How to Build and Justify Your Cybersecurity Budget: Real Examples + ROI

Creating a cybersecurity budget isn’t just about picking tools or estimating spend—it’s about protecting your company’s future. Whether you’re presenting to the board, preparing for the upcoming fiscal year, or recovering from a breach, this guide helps you build a data-backed, defensible cybersecurity budget that communicates ROI and reduces risk.

Understanding your cybersecurity needs

The first question to ask is: How much is enough to protect our business?

For large enterprises, security budgets can easily run into tens of millions. But for mid-market companies or smaller organizations, the process isn’t as straightforward. Lack of real-time visibility and measurable metrics often makes it difficult to align security initiatives with business impact.

A helpful way to approach this is to estimate the potential cost of a data breach, then work backward to justify your proposed security spend.

Calculating the cost of a breach

To simplify the budgeting process, we’ve created a free spreadsheet tool to help you calculate the cost of a potential breach. Our tool breaks down:

Incident Response Costs

• Third-party IT support
• Incident response retainers
• Legal counsel and compliance guidance
• Public relations and communications teams

Recovery Costs

• Increased cyber insurance premiums
• Additional headcount or consulting fees
• Security tool upgrades

Indirect Costs

• Future pipeline impact
• Customer attrition
• Downtime and lost productivity

Example: A fictional financial services company, FIN, with $100M in revenue suffers a two-week ransomware incident:

• Incident Response & Legal: $475K
• Recovery: $195K
• Premium Increase: $75K
• Customer Attrition (7%): $7M
• Future Pipeline Loss (25%): $6.25M
• Payroll Increase (5%): $1M

Total Estimated Loss (2 years): $19.63M

Recommended cybersecurity investment: $1.98M (10% of potential breach cost)

Building a business case for your cybersecurity budget

Once you’ve calculated potential loss, it’s time to translate risk into ROI. Executives and boards don’t respond to fear alone—they respond to numbers, outcomes, and business alignment.

Use your breach cost analysis to show how security investment:

• Supports compliance and governance efforts
• Reduces long-term operational costs
• Protects customer trust and market share
• Minimizes downtime and legal exposure

Allocating Your Cybersecurity Budget

Every organization has unique needs, but most cybersecurity budgets fall into three categories:

1. People

• In-house cybersecurity team
• Managed service providers (vCISOs, MDR, etc.)

2. Processes

• Security policies and compliance frameworks (e.g., HIPAA, GDPR)
• Employee training and phishing simulation
• Incident response planning and testing

3. Technology

• Identity & access management
• Endpoint protection, firewalls, cloud security
• MFA, threat detection, SIEM/SOAR tools

Real-World ROI: The Case for Proactive Investment

Too many businesses treat security as a cost center—until it’s too late. But in today’s landscape, cybersecurity is a growth enabler.

Smart security investment leads to:

• Faster deal cycles with enterprise customers
• Lower long-term costs through amortized services
• Fewer compliance violations
• Increased customer confidence and retention

Example: MGM Resorts lost over $100M in a single attack. Spending $5M on a comprehensive security program beforehand could have saved them millions and avoided reputation damage.

Key Considerations for Cybersecurity Spending

• Risk assessments & ongoing monitoring
• Training & awareness programs
• Cyber insurance coverage
• Compliance readiness (HIPAA, SOC 2, PCI, etc.)
• Budgeting for new initiatives & shadow IT prevention

Final Thoughts: The ROI of Prevention

A strong cybersecurity budget is your best defense against future losses. By calculating potential breach costs and proactively investing in people, process, and technology, you position your company for resilience and growth.

Need help mapping out your cybersecurity budget? Schedule a free consultation with our team at Cyber Defense Group and use our free spreadsheet to begin planning today.

Bonus Resource: Download our free ebook, “How Much Should You Allocate to Your Cybersecurity Budget?” for deeper insights and strategic templates!