As a business owner, you have likely weighed the pros and cons when starting a business. A formal way to do this would be by performing a risk analysis that identifies potential issues that could adversely affect your business. By studying these risks, you can determine how best to proceed in different scenarios. Although there are multiple external threats to your business, such as a natural disaster or a break-in, what about internal threats?
Threat # 1: Former Employees
Like it or not, leaving employees when running a business is inevitable. However, this can be an internal threat if they leave behind information that should only be kept within the confines of your business. A primary example is an employee who is engaged in the planning and ideation part of your company and decides to leave the company. They could try to claim intellectual property on the ideas they brought to the table or reveal your trade secrets.
solution: To keep your company data safe, get Word contracts so that all intellectual property belongs to you and make sure it is clear. Don’t forget to include a nondisclosure agreement to prevent former employees from disclosing confidential information. These agreements should be updated regularly and should comply with the laws of your state. The last thing you want is to lose your competitive edge in the market especially if they are using your data to start their own business.
Threat # 2: Business Partners
When two people get together and join forces to run a business, things can move a lot faster than doing it alone. However, one of the risks is that the partnership can be terminated at any time. An article by Susan Ward for The Balance titled “Why Business Partnerships Fail” states that 70% of business partnerships fail.
You need to be prepared for this by taking steps to avoid hostile takeovers. For example, if you are unfamiliar with this term, you can indicate whether the board of directors did not approve of a transaction and the acquirer stood behind those directors to get the transaction approved by the company’s shareholders.
You don’t want a scenario where one party takes over and everything you’ve worked so hard for is threatened. How do you protect your company in this case?
solution: To prevent hostile takeovers or bad breakups when a business partnership ends, you need to either prepare for an acquisition or be ready to fight and respond to takeover action. Other ways to protect yourself would be to develop an employee stock program so they can vote for management rather than support a hostile buyer. A purchase / sale agreement and equity agreement could protect you as well.
Threat # 3: Existing Employees
Security breaches happen more often than you can imagine. While you might suspect that the culprit is an elusive cyber criminal, sometimes it comes straight from your company. Unsurprisingly, this is one of the biggest threats given that employees have direct access to inventory, data, and sensitive information.
When a security breach is caused by an insider, it may be unintentional in some cases and not in others. Forrester research found that 36% of security breaches were caused by careless user actions. These negligent mistakes are costly, given that the average cost of an insider threat is $ 8.7 million, according to the Ponemon Institute.
If employees are careless, they can make you more vulnerable to growing threats like ransomware, which can prevent you from accessing critical systems until you pay a ransom. A real-life example of this is a city in Florida paying hackers a shocking ransom of $ 600,000 when they took over their system in 2016. They suspected that the hack was caused by an employee clicking on a phishing email link.
In the meantime, some employees are not so innocent and may be intentionally trying to steal statistics or information for their personal gain. In addition to trying to steal information, there is also the issue of employee theft which can affect your safety as well as your bottom line. The Department of Commerce announces that 60% of inventory losses are caused by employee theft.
solution: Research from the Insider Threat Persona Study found that 52% of employees disagree that sharing their work login poses a security risk to their employer. To help your employees understand the basics of cybersecurity, hold training courses that describe key issues such as credential confidentiality and changing passwords regularly. To combat employee theft, try security measures like installing metal detectors in the workplace, especially if you have a high workload and high quality products. If you don’t already have one, you can also keep an eye on employees with a comprehensive camera system.
No matter how efficient your business is, there are always potential threats that you need to be aware of. Just make sure you don’t pay so much attention to external threats that you miss the ones right in front of you.