Steps to Create a Successful Cybersecurity Business

Here are the most essential aspects of starting your cybersecurity business:

1. Choose an area of expertise — Decide on your focus areas, such as network security, endpoint security, cloud security, vulnerability assessment, incident response, or cybersecurity consulting and training.
2. Skills and certifications — Ensure that you and your team have the necessary technical skills and certifications. Common certifications include CISSP, CISM, CEH, and CompTIA Security+.
3. Licenses and permits — If your services involve handling sensitive data, particularly health or financial information, compliance with federal regulations such as HIPAA (for health information) or GLBA (for financial information) is mandatory
4. Technology — Invest in state-of-the-art cybersecurity tools and technologies. This might include software for penetration testing, intrusion detection systems (IDS), security information and event management (SIEM) systems, and advanced threat protection solutions.
5. Hire professionals — Cybersecurity requires a team with diverse skills, including security analysts, engineers, and ethical hackers.
6. Register your business — A limited liability company (LLC) is the best legal structure for new businesses because it is fast and simple. Form your business immediately using ZenBusiness LLC formation service or hire one of the best LLC services on the market.
7. Legal business aspects — Register for taxes, open a business bank account, and get an EIN.
8. Insurance — Obtain adequate insurance to cover liabilities associated with cybersecurity work. 

Step 1: Decide if the Business Is Right for You

Pros and cons

Starting a cybersecurity business has pros and cons to consider before deciding if it’s right for you.

Cybersecurity industry trends

The cybersecurity market is being driven by the increase in computer and internet usage, improved hacker skills, and various regulations. 

Industry size and growth

• Industry size and past growth – The US cybersecurity industry is valued at more than $58 billion in 2022.((https://www.statista.com/outlook/tmo/cybersecurity/united-states)) 
• Growth forecast – The US market is predicted to grow around 8% per year through 2026. Globally, the $150 billion cybersecurity industry is expected to grow more than 13% annually through 2027.((https://www.mordorintelligence.com/industry-reports/cyber-security-market))
• Number of businesses – Research platform CyberDB says it has listed more than 3,500 cybersecurity vendors in the US.((https://www.cyberdb.co/database/usa/))
• Number of people employed – The Bureau of Labor Statistics says there were more than 140,000 jobs for information security analysts in 2020, and the career is growing 33% per year through 2030.((https://www.bls.gov/ooh/computer-and-information-technology/information-security-analysts.htm))

Trends and challenges

Trends in the cybersecurity industry include:

• Artificial intelligence (AI) and machine learning are being increasingly used to detect and resolve security threats. These are important tools for cybersecurity professionals to use. 
• Machine to machine (M2M) and Internet of Things (IoT) connections are increasing the need for cybersecurity, driving demand in the market. The need for cloud security and information security is also boosting demand.

Challenges in cybersecurity include:

• Businesses using outdated hardware make it difficult to ensure cybersecurity.
• The number of potential cybersecurity threats is increasing, and each requires threat detection abilities and a security solution. 
• The increase in remote work represents a new challenge for cybersecurity firms, as they have to find ways to protect distant connections.

What kind of people work in cybersecurity?

Cybersecurity engineers design the security architecture.

• Gender – 84% of cybersecurity engineers are male, while 16% are female.((https://www.zippia.com/cyber-security-engineer-jobs/demographics/#gender-statistics))
• Average level of education – 60% of cybersecurity engineers hold a bachelor’s degree.((https://www.zippia.com/cyber-security-engineer-jobs/demographics/#degree-level-types))
• Average age – The average age of a cybersecurity engineer is 42 years old.((https://www.zippia.com/cyber-security-engineer-jobs/demographics/#age-statistics))

How much does it cost to start a cybersecurity business?

Startup costs for a cybersecurity company range from $7,000 to $20,000. Costs include a high-end computer system and relevant software. The high end includes education and certifications, if you don’t already have them. 

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’ll need a handful of items to successfully launch your cybersecurity business, including: 

• A computer system
• Network security monitoring tools
• Encryption tools
• Web vulnerability scanning tools
• Penetration testing tools
• Antivirus software
• Network intrusion detection tools
• Packet sniffers

Start-up Costs	Ballpark Range	Average
Setting up a business name and corporation	$150 - $200	$175
Business licenses and permits	$100 - $300	$200
Insurance	$100-$300	$200
Business cards and brochures	$200 - $300	$250
Website setup	$1,000 - $3,000	$2,000
Computer system	$2,500 - $5,000	$3,750
Software	$3,000 - $5,000	$4,000
Education and certification	$0 - $5,000	$2,500
Total	$7,050 - $19,100	$13,075

How much can you earn from a cybersecurity business?

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. The below calculations assume a price of $2,500 for each. If you’re working from home, you should be able to achieve a profit margin of about 80%.

In your first year or two, you could get one new client per month at $2,500 upfront, while also maintaining an average of three monthly clients. This would bring in $120,000 in annual revenue and a tidy profit of $96,000, assuming that 80% margin. 

As your brand gains recognition and you start to get referrals, sales could climb to 10 new clients per month and 20 clients paying for monitoring. At this stage, you would rent a commercial space and hire staff, reducing your profit margin to around 30%. With annual revenue of an impressive $900,000, you would make a very comfortable $270,000.

What barriers to entry are there?

There are a few barriers to entry for cybersecurity. Your biggest challenges will be:

• Gaining education, certification, and experience
• Funding complete startup

Step 2: Hone Your Idea

Now that you know what’s involved in starting a cybersecurity business, it’s a good idea to hone your concept in preparation to enter a competitive market. 

Market research will give you the upper hand, even if you’re already positive that you have a perfect product or service. Conducting market research is important, because it can help you understand your customers better, who your competitors are, and your business landscape.

Why? Identify an opportunity

Research cybersecurity companies in your area to examine their services, price points, and customer reviews. You’re looking for a market gap to fill. For instance, maybe the local market is missing a company that offers advanced threat intelligence. 

This could jumpstart your word-of-mouth marketing and attract clients right away. 

What? Determine your services

Your services will depend on your skills and certifications. Having a full suite of security services is probably your best bet in terms of earning money, but you could specialize in one area, such as system analysis.

How much should you charge for cybersecurity services?

Cybersecurity services can vary greatly depending on the size of the system and network. System analysis and the installation of firewalls and other security elements can range from $1,000 to $10,000 or more. The same numbers apply to monthly security monitoring. Your costs will be limited to software and marketing, so as a solopreneur working from home you should aim for a profit margin of about 80%. 

Once you know your costs, you can use this Step By Step profit margin calculator to determine your markup and final price point. Remember, the prices you use at launch should be subject to change if warranted by the market.

Who? Identify your target market

Your initial target market will be small businesses, which you can find on LinkedIn. You could also find local businesses on search and review platforms like Google Maps and Yelp! and reach out to them directly. 

Where? Choose your business premises

In the early stages, you may want to run your business from home to keep costs low. But as your business grows, you’ll likely need to hire workers for various roles and may need to rent out an office.  Find commercial space to rent in your area on sites such as Craigslist, Crexi, and Instant Offices.

When choosing a commercial space, you may want to follow these rules of thumb:

• Central location accessible via public transport
• Ventilated and spacious, with good natural light
• Flexible lease that can be extended as your business grows
• Ready-to-use space with no major renovations or repairs needed

Step 3: Brainstorm a Business Name

Here are some ideas for brainstorming your business name:

• Short, unique, and catchy names tend to stand out
• Names that are easy to say and spell tend to do better 
• Name should be relevant to your product or service offerings
• Ask around — family, friends, colleagues, social media — for suggestions
• Including keywords, such as “cybersecurity” or “tech security”, boosts SEO
• Name should allow for expansion, for ex: “SafeGuard Cybersecurity Solutions” over “Ecommerce Secure Solutions”
• A location-based name can help establish a strong connection with your local community and help with the SEO but might hinder future expansion

Once you’ve got a list of potential names, visit the website of the US Patent and Trademark Office to make sure they are available for registration and check the availability of related domain names using our Domain Name Search tool. Using “.com” or “.org” sharply increases credibility, so it’s best to focus on these. 

Finally, make your choice among the names that pass this screening and go ahead with domain registration and social media account creation. Your business name is one of the key differentiators that set your business apart. Once you pick your company name, and start with the branding, it is hard to change the business name. Therefore, it’s important to carefully consider your choice before you start a business entity.

Step 4: Create a Business Plan

Here are the key components of a business plan:

• Executive Summary: A concise summary outlining the core elements of the cybersecurity business plan, including its mission, vision, and key financial highlights.
• Business Overview: An overview detailing the nature of the cybersecurity business, its mission, target market, and key value proposition in the cybersecurity sector.
• Product and Services: A description of the specific cybersecurity products and services offered, highlighting their unique features and benefits.
• Market Analysis: An examination of the cybersecurity market, identifying target customers, market trends, and potential growth opportunities for the business.
• Competitive Analysis: An assessment of competitors in the cybersecurity industry, analyzing their strengths and weaknesses to position the business effectively in the market.
• Sales and Marketing: A strategy outlining how the cybersecurity business plans to promote and sell its products and services, including key marketing channels and sales tactics.
• Management Team: Introductions and brief bios of key individuals in the cybersecurity business, emphasizing their relevant experience and skills.
• Operations Plan: Details on the day-to-day operations of the cybersecurity business, including infrastructure, technology, and processes to ensure effective cybersecurity services.
• Financial Plan: A comprehensive financial overview, including revenue projections, expenses, and profit margins, providing a clear picture of the business’s financial health and sustainability.
• Appendix: Additional supporting documents and information, such as detailed market research, legal documents, or any other relevant data that strengthens the cybersecurity business plan.

If you’ve never created a business plan, it can be an intimidating task. You might consider hiring a business plan specialist to create a top-notch business plan for you.

Step 5: Register Your Business

Plus, registration is exciting because it makes the entire process official. Once it’s complete, you’ll have your own business! 

Choose where to register your company

Your business location is important because it can affect taxes, legal requirements, and revenue. Most people will register their business in the state where they live, but if you are planning to expand, you might consider looking elsewhere, as some states could offer real advantages when it comes to cybersecurity businesses. 

If you’re willing to move, you could really maximize your business! Keep in mind, it’s relatively easy to transfer your business to another state. 

Choose your business structure

Business entities come in several varieties, each with its pros and cons. The legal structure you choose for your cybersecurity will shape your taxes, personal liability, and business registration requirements, so choose wisely. 

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.
• General 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.
• 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.
• C Corp – 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.
• 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 needs 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.

We recommend that new business owners choose LLC as it offers liability protection and pass-through taxation while being simpler to form than a corporation. You can form an LLC in as little as five minutes using an online LLC formation service. They will check that your business name is available before filing, submit your articles of organization, and answer any questions you might have.

Step 6: Register for Taxes

The final step before you’re able to pay taxes is getting an Employer Identification Number, or EIN. You can file for your EIN online or by mail or fax: visit the IRS website to learn more. Keep in mind, if you’ve chosen to be a sole proprietorship you can simply use your social security number as your EIN. 

Once you have your EIN, you’ll need to choose your tax year. Financially speaking, your business will operate in a calendar year (January–December) or a fiscal year, a 12-month period that can start in any month. This will determine your tax cycle, while your business structure will determine which taxes you’ll pay.

It is important to consult an accountant or other professional to help you with your taxes to ensure you are completing them correctly.

Step 7: Fund your Business

Securing financing is your next step and there are plenty of ways to raise capital:

• Bank loans: This is the most common method but getting approved requires a rock-solid business plan and strong credit history.
• SBA-guaranteed loans: The Small Business Administration can act as guarantor, helping gain that elusive bank approval via an SBA-guaranteed loan.
• Government grants: A handful of financial assistance programs help fund entrepreneurs. Visit Grants.gov to learn which might work for you.
• Venture capital: Venture capital investors take an ownership stake in exchange for funds, so keep in mind that you’d be sacrificing some control over your business. This is generally only available for businesses with high growth potential.
• Angel investors: Reach out to your entire network in search of people interested in investing in early-stage startups in exchange for a stake. Established angel investors are always looking for good opportunities. 
• 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.
• Personal: Self-fund your business via your savings or the sale of property or other assets.

Bank and SBA loans are probably the best options, other than friends and family, for funding a cybersecurity business. You might also try crowdfunding if you have an innovative concept. If you’re successful, you may be able to attract venture capital or angel investors.

Step 8: Apply for Licenses and Permits

Starting a cybersecurity business requires obtaining a number of licenses and permits from local, state, and federal governments.

Federal regulations, licenses, and permits associated with starting your business include doing business as (DBA), health licenses and permits from the Occupational Safety and Health Administration (OSHA), trademarks, copyrights, patents, and other intellectual properties, as well as industry-specific licenses and permits. 

You may also need state-level and local county or city-based licenses and permits. The license requirements and how to obtain them vary, so check the websites of your state, city, and county governments or contact the appropriate person to learn more. 

You could also check this SBA guide for your state’s requirements, but we recommend using MyCorporation’s Business License Compliance Package. They will research the exact forms you need for your business and state and provide them to ensure you’re fully compliant.

If you feel overwhelmed by this step or don’t know how to begin, it might be a good idea to hire a professional to help you check all the legal boxes.

Step 9: Open a Business Bank Account

Before you start making money, you’ll need a place to keep it, and that requires opening a bank account.

Keeping your business finances separate from your personal account makes it easy to file taxes and track your company’s income, so it’s worth doing even if you’re running your cybersecurity business as a sole proprietorship. Opening a business bank account is quite simple, and similar to opening a personal one. Most major banks offer accounts tailored for businesses — just inquire at your preferred bank to learn about their rates and features.

Banks vary in terms of offerings, so it’s a good idea to examine your options and select the best plan for you. Once you choose your bank, bring in your EIN (or Social Security Number if you decide on a sole proprietorship), articles of incorporation, and other legal documents and open your new account. 

Step 10: Get Business Insurance

Business insurance is an area that often gets overlooked yet it can be vital to your success as an entrepreneur. Insurance protects you from unexpected events that can have a devastating impact on your business.

Here are some types of insurance to consider:

• General liability: The most comprehensive type of insurance, acting as a catch-all for many business elements that require coverage. If you get just one kind of insurance, this is it. It even protects against bodily injury and property damage.
• Business Property: Provides coverage for your equipment and supplies.
• Equipment Breakdown Insurance: Covers the cost of replacing or repairing equipment that has broken due to mechanical issues.
• Worker’s compensation: Provides compensation to employees injured on the job.
• Property: Covers your physical space, whether it is a cart, storefront, or office.
• Commercial auto: Protection for your company-owned vehicle.
• Professional liability: Protects against claims from a client who says they suffered a loss due to an error or omission in your work.
• Business owner’s policy (BOP): This is an insurance plan that acts as an all-in-one insurance policy, a combination of the above insurance types.

Step 11: Prepare to Launch

As opening day nears, prepare for launch by reviewing and improving some key elements of your business. 

Essential software and tools

Being an entrepreneur often means wearing many hats, from marketing to sales to accounting, which can be overwhelming. Fortunately, many websites and digital tools are available to help simplify many business tasks.  

You may want to use project management software, such as ClickUp, asengana, or Notion, to manage your projects, tasks, and workflows.

Accounting

• Popular web-based accounting programs for smaller businesses include Quickbooks, Freshbooks, and Xero. 
• If you’re unfamiliar with basic accounting, you may want to hire a professional, especially as you begin. The consequences for filing incorrect tax documents can be harsh, so accuracy is crucial. 

Develop your website

Website development is crucial because your site is your online presence and needs to convince prospective clients of your expertise and professionalism.

You can create your own website using website builders. This route is very affordable, but figuring out how to build a website can be time-consuming. If you lack tech-savvy, you can hire a web designer or developer to create a custom website for your business.

They are unlikely to find your website, however, unless you follow Search Engine Optimization (SEO) practices. These are steps that help pages rank higher in the results of top search engines like Google. 

Marketing

Here are some powerful marketing strategies for your future business:

• Professional Branding — Design your branding to communicate security, trust, and technical expertise across all elements, including your logo, website, and marketing materials.
• Website and SEO — Build a comprehensive website detailing your cybersecurity services, client testimonials, and valuable resources, optimized for key terms in the IT security sector.
• Social Media Engagement — Engage on LinkedIn for B2B networking, Twitter for sharing timely industry news, and YouTube for posting educational content on cybersecurity.
• Direct Outreach — Network with businesses via free security assessments, webinars, and by participating in industry conferences and online forums.
• Cybersecurity Blog — Regularly update your blog with articles on current threats, security best practices, and protective tips for businesses and individuals.
• Case Studies and Success Stories — Showcase successful client protection stories to highlight the effectiveness of your services.
• Webinars and Online Workshops — Conduct educational webinars and workshops focused on topics like phishing recognition and data protection basics.
• Cybersecurity Seminars and Conferences — Participate in or host seminars and conferences to educate businesses on cybersecurity risks and solutions.
• Networking Events — Attend and host events to form and strengthen relationships with potential clients and partners in the cybersecurity and tech sectors.
• Partnerships with Tech Firms and Consultants — Collaborate with tech firms and consultants to offer comprehensive security solutions.
• Targeted Advertising and Email Marketing — Use digital advertising to reach potential clients and develop an email marketing strategy to nurture leads, share updates, and promote your services.

Focus on USPs

Unique selling propositions, or USPs, are the characteristics of a product or service that sets it apart from the competition. Customers today are inundated with buying options, so you’ll have a real advantage if they are able to quickly grasp how your cybersecurity business meets their needs or wishes. It’s wise to do all you can to ensure your USPs stand out on your website and in your marketing and promotional materials, stimulating buyer desire. 

Global pizza chain Domino’s is renowned for its USP: “Hot pizza in 30 minutes or less, guaranteed.” Signature USPs for your cybersecurity business could be: 

• The best 24-hour on-call live security monitoring 
• Frustrate hackers with top-of-the-line cybersecurity
• Keep your business safe with a full suite of cybersecurity tools 

Networking

You may not like to network or use personal connections for business gain. But your personal and professional networks likely offer considerable untapped business potential. Maybe that Facebook friend you met in college is now running a cybersecurity business, or a LinkedIn contact of yours is connected to dozens of potential clients. Maybe your cousin or neighbor has been working in cybersecurity for years and can offer invaluable insight and industry connections. 

The possibilities are endless, so it’s a good idea to review your personal and professional networks and reach out to those with possible links to or interest in cybersecurity. You’ll probably generate new customers or find companies with which you could establish a partnership. 

Step 12: Build Your Team

If you’re starting out small from a home office, you may not need any employees. But as your business grows, you will likely need workers to fill various roles. Potential positions for a cybersecurity business include:

• Cybersecurity Specialists – security services and monitoring
• Cybersecurity Engineers – analysis and installation
• General Manager – staff management, scheduling, accounting
• Marketing Lead – SEO strategies, social media, other marketing

At some point, you may need to hire all of these positions or simply a few, depending on the size and needs of your business. You might also hire multiple workers for a single role or a single worker for multiple roles, again depending on need. 

Free-of-charge methods to recruit employees include posting ads on popular platforms such as LinkedIn, Facebook, or Jobs.com. You might also consider a premium recruitment option, such as advertising on Indeed, Glassdoor, or ZipRecruiter. Further, if you have the resources, you could consider hiring a recruitment agency to help you find talent. 

Step 13: Run a Cybersecurity Business – Start Making Money!

Cybersecurity is vital for most businesses today, which is why it’s one of the world’s fastest growing industries. The US is a major market and expected to sustain its strong performance, given the increasing cyber risks and threats as most companies undergo digital transformation. There’s still time to get in on the ground floor and grab a slice of this massive market with your own cybersecurity business. 

You can start from home and eventually hire a team and build a tech security empire. Now that you’ve sharpened your knowledge, it’s time to secure your future with your new cybersecurity business!

Common Questions

Is a cybersecurity business profitable?

A cybersecurity business can be very profitable. Cybersecurity services are in high demand and don’t come cheap, so even if you’re a solopreneur working from home, you can make great money.

How can I get certified in cybersecurity?

There are a host of different certifications that you can get in various areas of cybersecurity. You can find more information from the National Initiative for Cybersecurity Careers and Studies.

How hard is cybersecurity?

Cybersecurity can be challenging due to the evolving nature of threats and the need for continuous learning and adaptation. It requires technical expertise, critical thinking, problem-solving skills, and staying updated with the latest security trends and technologies.

How do I get cybersecurity clients?

To acquire cybersecurity clients, consider networking, referrals, digital marketing, partnering with other businesses, and proactive outreach to industries in need of cybersecurity services.

What industries are most in need of cybersecurity?

Industries that often have a high demand for cybersecurity include finance and banking, healthcare, government and public sector, technology and software, and e-commerce and retail.

Can I start a cybersecurity company with no experience?

Starting a cybersecurity company with no experience can be challenging. Acquire relevant certifications, gain hands-on experience, continuously learn and stay updated, and consider collaborating with experienced professionals or partnering with established cybersecurity firms.

Which industry has the most cyberattacks?

The industry with the most cyberattacks can vary, but finance, healthcare, government, and technology sectors are commonly targeted due to the value of the data they hold. However, cybersecurity threats can occur in any industry, and businesses of all types should prioritize cybersecurity.