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Beware of Ransomware!

As we enter 2020 and look back on the past decade, we see how much business and technology have evolved. For example, smartphones went from being a toy that those dang Millennials couldn’t get out of their faces (and the real reason they don’t have jobs, according to everyone’s uncle) to one of the most important fields of computing and marketing. We have also seen the rise and domination of cloud computing and online retailing.

As we progress further into the future, however, old foes that once lurked in the shadows have become dominant forces of disruption. One cyber threat to our modern world that has been around as long as most of us have been online is the common computer virus. And those viruses seem to grow stronger every year. With the start of the new year, let’s go over what we should be concerned with and how to protect yourself and your business.

Enemy at the Gates

Without a doubt, the word that strikes terrors in mortals throughout the business tech world is ransomware. We’ve covered this topic in great detail previously, but due to the ever-present and ever-evolving threat, it’s worth revisiting regularly. In fact, just recently, the entire city of New Orleans declared a state of emergency due to a particularly nasty ransomware attack.

Essentially, ransomware is a combination of a garden variety virus and kidnapper. Once your system is infiltrated, a portion or all of your system is locked out and an automated process or live person sends you a message explaining your situation and their demands. Think of it as less “nice place you have here — shame if something were to happen to it,” and more of an offer you can’t refuse. Once the demands are met, your system and data are supposed to be released back to you.

The FBI officially recommends that you don’t give in to their demands as this will only feed the problem, though they have made it clear that they understand that it is often less expensive to just pay the hackers than have the problem mitigated. Sadly, although these criminals do typically honor their word, there is no guarantee. In addition, there have been stories of companies that went through the effort of getting control of their system back on their own, only to see that some or all of the data had been lost, deleted, or put up for sale on the Dark Web.

Are You Prepared?

In short, if you have to ask this question, the answer is probably no. Simply avoiding strange websites or having an antivirus isn’t enough. We’re not just talking about random guys with a computer on their bed looking for a couple of extra bucks. Due to this being a more publicized, successful and profitable scheme, we’re seeing both an increase in volume as well as sophistication.

These are pirate attacks. When we think of pirates, we may have an image of the Hollywood dirty, toothless, bumbling buccaneers. But the truth is that pirates in all forms have always had to stay one step ahead of countermeasures against them. A solution that worked a decade ago — or even a year ago — might be outdated now, and it could open you and your company up to an attack.

Don’t Let This Slide

Cybersecurity is something that far too many companies put to the side and don’t pay much attention to. The problem with that attitude is that one minute you’re safe and the next minute your company’s data is at the mercy of some shadowy figure from the other side of the world — at least as far as you know. This isn’t an easy fix, like certain health problems that grow over time and can be managed by making simple changes once discovered.

One of the biggest transformations in recent years is how absolutely everything is done digitally. From Grandma’s recipes to Amazon’s shopping cart system, very little if anything is done on paper anymore. Gone are the days of towering filing cabinets, as they have been replaced with towering servers, either onsite or at a hosting location.

Obviously, if you lose access to your data, that will put your company out of commission for at least a few days, but probably much longer. Also, if something goes south with the ransomware attack, losing your data altogether can be a gamechanger — if not a game-ender.

A third problem that could also arise is if the person hacking into your system decides to ransom, sell or out just leak the data itself. Going back to the idea of more and more information being available digitally, think of the damage that can be done to your business if all of your customer’s credit card information was auctioned to the highest bidder. Or, if you’re a medical office, what would the repercussions be if your patients’ information was leaked. These aren’t hypothetical situations — they are reported by the news on a regular basis.

The Situation Isn’t Hopeless

It isn’t all bad news. Thankfully, there are companies that are ready and able to help you combat these threats as they arise. If you don’t have a system in place to protect your company or feel that what you currently have is inadequate, contact us to see what we can do to protect you against the everchanging threats to your cybersecurity.

Remember: the best way to keep hackers out of your system is to make sure they don’t get in there in the first place.

Unless you run a not-for-profit entity, the point of just about every business is to make money. Ironically, for many businesses, especially small businesses, this is the easy part. The hard part is keeping that money. Between paying vendors, purchasing supplies and materials, paying employees, and even yourself, you may find your balance sheet just breaking even. But is this the best way to do business?

Before we get started, just remember that we are not financial or tax experts, so make sure to speak with your accountant or financial department before making any changes. Well, now that we have that out the way…

Balancing the Books

Unless you are a publicly traded corporation, small businesses often like to zero out at the end of the year to avoid undue taxes. Sadly, it seems that some take that to the extreme and seem to keep a low balance in the bank throughout the year. In fact, a study by JPMorgan Chase concluded that the average small business only has enough cash on hand to cover 27 days of expenses. This can be a dangerous game to play if you want to make any major purchases or if your industry fluctuates seasonally.

Just like in personal finance, experts often suggest having enough cash to cover costs for three to six months. While this seems great in theory, that might be a lot of money depending on what sort of business you have. Many industries, such as construction, often have material bills ten times their payroll amounts or more, which would make the six-month plan almost impossible. So, how can you know what’s reasonable for your business?

Let Your Inner Nerd Lead the Way

Notice how we didn’t tell you there wasn’t any math at the beginning of this article. But don’t worry — we’ll make this as painless as possible. Before you can come to a number, think about your goals or previous experience. For example, if you have a seasonal business, how many months of “excess” do you have verse months of “lean”? If you have a stable workload year-round, do you plan on taking on more employees or want to make major capital investments? For the first scenario, merely take your average monthly inflow minus average outflow and multiply that number by the number of months you want to cover:

[Monthly Inflow – Monthly Outflow] x Months to Cover = How much cash you need on hand

It’s as simple as that!

For the second scenario, just adjust by including the estimated amount you will need for the investment divided by how many months you have to save for it included as part of your monthly costs:

[Monthly Inflow – Monthly Outflow + (Total Investment/Months to Save)] x Months to Cover

A little more complicated, but nothing most people couldn’t handle, especially if working with a financial professional. However, to make this easier, you have two options. The obvious option to increase gross income, which is always good. The other option is to lower expenses. What are some easy ways to do that?

Cut Down on Costly Mistakes

In general, the more efficient you are, the lower your costs. But there are hidden costs that many small business owners tend to overlook. We all know that good help is hard to find and not holding on to it can cost you. In order to cut costs, it might seem like a good idea to not pay employees a competitive salary. However, in the long run, this ends up being counterintuitive. How so?

In this job market, the grass sometimes seems greener everywhere else. With the internet, finding those pastures requires very little effort. Having a good employee leave over a few bucks can mean being without their work efforts, and that should generate you much more than what you pay them. Besides, on average, replacing an employee can cost you a third of their salary out of pocket!

Another mistake is not planning ahead when it comes to technology. While many businesses have one or more types of insurance for protection, what arrangements do you have for your computers, servers or other electronics? Think about this: if your system goes down or you need to upgrade, how much are you going to have to spend, both out of pocket plus any downtime this might cause?

Most businesses don’t include this important factor in their budgeting, and, as a result, may get a big hit that will take time to recover from. For this and other reasons, a Managed Service Provider (MSP) is like an insurance policy for your company’s technology needs. An MSP will go over your needs and goals and come up with a monthly plan to make sure that you won’t have any surprises when you have known or unknown technology needs. This gives you the ability to put one more item on your monthly budget and one less thing to keep you up at night.

It’s Totally Worth It

When your business has a reasonable amount of cash on hand, you’ll be able to not only navigate the seas of uncertainty but be able to grow and prosper. With today’s information, take some time to do an honest reflection on where you currently stand and what might be best for your business. To see where we can fit into a plan to increase your liquid cash on hand via an MSP, feel free to contact us directly!

You may have noticed in the past ten years or so, we’ve had more variety and better prices than ever before when shopping for — well, just about anything! This has been due in part by a global economy where competition is greater than ever. That’s great news for consumers but presents more pressure on companies to differentiate their goods and services from everyone else.

Regardless of what sort of business you run, there is almost certainly at least one other company that can do what you do just as well if not better. So, what do you need to do to get a leg up on the competition? Well, you can provide a better product or service, of course. But in today’s business climate, you’ll need to go above and beyond that.

Pricing

The days of competing with a store across town are long gone. Unless you are a business that offers a local service that can’t be done somewhere else (e.g., restaurants or barbers), you’re keenly aware that someone from another part of the country — or world — can offer the same thing at a lower price. When a consumer is browsing by price, a difference of just a few cents can cost you the sale.

Thankfully, you can use this system to your advantage. In the past, to see what prices your competitors offered, you had to either hear it from other people or go into their store yourself. Nowadays, you’re just a few clicks away from that information. Not only can this help you in adjusting your prices, but you can even see if the product or service you plan to offer can give you the income you need to be profitable before you even start.

Size

While many businesses can easily start off as a one-man operation or just a small office, being too small can hurt you in the long run. Having too small of an operation might cause you to not be able to handle the amount of clientele you need to stay competitive. Being small may also slow down production due to having too few people responsible for too much work. While running a lean business may seem to be the most cost-effective approach, be realistic about your business goals. Even modest growth in your operation can have astronomic results in overall business if done right.

Employee Relations

There’s a reason why any company of size has a human resources department. If there is trouble amongst your employees, it can eventually affect the bottom line. They say that good help is hard to find, but any business owner or anyone who’s worked in management can tell you that isn’t always true — good help is hard to keep! It’s little wonder that many companies, when measuring success and failure, use a metric known as employee churn rate. This measures the percentage of the company’s workforce that leaves and has to be replaced. The higher this number, the more unhappy the employees in general, and this is often reflected in the profitability of the company as a whole.

If you work in a professional or specialized field, where do you think those ex-employees end up? Often in the arms of your competition or occasionally starting their own company that competes with yours. One of the most notable examples is Dave Thomas, who many forgot worked for Kentucky Fried Chicken (Now just KFC) before using the skills he learned under Colonial Sanders to open his own company, Wendy’s, which is now one of KFC’s biggest competitors. Imagine how things might have turned out if they were able to keep him satisfied?

If your employees aren’t happy with their jobs, how do you think that will affect the quality of their work? How will they treat your customers? As famous businessman Richard Branson once stated: “Clients do not come first. Employees come first. If you take care of your employees, they will take care of your clients.”

Stay Out of the Stone Age

For better or worse, customer expectations can often be more important than reality. One of the things many customers expect these days is that if a company isn’t using the latest space-age technology, at least they should attempt to keep up with the times. For example, how would you feel about hiring a company that is still using Windows 98?

In addition to superficial perception, there may be some substance to that argument as well. Many older versions of software lack features that we now take for granted as being standard. What’s more, older versions of software can also be dangerous. How many times have we heard of common software (such as Java) that had a flaw that hackers were able to exploit? Besides, even if the version doesn’t have a defect, older versions of most software can and will eventually have ways to let in cyberthreats to either you or your clientele.

Along with aging software, older hardware can be detrimental to your competitive edge. Out-of-date or inefficient hardware can leave you unable to deliver what your customer’s expect or make the end product a lower quality. While you don’t have to purchase equipment every time a new advancement comes along, keeping an eye on what is generally being used by your competitors will at least keep you even with them.

Consider Outside Help

Technology is a tool for your business, either on the frontend or backend. Make sure your equipment, software, and data management are all up to date and optimal for your needs. If purchasing those items is cost-prohibitive, you might consider utilizing a Hardware as a Service (HaaS) or Software and a Service (SaaS) arrangement to keep up with the competition. If you feel that your company would benefit from this, contact us today to set up a consultation to help you sharpen your competitive edge.

As we head into this new decade, it’s more important than ever to stay competitive. You’ve worked hard to get your company this far. Don’t let it suffer by not keeping up with technology’s ever-changing advancements.

While many of us may not physically see our servers as often as we see our personal terminals, we interact with them directly or indirectly daily. Within your office network, the server is the heartbeat of the entire system. Since we rely on them without directly interacting with them we tend to forget that they’re there. However, just like with any other type of computer, servers can expire and need replacing from time to time. Have you checked your servers lately?

 

Section 179 Deductions

For those that have been following our blogs this month, you’ll recall that our topic is Section 179 tax deductions. As a quick recap, this is a section of the tax code that not only allows you to write off purchases made for business purposes, it will let you take the full value at one time versus the past option of making you deduct a depreciated percentage over multiple years. While it doesn’t give you credit for the total cost of your business investments, it does allow you to legally avoid paying tax on the funds used for these purchases.

The purpose behind Section 179 is to give businesses a break when they are just starting out or are expanding, therefore allowing them a chance at making a profit (or at least avoiding too much of a loss) while making major purchases. While the total amounts are subject to change, the law currently allows write-offs of up to $1 million for single purchases and a maximum of $2.5 million total per year.

As always, we need to remind our readers that we are not tax experts and this information should not be taken as the final word. Every business and situation is unique, so please consult your company’s CFO or other tax and accounting professionals before making any decisions or purchases.

 

Are You Ignoring Your Servers?

As we mentioned earlier, your servers can be an “out of sight, out of mind” affair. However, if you’re working on an internal network, (in the same building or remotely), you are likely interacting with one or more servers throughout most of the day. Just like with terminal computers, they are subject to a finite lifespan, either becoming obsolete or just wearing down. This can cause several potentially critical problems for your business. For instance; network speed might become an issue. This can affect how quickly information travels to and from the server and your computer or between users of the network itself.

In addition, storage can become difficult to access. While servers typically have much more capacity than the average desktop or laptop, that isn’t to say that it’s unlimited. Cloud storage and data back-up are becoming increasingly popular these days, but that’s not to say that there aren’t situations where it would be preferable or necessary to stick to a local, physical server. For example; if your office deals with sensitive medical information you’ll need to remain HIPPA compliant, and cloud storage may not be a safe choice for you. That means you’ll have to be extra diligent about keeping your on-site servers and back-up systems healthy.

 

Backups Don’t Last Forever

Many of us remember when we first used floppy disks or CDs for our computers, thinking about how they would outlive us — only to have our expectations dashed with corrupted data after just a few uses. Back-up systems in any form have their limitations, such as magnetic tapes becoming demagnetized or servers getting an unexpected electrical charge. Whether you’re using a back-up drive or a physical format, you need to understand that if you are archiving information that needs to be stored indefinitely, you’ll need to plan to transfer that data to another form of storage every 5-10 years depending on technological advancements.

There is a fairly new medium called M-Discs that, due to their unique material and technology, are reported to keep data safe for 1,000 years. While that may be theoretically possible, try to convince the horde of dads who bought those 100-year lightbulbs for $40 apiece only to have them burn out in about a year! Remember that no matter what the company selling to you may say, nothing is permanent. If your data is worth keeping, it’s worth transferring every few years.

With that in mind, as the year comes to a close, perhaps this would be a good opportunity to look over your current equipment and see where you stand. If you can’t find any records to tell you the age of the drive, checking to see when the first files were transferred could be a good place to start and at least give you a good estimate.

 

Now’s the Time!

Remember that both servers and back-up devices are important elements of many pieces of equipment that need to be updated and replaced at some point. If you’re coming to the end of 2019 and finding that you had a better year than expected, or have unused funds sitting around, take advantage of Section 179 deductions so that you can lower your tax liability while making business-critical equipment upgrades.

You’ll never know what tomorrow will bring, let alone next year or the year after. It’s impossible to predict if you’ll have the funds when the servers or backups fail or simply don’t have the time to address the issue. By upgrading your equipment while we’re still in tax year 2019, you’ll be setting yourself up for success for next year and possibly the years ahead!

The worst kept secret in the IT world right now is that Microsoft will end support of Windows 7 on January 14th of 2020. If you’ve been following this story at all, perhaps you’ve seen that many people are discussing this across all industries. And if you haven’t been following it, you’re probably wondering why this is such an important topic. It is important because it may affect you and your business.

Why Windows 7 EOL Matters

It may be hard to believe, but Windows 7 has been out for over ten years! At the time it came out, it was heralded as a new beginning for Microsoft — since they were just coming off of a series of disastrous releases mixed in with their successes.  (If you don’t remember Windows ME, you’re better off). The next version that came out, Windows 8, appeared to be another dud, so many users held onto Windows 7 as it was a proven operating system. Unfortunately, this has stopped many users from upgrading since then. In fact, some estimates from earlier this year show about 1 billion computers still running Windows 7!

What End of Life for Windows 7 means for you is that Microsoft will no longer provide support or updates for that operating system. While there will be some exceptions, (you will be able to pay substantial fees for certain updates and limited support), all Microsoft support will be done away with within three years. Even so, the cost of this supplemental measure is more than updating to Windows 10, so why spend money on a dying platform?

Hackers are paying attention to this deadline, so you should too. Older versions of Windows, for both computers and servers that have surpassed support, have continuously become victims of hacking campaigns. Remember; when a hacker finds a way into Windows, the team at Microsoft figures out how it’s being done and will send out a patch, which is the whole point of security updates. With Windows 7 being at the end of its life, once the updates come to an end and a hacker finds a way to exploit the system, you can be sure that he’ll be telling all of his friends how easy it is to breach.

Section 179 to the Rescue!

With all the new security benefits plus the updated features of Windows 10, what possible reason could someone have for not upgrading? One of the most common reasons is cost. While upgrades used to be free, Windows now charges $99 per license to upgrade. That can be a significant charge for anyone, and it’s especially costly if you have to purchase software for  multiple terminals.

As we’ve mentioned in previous blogs, Section 179 allows companies to take deductions of the full value of the property purchased for business purposes within the same business year. If you make the purchase this year, you can upgrade the software on your office systems and take it as a deduction on your 2019 taxes. While that doesn’t exactly eliminate the cost, it will make your burden much easier to bear.

Not Just the Software 

The other reason for not upgrading is that while businesses would like to upgrade, their hardware won’t support the new OS. This is a valid argument since many of the machines that came out around the time Windows 7 came out, which is ten years ago, are not able to support Windows 10. Or would run very slowly at the very least. If you find yourself in this camp, the fact is that you’ll need to upgrade your hardware to use Windows 10.

However, if you are currently using computers and servers that are out of date, it would probably be in your best interest to upgrade for reasons other than just Windows. Many other software programs that you currently (or would like to) use may not be able to run their latest versions on these terminals as well.

Just like with the OS software, while there is an upfront cost involved, you would be able to include any hardware updates with the other Section 179 deductions that you currently have for the tax year 2019. Note that this also includes any related costs. For example; you may pay for shipping or set-up in addition to the actual cost of the machinery, so you can write that off, too. Did you include service contracts, warranties or insurance fees? That would be included in the deduction as long as it is implemented this year.

The fact of the matter is that time is running out. Thankfully, Section 179 deductions help to lessen the blow of the cost, though this isn’t something that can be pushed aside indefinitely as there are real consequences to consider.

While we are discussing the theme of Section 179 deductions in our blogs this month, we need to remind our readers that we are not tax advisors. The information we provide is for general discussion, and before making any decisions, please speak with your company’s CFO or other tax and accounting professionals. That being said, remember that current Section 179 laws allow you up to $2.5 million in deductions that you can write-off in 2019. If you find yourself in need of a system upgrade, now is the time to do it!