Recent trends indicate that cyberattackers are increasingly targeting small, startup businesses as larger companies have ramped up IT defenses in recent years. According to a report by cybersecurity firm, Symantec, “cyberattacks on small businesses with fewer than 250 employees represented 31% of all attacks in 2012, up from 18% in the prior year” (Link 1). As soon as a business sets up its website and email domain, cyberattacks are triggered almost immediately. In fact, by the time a business is five months old, it has already been targeted by hundreds of spam phishing messages and Malware attacks and, within ten months, most companies will have been infected with Malware. (Link 2). Hackers will also use attacks known as Ransomware, where an attackers locks up company computers and networks demanding a ransom to stop the attacks. Computers are not the only targets of these attacks, however. With the proliferation of smart phones and mobile devices in the business world, many attackers are now using malicious software to infiltrate these mobile devices in order to steal valuable information. Verizon’s RISK team has indicated that this trend of increasing attacks on small startup companies has been relatively consistent over the past six years (Link 1).
Larger corporations have the time and resources to devote to IT security that small businesses and startups just don’t have. Startup businesses in particular have enough concerns related to gaining market share and generally keeping their doors open and generally can’t devote enough resources to IT security. Further, despite the statistics, many small business owners falsely believe they are boring targets for cyberattackers due to their size. However, small businesses can be extremely lucrative and easy targets for these types of attacks. Most often, cyberattackers are after customer credit card numbers, contact information, intellectual property, or money from company bank accounts that are specific to the individual target company (Link 2). However, many hackers target small firms with a much bigger prize in mind. Increasingly frustrated with the beefed up security at larger firms, cyberattackers are using smaller firms as an entry point as they are often customers or suppliers of larger firms. Once a smaller firm is infected, it can spread viruses and other malicious software to a larger firm by way of emails and other exchanges throughout the course of normal business operations. Another way attackers are attempting to use smaller companies as bait is through the strategy of infecting startup companies in growth industries like tech and healthcare. The attackers then lie and wait hoping these infected companies will be gobbled up through mergers and acquisitions, which have been increasing as of late with the improving economy and availability of cheap debt. The attackers are essentially using the acquired company as a sort of trojan horse strategy to then infect the acquiring company and steal its valuable information.
Whatever specific tactic is used, startup companies have been increasingly targeted by cyberattacks as of late. In terms of time and resources, these new companies are stretched thin enough as it is. In-house IT departments are very expensive as is externally sourced internet security software sufficient enough to fortify these companies against sophisticated attacks. In light of this, what is a small business owner to do? Can they take steps to not be infected without professional help? Or is IT security spending now just an operational cost of doing business that can’t be avoided?
Link 1: http://money.cnn.com/2013/04/22/smallbusiness/small-business-cybercrime/index.html?iid=EL
Link 2: http://money.cnn.com/2013/05/23/technology/startup-cyberattack/index.html?iid=SF_SB_River
Has anyone ever considered how the product life cycle would apply to a business? I am not referring to the product of a business but simply the business; the “business life cycle.” The business life cycle follows the same path as a product life cycle starting with its introduction, followed by its growth and maturity, and finally the decline. How would it feel to start a business and never make it past the introduction phase?
In the last month, a group of successful entrepreneurs got together to talk about the issues that came up while starting their businesses. There were a few conclusive points that don’t really get mentioned too often in the news. The common themes were the constant shadow of failure, and how failure can effect founders later. The start up of a business is very pricey and can take quite the toll on your financial position at first. The obvious goal is that the money you invest into your start up will at some point return back to you at a profit. How would you feel to have the constant thought that your business may not make it? After all the time, money, and energy that you put into trying to make a company successful only to find out a few years later that the only thing that came out of it was a pile of expenses and a bad reputation for yourself as a leader.
This was never something I thought about too deeply but these are the problems that founders deal with all the time. Many people have dreams to start their own businesses, but how many have thought about the emotional side that comes along with the start up You are constantly haunted of failure inside but need to keep a hard shell and show your confidence on the outside. It’s particular hard for the founder as they have no escape route. Employees can always quit and find a new job, but a founder quitting before seeing the company mature means failure; failure that will follow you forever.
Who do you go to for help when everything starts heading down hill? “When people at your company go to lunch, they have a common theme — they can complain about management. But you are management. You can’t go to lunch and complain to anyone” (Forbes). At this point it seems that pending failure is unavoidable. As a founder, what do you do? It seems that you have three main options: throw in the towel and accept defeat, change your business strategy and hope your new one is better, or wish for the best.
Has anyone ever wanted to start a business? If so, how much thought did you put in to the possibility of failure or was it simply never a possibility?
If you never had the desire to start your own business, what do you do when failure is inevitable?
Branding should be huge part of every company’s marketing plan. If it isn’t you are missing a very important connection that many consumers look for. In today’s marketplace there is always a substitute product, and if you disagree, I would argue that you do not know your market well enough. With the overwhelming amount of options consumers are faced with every day it is sometimes difficult to distinguish yourself from your competition. This has resulted in businesses trying to connect with their customer on a more personal level to help solidify their brand.
One way several businesses have built long lasting brand recognition is by taking on a “Do Good” corporate philosophy. My favorite example of this is Toms Shoes. What started as Blake Mycoskie’s personal project turned into a world-renowned humanitarian movement. I do not personally own a pair of Toms Shoes; however, I know dozens of people who do, and most of them will vow to never buy another brand of shoes ever again. This brand dedication comes from a sense of good will customers feel when purchasing the shoes along with the high quality of the product itself. Since the overwhelming success of Toms several other companies have adopted the “buy one give one” philosophy in hopes of coat tailing on its reputation. Warby Parker is one of those companies. Warby Parker is an eyeglass manufacture/retailer that makes high quality eye wear for affordable prices, and donates a pair for every pair sold. Warby Parker “sales have jumped by several hundred percent each year since its 2010 launch.” Do you own a pair of Warby Parker glasses or Toms shoes? If so what inspired you to make the purchase?
Another way businesses have inspired customers to make purchases is through selling more than just a product. Some businesses are now marketing themselves in such a way that customers are buying a sense of community when they purchase products. This type of business plan can be traced back to Live Strong. No one bought a plastic yellow bracelet because it was a quality bracelet. You bought one because it stood for cancer research, and it made you an active member of that community. Lululemon Athletica has found its niche in the high-end athletic clothing world by developing a feel good, inspirational, goal oriented community. “In addition to yoga and health, we’re also passionate about helping our guests create a life they love through the power of goal-setting.” “People care about our brand because they feel connected to it and what we stand for,” said Laura Klauberg, senior vice president of community and brand. Using the community driven philosophy has allowed Lululemon to open 60 new stores over the past two years.
We have developed a need for connectivity, and we are now looking beyond social media to fill that void. We want to feel a deeper connection with the shoes we wear, the gym we go to, and the music we listen to.
Entrepreneur Magazine, April 2013, Andruss. Paula, “7 Bewitching Brands” (pg 48)
When I get older, I want to be an entrepreuer, but it doesnt seem as appealing as it used to be back in 2006. Throughout the years, being your own boss hasn’t been working out for people as much as it used to, but the question is why? A lot of businesses cannot keep themselves running long enough to see the profits. When you want to stay open and don’t have the sufficient funds to pay for the cost of your business, you tend to make cuts, and the first cut most business owners make is hours of employees or the employee in general. As you can see from the graph shown above, job opportunities have been decreasing dramatically from 2006-2011. The main thing you would have to factor into this graph is simple: the economic recession. The recession made it a lot more difficult for job security, especially in small businesses. After the recession, people didnt have the money to make investments. A lot of Americans lost a lot of capital throughout the recession and quite frankly, many are scared to make investments not knowing if they will make a profit or not. People now a days do not have the money to invest like they used to in the past and you cannot blame them for not wanting to take the risk, can ya?
One factor I think people should consider when talking about job growth or loss is the size of the firm or business. More job opportunities are given by companies who are larger. My parents, for example, own a Rosati’s Pizza and they run the store quite differently than a California Pizza Kitchen. My parents need about 5 people to run the inside of the store and 3 delivery drivers, whereas, a CPK would need about 20 people to run the inside of the whole store (if not more) and have about 5-6 delivery drivers. You see, it all depends on the size of the company and of course, how well the business is doing itself.
I personally believe that even though there is a decline in job security and growth in the small business field, it is still not a bad route to go in. I believe that if you do your research on the company or fracnhise you believe to invest in, you will have a better chance of succeeding through these horrific stats. What do you guys think about the jobs created by small businesses? Would you want to own your own business?
Shortly after the economic downfall in 2008 began, Tom Sesti started Bandals, a new footwear company through which he introduced a line of women’s sandals with interchangeable multi-colored tops – their slogan being “Changeable by design.” The sandals were an instant classic and the five employee company was suddenly facing manufacturing and raw materials cost increases of 15-30%. Sesti knew he needed to figure out a strategy to deal with this issue – and two strategies he came up with involved moving the company overseas or introducing a new product.
Tom Seski took a look at how to improve the quality of his product and the strategy of where to locate his business. He gave a lot of thought about how to penetrate new markets. He realized if he could take something like sandals, which are sold mainly in warm months, and make them something one can wear year round, then they wont only sell for one season. Two ways he did this were by adding jewelry that could be taken off and used with other shoes such as boots in the winter, and also expanding his company to new countries where the weather was warm year round.
It took a lot of hard work and research, but Testi was able to figure out how to effectively manufacture his product as well as expand it to multiple countries. He estimated the cost of making his jewelry in China, the cost of promoting strategies, and assessed how many items he could sell and determined it was possible to break even in a year. He also estimated the costs of expanding his company to 15 countries overseas. These strategies had a high chance of being successful, so he decided to go about implementing them.
Tom Sesti’s operation strategies proved to be successful. Through the use of focus groups, multiple designs, bio-mechanicals, market research, marketing campaigns, location strategies, and design of goods and services, Bandals was able to improve revenues by 250 percent and more than triple annual profits. Sesti figured out cost effective strategies that addressed two major obstacles he saw within the seasonal footwear industry and made the right decisions on how to put his plans to action.