When a business is valued, many elements are considered. Reputation, risk and IT kit are three factors.
Whilst reputation and risk contain many aspects, cyber security is an area which could prove significant. So, if you’re considering selling your business, it’s essential that you have your cyber security ducks in a row.
Profit is the obvious biggy, and IT kit can impact the bottom line, but stopping spending is not necessarily the answer.
Within the factors examined in the process of a business evaluation is the risk of a cyber attack, and how resilient the business would be if it were attacked.
Any business that is not taking cyber security seriously is not understanding how devastating the consequences of an attack can be.
Whilst cyber attacks can instantly halt a business, they can also have a very long tail. Imagine if all your data is stolen – how long will it take you to find and enter that data again. Realistically, you won’t be able to find all the data you need. Data is valuable to business success – how would your business cope without it?
As alluded to above, cyber attacks put significant strain on a business, potentially stopping operations in their tracks. Sales will inevitably be lost, staff will be put under considerable strain and you could also face a hefty fine from the Information Commissioner’s Office.
Businesses that understand the consequences of an attack will have up-to-date hardware, software and systems, including layers of cyber security. They will understand the threats, making cyber security a regular boardroom agenda item. Staff will be well-versed in cyber security processes, and will understand procedures to take if they feel the company is under attack.
Demonstrating that your business is on top of cyber security reduces the risk factor for a potential buyer, helping the evaluation of it’s worth.
Cyber attacks and how you deal with them impact business reputation.
Any attack will pose reputational risk, especially if you’ve been fined by the ICO. The bigger the attack and the bigger the fine, the bigger the loss of reputation. Think how long it’s taken you to build up a fantastic reputation – losing it will take much less! And the greater the loss, the less your business will be worth to a potential buyer.
Whilst we accept that it’s now considered near impossible to rule out a cyber attack, a business that has strong cyber resilience will minimise the impact of an attack and will demonstrate a determination to protect customer data.
An acknowledgement that strong cyber security and resilience are part of providing great customer service will show a buyer how seriously you protect your reputation.
IT kit – to spend or not to spend…
As you know, all of your business equipment has a capital value. A business that hasn’t been keeping up and is sitting on a load of old IT equipment can expect any potential buyer to work out what needs to be spent and negotiate the offer price downwards accordingly. Holding off replacing equipment when you’re planning to sell not only reduces the valuation, but it’s slowing your team down. Productivity equals profits, and your buyer will spot issues from a mile away!
If you’re thinking of selling but aren’t convinced that your business is IT-ready, we are here to help. By conducting a free Technology Business Review we’ll be able to ascertain where the risks are, and guide you through the steps you can take to rectify issues.