What is a VPN? Small Business Owner’s Guide

what is a vpn small business

Running a business today almost certainly means having a digital presence, and being connected to the Internet. While the benefits of this transformation are many, the security issues are still a daily challenge, with many solutions in the market place to address them. One of them is VPN, or Virtual Private Network.

Even if you don’t know anything or much about it, you should seriously consider having a VPN, because it can be as important as your Internet connection, if not now then in the future.

What is a VPN?

what is a vpn small business

A VPN, or Virtual Private Network, is a means to enhance security and privacy for data transmissions. It allows devices to communicate over a public network (like the internet) as if they were connected to a private, secure network. Here’s a more expanded view of a VPN:

  • Foundation: A VPN is essentially a group of computers networked together over a public network, primarily the internet. It’s a “virtual” network because there isn’t a physical connection between all the computers. Instead, the connection happens over the internet.
  • Mimicking Physical Networks: These interconnected devices simulate a secure, physical network. It’s like having a private connection, even if you’re miles or continents apart from the other devices on the network.
  • Data Encryption: One of the primary features of a VPN is that it secures internet traffic with an encrypted connection. This means that data sent between devices on the VPN is turned into a code to prevent unauthorized access.
    • Benefits:
      • Privacy: By encrypting data, VPNs ensure that hackers, ISPs, and other third parties can’t easily access or interpret the data being shared.
      • Security: VPNs add an additional layer of security, especially when accessing the internet from public Wi-Fi networks, which are notoriously unsecure.
      • Geo-spoofing: Users can appear to be accessing the internet from a different location, which can bypass regional restrictions on content.
  • Shared Information: Devices on a VPN can share information more securely. This is particularly useful for businesses where remote employees need access to sensitive company data.
  • Enhanced Security: A VPN steps in to ensure the right level of security when the existing network infrastructure falls short. For instance, when you’re on a public Wi-Fi network, the security protocols might be weak or non-existent. A VPN can provide the robust security necessary to protect your data in such environments.

To sum it up, a VPN is like a secure tunnel over the internet. It shields your data from prying eyes and ensures that your online activities remain private and protected. Whether you’re a business aiming to protect sensitive information or an individual looking to maintain privacy, a VPN is an invaluable tool in the modern digital age.


Why Should You Use a VPN?

what is a vpn small business

VPNs have become an essential tool in today’s connected world. They serve a range of purposes, from enhancing security to enabling access to content. Here’s a more detailed look at why people use VPNs:

  • Business Connectivity:
    • Remote Access: Both small and large businesses employ VPNs to allow employees to connect to the company’s internal network from remote locations securely. This way, they can work from home or during travel as if they were in the office.
    • Access to Resources: Through a VPN, employees can securely access vital company resources:
      • Files and documents
      • Applications specific to business operations
      • Printers and other networked devices
      • Internal websites and databases
  • Home Network Access:
    • Remote Connection: Just as businesses use VPNs for remote access, individuals can set up VPNs for their home networks. This allows them to access personal files or use home-based applications even when they’re away.
  • Connecting Multiple Networks:
    • Enhanced Collaboration: VPNs can be used to securely connect multiple networks. For example, two branch offices of a company can share data and resources by connecting their networks through a VPN.
  • Online Privacy and Security:
    • Encryption: One of the primary functions of a VPN is to encrypt the data you send and receive. This encryption ensures that even if someone intercepts the data, they can’t understand it.
    • Public Wi-Fi Safety: When using public networks, like those in cafes or airports, your data is vulnerable to interception. A VPN provides a secure, encrypted tunnel for data transmission, safeguarding your information.
  • Bypassing Geoblocking and Restrictions:
    • Access to Content: VPNs allow users to bypass regional restrictions. For instance, a user in Europe can access content restricted to the U.S. by connecting to a U.S.-based server.
    • Overcoming Censorship: In countries with strict internet censorship, VPNs can be a tool to access blocked websites and services.
  • Privacy Maintenance:
    • Masking Physical Location: VPNs hide your actual IP address, thereby disguising your physical location.
    • Identity Protection: By routing your traffic through a VPN server, your online activities are anonymized, helping protect your identity.
    • Browsing History Privacy: Using a VPN ensures your browsing history remains private, shielding it from ISPs, advertisers, and potential hackers.

In essence, VPNs provide a comprehensive solution for many of the internet-related concerns of the modern age. Whether you’re a business aiming to expand your remote operations or an individual who values privacy, VPNs offer the tools to navigate the digital world securely and freely.

Using a VPN Provider

what is a vpn small business

If you don’t want to go through the process of setting up your own VPN, you can use a VPN provider. There are many vendors out there so find the company best suited for your needs.

Most providers have a free tier, which is supported with ads while you are connected. Even though they do provide a secure connection, they might log your activities to deliver contextual ads. The free version may also have a limit on data, with allowances varying from 500MB to 10GB or even unlimited in some instances.

If you are using the VPN for your business, it is best to go with a paid service. The subscription models vary greatly in price, starting as low as $6 going all the way up to $60 per month. The more expensive providers have more servers in more countries with tens of thousands of IP addresses.

When you choose a provider, make sure they list the connection protocols they use and thoroughly go through the privacy policy and terms of service. If they log whatever you’re doing online and collect data, find another company. Also check how many connections are supported at the same time, if it is for your small business, make sure you don’t get a single use only plan.

As for the price, the old adage definitely applies, you will get what you pay for. Read any offers that sound too good to be true carefully, especially the small print.  Most companies have a free trial, and if you like the service, the best option is to pay an annual contract.

Creating Your Own VPN

what is a vpn small business

You create a VPN by establishing a virtual point-to-point connection using different types of protocols to tunnel the traffic. These are the most popular protocols:

  • Point-to-Point Tunneling Protocol (PPTP) is developed by Microsoft, U.S. Robotics and several remote access vendor companies and it supports almost every operating system, including Windows, Mac OS, and mobile operating systems.
  • Layer 2 Tunneling Protocol (L2TP) was developed by Cisco, and it is an extension to the PPP protocol so internet service providers can operate VPNs. It is usually used with IPSec to secure the transfer of L2TP data packets over the internet.
  • Internet Protocol Security (IPsec) is a set of protocols developed by the Internet Engineering Task Force (IETF). It is used to secure communications over the internet, and it is more secure than PPTP. It can use transport mode or tunneling to encrypt data traffic in a VPN.
  • A Secure Sockets Layer (SSL) VPN system is more reliable than PPTP, L2TP or IPsec. It is the same security protocol used for banking and other domains with sensitive data. It creates encrypted channels and you can access it through a web browser from anywhere.
  • OpenVPN is based on SSL code so it is highly secure and it is free. However, you have to install a client because it doesn’t have native support from Windows, Mac OS X, and mobile devices.

Pros and Cons for Using a VPN

what is a vpn small business

The benefits of VPN are well established as one of the best and safest way to link together users across distances. It is part of the overall strategy for organizations to securely use the internet to connect remote offices and staff to the main company network, but this doesn’t mean it is for everybody. Here are some pros and cons to help make a more informed decision:


  • High level of security with advanced encryption and authentication protocols,
  • Reduced operational costs when compared to any traditional Wide Area Network (WAN),
  • Low-cost global-networking opportunities,
  • Scalability to address growth for large capacity and usage without the capital expenditure of an on premises infrastructure,
  • Allows employees to connect with remote offices using locally available high-speed broadband.


  • If you are looking to create your own VPN, it is not easy for a business because it requires expertise. It requires a thorough understanding of network security issues with careful installation configuration.
  • There is no direct control, because it is reliant on ISPs that supply the VPN. Network conditions can affect the Quality of Service (QoS)
  • There is not that much/if any vendor interoperability.
SecurityHigh level of security with advanced encryption and authentication protocols.If creating a VPN, requires expertise and a thorough understanding of network security. Careful installation configuration is crucial.
Operational CostsReduced operational costs compared to traditional WAN.-
Global Networking OpportunitiesLow-cost global-networking opportunities.-
ScalabilityScalability to address growth without the need for capital expenditure of on-premises infrastructure.-
ConnectivityAllows employees to connect with remote offices using locally available high-speed broadband.No direct control, reliant on ISPs supplying the VPN. Network conditions can affect QoS.
Configuration and Set-Up-For businesses looking to set up their own VPN, the process is not easy due to the expertise required.
Vendor Interoperability-Limited or no vendor interoperability.

Bottom Line

what is a vpn small business

At the end of the day, VPN is a proven technology for secure communications between distributed users. Whether you are a single operator or a small business with many employees, you can use it as an affordable alternative to WAN. With the right VPN service provider or one that you create, your business can have a secure network your employees can use to communicate and access company resources no matter where they are.

VPN Photo via Shutterstock

Michael Guta Michael Guta is the Assistant Editor at Small Business Trends and has been with the team for 9 years. He currently manages its East African editorial team. Michael brings with him many years of content experience in the digital ecosystem covering a wide range of industries. He holds a B.S. in Information Communication Technology, with an emphasis in Technology Management.