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Small businesses are more vulnerable to cyber-attacks since hackers view them as easy victims to target. While this may seem unlikely, statistics reveal that more than half of these businesses experienced some form of cyber-attack in 2022. It's also reported that state-sponsored threat actors are diversifying their tactics and shifting their focus toward smaller enterprises.
Cyber-attacks against small-sized businesses do not always make headlines, but they have potentially catastrophic impacts. These attacks can result in significant financial and data loss, sometimes shutting down the business. Therefore, it’s crucial that small businesses make cybersecurity a top priority.
What drives more cybersecurity attacks on small businesses?
Small businesses are on the target list of hackers mainly because they focus less on security. On average, SMBs and small businesses allocate 5%-20% of their total budget to security. Additionally, human mistakes are the root cause of 82% of cyber breaches in organizations. Cybercriminals take advantage of their weak security infrastructure and exploit the behavior of careless employees to launch insider threats and other cyber-attacks successfully.
A report reveals various cyber-attacks that often target small businesses, such as malware, phishing, data breaches, and ransomware attacks. Also, small businesses are vulnerable to malware, brute-force attacks, ransomware, and social attacks and may not survive one incident.
The influx of remote working culture has added new challenges and cybersecurity risks for small businesses. This culture has given rise to a large number of personal devices like mobile phones, laptops, and tablets that can easily access sensitive information. Many employees don't undergo regular scans of their phones and laptops for potential vulnerabilities.
In addition, few companies can provide access to password management software or VPNs to protect their internet connection and credentials and maintain security on rogue Wi-Fi networks. Statistics also reveal that only 17% of small businesses encrypt their data, which is alarming.
Moreover, small businesses are at a higher risk of being attacked because they have limited resources to respond to cyber-attacks. Unlike large organizations, they don't have a dedicated IT team with exceptional skills and experience to deal with complex cyber-attacks. They also have a limited budget to spend on effective cyber security measures. Hence they don't invest in advanced cybersecurity solutions or hire professionals to manage their cybersecurity.
Impacts of a Cybersecurity attack on small businesses
Cyber-attacks on small businesses can result in severe consequences - like financial loss, reputational damage, legal ramifications, and disruptions in operations. Below is a better insight into the effects of a potential cyber-attack on small businesses:
Loss of money
A cyber-attack may cause small businesses to lose billions of dollars. A report predicted that the attacks on small businesses will cost the global economy $10.5 trillion by 2025. Also, the average data breach cost to small businesses increased to $2.98 million in 2021, and these figures will likely increase with time. Sometimes small businesses will need to pay to compensate customers, investigate the attack, or implement additional security measures – all of which add up to more financial costs.
Reputational damage
A possible cyber-attack can also damage the business's reputation and erodes customers' trust. Suppose a customer's, partner's, or supplier's sensitive data gets exposed to attackers. In that case, it negatively affects the company's reputation. This might cause them to lose valuable clients, which can also lead to the unexpected closure of the business. According to the National Cybersecurity Alliance, 60% of small and mid-size companies get shut down within six months of falling victim to a cyber-attack. It might take a lot of time and effort to restore the client trust and restore the organization's reputation.
Disruptions in operations
Small businesses often face operational disruption after a cyber-attack. They may experience downtime or lose access to critical business data - which leads to lost opportunities and delays in operations. This negatively impacts your business as you fail to meet customer demands.
Legal ramifications
Small organizations are also subject to various industry legal and regulatory regulations like GDPR, HIPAA, and CCPA to maintain data privacy. A cyber-attack resulting in valuable data loss ultimately triggers regulatory penalties. As a result, small businesses may face lawsuits and hefty fines for non-compliance, further adding financial strains. A Small Business Association Office of Advocacy report finds that the cost of lawsuits for small firms ranges from $3,000 to $150,000. Therefore, protecting the clients' data is better than facing compliance issues.
Actionable Cybersecurity tips for small businesses
With 51% of small businesses having limited cybersecurity measures, adopting preventive measures to protect networks and employees from malicious threat actors is crucial. Some of the best practices that you, as an owner of a small business, can exercise to reduce the attack vector includes:
- Educate employees by providing regular training sessions and conducting awareness programs about cyber-attacks like phishing, malware, or social engineering techniques. Ensure that the employees at all levels understand the risks and learn how to detect and respond to these attacks.
- Create a comprehensive cybersecurity policy outlining the employees' guidelines, best practices, and responsibilities regarding data protection, password management, incident reporting, and acceptable use of technology.
- With the rise of remote and hybrid working culture, it's crucial to ensure that all remote workers use online security tools like a virtual private network (VPN). It maintains data safety and privacy and enables the workers to access the company's resources safely.
- Deploy a regular data backup strategy to prevent data loss due to phishing or ransomware attacks. Store the backups offline or within secure cloud storage to ensure they are not easily accessible by attackers.
- Regularly monitor and assess systems using inexpensive security tools to detect and respond to threats in real-time. Conduct regular security assessments, vulnerability scans, or penetration testing to identify potential vulnerabilities within the system and address them promptly.
- Creating an incident response plan (IRP) helps small businesses prevent cyber-attacks by providing a structured approach to detect, respond, and mitigate security incidents. It outlines roles, procedures, and protocols - enabling effective action to minimize damage, protect data, and restore operations, ultimately strengthening the business's cybersecurity defenses.
These are some of the effective steps that small businesses and start-ups can take to reduce the likelihood of a data breach or decrease the negative impact when an attack occurs.
Final thoughts
Small businesses face many cybersecurity threats and challenges that can affect their reputation and making it difficult to run their business successfully. The best way to ensure a healthy cybersecurity culture is to deploy a successful security awareness and training program. This assures employees are well aware of the threats and how to respond at the right time. To sum up, by prioritizing cybersecurity and adopting proactive measures, small businesses can safeguard their digital assets and mitigate potential threats in today's increasingly interconnected world.
