Even though many don’t realize it, small businesses are at a greater cybersecurity risk than ever. Larger companies may be able to throw money or influence at such problems, but most small businesses are out of luck.
If you are a small business owner, keep on reading and familiarize yourself with the seriousness of the outcome that cyber threats can cause.
5 Reasons Why Small Businesses Should Worry about Security
A single cyberattack can be enough to make a small business go under. Depending on the severity of the attack, recovering financial and reputational loss might be challenging.
There is more to it. Here are five main reasons why you should take precautions today.
1. Small businesses have become prime targets for cyberattacks
Cybersecurity is a long-standing concern for large companies. However, hackers are increasingly shifting their attention toward small businesses. It makes sense since many Small and mid-size businesses (SMBs) have modest cybersecurity budgets. Worse yet, it’s not uncommon for SMB owners to dismiss the threat because they think their company is too small.
SMBs are the target of 41% of cybercrime. Almost two-thirds were victims at least once. Small businesses are more likely to receive emails containing malicious code, with ransomware being the worst.
Ransomware can seize your most sensitive files and threaten to destroy them unless you pay up. Such attacks are rising, and more than four out of five target small and mid-sized companies.
2. Dealing with cybercrime costs SMBs money
The costs a successful data breach can cause are far greater than any security budget. Even if we focus on finances alone, the fallout can be damning.
Ransomware poses the most direct form of financial threat. About 50% of companies give in to the demands. The asked-for amounts vary widely, but even a few thousand dollars may be enough to bankrupt a small company.
Hiring lawyers and doing damage control doesn’t come cheap. Neither does belatedly forming an IT department or outsourcing security duties to third parties. Audit and potential product recall costs also add up.
3. Hidden costs can be equally severe
Cyber threats also result in costs that are much harder to quantify. For example, it’s hard to tell how much dealing with the damage instead of focusing on business can set a company back. It takes time to recover, time the company isn’t using to grow and innovate.
All of this negatively impacts employee morale. A disheartened workforce will likely perform poorly.
4. The associated reputation loss is hard to recover from
A business’s size has little bearing on the sensitivity of the data it gathers. This can include financial data, medical records, SSNs, etc. The theft of such data marks any company as unreliable.
Business partners will see it as careless, while potential hires are more likely to sign on elsewhere. Abundant competition means the public has no problems severing ties with compromised companies.
5. Successful cyberattacks raise product prices
As if all the above weren’t enough, price hikes are often an inevitable consequence of cyberattacks. Companies have to pay for the costs somehow. Since few SMBs have cyber insurance, it falls on customers to help pick up the slack.
How Can SMBs Protect Themselves?
Our warnings might look dire, but a small business can proactively reduce the risks. Taking the following actions is a good start.
1. Implement a password manager
Password managers reduce human error. They generate strong passwords for all accounts, giving users a single master password to remember. This drastically reduces the likelihood of password theft, misplacement, or forgetfulness. Even if one gets stolen, it is of limited use.
2. Restrict network access
Creating a level-based clearance system will help restrict access to people who legitimately need it. This also makes identifying suspicious activity easier.
Ensure all devices that connect to your network are up-to-date and have malware protection.
3. Back up and encrypt your data
You should have secure copies of all your sensitive data. Cloud storage is a good solution since it’s off-site and encrypted. This allows you to store all your important data in a secure environment.
Cybersecurity professionals often monitor cloud systems, which adds to the protection.
4. Train employees in cybersecurity basics
The best protection won’t be enough if employees thoughtlessly open suspicious emails. Organize training sessions that teach employees to recognize and deal with cybersecurity threats.