Understanding Internet Security Threats for Small Businesses

Small business makes up a huge part of the global economy. Based on a new survey of U.S. small businesses sponsored by Symantec and the National Cyber Security Alliance, sixty-seven percent (67%) of small businesses have become more dependent on the Internet last year and sixty-six (66%) are dependent on it for their day-to-day operations.

Business man

The Internet is a vast gateway that provides great potential for businesses. More small businesses today use networks and the Internet as vital business tools to find new customers, and serve existing customers more effectively.

Strategic Research Corporation reported that seventy (70%) percent of small firms that experienced a major data loss went out of business within a year. In a related survey by Insight UK, thirty-seven percent (37%) of respondents admitted that they backup their files only once a month. Some, unbelievably, never back up at all. Some of these small online businesses don't even install anti-virus software and anti-spyware in their computers.

Internet security threats can severely impair business operations, affecting profitability and customer satisfaction. Businesses lost huge amounts of money to cyber criminals and internet scams. Not only is the business compromised, but the safety of the customers as well. Many individuals been victims of identity theft and other Internet crimes. Internet security is a grave issue as danger lurks everywhere on the Internet and anyone online is susceptible.

Cyber criminals, attack tools and methods have evolved and these criminals are coming up with new ways to attack businesses all the time. They are using more sophisticated and dynamic methods of stealing information. "High-tech criminals that steal highly secure information, but even more novice users are capable of making an attack due to the tools available to them. These criminals do not focus on the size of your businesses, rather, the ease of getting past your defenses and stealing your information, which is of great value to them.

Small businesses are attractive to cyber criminals

Cyber criminals already control more than 100 million computers across the globe, and have have shifted their attention to small businesses and individuals. While large firms are ideal targets because of their large assets, small businesses are more vulnerable to attacks. Large firms have set security and contingency measures in place, but small businesses are at risk since cyber criminals know that they are the least protected.

A closer look reveals that most small businesses lack effective protection from attackers and other cyber criminals, sufficient cyber security policies and training. They often lack resources to hire internet security experts or purchase effective security software. Some rely on using cheap Internet security software or making use of freeware, or none at all, and doing so makes them easy targets. This lack of security investment creates an environment that is relatively low risk for criminals.

A firewall coupled with anti-virus software and spyware are not sufficient protection against the web threats and email threats of today. Other factors such as data loss due to hardware failures, proper backup procedures and disaster recovery, are also often overlooked.

In other cases, management views information security as a cost that can be cut during difficult financial times, only to create the potential to suffer significant losses in the long run. Brad Dinerman, founder of the National Information Security Group, states that, "When economic circumstances look dire, it is easy to turn security into a checklist item that keeps being pushed back. However the reality is that, in such situations, security should be a primary issue. The likelihood of threats affecting your organization will probably increase and the impact can be more detrimental."

Online technology, particularly social media, creates a myriad of challenges and problems for businesses. In small business marketing, promotion through social marketing, such as Facebook, Twitter and Google+ is becoming a huge trend. Online businesses realize the affordability and ease of use of these channels and are using them as promotional tools.

Unfortunately social networking, as well as other emerging technology such as smartphones and tablets, provide avenues of potential threats and attack. Social networking platforms provide cyber criminals with the ability to reach targets where smart phones and other devices play a large role. Businesses with employees who access corporate data using their smartphones and tablets need to have implemented security policies for these devices to avoid making them prone to social engineering attacks.

Ensuring the security of business networks while utilizing the benefits of social networks and mobile technology becomes a challenge for business owners.

Strengthening Internet Security

Security threats are continually evolving - as threats change, and new threats appear. The continuously increasing level of security threats makes it imperative for small businesses to increase their level of security knowledge and investment.

Fortunately, there are also a variety of ways to protect your business from Internet security threats. Investing in reliable security solutions combined with actual knowledge provides small business owners with a well-rounded approach to protecting their businesses and managing cyber risk.

Developing a security policy that can easily be updated and enforced is important. It is also vital to focus on network security prevention such as educating staff on safe web usage, choosing secure passwords, empowering your staff with the best practices and guidelines, keeping PC and network security up to date, and limiting exposure through content filtering.

Using Personal Finance Tips To Grow Your Small Business

Every business guru states that you should keep your personal finances separate from your business finances. And, we could not agree more.

However, separating your business life from your personal life should only be about monetary transactions. We all learn life lessons (knowledge) that not only work in our personal lives but can easily translate to our business lives as well.

Knowledge is power after all and if it can help get you get ahead in your business then it really does not matter where that knowledge originated from.

To that note, there are many personal finance tips that relate very well to managing the financial aspect of your business.

Let's review a few of them:

1) What You Need vs. What You Want:

You may want a Lamborghini but know that it is not a good vehicle for a small, growing family - it's not good on gas, has no room for groceries and cannot take the kids to soccer practice. It just does not make sense for you - even though you would really like to have it.

The same goes for our business. You may want that 50,000 square foot building or that $50,000 piece of equipment. But, if your business cannot use those items to generate more revenue then they cost - then those types of purchases just do not make sense for your business.

And, it is just not capital purchases either. Do your employees really need a foosball table in the break room? Or, does your business really need that $500 per month T-1 line when a simple $50 per month DLS line would work just fine.

Being in business is not about satisfying what you want but taking asset that you need and leveraging them to grow the business - by bring in more revenue then that revenue costs to get.

If you don't need it for your core business - then don't waste your scarce money on it!

2) Living Pay Check To Pay Check:

If you over spend in your personal life, you usually run out of money before that next pay check comes in.

What happens is as soon as you get your pay check, you immediately look for ways to spend it - most of the time for things that leave you little or nothing to show for it. Some even spend their pay before they get it in their hands. Sure you had a great time, but that money runs out and runs out quickly.

Then, about half way between pay checks, a week after your last pay period and a week before your next pay day - you have an opportunity to do something really amazing - something that would either improve your life or maybe even bring in more money for your personal use.

But, you have to decline because you have no money to take advantage of it and the opportunity will not wait for you to get your next check.

This is a great lesson for business. Far too many businesses spend their revenue before or immediately after they get it - regardless if that spending does anything to perpetuate the business.

Example: I worked with a brand new business owner who was helping doctors and other medical professionals collect payments from insurance companies. I took this business owner around to all the independent doctor offices I could find and helped him pitch his services. One of these contacts bit and gave him some business. The doctor provided him with about $10,000 worth of claims to collect on. Immediately, this business owner was able to get about 90% of those claims to pay from which he received a 10% commission.

Now, instead of taking that $900 and putting it into his business - to grow his business or setting some of it aside for new opportunities - he used those funds, for personal reasons like a new gym membership, took his friends out to dinner and purchased the latest cell phone with a very expensive plan, not for his business, but for his personal use only.

What happened is that this doctor, who was really impressed with this business owner's ability to collect, referred him to a college friend and colleague in a town about 85 miles away. However, this business owner had to decline the new business, not because he couldn't do it or because he was too busy, but because he did not have the cash to drive to the other town.

Not only did this mean that the business owner missed out on new business, but the referring doctor, feeling let down, did not give him any additional business after this incident.

3) More Money Will Improve Your Life:

In our personal lives, if we find ourselves short of cash, we tend to look for more money. Get a bank loan or maybe even a payday loan. While this may work temporarily, giving us more money to spend, if we don't change what we spend our money on, very quickly we end up right back in the same situation - short of cash and a life that is not improved but maybe worse off as we still have to pay for that new money.

In business, many entrepreneurs find that their expenses outweigh their revenue - especially if revenue is slipping. But, instead of looking at the business - what it is spending its money on or why it is losing or not growing revenue - the business owner thinks that just getting more money is the only answer.

Ten Ways to Strengthen Your Business Plan

The most important reason to write a business plan is create a roadmap for the entrepreneur or business owner. A plan can also be a valuable tool for communicating your business idea to others, for example, to secure financing or attract investors.

Whatever your reasons, any business plan will be stronger by following these basic guidelines.

1. Anticipate the questions readers will have and answer them in your business plan. They'll want to know about you, your business, and your industry. They'll be interested in your financial and employment history. They'll need to know that you understand your customer, and that you know how to makes sales and serve customers.

2. Forecast sales a bit lower than you think they will be. Smart business planners will intentionally err on the conservative side, showing viability with as few sales as possible.

3. Estimate expenses a little higher than you believe they might be. The brutal truth is that contingencies or expense buffers are all too often necessary and get spent once the business is in play.

4. Remove some of the guesswork from your sales projections by gathering items such as signed contracts, letters of intent or some other form of written confirmation that customers are willing to buy your products or services.

5. Provide a complete set of clear and realistic financial forecasts, and make sure you know them well enough to discuss them intelligently with your banker or investor. Demonstrate your understanding of how money flows in and out of your business, and convey your knowledge with sales projections, a cash flow forecast, and pro forma income statements and balance sheets.

6. Be frugal. In your business plan, show readers that you make wise buying decisions and that you are sourcing the best products and materials. If you can get by with an older truck, don't ask for financing for that shiny new one.

7. Be realistic and factual throughout your business plan. Nothing undermines your credibility quicker than inaccuracies. Where it makes sense to do so, state where the information comes from.

8. Communicate various ways that you know your business, including, understanding your customers, having a savvy approach to pricing, and knowing how to make the operation work efficiently.

9. Your business plan needs to communicate your knowledge of the industry you will operate in. What types of goods are sold? Who are your competitors? What competitive advantage will motivate customers to buy from you?

10. Somewhere in your plan you'll want to talk about your qualifications, and share information about any business-relevant assets such as your educational background or work experience.

Everything you do to create a business plan will increase or decrease your confidence in the business idea. As your confidence increases you move toward launching the business; if it decreases, you have more work to do.

Type of Business Could Surpass Your Current Income

I know all too well what it feels like to be underpaid and unappreciated. Many people feel this way every single day and maybe you do as well. You probably work 40 hours or more per week and your paycheck doesn't seem worth the effort. Being underpaid leads to a lack of job satisfaction and frustration. It makes you want to search for something better and quit your current job.

The problem for many people is that they get so desperate they end up finding another job that is no better than the one that they left. You may possibly earn a little more but you're still trading hours for dollars and may soon fall back into the same rut. If you have ever read the book Rich Dad Poor Dad then you know the author's stance on being an employee. In order to have more income beyond just getting by as well as time-freedom to do what you want is by being a business owner but not with just any type of business.

Now you may be thinking, "I can't run a business, I have no experience." However, there is one business that doesn't require you to have experience or a college degree. It doesn't require tons of money to start and you don't have to spend 40 hours a week running it. This business is called network marketing (also referred to as direct selling.) Network marketing levels the playing field for everyone. People from all walks of life have created residual income and time-freedom for themselves.

I know of actors, singers, teachers, doctors, and various other professionals who have become a part of a network marketing company because they enjoy helping people as a way to earn more income. The two best things about this industry is that you create residual income and time-freedom. Being an employee cannot offer that and neither can a traditional small business. You spend a bulk of your time doing both.

If you dedicate your time and effort into building your network marketing business, you have the ability to enjoy the income you make. You will not lose income if you decide to go on vacation or have to take a few sick days, etc. Keep in mind that there are tons of opportunities out there so it is important to find one that offers products and/or services that you enjoy using yourself.

Selling a Small Business As a Short Sale

Drowning in business debt!?! Even when a company's sales start increasing, debt can eat away at the profits...

More and more small business owners are finding that profits are going to servicing their debt and keeping their business operational. In such cases, an option is to sell the business through a short sale. Especially if a business owner is burnt-out, looking at shuttering the business and declaring bankruptcy.

Declaring bankruptcy is different as a small business owner. It's not just an anonymous bank or bureaucratic phone company that is owed money; it's often suppliers and vendors with whom there are long-term personal relationships. And often, friends and family have invested in the business or lent large sums of money to help keep the business afloat.

A short sale can provide creditors at least a portion of the funds owed to them, while alleviating the small business owner of having a bankruptcy tied to their name and credit. It can also save the jobs of the employees.

Special note for franchise owners - If the business is under a franchise agreement and the franchise payments are grossly in arrears, there is a chance the franchisor can take back the business, leaving the owner without a business and still holding all the debt. It is in the interest of the franchisor for the business to sell and bring in a new owner who will start paying royalties.

How it works -

An experienced and competent business broker will package the business based upon its net profit and assets. The debt and other non-operational expenses will be added back to the net profit and an industry appropriate multiple will be determined. If the business sells for less than what is owed, it is a Short Sale. If it sells for more than what is owed, the owner will receive whatever is left over after all the debt is paid.

In a normal sale, an escrow is used primarily to protect the buyer from successor liability - any debt attached to the business. In a short sale, the escrow process also aids the seller in settling the business's debt.

Once all the debt is established, the escrow officer will prepare a seller's estimated statement reflecting all secured and unsecured debt. Secured debt includes tax liabilities, private liens, judgments, etc. Unsecured debt includes private loans. If the sale price covers all the secured debt, the remaining funds are distributed pro rata to the unsecured creditors. If the sale price doesn't cover all the secured debt, remaining funds are distributed pro rata to the secured creditors.

All creditors will need to agree on the payout in order to close the deal. Since the alternative is usually bankruptcy for a small business owner, creditors would prefer to receive something rather than nothing. Thus, they generally will agree to the pro rata payout.

Although short sales are messier than regular business transfers, they are a win-win for the buyer, the seller and the creditors. The buyer gets a good deal on the business; the seller avoids bankruptcy and is alleviated of their debt while their creditors get something rather than nothing.