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.

Cyber Security Business Plan - 3 Years Profit Forecast

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:

Cyber Security Business Plan - Startup Cost

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. 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.

Cyber Security Business Plan - Market Segmentation

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 CustomersGrowthYEAR 1YEAR 2YEAR 3YEAR 4YEAR 5CAGR
Corporate Sector48%22,33432,34443,66552,54466,43210.00%
Institutions & Organizations18%11,43313,34416,55318,74520,54513.43%
Customers & Individuals34%18,32219,45520,65522,86724,43315.32%
Total100%52,08965,14380,87394,156111,4109.54%

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

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

Cyber Security Business Plan - Sales Monthly

6.4 Sales Yearly

Cyber Security Business Plan - Sales Yearly

6.5 Sales Forecast

Cyber Security Business Plan - Unit Sales

Sales Forecast   
Unit SalesYear 1Year 2Year 3
Cyber Security187,330260,320258,240
Network Assessment802,370815,430823,540
Firewall & Managed Firewall539,3207702301,002,310
Next Generation Endpoint Protection265,450322,390393,320
Dark Web Monitoring Agent1,435,3201,250,4301,762,450
TOTAL UNIT SALES3,229,7903,418,8004,239,860
Unit PricesYear 1Year 2Year 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 CostsYear 1Year 2Year 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 1Year 2Year 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 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 1Year 2Year 3
Plan Month123
Current Interest Rate10.00%11.00%12.00%
Long-term Interest Rate10.00%10.00%10.00%
Tax Rate26.42%27.76%28.12%
Other000

 

8.2 Brake-even Analysis

Cyber Security Business Plan - Brake-even Analysis

 Brake-Even Analysis 
Monthly Units Break-even5530
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 1Year 2Year 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/Sales30.00%39.32%48.64%

8.3.1 Profit Monthly

Cyber Security Business Plan - Profit Monthly

8.3.2 Profit Yearly

Cyber Security Business Plan - Profit Yearly

8.3.3 Gross Margin Monthly

Cyber Security Business Plan - Gross Margin Monthly

8.3.4 Gross Margin Yearly

Cyber Security Business Plan - Gross Margin Yearly

8.4 Projected Cash Flow

Cyber Security Business Plan - Projected Cash Flow

 Pro Forma Cash Flow   
Cash ReceivedYear 1Year 2Year 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
ExpendituresYear 1Year 2Year 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   
AssetsYear 1Year 2Year 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 CapitalYear 1Year 2Year 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 1Year 2Year 3Industry Profile
Sales Growth4.35%30.82%63.29%4.00%
Percent of Total Assets
Accounts Receivable5.61%4.71%3.81%9.70%
Inventory1.85%1.82%1.79%9.80%
Other Current Assets1.75%2.02%2.29%27.40%
Total Current Assets138.53%150.99%163.45%54.60%
Long-term Assets-9.47%-21.01%-32.55%58.40%
TOTAL ASSETS100.00%100.00%100.00%100.00%
Current Liabilities4.68%3.04%2.76%27.30%
Long-term Liabilities0.00%0.00%0.00%25.80%
Total Liabilities4.68%3.04%2.76%54.10%
NET WORTH99.32%101.04%102.76%44.90%
Percent of Sales
Sales100.00%100.00%100.00%100.00%
Gross Margin94.18%93.85%93.52%0.00%
Selling, General & Administrative Expenses74.29%71.83%69.37%65.20%
Advertising Expenses2.06%1.11%0.28%1.40%
Profit Before Interest and Taxes26.47%29.30%32.13%2.86%
Main Ratios
Current25.8629.3932.921.63
Quick25.428.8832.360.84
Total Debt to Total Assets2.68%1.04%0.76%67.10%
Pre-tax Return on Net Worth66.83%71.26%75.69%4.40%
Pre-tax Return on Assets64.88%69.75%74.62%9.00%
Additional RatiosYear 1Year 2Year 3
Net Profit Margin19.20%21.16%23.12%N.A.
Return on Equity47.79%50.53%53.27%N.A.
Activity Ratios
Accounts Receivable Turnover4.564.564.56N.A.
Collection Days9299106N.A.
Inventory Turnover19.722.5525.4N.A.
Accounts Payable Turnover14.1714.6715.17N.A.
Payment Days272727N.A.
Total Asset Turnover1.841.551.26N.A.
Debt Ratios
Debt to Net Worth0-0.02-0.04N.A.
Current Liab. to Liab.111N.A.
Liquidity Ratios
Net Working Capital$120,943$140,664$160,385N.A.
Interest Coverage000N.A.
Additional Ratios
Assets to Sales0.450.480.51N.A.
Current Debt/Total Assets4%3%2%N.A.
Acid Test23.6627.0130.36N.A.
Sales/Net Worth1.681.290.9N.A.
Dividend Payout000N.A.