Cybersecurity Budget Calculator for Small Business

Apr 23, 2021

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.

Try out our IT Security Budget Calculator below!

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Cybersecurity Budgets Explained

Every business owner knows the importance of proper budgeting. Successful small businesses create plans minutely in order to maximize profits.

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?

So, now you’re wondering, what is a typical budget? As there isn’t a “typical” small business, how can we describe a typical budget? Nonetheless, we can give you some factors to consider when making a budget. Look into:

    • 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)
commencing a data breach risk calculation

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

While there isn’t one unique solution to your cybersecurity spending, you can consider a couple of things when budgeting 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!

When you’re budgeting, set aside the minimum sum, which can increase over time.

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!

Triada Networks can be your partner that will provide long-term protection! We have more than twenty years of experience working with financial firms, so you can be assured that we’ll take care of your every need.
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Three Approaches to Setting a Cybersecurity Budget

You can approach security budgets in many ways. Let’s consider each one below.

Reactive vs. Proactive Approach

Most organizations are reactive – a cyberattack happens, and they jump at solving the problems that occur. Suddenly, they are spending tons of money because they want to act fast and keep their data unharmed. Instead, why not consider a proactive approach? Prepare for the attack before it happens! It’s much more efficient.

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!

Benchmark Approach

As the name suggests, organizations sit on the bench and monitor what others are doing. Sometimes it can be beneficial to check out what your competitors are doing and compare this to your security programs.

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.

Risk-Based Approach

This approach understands that your consultant or service provider will create a strategy based on the initial risk assessments. And when you think about it, this makes absolute sense.

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

Cyber Insurance

Have you heard about cyber insurance? A lot of organizations are including it in their security budgets simply because the costs of responding to the attacks keep increasing.

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.

Employee Education

As said, focus on prevention is of utmost importance, so it isn’t a surprise to see various companies holding training sessions on information security for their employees.

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.

Outsourcing

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

As mentioned, you might have a lot of clients that value privacy, which isn’t a surprise. More people are aware of privacy issues, especially when it comes to sensitive information such as financial data, ID numbers, etc.

Nowadays, you must guarantee privacy, or you’ll be out of business in no time.

Things to Consider When Creating Your Cybersecurity Budget

When creating any kind of budget, make sure to always look at the metrics and analytics. Get insights into your usual IT issues so you can solve them and build from there. Ask your IT experts the following questions:

    • 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.

Final Thoughts

With all of this on your mind, we hope you can use our calculator to set a solid cybersecurity budget. Although one can’t really put a price on safety, it’s good to know how much security you can afford. We would all like to live in houses with the best burglary prevention systems, right?

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.