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Do you want to start cyber security business?
Do you want to start a cyber security business? Well, in the modern world of internet and technology, cybercrimes such as stealing personal, financial or national data are committed by people on every scale by the use of computers and internet.
Starting a cyber security business will prove extremely beneficial for you as all business owners know the importance of protecting their sensitive data from expert hackers. In case, you don’t know how to start this business, we are providing you a detailed sample business plan for the cyber security business startup named ‘Fiduciary Tech’.
Executive Summary
2.1 The Business
Fiduciary Tech will be owned by Jack Gosling who is a Masters in Information Security and has revolutionary cyber security business ideas. The business is meant to secure the data of its clients from cybercrimes and unnecessary threats.
2.2 Management
Jack has obtained the services of experienced and skilled software and computer engineers.
2.3 Customers
Our customers will be the business owners, government agencies, and institutes. We’ll secure our customer’s data by blocking its access to unauthorized users.
2.4 Business Target
Our target is to balance the initial cost of the startup with earned profits by the end of the first year and to achieve the net profit margin of $10k per month by the end of the first year.
Company Summary
Jack has a Masters degree in Information Security from Harvard University and is expert in the domain of cyber-security. He has been working in Symantec as a Cryptographer for ten years, but now he has decided to start a cyber-security business .
3.2 Why the Business is being started
Jack has always been passionate about learning more about securing data from hackers, by starting a cyber-security business. He has a team of excellent security analysts and vulnerability assessors. He wants to use his and his team’s IT skills to avail the cyber security business opportunities.
3.3 How the Business will be started
Jack will rent a large office near the Chinatown, Boston. Latest computers, servers, laptops, intrusion detection and prevention systems, anti-malware and other tech things will be purchased for the startup besides the usual inventory. The company will undertake various measures to make sure that employees and networks are secured from unnecessary threats.
The startup summary is as follows:
The detailed start-up requirements are given below:
| Start-up Expenses | |
| Legal | $75,500 |
| Consultants | $0 |
| Insurance | $62,750 |
| Rent | $22,500 |
| Research and Development | $42,750 |
| Expensed Equipment | $42,750 |
| Signs | $1,250 |
| TOTAL START-UP EXPENSES | $247,500 |
| Start-up Assets | $0 |
| Cash Required | $322,500 |
| Start-up Inventory | $52,625 |
| Other Current Assets | $222,500 |
| Long-term Assets | $125,000 |
| TOTAL ASSETS | $121,875 |
| Total Requirements | $245,000 |
| START-UP FUNDING | $0 |
| START-UP FUNDING | $273,125 |
| Start-up Expenses to Fund | $121,875 |
| Start-up Assets to Fund | $195,000 |
| TOTAL FUNDING REQUIRED | $0 |
| Assets | $203,125 |
| Non-cash Assets from Start-up | $118,750 |
| Cash Requirements from Start-up | $0 |
| Additional Cash Raised | $118,750 |
| Cash Balance on Starting Date | $121,875 |
| TOTAL ASSETS | $0 |
| Liabilities and Capital | $0 |
| Liabilities | $0 |
| Current Borrowing | $0 |
| Long-term Liabilities | $0 |
| Accounts Payable (Outstanding Bills) | $0 |
| Other Current Liabilities (interest-free) | $0 |
| TOTAL LIABILITIES | $0 |
| Capital | $0 |
| Planned Investment | $0 |
| Investor 1 | $312,500 |
| Investor 2 | $0 |
| Other | $0 |
| Additional Investment Requirement | $0 |
| TOTAL PLANNED INVESTMENT | $695,000 |
| Loss at Start-up (Start-up Expenses) | $313,125 |
| TOTAL CAPITAL | $221,875 |
| TOTAL CAPITAL AND LIABILITIES | $221,875 |
| Total Funding | $265,000 |
Services for customers
If you are starting a computer security business, you must focus on the services, you will provide to your customers. This sample business plan of Fiduciary Tech will guide you how to start your own cyber security business.
Our services will include:
- Dark Web Monitoring Agent: This system will detect the compromised credentials associated with your personnel and notify to block his access before they breach your data.
- Next Generation Endpoint Protection: This system will detect zero-day threats and restore the database in case of attack and recover it from error.
- Firewall & Managed Firewall: This system will monitor your networks, connected with multiple sources and block sophisticated malicious attacks by using Intrusion Detection and Prevention System.
- Cyber Security & Network Assessment: This system will protect the client by internal threats by strictly controlling the addition of unauthorized users. This system will ensure that unauthorized users can’t access the internet data and can’t make any changes to lockdown servers and computers.
Marketing Analysis of cyber security business
The most deciding and important feature of a cyber security business plan is the accurate marketing analysis. A perfect cyber security company business plan is the one in which you have mentioned your target customers and devised your policies according to them. Correct marketing analysis of IT security consulting business plan will help you by clearly defining whether the market has the potential of your startup or not.
For the initial startup, you must formulate a small business cyber security plan template, but if you want to expand your business at a bigger scale, you must seek the services by experts to devise you an IT security business plan according to your finances and location.
5.1 Market Trends
The demand for cybersecurity is increasing day by day. According to a report by IBISWorld, the business is growing at a considerable rate of 5.2% annually. There are about 16,000 cybersecurity centers working in the United States.
Note
This business is responsible for the employment of more than 70,000 persons in the U.S. and is generating a revenue of $13 billion per year. This statics clearly demonstrate that the demand of cyber-security business is about to reach the optimal peak in the near future
5.2 Marketing Segmentation
Our business has a worldwide scope, however, we will only target the companies and institutes of Boston at the initial stage. The following groups will prove our major customer’s category.
5.2.1 Corporate Sector & Business Owners: This target group will comprise of all the hotels, restaurants, real estate owners, manufacturers and distributors, branding agencies and most significantly software development firms. The business owners have now acknowledged that the breaches of their data can have drastic consequences and can even lead to the cessation of their business. So, they will acquire our deft execution services and can concentrate on growing their business without the tension of losing sensitive information.
5.2.2 Institutions & Organizations: Our second target group comprises of institutions and organizations located worldwide including schools, colleges, and universities, government and public-sector organizations, religious and sports organizations, political parties, etc. These organizations will also need our services for securing their network and server to block the access of unauthorized users to the personal data of the members of those institutes.
5.2.3 Celebrities & Individuals: Our third target group consists of actors, media persons, sportsmen, bloggers and other people who can need our services if some unauthorized user tries to access their accounts.
The detailed market analysis of our potential customers is given in the following table:
| Market Analysis | |||||||||
| Potential Customers | Growth | YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | CAGR | ||
| Corporate Sector | 48% | 22,334 | 32,344 | 43,665 | 52,544 | 66,432 | 10.00% | ||
| Institutions & Organizations | 18% | 11,433 | 13,344 | 16,553 | 18,745 | 20,545 | 13.43% | ||
| Customers & Individuals | 34% | 18,322 | 19,455 | 20,655 | 22,867 | 24,433 | 15.32% | ||
| Total | 100% | 52,089 | 65,143 | 80,873 | 94,156 | 111,410 | 9.54% | ||
5.3 Business Target
- To achieve the net profit margin of $10k/month by the first year, $15k by the second year, and $25k by the third year
- To balance the initial cost of the startup with earned profits by the end of the first year
5.4 Product Pricing
Great service
Great service. Good turnaround time and quality work. Thanks!
Product pricing is one of the most important factors in deciding the strategy for any business. The cyber-security services are in great demand due to the advancements in technology to prevent the trade of personal data. However, we have almost the same rates as most of the cyber-security businesses in our vicinity.
Strategy
If you are going to start cyber security business, and want to expose your business to a wider audience, there is a way which we call improving sales. For gaining lead upon your competitors, you have to make an exceptional cyber security business model.
The sample sales strategy of Fiduciary Tech is given for your help.
6.1 Competitive Analysis
Our biggest competitive edge is that each member of our team is insured and licensed, besides being skilled and expert, and can resolve any issue regarding cyber-security instantly. We are offering a wide range of services to our customers. Moreover, we are located in an area which is the center of small and large businesses and institutes who need their data to be safe and protected.
6.2 Sales Strategy
A startup cannot thrive without proper publicity and advertisements; we will adopt various means to advertise our service.
- We will hold seminars and workshops to aware business owners about the cybersecurity threats
- We will advertise our business in relevant business magazines, newspapers, TV stations, and social media.
- We will offer a 10% discount on our services for the first three months of our launch.
- We will offer our services with a money back guarantee in case of any fault.
6.3 Sales Monthly
6.4 Sales Yearly
6.5 Sales Forecast
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Cyber Security | 187,330 | 260,320 | 258,240 |
| Network Assessment | 802,370 | 815,430 | 823,540 |
| Firewall & Managed Firewall | 539,320 | 770230 | 1,002,310 |
| Next Generation Endpoint Protection | 265,450 | 322,390 | 393,320 |
| Dark Web Monitoring Agent | 1,435,320 | 1,250,430 | 1,762,450 |
| TOTAL UNIT SALES | 3,229,790 | 3,418,800 | 4,239,860 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Cyber Security | $140.00 | $150.00 | $160.00 |
| Network Assessment | $600.00 | $800.00 | $1,000.00 |
| Firewall & Managed Firewall | $700.00 | $800.00 | $900.00 |
| Next Generation Endpoint Protection | $650.00 | $750.00 | $850.00 |
| Dark Web Monitoring Agent | $140.00 | $120.00 | $100.00 |
| Sales | |||
| Cyber Security | $214,800 | $274,000 | $333,200 |
| Network Assessment | $120,050 | $194,500 | $268,500 |
| Firewall & Managed Firewall | $50,110 | $71,600 | $93,000 |
| Next Generation Endpoint Protection | $139,350 | $194,600 | $249,850 |
| Dark Web Monitoring Agent | $62,350 | $72,300 | $82,250 |
| TOTAL SALES | |||
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Cyber Security | $0.70 | $0.80 | $0.90 |
| Network Assessment | $0.40 | $0.45 | $0.50 |
| Firewall & Managed Firewall | $0.30 | $0.35 | $0.40 |
| Next Generation Endpoint Protection | $3.00 | $3.50 | $4.00 |
| Dark Web Monitoring Agent | $0.70 | $0.75 | $0.80 |
| Direct Cost of Sales | |||
| Cyber Security | $98,300 | $183,000 | $267,700 |
| Network Assessment | $66,600 | $119,900 | $173,200 |
| Firewall & Managed Firewall | $17,900 | $35,000 | $52,100 |
| Next Generation Endpoint Protection | $19,400 | $67,600 | $115,800 |
| Dark Web Monitoring Agent | $27,700 | $69,200 | $110,700 |
| Subtotal Direct Cost of Sales | $294,100 | $699,400 | $1,104,700 |
Personnel plan
After knowing the basics of how to start a cyber security business, the most important step is to hire hard-working, skilled and honest professionals to assist you in running your business. Here is the sample personnel plan of Fiduciary Tech.
7.1 Company Staff
Jack will be the manager himself, however, he’ll hire the following staff:
- 1 Accountant to maintain financial and other records
- 5 Security Engineers and Architects for developing security software
- 3 Technicians to operate the servers and other machines
- 4 Cryptographers & Cryptanalysts for encrypting algorithms
- 4 Virus Technicians & Vulnerability Officers for analyzing new viruses
- 2 Managing Assistants to manage the company’s official website
- 5 Penetration Testers/Ethical Hackers
- 4 Customer Representatives to interact with customers and record their orders
7.2 Average Salary of Employees
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Accountant | $85,000 | $95,000 | $105,000 |
| Security engineers | $133,000 | $166,000 | $199,000 |
| Technicians | $35,000 | $42,000 | $59,000 |
| Cryptographers | $100,000 | $133,000 | $170,000 |
| Virus Technicians | $63,300 | $70,000 | $76,700 |
| Managing Assistants | $85,000 | $92,000 | $109,000 |
| Penetration Testers | $100,000 | $133,000 | $166,000 |
| Customer Representatives | $85,000 | $95,000 | $105,000 |
| Total Salaries | $331,300 | $411,000 | $504,700 |
Financial Plan
If you are going to start your own cyber security business, then make sure you will pay special attention to your financial plan. Your financial plan should include the details about how will you manage your incomes and expenses, and how will you recover investments group business plan from the profit etc. So, you should focus on your financial plan if you want to expand your business at a large scale.
For if you don’t know how to write an effective financial plan, you can take help from this sample business plan on how to start your own cyber security business. However, it is always better to hire experts for devising you a financial plan, for if you want accurate figures of your business in your financial plan.
8.1 Important Assumptions
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 11.00% | 12.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 26.42% | 27.76% | 28.12% |
| Other | 0 | 0 | 0 |
8.2 Brake-even Analysis
| Brake-Even Analysis | |
| Monthly Units Break-even | 5530 |
| Monthly Revenue Break-even | $159,740 |
| Assumptions: | |
| Average Per-Unit Revenue | $260.87 |
| Average Per-Unit Variable Cost | $0.89 |
| Estimated Monthly Fixed Cost | $196,410 |
8.3 Projected Profit and Loss
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $309,069 | $385,934 | $462,799 |
| Direct Cost of Sales | $15,100 | $19,153 | $23,206 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $15,100 | $19,153 | $23,206 |
| Gross Margin | $293,969 | $366,781 | $439,593 |
| Gross Margin % | 94.98% | 94.72% | 94.46% |
| Expenses | |||
| Payroll | $138,036 | $162,898 | $187,760 |
| Sales and Marketing and Other Expenses | $1,850 | $2,000 | $2,150 |
| Depreciation | $2,070 | $2,070 | $2,070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4,000 | $4,250 | $4,500 |
| Insurance | $1,800 | $1,800 | $1,800 |
| Rent | $6,500 | $7,000 | $7,500 |
| Payroll Taxes | $34,510 | $40,726 | $46,942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $188,766 | $220,744 | $252,722 |
| Profit Before Interest and Taxes | $105,205 | $146,040 | $186,875 |
| EBITDA | $107,275 | $148,110 | $188,945 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $26,838 | $37,315 | $47,792 |
| Net Profit | $78,367 | $108,725 | $139,083 |
| Net Profit/Sales | 30.00% | 39.32% | 48.64% |
8.3.1 Profit Monthly
8.3.2 Profit Yearly
8.3.3 Gross Margin Monthly
8.3.4 Gross Margin Yearly
8.4 Projected Cash Flow
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40,124 | $45,046 | $50,068 |
| Cash from Receivables | $7,023 | $8,610 | $9,297 |
| SUBTOTAL CASH FROM OPERATIONS | $47,143 | $53,651 | $59,359 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47,143 | $53,651 | $55,359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21,647 | $24,204 | $26,951 |
| Bill Payments | $13,539 | $15,385 | $170,631 |
| SUBTOTAL SPENT ON OPERATIONS | $35,296 | $39,549 | $43,582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35,296 | $35,489 | $43,882 |
| Net Cash Flow | $11,551 | $13,167 | $15,683 |
| Cash Balance | $21,823 | $22,381 | $28,239 |
8.5 Projected Balance Sheet
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184,666 | $218,525 | $252,384 |
| Accounts Receivable | $12,613 | $14,493 | $16,373 |
| Inventory | $2,980 | $3,450 | $3,920 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $201,259 | $237,468 | $273,677 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $12,420 | $14,490 | $16,560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198,839 | $232,978 | $267,117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9,482 | $10,792 | $12,102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9,482 | $10,792 | $12,102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9,482 | $10,792 | $12,102 |
| Paid-in Capital | $30,000 | $30,000 | $30,000 |
| Retained Earnings | $48,651 | $72,636 | $96,621 |
| Earnings | $100,709 | $119,555 | $138,401 |
| TOTAL CAPITAL | $189,360 | $222,190 | $255,020 |
| TOTAL LIABILITIES AND CAPITAL | $198,839 | $232,978 | $267,117 |
| Net Worth | $182,060 | $226,240 | $270,420 |
8.6 Business Ratios
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 4.35% | 30.82% | 63.29% | 4.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 5.61% | 4.71% | 3.81% | 9.70% |
| Inventory | 1.85% | 1.82% | 1.79% | 9.80% |
| Other Current Assets | 1.75% | 2.02% | 2.29% | 27.40% |
| Total Current Assets | 138.53% | 150.99% | 163.45% | 54.60% |
| Long-term Assets | -9.47% | -21.01% | -32.55% | 58.40% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.68% | 3.04% | 2.76% | 27.30% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.80% |
| Total Liabilities | 4.68% | 3.04% | 2.76% | 54.10% |
| NET WORTH | 99.32% | 101.04% | 102.76% | 44.90% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.18% | 93.85% | 93.52% | 0.00% |
| Selling, General & Administrative Expenses | 74.29% | 71.83% | 69.37% | 65.20% |
| Advertising Expenses | 2.06% | 1.11% | 0.28% | 1.40% |
| Profit Before Interest and Taxes | 26.47% | 29.30% | 32.13% | 2.86% |
| Main Ratios | ||||
| Current | 25.86 | 29.39 | 32.92 | 1.63 |
| Quick | 25.4 | 28.88 | 32.36 | 0.84 |
| Total Debt to Total Assets | 2.68% | 1.04% | 0.76% | 67.10% |
| Pre-tax Return on Net Worth | 66.83% | 71.26% | 75.69% | 4.40% |
| Pre-tax Return on Assets | 64.88% | 69.75% | 74.62% | 9.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19.20% | 21.16% | 23.12% | N.A. |
| Return on Equity | 47.79% | 50.53% | 53.27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.56 | 4.56 | 4.56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19.7 | 22.55 | 25.4 | N.A. |
| Accounts Payable Turnover | 14.17 | 14.67 | 15.17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1.84 | 1.55 | 1.26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.02 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120,943 | $140,664 | $160,385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.45 | 0.48 | 0.51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23.66 | 27.01 | 30.36 | N.A. |
| Sales/Net Worth | 1.68 | 1.29 | 0.9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
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