When it comes to safety, you should be generous with your IT budget. Still, you need to know exactly how much you need to set aside each month so you can create a more precise business plan and protect your business from data breaches.
Our calculator will help you calculate the costs, and this article will go in-depth about cybersecurity budgets.
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Cybersecurity Budgets Explained
As a business owner, you really need to concentrate on money management, from general cash flow monitoring to cost reduction and profit allocation. Remember that each unnecessary cost hits much harder when you’re a smaller company.
Thorough planners must cover everything. Gather your firm’s financial data, market analytics, and forecasts in order to keep strategic options in mind. When considering future improvements, you also want to have a precise starting point. This is where calculators, such as ours for an IT budget, are so helpful.
You’ll get precise estimates about your future security spending so you can fit other company’s expenses in your plan.
And what’s a bigger business expense than security risks? With the news regularly reporting on new business devastations due to cybercrime, you must reconsider whether you are investing enough in the protection of your small business.
Data breaches and cyberattacks will take away your clients’ trust, along with revenue. On top of that, you’ll lose your valuable data, which will prevent you from doing business as usual. In the end, cybercrime can cost you much more than security services.
If you don’t invest in cybersecurity and data loss prevention, you risk:
- Monetary theft
- Expensive software and network repairs
- Legal fees and consequences
- Increased costs of insurance
- Business and client loss
- Data loss or corruption
- Damage to your business reputation
When you realize this, calculating a security budget gets clearer. Just remember, cybersecurity spending will save you money by allowing your usual business processes to go as smoothly as possible.
What Is a Typical Cybersecurity Budget?
- Average spending on cybersecurity in your industry
- IT budgets in general for companies of your size
- The sensitivity of the data hold (if you’re running a financial business, your clients’ data is extremely vulnerable, so you should increase your IT security spending based on that)
- Requests from partners and clients (if clients or your business partners demand privacy, there’s no doubt about spending more on security)
How Much Do Companies Generally Spend on Cybersecurity?
Estimates of what an average company might spend greatly vary.
Some cybersecurity professionals argue that an organization should spend around 10% of its IT budget on security, but a lot of companies spend 15-20%. Companies in high-tech and finance sectors, naturally, have even bigger budgets.
According to Forbes, spending on cloud security is predicted to increase by 33%, becoming a $585 million-dollar market, and data security will grow by 7.2%.
Big enterprises are doing all in their power to avoid cyber threats, but smaller businesses aren’t far behind. This isn’t a surprise since remote working has left us all exposed. People are much easier targets when out of office, so it’s only logical to increase cybersecurity budgets to avoid being targeted.
Speaking in real numbers: if your one hundred-person company has an IT budget of $5,000 per month, you should plan to use at least $500 for security. You can build from that and get a risk assessment from your provider to avoid future data breaches.
Think about it: 10% of your IT spending is around 0.5% of company revenue – essentially nothing for the safety of your business.
One other way to look at the issue is in relation to the ROI (return on investment). If you invest $10,000 a year in cybersecurity to prevent a loss of $50,000 in revenue, that’s a win. However, it would be too much if your potential losses due to cyberattacks are around 5-15k. If you take one step forward, don’t take two steps back.
It’s worth noting that finding a trustworthy IT provider is much more important than having a huge budget. You can spend half of your IT budget on security and not get the same level of security as you with a 5% allocation.
This is because, like with any service business, you need to carefully pick your partners. Scan security teams that offer IT services and conduct due diligence on companies. It’s best you do this from the start rather than blowing your budget and still not being safe.
How to Budget for Cybersecurity
First and foremost, make sure to focus on providing an ongoing program for your company, not hiring experts for a one-time project.
You need continuous protection, and it’s more advisable to get a package with various services, from network security to weekly risk assessments.
Try out our IT Security Budget Calculator!
You’ll be slowly easing into a secure IT environment with your limited budget. With smart planning, you won’t even feel the cutbacks you’ll have to make for investing in information security products.
When you operate on a tight budget, you and your advisers must realize the value of cybersecurity. There’s no room for hesitation when cyber threats are approaching each day.
You have the responsibility to protect your company, and this includes protecting it from virtual dangers, too. It’s like installing a good lock on your store – the better the lock, the lesser your chances are of getting robbed.
The commitment to lower your risk exposures must be long-term. If you lower your shields, you’ll experience data breaches sooner or later.
But not all locks are expensive. Some great cybersecurity solutions can be implemented at zero cost. Creating strong passwords, using multi-factor authorization, and educating your employees about suspicious emails are all great barriers to begin with, to name a few.
It’s all about the commitment toward security that comes from above – from you.
You must budget for current issues with the goal of achieving full protection.
If your cloud isn’t secure, improve that first before moving on to more complex threats. Likewise, you don’t need fancy systems if you haven’t installed basic security protocols first.
Even the best of systems can’t protect you against your employees’ mistakes, like jeopardizing the network with unauthorized Wi-Fi or using the company’s email address on suspicious websites.
Security training should be a part of your onboarding process, so include that in your budget, too.
Keep Your Small Business Safe!
Three Approaches to Setting a Cybersecurity Budget
Reactive vs. Proactive Approach
Instead of hoping you’ll be lucky enough to avoid getting hacked, focus on preventing data breaches and keeping business risks under control. It will end up being much more profitable in the long run!
For example, if your main competitor starts spending more on security and attracts your clients that value privacy, you should utilize that fact.
Get those clients back by implementing the same changes to your systems. The best practices are valued for a reason, so use them.
You need to find out where your leaks are so you can fill the holes. Usually, IT security companies categorize risks and suggest prices in accordance with the things you aim to tackle. If you haven’t had trouble with, for example, phishing attempts but have constant DDoS attempts on your network, you should put more effort into preventing the latter.
Naturally, don’t forget to implement the basic measures against phishing, too. Just put more money where your risks lie.
Trends in Cybersecurity Budgeting
You need to recover after a robbery, right? Your insurance company covers broken windows, property damages, etc. Data theft is similar. You’ll be spending a lot of money on recovery, so it’s wise to have insurance that can cover the costs.
Naturally, focus on prevention is still important, but in case the worst happens, you need a response plan.
Consider doing the same because a lot of issues can be avoided with education. People make mistakes, especially if they aren’t aware of cyber threats. They can become a target for phishing attacks or allow easy access to your system with weak passwords.
A simple computer-based course can go a long way, so don’t worry about additional costs in your budget.
Both small businesses and large corporations are opting for hiring outside cybersecurity companies. It’s often more affordable than having an entire IT department specialized in preventing cybercrime.
Managed service providers can offer you full protection in addition to on-call IT support for a decent price.
Increasing Privacy Concerns
Nowadays, you must guarantee privacy, or you’ll be out of business in no time.
Things to Consider When Creating Your Cybersecurity Budget
- How many crashes did your website have and why?
- How many DDoS (distributed denial of service) attempts did your network experience?
- How many times have you got malware or viruses in the system?
- Has your business information ever been compromised (data breach or data leak)?
- Has someone in your company been a victim of phishing?
Gathering these pieces of information will surely help you with risk management. Only when you know exactly how much you’re exposed will you know how much you should spend.
Arm yourself with the best protection right now, tailored to your specific needs.
We can schedule a consultation and discuss your budget in relation to relevant threats to your business to find the most optimal solution. Get in touch and secure your business today.