SMART START WORKSHOP

SMART START WORKSHOP

December 1 | Gerdin Business Building, Rm 2117

REGISTER FOR ONE OR BOTH SESSIONS 9:00-12:00 P.M., 1:00- 4:00 P.M.

The ISU Pappajohn Center for Entrepreneurship, Ames Chamber of Commerce & the Small Business Development Center (SBDC) will be hosting a “crash course” workshop for anyone who has ever considered starting a business. You will learn various topics such as insurance, intellectual property, business organization, registration, and operations. Topics will be presented by local business professionals.

This is a free workshop; however, registration is required. Please register by November 28th to guarantee your spot!

Register at http://www.isujcenter.org/event/smart-start-workshop

Cybersecurity, Part II

Last time, we looked at some reasons to start thinking about cybersecurity for your business. You may have found yourself asking, “Ok, how can I protect myself?” Below is a high-level overview of three fundamental aspects of cybersecurity, as well as some resources for further study. This technology doesn’t take a genius to understand, just a little patience and willingness to learn. Your business’s survival may depend on it.

Firewalls

“Firewall” may be a term we are all familiar with, but many of us don’t know what exactly a firewall is. According to cisco.com, “A firewall is a network security device that monitors incoming and outgoing network traffic based on a defined set of security rules.” Basically, a firewall will use filters to keep certain pieces of information out of your network. Most firewalls will let you choose which filters you want. In a post on their website, Comodo explains that firewalls can be configured to “prevent access to certain websites,” “prevent employees from sending certain types of emails,” and “prevent outside computers from accessing computers inside the network.” Some operating systems have firewalls built-in, including Mac OSX and Microsoft Windows. According to Microsoft, setting up a firewall is “the most effective and important first step you can take to help protect your computer.”

Firewalls can often act as your router, and even have “more advanced features that are designed to offer a superior level of [defense],” as opposed to a normal router, according to Manx Technology Group. For this reason, they recommend a firewall for a small business, rather than a traditional router. MTG goes on to list various features you will want when choosing a firewall. These include:

  • “Internet connection support”
  • “Wireless support”
  • “Antivirus”
  • “Intrusion Prevention Service”
  • “Web filtering”
  • “Reporting”
  • “Virtual Private Networks (VPN)”
  • “Technical support”

Popular vendors of firewalls include Cisco, Fortinet, and Sophos.

Antivirus software

Geeks On Site offer the following explanation of antivirus software: “Antivirus software, sometimes known as anti-malware software, is design to detect, prevent and take action to disarm or remove malicious software from your computer such as viruses, worms, and Trojan horses.” They go on to list the three scanning detection processes antivirus software uses:

Specific Detection, Generic Detection, and Heuristic Detection. Specific Detection “works by looking for known malware by a specific set of characteristics.” Generic Detection “looks for malware that are variants of known ‘families,’ or malware related by a common codebase.” Heuristic Detection “scans for previously unknown viruses by looking for known suspicious behavior or file structures.”

In a March 2007 article for TechRepublic, Erik Eckel lists 10 thing to look for in an antivirus application. These were:

  • “Potency”
  • “Low overhead”
  • “Centralized administration”
  • “Email protection”
  • “Compatibility”
  • “Effective reporting tools”
  • “Technical support”
  • “Certification”
  • “Simplified licensing”
  • “Reasonable cost”

Techradar offers suggestions on which antivirus software to use for your business: http://www.techradar.com/news/best-business-antivirus-8-top-paid-security-tools-for-small-businesses

Data backup

Losing data can be the ultimate business killer. According to atlantatech.net, “the cost of lost or stolen data access is estimated at $1.7 billion per year,” industry-wide. Backing up your data is the simplest step you can take to avoid these huge costs. In a 2014 article for CIO, Paul Mah advises that businesses use the “2+1” strategy. “For critical data,” he says, “businesses should make two full copies, maintained on separate physical devices. In addition, a third copy should be kept offline, preferably stashed at another location.” He points out that having one copy in a different location “protects a business from fires, floods and other localized natural disasters.”

Cloud backup solutions are gaining traction among small business owners these days, with companies like Carbonite, CrashPlan, and Backup Blaze being major players in the field. The previously mentioned Atlanta Tech article gives the following as factors to consider when choosing a cloud backup provider:

  • “Is Public, Private, or Hybrid Cloud the Best Bet for Your Business?”
  • “Which Type of Backup Schedule is Best for You?”
  • “Do They Offer Sufficient Flexibility for Your Storage and Scalability Needs?”
  • “How are Their Uptime Guarantees?”
  • “Do They Offer Sufficient Data Security and Compliance?”
  • “Do You Have Adequate Bandwidth?”
  • “Is There an Opportunity for Unified Business Communications?”

While cloud backup is the hip thing to use, Paul Mah recommends tape storage technology for your backup.

There are plenty of options out there for Cybersecurity. It all may seem a little overwhelming at first, but the important thing to do is educate yourself. Below, I’ve listed some resources that can be very useful in learning what security you need, how that security works, and what the options available are. Be sure to check them out, and ask your SBDC counselor about the Cybersecurity Workbook.

For further reading:

https://www.cio.com/article/2378019/small-business/how-to-build-a-storage-and-backup-strategy-for-your-small-business.html

https://www.techrepublic.com/article/10-things-to-look-for-in-an-antivirus-application/

http://www.techrepublic.com/blog/10-things/10-things-to-look-for-in-a-hardware-based-firewall/

https://www.comodo.com/resources/home/how-firewalls-work.php

Cybersecurity, Part I

Why should a small business need to worry about cybersecurity? Sure, there are hackers and data thieves out there, but they only go after big corporations, right? Some of the numbers regarding the threat to small businesses may surprise you. While you shouldn’t let these statistics paralyze you, or shy away from the competitive advantage technology can provide, you need to be aware of the risks that exist. Let me outline for you why you need cybersecurity, and give you some numbers for perspective.

Organizations are relying more and more on cloud services. While this provides extra convenience, it is also a great target for potential hackers. Additionally, any device connected to the internet can be attacked. Munichre.com reports that “one-third of U.S. consumers experienced a computer virus, hacking incident or other cyber attack in [2016].” Clearly, attackers are more active now that they know the pool of potential victims is growing. Not only that, but they know that businesses are viable targets as well. On October 31 of last year, nudatasecurity.com reported that “64% of companies have experienced web-based attacks.” Unfortunately, the increased convenience and capabilities that come with cloud storage, digital technology, and the like, also bring increased risk in the form of viruses, ransomware, and data breaches.

These attacks can damage your business in any one of a number of ways. The most prominent form of damage among small businesses, however, is financial. A 2015 report by juniperresearch.com estimated that “the average cost of a data breach…will exceed $150 million by 2020.” Now, this number is inflated by the cost of breaches to major corporations. Still, a recent Poneman Institute study revealed that small businesses (less than 1,000 employees) spent an average of $879,582 recovering from data breaches (between May 2015 and May 2016), because of theft or damage. Also, revenue losses among businesses breached averaged $955,429. This can be absolutely devastating for your business. According to the study, 60% of small businesses who experience these attacks go out of business within six months.

At this point, it may seem obvious that there is a serious threat to small businesses from cyber attackers and data thieves. According to smallbiztrends.com, “43% of cyberattacks target small businesses.” That number is staggering, considering the number of large firms and individuals who could be targeted instead. In a June 2, 2017 article for Business News Daily, Sammi Caramela observed that “The…reason small businesses make such appealing targets is because hackers know these companies are less careful about security.” Most small business owners underestimate the threat to their businesses. As Caramela points out, “small businesses fall into hackers’ cybersecurity ‘sweet spot:’ They have more digital assets to target than an individual consumer has, but less security than a larger enterprise.”

You don’t have to live in fear of a cyberattack on your business. But you shouldn’t be naïve either. Next week, we’ll go over some valuable tools you can use to protect your business.

Also, be sure to get the Cybersecurity Workbook from your SBDC Adviser.

Crowdfunding: Pros and Cons

Crowdfunding has become a popular way of obtaining capital among entrepreneurs. Everything from movies to bottle cutters have gone through the financing process on sites such as Indiegogo and Kickstarter. Many have achieved success this way. Others have failed. Today I want to explain what exactly crowdfunding is, and what the pros and cons of using this method are.

According to investopedia.com, “Crowdfunding is the use of small amounts of capital from a large number of individuals to finance a new business venture.” The purpose of crowdfunding is to increase the availability of funds for entrepreneurs by putting them in contact with a larger pool of potential investors. On the other side of the equation, investors can avoid the risk of putting large sums of money into a single venture, and instead only donate amounts as low as $10. Entrepreneurs are required to provide updates to investors periodically, protecting the investors’ interests. Crowdfunding is sometimes rewards-based, meaning investors will “get to participate in the launch of a new product or receive a gift for their investment,” according to Investopedia. Equity-based crowdfunding is another option. This option works more like a typical investment, where funders become partial owners of the company. Equity-based funding is fully regulated by the SEC.

Crowdfunding comes with its own set of problems. According to floship.com, there’s “a huge amount of uncertainty when it comes to the accounting rules for funds raised through crowdfunding.” Because crowdfunding doesn’t work like a typical investment (such as a loan), there is confusion as to whether funds received in this manner should be declared as capital or income. Additionally, each state will have different rules on taxing this money. Some legal experts are also concerned that the lack of regulation will lead to scammers using crowdfunding sites to grab free money (Forbes). This is due to the businesses seeking funding not being required to provide financial statements to investors. This may cause many investors to put a lot of money in the hands of irresponsible business owners. There are other problems with crowdfunding, but these are some of the most widespread.

Despite the risks, crowdfunding has considerable benefits that come with it. After all, there have been a number of successful ventures that have used crowdfunding to reach their goals (onlinemba). Notably, all-or-nothing crowdfunding platforms have no participation fee, and return funds to investors if the project doesn’t reach 100% of its goal. It can also be a valuable marketing tool. According to Tanya Prive on Forbes, “an active crowdfunding campaign is a good way to introduce a venture’s overall mission and vision to the market, as it is a free and easy way to reach numerous channels.” This is because “many crowdfunding platforms incorporate social media mechanisms, making it painless to get referral traffic to your website and other social media pages.” Another attractive aspect of crowdfunding, according to nibusinessnessinfo.co.uk, is that “your investors can often become your most loyal customers.” After taking part in the financing process, it is likely that they will not only buy whatever you are selling, but also will refer their friends to the product or service. This makes your investors your marketing team, minus the salary expense.

Like all investments, there are considerable risks and benefits that go along with crowdfunding. When done the wrong way, investors can waste considerable amounts of money, and business owners can lose customers and develop a negative image. When done right, however, it can result in visionary products being developed, and benefit everyone involved in the process. If you decide to invest in a crowdfunded project, be sure to proceed with caution. If you decide to use crowdfunding to obtain funds, make sure you keep your investors informed, and develop a plan beforehand. Despite the criticism, plenty of businesses and entrepreneurs have used crowdfunding successfully, and you can as well.

For further reading:

https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-crowdfunding

https://www.cnbc.com/2015/09/15/how-to-crowdfund-successfully-tips-from-experts.html