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    17Feb, 2023
    Three Things Small Business Owners Should Consider When Looking For An Acquisition

    Just over a year ago, the company I started alongside my co-founder was acquired. This was both a short and long time coming: Any entrepreneur worth their salt will always be on the lookout for a valuable exit opportunity, but rarely do these opportunities evolve into something concrete.

    While my co-founder and I had been in discussions with the company that acquired us for years, there was still an incredible learning curve when it came to navigating the acquisition process. Despite almost always being on our radar, the acquisition highlighted both new challenges and opportunities for our company. Small businesses, in particular, face a unique set of challenges around an acquisition—especially when the potential parent company is much larger.

    Every company is for sale, always.

    One of my company’s board members once told me, “A CEO has two main jobs: raise money and sell the company.” What changes over time are the opportunities for exit and whether there’s a match between those opportunities and your goals. For most of the life of a company, you’re looking for that alignment and it isn’t there because it’s rare.

    That alignment can evolve, too, developing years later even if it wasn’t there the first time around. The company that acquired my company manages casinos and racetracks. At first blush, there wasn’t that synergy we were after. As conversations continued, though, we were able to identify mutually beneficial opportunities in the digital space. Now, my company helps them diversify its business and expand customer reach for its land-based casinos.

    To me, it’s a mistake to not think of yourself as acquisition-minded, no matter where you are in the business development cycle. Entrepreneurs should always be open to the idea and be willing to hear from any and all potential buyers, despite how they may look on paper.

    Prepare, prepare, prepare.

    Being open to an acquisition is one thing, but being thoroughly prepared is another. I recommend having audited financials even if you’re not required to have them, as well as solid employment agreements with everyone who works for you. You should also know where all your formation, legal and other important documents, are and make those readily available.

    Like the old adage goes: Failing to plan is planning to fail. I give major credit to my team for keeping us organized as our company evolved and grew, making what could be a stressful, complicated task an easy one.

    Consider good (and bad) intentions.

    The devil is in the details, and the due diligence process has a lot of details. My philosophy is always to assume good intent on the part of your acquirer—and bad intent on the part of their attorneys and representatives. This is the typical way things proceed, and I’ve been lucky enough not to be surprised.

    Another piece of helpful advice I received was “Never let the other side think they are your only option—even if they are.” Combining this approach with my philosophy on intent helped us remain steadfast in our expectations—without wavering—no matter how many (or few) prospects we had.

    It’s also critical for entrepreneurs to have their own lawyers involved at an early stage of the acquisition process. Much earlier than you might think. Full transparency: It’s a major expense, so your instinct may be to wait until the last minute, but it’s too important to put off. Your company’s attorney represents the interests of the company, not your personal interests. The post-acquisition terms of your employment, compensation and many other issues will need to be memorialized. You want your own personal attorney for that. Entrepreneurs need someone who is negotiating from their (and any other equity holding employees’) point of view.

    Our second year since the acquisition has officially begun, and I’m eager to see how our two companies continue to grow together.

    Resource : https://www.forbes.com/sites/forbestechcouncil/2023/02/15/three-things-small-business-owners-should-consider-when-looking-for-an-acquisition/?sh=5b81f0be7383

    17Jan, 2023
    10 data security enhancements to consider as your employees return to the office

    77% of IT decision makers across the United States and Canada believe their companies are likely to face a data breach within the next three years according to survey results released by Adastra.

    Survey respondents ranked data security as the biggest game changer in 2023 as companies continue to bolster their cybersecurity preparedness—68% of managers surveyed say their companies have a cybersecurity division and a further 18% report they are in the process of creating one. Only 6% of respondents reported having no cybersecurity division.

    “The increase in data breach incidents across North America is troubling and must be prioritized as employees continue to return in-person to their corporate offices,” said Kuljit Chahal, Practice Lead, Data Security at Adastra North America.

    “During the pandemic many employees were hired virtually and, in combination with long absences from offices, introductions to and re-familiarization with security protocols will be critical,” Chahal added.

    Awareness of data security best practices among employees is essential—according to the 2022 Verizon Data Breach Investigations Report, 82% of data breaches are caused by human error and companies of all sizes are at risk.

    “In our role as data security experts, we have found that some companies, especially smaller ones, can be lulled into a false sense of security believing that perpetrators will not bother with them­—this is absolutely not the case,” said Chahal.

    “The results of this survey should serve as a reminder that companies of all sizes must invest in data security protection, resources and education, particularly as we return to in-office activities,” he said.

    The cost of a breach can be significant and far more than what an audit from a data security firm will cost. According to Statista, the average cost of a data breach in the United States grew to $9.4 million in 2022, up from $9 million in the previous year.

    10 data security enhancements

    Insider threats – employee re-education of systems and protocols

    The unauthorized disclosure of data isn’t always the result of malicious actors. Often, data is accidentally overshared or lost by employees. Keep your employees informed with cyber security education. Employees who go through regular phishing tests may be less likely to engage with malicious actors over email or text messaging.

    Know your inventory

    An inventory of software, hardware and data assets is essential. Having control over the assets with access to your corporate environment starts with an inventory. Inventories can be a part of the overall vulnerability management program to keep all assets up to date, including operating systems and software.

    Furthermore, a data inventory or catalogue identifies sensitive data, which allows appropriate security controls like encryption, access restrictions and monitoring to be placed on the most important data.

    Delete redundant data

    Reducing your overall data footprint can be an effective way of reducing risk. Data that resides in multiple locations may not have equal protection in each environment. Understanding what data is required and what can be archived helps to keep control over data assets.

    Early detection systems

    Detecting anomalies and suspicious activities can resolve issues before they become a breach. Today’s XDR (extended detection and response) and EDR (endpoint detection and response) systems include automated responses to common attacks.

    For example, suppose an employee downloads a malicious email attachment. In that case, the EDR system can prevent the execution of the malware hidden inside and alert security staff.

    These detection systems can be monitored by internal cyber security staff or monitored by third-party security companies who can alert management of incidents as they occur.

    Data back-ups

    Having a robust, immutable data backup plan can help an organization quickly recover from an incident. The frequency of the data backup depends on the risk the organization is willing to take. “Can we afford to lose a week’s worth of data or a day’s worth of data?”

    Limiting staff access

    Employing the least privilege principle reduces overall risk by only allowing access to data and services required to perform specific duties. Establishing processes for provisioning and de-provisioning user access with approvals, audit trails, reports, and regular attestations can limit what an attacker may be able to access in the event of compromised credentials.

    It’s not uncommon for end users to have unrestricted administrative access to their endpoint laptops. This allows users to install unauthorized software or be more easily targeted for malware attacks.

    Hire a third-party company to conduct a security audit – know your vulnerabilities

    An outside assessment of your organization’s security posture, based on established cyber security frameworks such as NIST or CIS, can provide a clearer picture of strengths and weaknesses and a roadmap to address your greatest vulnerabilities.

    Establish new passwords with two-factor authentication

    Traditionally users are authenticated by one of three ways:

    • What you know (password)
    • What you have (card access or one-time passcode)
    • What you are (biometrics)

    Adding a second factor to the ubiquitous password authentication adds another layer of security for access.

    Update your computer programs with the latest security features

    Most data breaches occur because a known vulnerability was exploited. Establishing a vulnerability management program that regularly scans software assets and applies patches is one of the most crucial security activities a company can perform.

    Physical security

    As employees return to the office, there will be employees who are coming back to the office for the first time. Reinforcing clean desk policies and reviewing physical access controls, including access to secure areas, may be required to ensure assets are not stolen or lost.

    Work-from-home employees who have company assets should be routinely educated on keeping those assets secure while at home as they would in the office.

    Resource : https://www.helpnetsecurity.com/2023/01/16/data-security-enhancements/?web_view=true