Our business relies heavily on digital workflows, but we have never done a formal cybersecurity assessment. How does a lack of documented IT security policies impact our enterprise value, and what must we clean up on our runway?

Question

Tyler Smith · Accepted Answer

A modern buyer views cybersecurity as a major risk factor. If your business suffers a data breach during due diligence, your deal will fall apart immediately. Even if you avoid a breach, a lack of documented IT security policies and procedures will give a buyer a powerful excuse to discount your valuation at the closing table.

To protect your enterprise value, you must treat cybersecurity as an operational priority on your exit runway. Start by hiring an external IT firm to conduct a comprehensive security assessment. They will identify vulnerabilities in your network, your cloud storage, and your employee devices.

Next, document your IT policies using the EOS Process Component. This includes policies for passwords, data encryption, remote work security, and incident response. Ensure your team is trained on these policies and that you have robust, off-site data backups that are tested regularly.

You should also obtain a cyber liability insurance policy to protect your business from financial losses in the event of an attack. When a buyer's technology team audits your operations, showing them documented security processes and a clean security assessment report will prove that your digital infrastructure is secure and ready for transition.