
By the time you finish reading the first sentence of this blog article from Huddle Business Capital, a business in the United States will have been targeted by a cyberattack. A cyberattack occurs every 11 seconds in the U.S., totaling nearly 8,000 attacks each day.1 When a business falls victim to a cyberattack, it can result in financial losses ranging from tens of thousands to millions of dollars. Recent surveys indicate that over 90% of businesses report fraud losses of up to 9% of their annual revenue.2 Plus, a cyberattack can undermine customer trust, leading to diminished confidence in the business's ability to protect sensitive information.
If you own a business, investing in cybersecurity tools and measures is not merely an option; it has become a necessity. Continue reading to learn more about emerging cybersecurity threats and how prioritizing cybersecurity can help protect your business's assets and data. Additionally, we will discuss ways to invest in cybersecurity without straining your company's budget.
Emerging cybersecurity threats.
Cybercriminals use a variety of techniques to commit cybercrimes. These methods include hacking into business websites or internal networks, injecting malware (e.g., spyware, ransomware) onto computers through phishing emails or fake websites containing malicious code, and using social engineering tactics to manipulate business owners or employees into revealing sensitive information.
Business owners have additional concerns as cybercriminals expand their activities using artificial intelligence (AI), deep fake voice scams, quantum computing, and hacking Internet of Things (IoT) devices.
Industry-specific requirements.
Every business has unique needs, so there is no universal requirement for cybersecurity measures. However, it is recommended that every business, regardless of size, should implement robust security strategies. This might include securing a website with Hypertext Transfer Protocol Secure (HTTPS), employing additional encryption methods to protect data during transmission and storage, or requiring multi-factor authentication (MFA) for business owners and employees to access their systems. Firewalls can also be used to help prevent unauthorized access to a company's internal network and protect company and customer data.
Next, it is mandatory for companies and organizations in specific industries to follow cybersecurity measures and compliance regulations based on the types of data they handle. For instance, banks, credit unions, and other financial institutions are required to maintain a strong information security system in accordance with the Federal Trade Commission (FTC) Safeguards Rule. Next, healthcare organizations and healthcare practices need to protect patient data and information based on the HIPAA (Health Insurance Portability and Accountability Act).
Determine your business's cybersecurity needs.
The first step in the quest to protect your business from cybercrimes is to evaluate potential risks. For example, outdated software or hardware, a non-secure (non-HTTPS) website, and a lack of basic security protocols (such as strong passwords) can make your business vulnerable to cyber threats. This assessment can be performed by your information technology (IT) manager. If you don't have an IT manager on staff, consider hiring a third-party individual or company.
After the assessment is complete and you have a list of the areas that require improvement, you will gain an understanding of the financial investment needed to address these issues.
How to fund your cybersecurity investment.
Investing in your company's cybersecurity measures does require financial resources, but the potential benefits far outweigh the costs. For example, improving your cybersecurity can help reduce the risk of cyber threats that can lead to data breaches, reputational damage, and possible lawsuits. As a result, allocating funds to strong cybersecurity measures can result in a positive return on your investment.
If your business is facing financial constraints that hinder your ability to meet cybersecurity needs, there are options to explore. One option is equipment financing. When you finance network equipment, hardware, antivirus software, firewalls, and intrusion detection systems, you can make monthly payments, plus interest, over a set time frame. Once you complete all the payments, you will own everything outright.
Equipment leasing is another option. It is similar to equipment financing in that you will make monthly payments, plus interest, over a designated period. The main difference is that once you complete the scheduled lease payments and fulfill your lease agreement, you don't own the equipment. That said, many lenders offer several end-of-lease options. For example, you might be able to purchase the equipment and software for its fair market value, renew the lease for a new term, or upgrade to new equipment and software.
Equipment financing and equipment leasing allow you to preserve your business's existing capital, as they do not require a large, one-time cash outlay.
Potential tax and insurance savings.
Many types of cybersecurity equipment are eligible for the Section 179 tax deduction. Section 179 allows businesses to deduct the purchase price of qualifying equipment and software in the year it is acquired and placed into service. Consult an accountant to find out if the cybersecurity equipment you are considering qualifies for Section 179.
Additionally, it's a good idea to check with your business insurance provider to see if they offer discounts for businesses that use cybersecurity equipment. If they do, you may be able to reduce your insurance premium.
Sources:
1 - https://www.fortinet.com/resources/cyberglossary/cybersecurity-statistics
2 - https://sb-fi.com/the-cybersecurity-equipment-mandate-why-every-small-business-needs-50000-in-protection-technology/
Disclaimer.
This Huddle Business Capital blog article is purely educational and contains general information and opinions; it is not intended to provide advice or recommendations of any kind. Huddle Business Capital is not affiliated with nor endorses the companies mentioned in this blog article.