Cyber Security

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One concern many online users and businesses have is about the security of their personal conversations and correspondences. Nobody wants to have their correspondences stolen and snooped on by strangers for personal and security purposes. Furthermore, many online products make broad claims to the security and safety of their products, but how can we be sure that they work as advertised? Just because a company claims that its product is secure does not mean it is true. One of the limited options that consumers have is to rely on third party and independent reviews.

One such independent security reviewer is the Electronic Frontier Foundation. They recently made a very eye-opening and thought provoking review of online messenger products. Some of the criteria they based their evaluation on includes the following: Is your communication encrypted in transit; Is your communication encrypted with a key the provider doesn’t have access to; Can you independently verify your correspondent’s identity; Are past communications secure if your keys are stolen; Is the code open to independent review; Has there been an independent security audit.

It is important that security include end-to-end encryption, which means that the service company doesn’t have access to the keys of the users. Only the users have the keys and it doesn’t leave their possession. This means that the service company can’t give up information without the consent of the users. It is also important that past communications are secure if keys are stolen, so if a key is compromised but the message deleted on a user’s local machine, past messages are encrypted and can’t be decoded at all because the encryption uses ephemeral keys which are routinely deleted. Finally, it is necessary to make sure that the identity of the corresponding participant can be verified when communications are in route, because a significant security risk exists in divulging information to a false identity. The perpetrator can glean and steal sensitive data, so this must be prevented with a robust verification protocol.

Some of the top security performers in this analysis include products such as ChatSecure, CryptoCat, Pidgin, Signal/RedPhone, Silent Phone, Silent Text, Telegram, and TextSecure. The best mass-market option was Apple’s iMessage and FaceTime products, although neither provides complete protection against sophisticated and targeted forms of cyber intrusion. Some of the messenger options analyzed were found to be vulnerable to surveillance by the service provider, such as email products from Google, Facebook and Apple; Yahoo’s web and mobile chat; Secret; and WhatsApp. Even worse, some major messaging platforms have no encryption at all, such as Yahoo’s desktop messenger, QQ, and Mxit.

This security analysis affirms the notion that individuals and businesses must be very diligent in protecting personal information, and this includes stringent research in the security of the products that one utilizes to secure important data. In this day and age, cyber security is something that most people take for granted, but as the system evolves to become more sophisticated and the world becomes more reliant on cyber technology, the importance for all users to protect themselves will become paramount. You cannot assume that any entity or product is safe based on general reputation or unconfirmed claims. Assuming these claims as truth without due diligence opens yourself up to risk which is the path to loss and damage.

Choosing A Business Structure

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When starting a new business, one must carefully choose a business structure to make it a legal entity, which means that it can own property, own bank accounts, and pay taxes the same way that an individual person would. When contemplating which business structure to choose, one must weight the pros and cons as they all have different features.

 A sole proprietorship is usually owned by a single person or a couple. With this business structure, the owner is personally liable for all business debts, can freely transfer the business assets, and report all taxes under personal income. This entity is good in its simplicity and lack of restrictions. However, it comes with a severe drawback of potentially being personally liable for all damages that a business may incur.

 In recent times, Limited Liability Companies have become very popular, as they combine the limited legal liability of full corporations but have easier tax structures like sole proprietorships and partnerships. LLCs are powerful because they protect owners from the present and future debts of the business. They also provide tax benefits of pass-through business losses that can offset the owner’s other nonbusiness income and distribution of profit that can be taxed at the owner’s potentially lower marginal tax bracket.

In addition, if a business has multiple owners, it can operate as an LLC while electing for its tax structure to be treated as a corporate entity. If the owners of the LLC want to retain profits within the business to facilitate growth of the business, the recommended option is a C corporation tax election, where the LLC’s profits are only subject to the beginning corporate tax rate of 15%, which is usually less than the personal marginal tax rates of individual owners. And if any of the owners wish to receive compensation, they can be paid W-2 wages for their work within this structure. However, if the owners prefer to withdraw substantial profits from business, the recommended option is the S Corporation election. This allows each owner to receive a pro rated share of the LLC’s total profit as distributions that would be personally taxed at each owner’s marginal tax rate. Furthermore, these distributions are not subject to Self-Employment Tax.

With general partnerships, partners share income and managerial duties, while each partner is personally liable for any debt. Members of general partnerships must file an informational tax return and file personal income taxes. General partnerships are the most simple business structure to form, as they only require that at least two people agree to be partners or conduct business and share profits even with an express agreement. They do not have to register or file organizational documents but usually must register a trade name unless the business operates under the names of the partners.

 Corporations are complex structures with high legal costs. They are owned through stock and have complicated tax, licensing and regulation requirements. They must also follow complex procedures such as issuing stock certificates, holding annual meetings and keeping minutes, electing directors, and so on.

 C-Corporations are distinct legal entities that are taxed separately from the owners and generally are not advised to own assets that appreciate in value. While they do protect against personal liability, they have some disadvantages with regards to taxes and operations when compared to an LLC or limited partnership. However, they may have lower tax rates if annual net income is below $75,000. S-Corporations protect their owners against personal liability and are not taxed as a separate legal entity. They have limitations on the number and type of eligible shareholders and have some tax and operating disadvantages when compared to an LLC.

 When choosing a business structure, it is important to consult a tax accountant or attorney to make sure that one understands all the pros and cons behind the decision and makes the correct elections based on the situation. This decision should be based on a multitude of factors, including the type of business, the tax structure and benefits desired, who the owners of the business are, and the amount of capital and budget available to spend on a particular business structure.       

 

Online Business Marketing

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The biggest challenge facing most online businesses is the difficulty in obtaining traffic. The problem here is if you’re not getting traffic, you’re not getting sales. Even if you have the greatest product or service in the world, it must be visible to consumers for it to sell and deliver the most value. Your business needs to be discovered by consumers. Whether it be through word-of-mouth, print and tv advertising, or online marketing, there needs to be some avenue of accessing the awareness of consumers.

One option for acquiring more traffic with online marketing is to pay for traffic through PPC search engines, which provides immediate qualified traffic based on keywords that you bid on. The goal is to bid on the top three positions, because these reach 80 percent of all internet users. Bidding on PPC search engine traffic also allows your site to get ranked in the search engines for free. The advantages of this method is the speed of delivery and flexibility in selecting which search terms you would like to advertise for. Disadvantages include the competitiveness of this industry, which drives up the prices of keyword ads and doesn’t guarantee you will receive the amount of traffic that you intend.

Another option is to implement search engine optimization techniques that make your website available to address the search queries of users looking for information. By adding relevant content to your site and promoting it to other websites and as many viewers as possible, you can increase the brand awareness of the site and make sure it is hitting the public consciousness. One firm that specializes in SEO in Washington DC, states that 87 percent of all consumers search actively for products and services online. Furthermore, this DC SEO firm says that consumers are becoming more attached and dependent on their mobile phones for personal activities than ever before, which means online marketing is becoming more essential for being able to access these mobile consumers. This is a very powerful way of marketing because 44 percent of consumers begin their purchase through a search engine. In fact, search is the 4th top internet activity behind social media, email, and video.

Finally, another effective marketing strategy to attract more traffic is to give away free content in exchange for contact information. This allows you to build a potential customer base that you can continually market to and encourage to pass on valuable content to other potential customers. This is very important, because it can take up to seven points of contact before making a single sale to an individual customer. By having a direct line of communication to your potential customer base, you can employ much more effective marketing strategies and develop a relationship of trust which is vital for sale conversions. Furthermore, it is known that repeat customers are the most valuable customers.

Whatever method of traffic generation that you employ to drive customers to your business, you must make sure that it is cost effective and scalable. Because if generating traffic is costing you more money to bring in a customer than the sales you receive from that customer, this is not sustainable over the long term. Also, if your strategy is not scalable, it will not have a meaningful impact on your business and is not necessarily worth the time and investment for such a low return activity. Being able to scale your strategy is also very important for being able to drive down marginal costs of marketing over time.