How To Get Some Serious Bucks From Cybersecurity
If you’re a tech guru, it’s a great time to get into the cybersecurity industry. Cybersecurity is one of the fastest-growing markets, worth more than $150 billion today and expected to more than double by 2026. You can learn cybersecurity and become instantly employable, with good-paying jobs readily available. However, if you want to make the big bucks, you can start your own cybersecurity business. It takes a relatively small investment, and when you’re in the beginning stages, you can run your business from home.
Here we will offer some tips on becoming a cybersecurity entrepreneur.
Getting Cybersecurity Education
While getting a degree in cybersecurity is one route to take, it’s expensive and will take time. Alternatively, you can take online cybersecurity courses and get various certifications. There are a host of different certifications, including cybersecurity expert, information security analyst, big data analysis, threat intelligence, and more. Find detailed information from the National Initiative for Cybersecurity Careers and Studies. You might spend up to $5,000 on this kind of education, but you can get your certifications in a year or less.
Costs to Start a Cybersecurity Business
Besides the cost of education, you’ll need a sophisticated computer system, and cybersecurity tools and software. You’ll also need to set up your own website. For all of that, you might spend $6,000 to $10,000. Business licenses, business registration, and insurance will cost you several hundred dollars more. It’s an investment, but one that can pay off in big ways.
If you don’t have the funds, there are various ways to get financing. Here are some options:
- Bank loans: This is the most common method but getting approved requires a great business plan and strong credit history.
- SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping with bank approval via an SBA-guaranteed loan.
- Friends and Family: Reach out to friends and family to provide a business loan or investment in your concept. It’s a good idea to have legal advice when doing so because SEC regulations apply.
- Crowdfunding: Websites like Kickstarter and Indiegogo offer an increasingly popular low-risk option, in which donors fund your vision. Entrepreneurial crowdfunding sites like Fundable and WeFunder enable multiple investors to fund your business.
How Much Can You Make?
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. If you’re working from home, you should have a profit margin of about 80%.
So, say, for example, in your first year you get one new client per month, at about a $2,500 upfront price for system installation. You could also get recurring revenue from perhaps five clients by providing ongoing security monitoring for $1,000 per month. That’s $90,000 in revenue in your first year!
Let’s say you keep growing your business so much that you rent an office and hire a cybersecurity team. This will lower your profit margin, probably to about 30%, but you’ll be able to handle a higher volume of business. You might be able to get ten new clients per month at $2,500 and have twenty clients paying for monitoring at $2,000 per month. That’s the annual revenue of an impressive $780,000, of which $234,000 stays in your pocket assuming that 30% margin.
From that point on your business can just keep growing. The sky is the limit!
Write a Business Plan
Before you can start bringing in those big bucks, you need to get your business plan together. This will function as your guide to take your cybersecurity business through the launch process. A business plan is also necessary if you need to apply for a bank loan or SBA loan.
Your business plan should include:
- Executive Summary: Brief overview of the entire business plan. Write this last.
- Business Overview: Overview of the company, vision, mission, ownership.
- Product and Services: Describe your offerings in detail. This will be based on your cybersecurity skills.
- Market Analysis: Assess market trends in cybersecurity.
- Competitive Analysis: Analyze main competitors, assessing their strengths and weaknesses, and try to find a way to gain an advantage.
- Sales and Marketing: Develop sales, marketing, and promotional strategies. Your target market is going to be small businesses.
- Management Team: Overview of management team, detailing their roles and professional background. This may be just you at this point.
- Operations Plan: This is the logistics of how you will run your business on a day-to-day basis.
- Financial Plan: Three years of financial planning, including startup costs, break-even analysis, profit and loss estimates, cash flow, and balance sheet.
Choose Your Business Structure and Register it with Your State
You need to decide what your company’s business structure will be. Here are the main options:
- Sole Proprietorship – The most common structure for small businesses makes no legal distinction between company and owner. All income goes to the owner, who’s also liable for any debts, losses, or liabilities incurred by the business. The owner pays taxes on business income on his or her personal tax return. You do not have to register your business with the state.
- Partnership – Similar to a sole proprietorship, but for two or more people. Again, owners keep the profits and are liable for losses. The partners pay taxes on their share of business income on their personal tax returns. You usually do not have to register a partnership with the state.
- Corporation – Under this structure, the business is a distinct legal entity and the owner or owners are not personally liable for its debts. Owners take profits through shareholder dividends, rather than directly. The corporation pays taxes, and owners pay taxes on their dividends, which is sometimes referred to as double taxation. You must register your corporation with your state.
- Limited Liability Company (LLC) – Combines the characteristics of corporations with those of sole proprietorships or partnerships. Again, the owners are not personally liable for debts. You must register your LLC with your state.
- S Corp – An S-Corporation refers to the tax classification of the business but is not a business entity. An S-Corp can be either a corporation or an LLC, which just need to elect to be an S-Corp for tax status. In an S-Corp, income is passed through directly to shareholders, who pay taxes on their share of business income on their personal tax returns.
Just a few last things to do:
- Apply for an Employer Identification Number (EIN) with the IRS
- Apply for business licenses and permits that may be needed at the state and local levels
- Obtain business insurance
- Open a business bank account
Get Your Business Up and Running!
Now you’re ready to start marketing your business and bringing in those clients. It will take some time to acquire your first few, but once you start providing services for clients, you’ll probably get referrals to new clients. Over time, there’s no limit to how large you can grow your business, considering the size and growth of the cybersecurity industry. So, it sounds a lot better than working for someone else, right? Take control of your future and your income and get rolling on your new cybersecurity business.