Cyber Security and Buying a Business
By Kimberly Connella | October 25, 2019 | 0 Comments
Cyber Security and Buying a Business
Before you buy a business, you need to ensure the quality of its cyber security. In 2019, most companies rely on technology to store, transmit and secure valuable elements of their business.
A company’s network is like the hood of a car, everything can look shiny and great from the outside, but be falling apart on the inside.
Just like you wouldn’t buy a car without examining what’s under the hood, you shouldn’t buy a business without first examining its IT infrastructure.
Many elements that contribute to a company’s value rely on adequate cyber security. Without it, the following lose their value:
- Intellectual property
- Customer records
- Employee information
- Marketing tactics
- Data operations
- Financial records
And more.
As a result, these elements are only as valuable as the cyber security policies and protocols protecting them.
Before you invest in a business, you need to make sure you’re not buying technical assets that are vulnerable to theft, loss, and attacks.
Analyze Cyber Security Before Investing
Ultimately, you don’t want to discover after purchase that a company’s IT infrastructure is riddled with security flaws and vulnerabilities.
The more vulnerabilities a network has, the more risk you’re taking on by purchasing it. Even if nothing is visibly wrong, hidden holes in security could lead to unwelcome cyber attacks and data breaches down the line.
It’s one thing to get hit with a cyber attack on a business you know like the back of your hand, it’s another thing to get hit on a business you just purchased.
It’s important to always have an incident response plan catered to your business. However, it’s more important to ensure the business isn’t an easy target for cyber attacks in the first place.
If the prospective company does have network and security risks that you’re aware of, then you should be negotiating the valuation of the company based on those risks.
In the past, the state of a company’s cyber security hasn’t been as detrimental as it is now. However, in the age of data breaches, it’s increasingly risky to invest in companies that are susceptible to cyber attacks.
Due Diligence Before Buying a Business
Luckily, it is easier than ever to determine if a business has adequately invested in their cyber security.
All it takes is a quick network security assessment to reveal the state of their IT infrastructure. Think of it as an audit, it’s an inspection of the entire network, policies, people, and systems within an organization.
Before making an offer on a company, you should be asking them for an updated vulnerability scan of their networks.
That way, you know exactly what you’re walking in to and are aware of whatever risks you’ll be taking on.
There are many negative cyber security factors that can take away from the overall valuation of your company. Specifically, here are a few:
- Unsecure network
- Unsecure databases
- Inadequate security measures on the cloud
- Risky security policies
- Lack of security policies
- Uninformed or untrained staff
- Firewall misconfigurations
- Outdated applications and software
If you’re not versed in technical jargon, you should consider consulting a cyber security expert for a quote on the cost of fixing your prospective company’s network. Learn more about network security assessments here.
That way, when it comes time to negotiate the purchase, you have a clear idea of how much it will cost to clean up the network.
Cyber Security is the Future of Business
Cyber security is the process of securing your people, network, systems, and data.
As businesses rely on technology more and become increasingly digitalized, it will become the most important aspect of every business that operates online.
You can’t run a business when criminals keep breaking into your network and stealing your merchandise. Security enables daily operations and takes priority.
If you’re about to invest in a business, then it’s important to look ahead. Furthermore, if you’re planning on scaling your business, then it’s important that you have an IT infrastructure that can grow with you.
Ultimately, if your prospective company has an IT infrastructure that’s outdated, weak, and insecure, then it’s a myriad of risks you ought to consider before purchasing.
If you’re looking for a consult, aNetworks offers free cyber security consulting and complimentary quotes.
If you’re looking for a comprehensive list of factors to consider before purchasing a business, check out entrepreneur’s “How to Buy a Business” article for an in-depth analysis.