didn’t need to think about cybersecurity or how to protect their data from hackers or other bad actors. There wasn’t the internet as it’s known today and many files were stored in a physical, rather than digital, format. Nowadays, even the smallest of businesses most likely uses a network to store data or share information. For the sake of your company, it’s vital that you protect that information from malicious parties.
Should a bad actor get access to your company’s private information, the cost could be substantial. In 2020, the average data breach cost companies $3.86 million. The U.S. was the most expensive country for data breaches, with an average cost of $8.64 million. Cybersecurity measures can help reduce the risk of a breach, but the cost of such measures can add up, especially if you purchase more products or services than you need. Assess your company’s need for particular cybersecurity measures as well as how implementing them will affect your bottom line.
The Importance of Cybersecurity Measures
Cybersecurity measures protect your company from attacks by third parties and from errors that can put your business’ data at risk. Protecting your company’s data doesn’t just save your business money. It can also save time and can protect your business’ reputation. Depending on the size of your company and the scope of a data breach, getting hacked can mean that customers and the public feel wary about working with your business. It can take years to rebuild your reputation following a breach.
Cybersecurity is a broad term that refers to any measures taken to protect your business from threats. You can implement measures to reduce the chance of ransomware getting installed on a company device, protect against phishing attacks, and minimize the risk of insider threats. The measures you take can range from installing products, such as antivirus software, on your company devices to implementing services, such as monitoring and auditing. Educating your team, such as by training them to create strong passwords or implementing an internet use policy, is also effective.
Set a Cybersecurity Budget
The cost of cybersecurity measures is often worth it, as the measures can keep your company’s data safe and help you avoid the high cost of a breach. It’s a good idea to review your company’s overall financial situation when creating a cybersecurity budget. It’s also useful to consider where the biggest threats to your company lie. All told, you might dedicate anywhere from 6 to 14% of your IT budget to cybersecurity.
Conduct a Cybersecurity Risk Assessment
As you examine cybersecurity’s impact on your business’ finances and budget, it’s useful to evaluate your risk for specific security issues. Doing so helps you determine where to focus your spending. Make a list of potential issues that could affect your business, consider how likely they are to occur, and what the potential impact might be if they did take place.
For example, if a bad actor installs ransomware on a company computer, you’ll lose access to the computer, which can lead to operational downtime. When deciding whether to spend on securing devices against ransomware, consider how much that downtime will cost your business. If your company’s website is down for a day and people can’t place orders, what’s the potential loss?
Keep Your Cybersecurity Costs in Check
With cybersecurity, as with many business concerns, the temptation can be to throw money at the problem in the hope that doing so will make it go away. But spending more on measures your company doesn’t need won’t necessarily keep you safer. Spending more than necessary could have a negative overall effect on your company’s bottom line, though. If you’re not sure where to start when it comes to managing cybersecurity costs or choosing the products and services that will provide the greatest benefit to your business, a virtual CFO can help.
The virtual CFOs at New Direction Capital can help you develop a strategic business plan that maps out a path for growth while protecting your company’s confidential data. If you’re feeling unsure about how to protect your business without burning through cash, we can help. To learn more, contact us today.