Cybersecurity is a booming market, as companies adopt new security practices to stay ahead of hackers. If you’re considering starting a cybersecurity business, there are pros and cons to consider before deciding if it’s right for you.
To learn more about how to start a cybersecurity business, check out this post
Pros of a Cybersecurity Business
1. Massive Market
As we mentioned, cybersecurity is booming. The global cybersecurity industry is worth more than $150 billion and is expected to grow a whopping 125% by 2026. The market is being driven by the increase in computer and internet usage, improved hacker skills, and various regulations.
Additionally, Machine to machine (M2M) and Internet of Things (IoT) connections are increasing the need for cybersecurity, driving demand in the market. The need for cloud security and information security is also boosting demand.
In 2020, the average cost to businesses as a result of hackers was $8.64 million and had increased steadily during previous years. Demand for cybersecurity services will therefore remain high for the foreseeable future, as companies are willing to pay for those services to prevent losses from security breaches.
2. Excellent Profit Potential
For analysis and installation of cybersecurity systems, prices vary from $1,000 to upwards of $10,000. Ongoing security monitoring ranges from $1,000 to $10,000 per month, so clearly, you can build up quite a monthly revenue stream. Ongoing costs are also relatively low, with gross profit margins for cybersecurity businesses of between 70% and 80%.
Because of these numbers, cybersecurity businesses are often a target for investors, so as you grow your company you might be able to attract venture capital, with the goal of being acquired in 3 to 5 years. Acquisitions bring big payouts, so your money potential could be enormous.
3. Start Small
You can start your cybersecurity business from home for less than $10,000. If you already have technology systems in place that you can use for your business, your costs to get started are far less. Even as a solopreneur you can make a good living and have money to put back into the business to grow. Eventually, you can get a space and hire staff, to begin to grow your operation.
Cybersecurity is one of the few businesses that you can start from home and rapidly grow into an investable company. Imagine your small investment in a home-based business turning into a multi-million acquisition payday within 5 years!
4. Make an Impact
With a cybersecurity business, you’ll be providing huge value to businesses, potentially saving them millions of dollars that might be lost from security breaches. Making businesses more secure, and thus in better financial positions, means that you’re also contributing to building a healthier overall economy. This is good for everyone, not just businesses.
Cybersecurity can thus be a gratifying business to pursue. You’ll know that you are contributing to society, and making everyone more financially secure, as well as cyber secure.
Cons of a Cybersecurity Business
1. Education Required
Becoming a cybersecurity expert takes extensive education. While you can take a host of online classes for very little money, you’ll have to be very dedicated to self-study to build the necessary skills. Alternatively, you can pursue a formal degree, which will take several years and come with a price tag. If you don’t have or obtain enough education to really be an expert, you’re not likely to be successful.
Additionally, because technology is always evolving, continuing education will be required. This will be a never-ending process, as cybersecurity technology struggles to keep up with hacker technology. This means ongoing time and money that you’ll have to spend so that your business can keep up with the competition.
2. Competitive Market
A booming industry also means a competitive market. There are tens of thousands of cybersecurity companies, including some very large companies, to compete with. It may take some time for your small cybersecurity company to break into that market. This makes it even more important for you to have extensive education to give you credibility and to make sure that you can offer outstanding services to businesses so that you’ll retain customers.
You’ll also have to invest in some marketing to get noticed and go knock on a lot of doors. Your best bet when you get started is to call on local small businesses directly to sell your services. This, of course, takes another skill set. Not everyone is good at sales and marketing, but you’ll have to learn to be good at it to be successful.
3. Mistakes Can Be Costly
In this litigious day and age, if you make a mistake that costs a business a significant amount of money, you could be sued. This is nothing to take lightly when losses can significant. When a data breach happens, often consumers will file suit against the company, which may in turn file suit against your company.
For these reasons, it’s important, first of all, to set your company up properly from the beginning. If you just run your company as a sole proprietorship, you’ll be personally liable for any claims against you. This means your personal assets, including your home, will be at risk. If you set up your business as a limited liability company (LLC) or a corporation, you will have personal liability protection. Your business can still be sued, but you will not be personally liable. By the way, you would need some help from LLC services in case you wanted to manage your finances like a pro to grow your business.
You also need to make sure that your business is fully insured, particularly with professional liability insurance, which protects your company from losses incurred by errors.
It’s important to understand these pros and cons so that you know what you’re getting into by starting a cybersecurity business. It offers unlimited opportunities, but you may encounter some challenges along the way. By starting a cybersecurity business, however, you’ll be providing a valuable service that benefits everyone, and that has its own rewards.