As an entrepreneur, when you set out to start a business, you’ve likely weighed out the pros and cons. A formal way of doing this would be by carrying out a risk analysis that identifies potential issues that could negatively affect your business. By examining these risks, you can determine what the best course of action is in various scenarios. However, while there are several external threats to your business like the occurrence of a natural disaster or a burglary incident, what about internal threats?
Threat # 1: Former Employees
Whether you like it or not, employees leaving is inevitable when you run a business. This can be an internal threat, however, if they leave with information that should only be kept within the confines of your company. A primary example is an employee involved with the planning and ideation part of your business deciding to leave. They could try and claim intellectual property for the ideas they brought to the table or disclose your trade secrets.
Solution: To keep your corporate data safe, word contracts so that all intellectual property belongs to you and ensure they’re clear about that. Don’t forget to include a non-disclosure agreement as a means of deterring former employees from disclosing confidential information, as well. These agreements should be updated regularly and comply with your state’s laws. The last thing you want is to lose your competitive advantage in the marketplace, especially if they use your data to go and start a venture of their own.
Threat # 2: Business Partners
When two people come together and partner to run a business, things can move far quicker than when you do it alone. However, one of the risks is that the partnership can be dissolved at any time. An article written by Susan Ward for The Balance called Why Business Partnerships Fail tells us that 70% of business partnerships fail.
You have to be prepared for such by putting measures in place to avoid hostile takeovers. If you aren’t familiar with this term, an example includes if the board of directors didn’t agree with a transaction and the acquirer went behind such 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. So, how do you protect your business in the event that this happens?
Solution: To prevent hostile takeovers or bad breakups when a business partnership ends, you’ve either got to prepare for an acquisition or be prepared to put up a fight and react to takeover efforts. Other ways to protect yourself would be to develop an employee stock program so that they’re able to vote for management as opposed to supporting a hostile buyer. Having a buy/sell agreement and equity arrangement in place could protect you too.
Threat # 3: Existing Employees
Security breaches are something that occurs more frequently than you’d imagine. While you may guess that the culprit is an elusive cybercriminal, sometimes it comes from right within your organization. It isn’t surprising that it’s one of the biggest threats as employees have direct access to inventory, data, and sensitive information.
When a security breach is caused by an insider, in some cases, it may be unintentional while not in others. Forrester research discovered 36% of security breaches come from careless actions taken by users. These careless mistakes are expensive as the mean cost of an insider threat is $8.7 million according to Ponemon Institute.
When employees are careless, they can leave you more vulnerable to growing threats like ransomware which can block you from accessing critical systems until you pay a ransom. A real-life example of this occurring is when a Florida city ended up paying hackers a shocking ransom of $600,000 when they took over their system back in 2016. They suspected that the hack was a result of an employee clicking on a phishing email link.
Meanwhile, some employees aren’t so innocent and may intentionally be trying to steal stats or information for their personal gain. Aside from trying to steal information, there’s also the issue of employee theft which can be detrimental to both your security and bottom line. The Department of Commerce reveals that 60% of inventory losses occur because employees are stealing.
Solution: Research by the Insider Threat Persona Study found 52% of employees don’t think sharing their work login poses a security risk to their employer. So that your staff is aware of the fundamentals of cybersecurity, conduct training that outlines core issues such as keeping login information confidential and changing passwords regularly. To address employee theft, try security measures like installing metal detectors in the workplace, especially if you have a high volume of workers and high-value products. If you don’t have one already, a comprehensive camera system can help you keep an eye on employees too.
No matter how efficient your organization is, there will always be potential threats that you have to take note of. Just make sure you don’t pay so much attention to external threats that you overlook the ones right in front of you.