Do you want to start a data protection service? If YES, here is a complete guide to starting a data protection business with NO money and no experience.
Okay, so we have provided you an in-depth sample data protection service business plan template. We also took it further by analyzing and drafting a sample data protection service marketing plan backed up by actionable guerrilla marketing ideas for data protection service firms. In this article, we will be considering all the requirements for starting a data protection business. So put on your entrepreneurial hat and let’s proceed.
Why Start a Data Protection Business?
In the United States, there is no one single law that regulates the collection and use of data, though there are several state and federal laws that have not really been effective in regulating Data Protection. This is even as the growing internet has become the in-thing, and many transactions are being conducted online which should make protection of data paramount.
Some large scale companies who have been known to have very stringent data security policies have had their security breached at one time or the other by hackers, not counting small and medium businesses (SMEs); this shows that data protection should be given more attention than it is currently receiving.
Even though the data protection business can be very lucrative for any entrepreneur looking to start the business, the cost for starting this business varies depending on several factors. However to be able to hit it big in this business regardless of the cost and other factors, you should not run this business on a small scale.
This is because it is the big organizations you handle that will allow your business to break-even, grow and sustain itself. This therefore means that when you are conducting a research about the business, you shouldn’t use small companies as your scale of study.
Ensure that you are able to protect data so that when something happens to the site or server of your client, their data is not lost. Most people going into this business often have knowledge of cloud storage services so it is easier for them to replicate the data of their clients to multiple sites and therefore help keep the data safe should anything happen to the major site. Asides from protecting and backing up data, you should also know how you can help your clients recover their data so as to ensure the continuity of their business.
One of the things you ought to also do is to write out a comprehensive business plan. Also, if you do not have all the start-up capital that would be required for you to start the business and are planning to approach investors, a business plan will be perfect in helping you convince your potential investors of your commitment and passion towards your business.
Due to the fact that this business is in the IT industry and is regarded as a serious one, you might need to build a profile first as clients will want to see what you have done before they can trust you with handling any sort of data for their organization.
Starting a Data Protection Business – A Complete Guide
- Industry Overview
Data protection service is poised to become one of the most sought after services in the IT industry, as there is a growing need for applications that have to do with disaster recovery. Players in this industry are making it big as they have not only been able to store data for clients but have also helped to provide effective disaster recovery management methods. Also, due to the falling costs of cloud data storage, data protection as a service has also become something quite affordable.
North America has always ruled the global market due to the advancement of its IT infrastructure as well as the large amount of data that is being generated and therefore has to be protected. North America alone is expected to generate at least $14 billion in revenue by 2024.
In the global market, data protection as a service is estimated to reach a CAGR of more than 30 percent by 2024, even though the pace at which the sector is currently growing is very slow. At the end of 2016, data protection as a service market’s revenue surpassed $5 billion and is expected to reach at least $47 billion by the end of 2024, on a global level.
According to a report by Allied market Research, the Data Protection as a Service (DPaaS) is expected to reach $29 million by 2022, which means the CAGR growth from the period of 2016 to 2022 is 32 percent. The growth in this market globally is expected to come from growing concerns about data loss, and an increasing need for archives and backups.
Also, increase in demand for disaster recovery and backup that is cloud based especially for virtual machines as well as integration of backup and recovery service have served to make the sector a lucrative one for players even as complexities and high costs have limited the growth of the Data Protection as a Service (DPaaS) market.
There are several reasons for the growth experienced in the DPaaS market and they are; increase in demand for disaster recovery services in order to protect against potential threats, an increase in the integration of deployment techniques, the emergence of advanced data management forms, global expansion, business expansion, core competence as well as financial efficiency. While the market is experiencing growth, there are challenges it faces when it comes to not only providing services but also the management of a communication network, and chief of them are trust and security.
According to research, most IT professionals find it more difficult to protect sensitive information in the cloud. Very few organizations have defined roles and set accountability in order to safeguard information that is deemed confidential in the cloud. In 2015, 47 percent of corporate data stored in the cloud was not done by the in-house IT department. This therefore means that most IT in-house professionals do not know about all the cloud services that is being used by the company they work in, which therefore makes it hard to protect the information stored in the cloud.
In 2016, more than 554 million records were either lost or stolen in the United States and this was due to about 974 breaches experienced. One of the biggest breaches that was experienced was accidental which involved the voter database and saw an exposure of 154 million records.
Most of the breaches were from outside the country, only a little percent of the breaches were deemed secure breaches as encryption was not only used but the stolen data became useless. However, despite the increasing number of breaches being experienced by organizations, it has not caused organizations to decrease their perimeter security technologies.
Starting a Data Protection Business – Market Research and Feasibility Studies
- Demographics and Psychographics
The demographic and psychographic composition of those who require the services of a Data Protection as a Service business can be categorized into large scale enterprises as well as Small and Medium Scale Enterprises (SME) in the IT and telecommunications, manufacturing, defense and energy, healthcare, banking, financial and insurance industries. While there has been more demand from large scale enterprises, the SMEs are poised to catch up.
Therefore, if you are looking to define the demographics for your data protection as a service business, you should look towards making it more encompassing as you should include not only the federal and state governments and the public sector but also organizations and businesses outside the United States of America.
List of Niche ideas Within the Data Protection Business That You Can Specialize in
The data protection business is one that helps organizations – large and small – as well as the public sector and government agencies protect their data from breaches that might occur internally or externally. In protecting data for organizations, the data may have to be backed up, stored in different places and sometimes restored if it had already been breached.
Companies nowadays do not mind spending more in order to protect their data especially as the internet has made it even more possible for the data of organizations to be breached. While the data protection business usually involves a company being able to handle several services, some companies however prefer to stick to a niche or two so that they will become experts.
The niches for this industry aren’t much and so if you are picking a niche or two; ensure that you understand the area well. Below are some of the niche areas that a data protection business might decide to major in;
- Disaster Recovery as a Service (DRaaS)
- Storage as a Service (STaaS)
- Backup as a Service (BaaS)
The Level of Competition in the Data Protection Industry
The level of competition in the data protection business depends to a large extent on the location of the business because even though the data protection business can be done via the internet, sometimes recovering data that have been breaches might require physical presence.
If however, the task is to protect the data of clients either via cloud or the internet, then distance is certainly no barrier when it comes to competition especially if it is for international clients. All clients are on the lookout for is to get an excellent service that is not only secured but seamless as well, which is why they usually hire those who have had some experience when it comes to offering the same service as they will be able to deliver excellent results.
The data protection business is a huge one and as such there are many huge companies dominating the industry as well as many small ones. If you are therefore looking to start your own data protection business in the United States, you should be sure of meeting intense competition not only from those already in the field but from new players in the industry not only in the country but globally as well, and you therefore should be prepared.
List of Well – Known Brands in the Data Protection Industry
Every industry has brands that stand out due to different factors and this industry is no different. The several brands that are well known in this industry is due to the services they offer, their length of activity in the industry, their customer service relationship, their marketing and promotional strategy and so many other factors.
Below therefore are some of the well-known data protection businesses in the United States of America and also globally as well;
- EMC Corporation
- IBM Corporation
- Amazon Web Services, Inc
- VMware, Inc
- HP Development Company, L.P
- Asigra, Inc
- Commault Systems, Inc
- Quantum Corporation
The demand for data protection as a service is high in North America and this is because of not only the growing awareness for applications that has to do with cloud computing but also advantages offered by institutions in both the public and private sectors. In North America, there is a large cloud platform for open source which has allowed for hybrid cloud and data protection as a service model to be used.
There has been a significant disparity in the revenue generated by players in this industry from large enterprises in comparison to small and medium scale enterprises; however, it is expected that the disparity will no longer be there as small and medium scale enterprises will increase its demand for data protection as a service. The revenue that will be generated by players in this industry from large scale enterprises alone will amount to $23 billion.
Globally, the Data Protection as a Service (DPaaS) market is broken down into three services namely; Backup as a Service (BaaS), Disaster Recovery as a Service (DRaaS) and Storage as a Service (STaaS). The market was led by BaaS, STaaS and DRaaS in 2015 respectively. However, the DRaaS is expected to be the fastest growing with a CAGR of 33 percent despite lagging behind the first two services.
Globally, Data protection as a Service (DPaaS) has three deployment models it has been segmented into and they are; private cloud, public cloud and hybrid cloud. In 2015, the private cloud led the others and accounted for close to 42 percent of the revenue generated in this sector and is expected to dominate till 2024. However in the market, the hybrid cloud segment has been predicted to be the fastest growing.
Starting Your Data Protection Business Company from Scratch vs Buying a Franchise
When starting your business in an industry that is difficult or a bit tricky, it is usually to your advantage if you buy a franchise as opposed to starting from the scratch. This is because when you buy a franchise, you will also be getting guidance that will be helpful when it comes to starting and especially running your business.
However, it is vital that you research on the franchises that you will be getting for your business so that you do not end up buying a franchise whose capabilities do not align with the goals and objectives of your business. While buying a franchise might look like just what you need for your data protection business, it is not available in this industry, which means you will need to start from the scratch.
When starting your business from the scratch, it is important that you understand the business thoroughly. This means that you would have carried out proper research about the business so as to know what is needed and also how you will start and run the business with as few hitches as possible.
Possible Threats and Challenges You Will Face When Starting a Data Protection Business
Any business that is started in whatever industry is likely to face threats and challenges that will be unique to that business and industry as not all challenges cut across all industries. Therefore as an entrepreneur, you should be prepared to face any challenges and threats that will likely crop up when you are starting or running your business.
Some of the threats and challenges you are likely to face when starting or running your data protection business are; having to face stiff competition from already established data protection companies, unfavorable government regulations and policies, arrival of a new competitor.
Starting a Data Protection Business – Legal Matters
- Best legal entity to use for this type of business
There are several factors to consider when choosing a legal entity for your business and they are how flexible the entity is in case you are looking to change to another entity later, how easy it is to set up the legal entity, the taxation structure, and if the liability will be limited or not. If you are confused on which legal entity to pick, consider engaging the services of a lawyer who would know which is right for you.
In order to run your legal entity without hitches of any sort, the legal entities that you can choose from are sole proprietorship, general partnership, Limited Liability Company (LLC) and corporation.
The sole proprietorship and partnership form of legal entity have similarities in that the owners make all the decisions and own all the profits and losses accrued by the company, and tax under these legal entities are on personal tax returns. However, liability is unlimited as the owners could be personally affected by any loss or debt incurred by the business.
In an LLC and a corporation kind of legal entity, the business is regarded as a separate entity from the owners of the business, which means that liability is limited. However, in an LLC, owners pay tax from their personal tax returns, while in a corporation depending on the type, tax is double. Depending on the state where you will be operating your business from, some of these legal entities might differ and your attorney will not only point out that to you but will let you know which you should go for.
Catchy Business Name Ideas Suitable for a Data Protection Business
When starting a new business, one of the most important aspects is choosing a name for the business. Choosing a name is not as simple as some people might think because the name you should choose for your business is one that should be unique, catchy, pronounceable and easily memorable. Also, you should pick more than one name so that if the name you have chosen has been picked, you can have alternatives to fall back on.
Therefore, if you are looking to start your own data protection business, below are some catchy names you can consider;
- Damitos, Inc
- Cotech Web Services, Inc
- Trevor Corporation
- Colbert Data Solutions
- Clovau Corporation
- DataFeed Service, Inc
If you are looking to start your business in the United States of America, then it is necessary that you have insurance for your business, as having insurance policies especially for a business is mandatory. Consult with an insurance agent or broker so as to be guided on what insurance policies will be most appropriate for your data protection business.
Below are some of the basic insurance policies that you should consider buying if you are looking to start your data protection business in the United States of America;
- General Liability Insurance
- Health Insurance
- Workers’ Compensation Insurance
- Payment Protection Insurance
- Errors and Omission Insurance
- Fidelity Bond Insurance
- Business Owner Policy (BOP) Insurance
- Cyber Liability Insurance
- Auto Insurance
- Umbrella Insurance Policy
- Employment Practices Liability Insurance
Intellectual Property Protection/Trademark
In the data protection business, all you are required to do is to protect or in some cases restore the data of your clients and as such you do not need to worry about acquiring intellectual property protection for your business as some players in this sector do not consider this a priority.
If on the other hand you feel protecting the logo, name of your company, certain software and some materials peculiar to your business is necessary, then you would need to consult the services of an attorney who understands this business thoroughly to help you apply for an IPP with the United States Patent and Trademark Office (USPTO).
Is Professional Certification Needed to Run a Data Protection Business?
Even though your success rate and excellent jobs are likely to attract the clients you need for your data protection business, having professional certification is more likely to up the ante and give you the desired edge over your competitors.
Therefore, it is strongly advised that you research on what qualifications will get the attention of your clients and look towards acquiring them. Another reason why professional certifications are very important is that it shows clients how committed you are to the business.
Below are some of the professional certifications that you should look towards getting for your data protection business;
- Certified Information Privacy Professional (CIPP/G) Certification
- Practitioner Certificate in Data Protection
- ACOI – Professional Certificate in Data Protection
The IT industry is one that is regulated by certifications and so the more certifications you have, the easier it would be for you to attract the clients you need for your data protection business.
List of Legal Documents You Need to Run a Data Protection Business
Whatever business you go into, having the necessary legal documents is very important as this will help you avoid running into any problems with the law. If you aren’t sure of what legal documents you would require to run your data protection business, it is best you engage the services of an attorney or accountant experienced in the IT industry who would help tell you what you will need to run your business legally.
Below are some of the basic legal documents that you would need to have in place if you intend to start your data protection business in the United States of America;
- Certificate of Incorporation
- Operating Agreement
- Business Plan
- Business License and Permit
- Business Certification
- Insurance Policy
- Non-Disclosure Agreement
- Contract Documents
- Employer Identification Number (EIN)
- Federal Tax Identification Number
Financing Your Data Protection Business Company
For every business idea to become a reality, finance is necessary, which is why as an entrepreneur, it is necessary to have your start-up capital ready or know where you are likely to source the start-up capital from if you are serious about starting your business.
Below therefore are some options that can be explored when it comes to starting your data protection business;
- Use money from personal savings or from sale of stocks or properties
- Source for soft loans from wealthy family members and friends
- Apply for loan from a commercial bank
- Raise money from private investors
Choosing a Suitable Location for your Data Protection Business
When starting any business, the issue of location is usually a very serious one as this can have an impact on how your business grows. The data protection business is one – like any IT business – that can be run from home especially as most of your business can be done online without having to physically meet with your clients.
However, even though you can operate your business from home, it is usually best to consider leasing or renting a commercial facility with which to run your business from especially if you are located in an area where most of your competitors have rented facilities that they work from.
If you are going to rent or lease a facility, ensure that it is in a location that is not only easily accessible and convenient but conspicuous as well so that clients can easily get to you should they want to meet physically. If you lease your facility in an area that is too far away, then you might need to spend extra to get the awareness of your intended target market.
Consider engaging the services of a real estate agent as not only will they help in looking for a location that will be of advantage to your business, they will also ensure that what you get falls within your budget. If you feel that renting or leasing a facility might be too much, you should consider paying for a shared workspace so that you do not end up spending too much.
Starting a Data Protection Business – Technical and Manpower Details
Data protection businesses usually have to depend on accessibility and virtual infrastructure in order to be able to perform certain tasks. This business is therefore not one that can be started by just any entrepreneur as it is a highly technical business, and not having any idea of how to read encryptions or protect the data of a company could lead to you having to deal with lawsuits.
Location is something that is important when starting or running a business as the location you choose can make or mar your business. If you intend to employ however, you may need to rent or lease a facility for your use. Whatever size of facility you intend to use should be entirely dependent on your budget.
The business is also one that requires financing in order for it to start up and run efficiently. Money is needed to buy the infrastructures and equipment needed to run the business till it is able to generate a steady stream of revenue that will sustain, grow and even expand the business.
Building the right business structure for your business is very important as not only are you meant to hire those that are competent and have the right experience but you should also get those who understand your goals and objectives and are therefore willing to work to see it come to fulfillment.
Therefore, the employees you would need to start off your business are; a Chief Executive Officer (CEO), Admin and Human Resource Manager, Business Development and Marketing Executive, ICT Consultants, Customer Service Executive, and Accountant. Therefore from the above breakdown, you would require at least 6 key staff to help run your data protection business effectively.
The Service Delivery Process of a Data Protection Business
The need to protect data only came about as a result of the internet. Prior to this, most of the information generated by companies was on paper, written or printed. The internet helped to open up easy ways companies could store their data without having to create a storeroom with bulky papers.
However, as easy as this option was, there was also a threat because even though companies no matter where they were located could easily access their data online, threats were arising from both internal and external hackers who sought to also lay hands on this information.
Data protection companies therefore help companies to not only store their data online but also protect it from any form of internal and external attack and should the attack already have occurred, help to recover the data as well.
Starting a Data Protection Business – The Marketing Plan
- Marketing ideas and strategies
Data security has become a huge concern for several end users such as large organizations in different industries as well as the public sector, which means marketing your data protection business might be easier than marketing some other services.
However with marketing these kinds of services, it is essential that your clients know that you are capable of providing the service that you claim you can. If you therefore intend to run a successful Data protection as a Service business, then you must build a successful career before you can think of marketing your business in order to attract the clients you need.
Before you can however draft the marketing strategies you need for your business, it is essential that you make a thorough research in order to determine your target market and what niche you would be focusing on. Your market research will allow you understand what exactly your clients would want from you, as most clients will only hire you on the basis that they would be getting the value for their money. You should also be able to study your competition and know how best to win over them after studying their strategies.
Below are some of the marketing strategies you can use for your data protection company;
- Ensure that you formally introduce your business to corporate organizations in various industries, small and medium enterprises, and the government by sending introductory letters and a brochure listing your services, contact information and rates
- Advertise your data protection business in newspapers (local and national), ICT magazines and on radio and television stations
- Empower your marketing executives to physically engage in direct marketing
- Ensure that your business is not only listed in yellow pages but in online directories as well
- Attend ICT seminar, events, expos and business fairs
- Use social media platforms such as Facebook, Twitter, Linkedin and Google Plus to market your services
Strategies to Boost Your Data Protection Company Brand Awareness and Create Your Corporate Identity
The intention of every business that starts out is to ensure that the awareness of their brands is well boosted and that they are able to create a corporate identity for their business. If this is your intention, then it is important that you use all means necessary to promote your business locally, nationally and internationally.
Because of the benefits that are usually derived from an organization boosting their brand, large scale companies do not mind spending a fortune each year to be able to promote their businesses on a constant basis.
There are several ways which you can promote your brand and most of it can be online or offline. Whatever way you intend to focus on should be well researched on so that you do not end up wasting time and resources in promoting your business using the wrong avenue.
If you are not sure of which avenue will be right for your business, it is best to get a publicity consultant that knows the industry thoroughly to help you craft the right strategies that would boost the awareness of your brand and also create a corporate identity for your business.
Below are some of the platforms that you can leverage on in order to boost the awareness of your brand and advertise your data protection business;
- Ensure that your company promptly bids for contracts from your target market
- Create a website and leverage on this to promote your services and boost awareness for your brand
- Encourage your loyal customers to help spread the word about your services and company
- Distribute handbills and business cards in various strategic places
- Position billboards about your services in strategic locations all around the city where you are operating your business
- Use social media platforms such as Facebook, Linkedin, Twitter, Google Plus and any other ICT platform to promote and advertise your data protection business