How to Start a Cybersecurity Company

Technological advances over the last few decades have made it possible for organizations to conduct business without the boundaries of time and space. Consumers can purchase life insurance online. Retailers can reach customers on the other side of the world. 

Now, physicians are even conducting telehealth visits, eliminating the need for patients to travel to the office for routine visits. While this has broadened our horizons, both as consumers and business owners, it has also presented us with a new set of problems: protecting our information from online attacks. Cybersecurity companies help small, mid-size, and large corporations identify any chinks in their armor that could lead to costly data breaches.

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Learn how to start your own Cybersecurity Company and whether it is the right fit for you.


Start a Cybersecurity Company by following these 10 steps:

You have found the perfect business idea, and now you are ready to take the next step. There is more to starting a business than just registering it with the state. We have put together this simple guide to starting your Cybersecurity Company. These steps will ensure that your new business is well planned out, registered properly and legally compliant.

Check out our How to Start a Business page.

STEP 1: Plan your business

A clear plan is essential for success as an entrepreneur. It will help you map out the specifics of your business and discover some unknowns. A few important topics to consider are:

Luckily we have done a lot of this research for you.

What are the costs involved in opening a Cybersecurity Company?

While you may not realize it, you have already made the first investment in your business — your education. As mentioned, most potential clients will look beyond your formal education, placing stock in certifications. While just one certification can set you back $1,000, the return on your investment will prove invaluable in the long run.

Once you have the education and experience needed to launch a cybersecurity company, you will need to invest in a few other things:

  • Office space — Many small business owners start out working from a home office or co-working space. While these options will reduce initial costs and ongoing expenses, they are limiting. Once your business starts to expand and you find you need to hire additional staff, it will be necessary for you to purchase or lease a dedicated office space.

  • Computer systems and software — This investment will be used to manage the day-to-day activities in your business. You will also need a variety of hardware and software tools to assist in identifying new potential threats and testing new patches and/or security tools.

  • Website and marketing strategy — While your website doesn’t need to be complicated, it should be educational and secure. Remember, every client considering hiring your company will visit your website and will partially base their decision on what they see.

  • Insurance and licensing — Startup business owners are encouraged to work with an insurance agent, attorney, and/or financial advisor to ensure their investment is adequately protected against potential losses.

  • Transportation — Your work will often require travel to client offices for on-site work.

Industry leaders recommend an initial investment of between $100,000 and $350,000. This budget covers all upfront costs, as well as payroll and ongoing expenses, for the first year while you work to bring on paying customers.

What are the ongoing expenses for a Cybersecurity Company?

Given the dynamic nature of this industry, you will want to continue to invest in your (and your team’s) education through certifications and continued education. Additionally, your ongoing expenses budget should include payroll costs, insurance, upgrades, maintenance, and hardware and software repair. Transportation and travel expenses to clients and for networking events should also be budgeted for.

Who is the target market?

Research indicates that 58% of all malware attacks target small businesses. This, coupled with the fact that most corporations have their own cybersecurity teams on staff, makes small to medium-sized companies your target market. 

From there, you will need to decide where your team’s knowledge and experience could prove most beneficial. Do you want to be known for your extensive knowledge in network security or access control? Did your market analysis reveal that a particular industry’s cybersecurity needs aren’t being met?

How does a Cybersecurity Company make money?

Cybersecurity companies offer a variety of security services for a fee. These services include systems auditing, technology support, pen testing, vulnerability analysis, and consulting. Some specialize in one or two services, while others offer a full suite of solutions. Some choose to cater to the needs of one particular industry while others utilize their skills to service businesses spanning every industry.

How much can you charge customers?

Cybersecurity rates vary depending upon location, client budgets, and the scope of each project. On average, businesses are paying cybersecurity consultants $150 an hour or more to defend their networks against cyberattacks.

How much profit can a Cybersecurity Company make?

Large cybersecurity firms that service corporations report profits in the millions. With a vision and a targeted marketing strategy, businesses focusing on the individual market have this same earning potential.

How can you make your business more profitable?

Building a sustainable, scalable business in this industry requires innovation and a talented workforce. To maximize profits, surround yourself with the brightest talent and continually strive to introduce new solutions that fill this industry’s dynamic needs.

What will you name your business?

Choosing the right name is very important. Read our detailed guide on how to name your business. We recommend checking if the business name you choose is available as a web domain and securing it early so no one else can take it.

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STEP 2: Form a legal entity

The most common business structure types are the sole proprietorship, partnership, limited liability company (LLC), and corporation.

Establishing a legal business entity such as an LLC or corporation protects you from being held personally liable if your Cybersecurity Company is sued.

Form Your LLC

Read our Guide to Form Your Own LLC

Have a Professional Service Form your LLC for You

Two such reliable services:

You can start an LLC yourself and pay only the minimal state LLC costs or hire one of the Best LLC Services for a small, additional fee.

Recommended: You will need to elect a registered agent for your LLC. LLC formation packages usually include a free year of registered agent services. You can choose to hire a registered agent or act as your own.

STEP 3: Register for taxes

You will need to register for a variety of state and federal taxes before you can open for business.

In order to register for taxes you will need to apply for an EIN. It's really easy and free!

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You can acquire your EIN for free through the IRS website, via fax, or by mail. If you would like to learn more about EINs and how they can benefit your LLC, read our article, What is an EIN?.

Learn how to get an EIN in our What is an EIN guide or find your existing EIN using our EIN lookup guide.

Small Business Taxes

Depending on which business structure you choose, you might have different options for how your business will be taxed. For example, some LLCs could benefit from being taxed as an S corporation (S corp).

You can learn more about small business taxes in these guides:

There are specific state taxes that might apply to your business. Learn more about state sales tax and franchise taxes in our state sales tax guides.

STEP 4: Open a business bank account & credit card

Using dedicated business banking and credit accounts is essential for personal asset protection.

When your personal and business accounts are mixed, your personal assets (your home, car, and other valuables) are at risk in the event your business is sued. In business law, this is referred to as piercing your corporate veil.

Additionally, learning how to build business credit can help you get credit cards and other financing in your business's name (instead of yours), better interest rates, higher lines of credit, and more.

Open a business bank account

  • This separates your personal assets from your company's assets, which is necessary for personal asset protection.
  • It also makes accounting and tax filing easier.
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Recommended: Read our Best Banks for Small Business review to find the best national bank, credit union, business-loan friendly banks, one with many brick-and-mortar locations, and more.

Open net-30 accounts

When it comes to establishing your business credit, net-30 vendors are considered the way to go. The term "net-30," which is popular among vendors, refers to a business credit arrangement where the company pays the vendor within 30 days of receiving goods or services.

Net-30 credit terms are often used for businesses that need to obtain inventory quickly but do not have the cash on hand.

Besides establishing business relationships with vendors, net-30 credit accounts get reported to the major business credit bureaus (Dun & Bradstreet, Experian Business, and Equifax Business Credit). This is how businesses build business credit so they can qualify for credit cards and other lines of credit.

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Recommended: Read our guide on the best net-30 vendors so you can start building business credit now, so you never have to worry about cash flow in the future. Keep in mind that poor cash flow is the #1 reason businesses fail!

Get a business credit card

  • This helps you separate personal and business expenses by putting your business' expenses all in one place.
  • It also builds your company's credit history, which can be useful to raise money and investment later on.

STEP 5: Set up business accounting

Recording your various expenses and sources of income is critical to understanding the financial performance of your business. Keeping accurate and detailed accounts also greatly simplifies your annual tax filing.

STEP 6: Obtain necessary permits and licenses

Failure to acquire necessary permits and licenses can result in hefty fines, or even cause your business to be shut down.

STEP 7: Get business insurance

Just as with licenses and permits, your business needs insurance in order to operate safely and lawfully. Business Insurance protects your company’s financial wellbeing in the event of a covered loss.

There are several types of insurance policies created for different types of businesses with different risks. If you’re unsure of the types of risks that your business may face, begin with General Liability Insurance. This is the most common coverage that small businesses need, so it’s a great place to start for your business.

Learn more about General Liability Insurance.

Another notable insurance policy that many businesses need is Workers’ Compensation Insurance. If your business will have employees, it’s a good chance that your state will require you to carry Workers' Compensation Coverage.

STEP 8: Define your brand

Your brand is what your company stands for, as well as how your business is perceived by the public. A strong brand will help your business stand out from competitors.

If you aren't feeling confident about designing your small business logo, then check out our Design Guides for Beginners, we'll give you helpful tips and advice for creating the best unique logo for your business.
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Recommended: Get a logo using Truic's free logo Generator no email or sign up required, or use a Premium Logo Maker.

How to promote & market a Cybersecurity Company

Leading cybersecurity professionals utilize a variety of advertising tools to reach their target audience. Webinars, videos, and blogs are an effective way to reach potential customers and educate them regarding internet dangers. Content should be shared on social media platforms such as LinkedIn and Twitter. Guest writing spots on relevant websites and in printed publications will also help establish your business as an industry expert. Once you have built an email list, emails with relevant tips and tricks should be sent out at least once a week. Additionally, business owners are encouraged to attend conferences and host events, both locally and on a national level, that could draw in potential new customers.

How to keep customers coming back

Networking and word of mouth are effective and powerful marketing tools. Invite happy customers to share their stories on your website or as a featured blog post. Preventing cyberattacks against your clients will be paramount to your company’s long-term success.

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Still unsure about what kind of business you want to start? Check out the latest Small Business Trends to help inspire you.

STEP 9: Create your business website

After defining your brand and creating your logo the next step is to create a website for your business.

While creating a website is an essential step, some may fear that it’s out of their reach because they don’t have any website-building experience. While this may have been a reasonable fear back in 2015, web technology has seen huge advancements in the past few years that makes the lives of small business owners much simpler.

Here are the main reasons why you shouldn’t delay building your website:

  • All legitimate businesses have websites - full stop. The size or industry of your business does not matter when it comes to getting your business online.
  • Social media accounts like Facebook pages or LinkedIn business profiles are not a replacement for a business website that you own.
  • Website builder tools like the GoDaddy Website Builder have made creating a basic website extremely simple. You don’t need to hire a web developer or designer to create a website that you can be proud of.

Using our website building guides, the process will be simple and painless and shouldn’t take you any longer than 2-3 hours to complete.

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Recommended: Get started today using our recommended website builder or check out our review of the Best Website Builders.

Other popular website builders are: WordPress, WIX, Weebly, Squarespace, and Shopify.

STEP 10: Set up your business phone system

Getting a phone set up for your business is one of the best ways to help keep your personal life and business life separate and private. That’s not the only benefit; it also helps you make your business more automated, gives your business legitimacy, and makes it easier for potential customers to find and contact you.

There are many services available to entrepreneurs who want to set up a business phone system. We’ve reviewed the top companies and rated them based on price, features, and ease of use.

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Recommended: Find the best phone system for your business; check out our review of the Best Business Phone Systems 2021.

Start A Cybersecurity Company In Your State

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Select your state below for an in-depth guide on completing each of these steps in your home state.

Is this Business Right For You?

Are you highly motivated and detail-oriented? Do you have a background in cybersecurity and the certifications needed to lead an organization to success? Do you enjoy rooting out potential problems and helping others keep their business assets secure? If so, you may have what it takes to launch and manage a successful cybersecurity company.

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Want to know if you are cut out to be an entrepreneur?

Take our Entrepreneurship Quiz to find out!

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What happens during a typical day at a Cybersecurity Company?

You and your cybersecurity team will be responsible for ensuring your clients’ unique security needs are met. Because this is a very dynamic industry, no two days will be alike. Common duties include:

  • Research and identify emerging online threats.

  • Review clients’ apps, operating systems, and networks to identify any weaknesses

  • Develop new patches that protect your clients’ systems and data from attack

  • Provide customer support through multiple channels, including telephone, online, and in-person services

  • Repair servers, networks, hardware, and software that have been attacked

  • Stay up to date on new programming languages, network architecture, devices, firmware, and software.
  • Research industry needs and market accordingly

  • Perform sales pitches and onboard new clients

  • Attend new certification classes and industry-related conferences

Additionally, you, or a member of your staff, will need to perform administrative duties and continually seek out innovative ways to market the business.

What are some skills and experiences that will help you build a successful Cybersecurity Company?

Education and hands-on experience will lay the foundation for your business. Team members should have a degree in computer science, information technology, or a related field. Degrees, however, will not be enough to prove you have what it takes to protect your clients against cyber attacks. Certifications through reputable organizations such as EC-Council, ISACA, and Global Information Assurance Certification will build industry credibility and help you gain a competitive edge over the competition.

While education and certifications will help you get your foot in the door, they won’t be enough to lead your business to long-term success. Attention to detail, interpersonal skills, and the ability to communicate with individuals from varying backgrounds will all be essential to building your business. A business or marketing background would also prove beneficial. As the leader of your company, you must be able to examine your strengths and weaknesses and surround yourself with team members who fill in any gaps.

What is the growth potential for a Cybersecurity Company?

From the small mom-and-pop retail store to the large hospital down the street, virtually every company relies on computers, software, and the internet to conduct everyday business. Hackers understand and prey on our reliance on technology. As soon as experts identify and combat one attack, two more pop up in its place. 

While this is bad news for business owners, it has led to a thriving cybersecurity market. By 2022, the industry is expected to grow to almost $225 billion in annual revenue. And, since more and more organizations are beginning to realize the value in preventing an attack before it happens, this number is expected to increase significantly over the next decade.

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Take the Next Step

Find a business mentor

One of the greatest resources an entrepreneur can have is quality mentorship. As you start planning your business, connect with a free business resource near you to get the help you need.

Having a support network in place to turn to during tough times is a major factor of success for new business owners.

Learn from other business owners

Want to learn more about starting a business from entrepreneurs themselves? Visit Startup Savant’s startup founder series to gain entrepreneurial insights, lessons, and advice from founders themselves.

Resources to Help Women in Business

There are many resources out there specifically for women entrepreneurs. We’ve gathered necessary and useful information to help you succeed both professionally and personally:

  • Funding
  • Events
  • Guides
  • Support

If you’re a woman looking for some guidance in entrepreneurship, check out this great new series Women in Business created by the women of our partner Startup Savant.

What are some insider tips for jump starting a Cybersecurity Company?

It is important to keep in mind that, for most clients, cybersecurity is a sensitive and intimidating subject. While they understand that the cost to clean up after a cyberattack is far greater than protecting themselves on the front end, many are hesitant to make that initial investment. Therefore, your ability to prove your value will be put to the test from the start. While it may be tempting to be an industry jack-of-all-trades, leaders caution against doing so. Instead, start by carving out a niche based on your experience and market needs. Once you’ve built a solid foundation and reputation in the industry, you can start to add additional services and specialties.

Due to the sensitive nature of this business, it is recommended that you have a client service agreement signed before starting any project. The agreement should outline client expectations, payment terms, ownership of intellectual property, and liabilities/indemnification. Failure to do so could result in a lawsuit that can cause irreparable damage.

How and when to build a team

Many start-up businesses find it difficult to gauge when it is time to hire additional staff. While performing all the work yourself may save you money initially, it could stifle long-term growth and profits. If you find it is difficult to adequately service your existing clients or you are turning away business due to lack of time, it is time to build your team.

Due to the sensitive nature of this business, proper vetting and background checks are critical. The Small Business Administration offers helpful guidelines regarding the onboarding process. Each new employee should go through extensive training regarding your business’s procedures and industry best practices. Additionally, you will want to consider purchasing a fidelity bond to protect you against illegal data access, fraud, and theft.

Next Steps

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