Even if you run a small business, you’re still on a hacker’s radar. Small enterprises often save the same kinds of sensitive buyer information as big companies. This, along with their perceived lack of cyber security expertise and resources, makes them an appealing target for hackers.
A recent SBA survey showed that 88% of small business owners felt their business was at risk of a cyber attack. However, many can’t afford professional IT solutions, lack time to focus on cyber security, or don’t know where to start.
The most effective way for small business owners to be prepared is to learn about common threats and the best strategies to protect themselves from cyber attacks.
Here are some implications of cyberattacks on small enterprises and strategies to fight cybercrime.
The Effects of Cyberattacks on Small Businesses
Small businesses have much to lose when ignoring cybersecurity. Quite evidently, 43 percent of data infiringements include small businesses. Not surprisingly, companies are highly vulnerable to malware, ransomware, brute-force attacks, and social attacks, as per Verizon’s 2022 Data Breach Investigations Report. Any one of these incidents can be disastrous.
Despite this, many businesses don’t implement a data security suite or other protective measures. This oversight leaves small businesses more exposed to cyberattacks.
Here’s what might occur if a small business faces a cyberattack.
Cyberattacks cost small businesses a lot of money
A study by IBM and the Ponemon Institute, small enterprises with fewer than 500 workers face an average data infringment cost of 2.98 million dollars, with every infringement record costing about 164 dollars. Although expenses will vary depending on the incident’s specifics, financial recovery for small businesses is uncommon.
During a cyberattack, businesses experience direct costs like:
- Addressing immediate damages and repairs
- Paying ransomware demands
- Providing complimentary credit monitoring
- Hiring customer service staff to handle inquiries
- Offering free or discounted products and services
- Paying penalties
Businesses may also need to hire:
- IT security consultants
- Risk-management advisors
- Attorneys
- Physical security experts
- Auditors and accountants
- Management advisors
- Public relations experts
Cyberattacks can also result in legal, civil, and regulatory issues that complicate a business’s operations and future. These and other expenses can significantly reduce a business’s value.
Hidden Costs of Cyberattacks
Beyond the obvious costs, cyber attacks lead to hidden expenses linked to unexpected downtime, decreased productivity, and diminished team morale.
In addressing and assessing the damage from such attacks, business owners or IT managers struggle to focus on growth while managing daily responsibilities. Operations could halt entirely, particularly if web-based applications are breached.
These adverse effects and workplace tensions can severely affect team morale, especially if poor security practices contributed to the attack.
Damage to Business Reputation
Cyber incidents can potentially cause substantial damage to a company’s reputation. Prospective customers might be wary of engaging with companies that have been compromised by such attacks.
Similarly, investors might view being targeted by cyberattacks as a sign of carelessness and hesitate to get involved with the affected business. Furthermore, a tarnished reputation could discourage talented job seekers from wanting to be associated with a poorly regarded company.
Cyberattacks Lead to Price Hikes for Many Businesses
Cyberattack costs frequently get transferred to consumers, who ultimately bear the burden of the organization’s unpreparedness. IBM reports that 60% of businesses that suffer breaches increase prices following a cybercrime incident to offset related expenses. As a result, some customers may resist higher prices and switch to competitors with better rates and enhanced security.
Safeguarding Small Businesses from Cyber Hackers
Keeping Security Software Updated
Firewalls and anti-virus software, as well as anti-spyware, should be in place to eliminate the ability of hackers to easily create access to sensitive information. Regular updates of these security programs are necessary to keep them free from vulnerabilities. Keeping informed about upcoming security patches and updates from software vendors is essential.
Enforcing Strong Passwords and Multi-Factor Authentication
There has been a significant increase in reports of employee passwords being compromised or stolen due to missing devices and other factors. With businesses increasingly accommodating remote systems, hackers are finding easier ways to steal data through weak passwords.
- All employees must discrete their work passwords from personal ones.
- They must also think about updating their passcodes every month or quarter to avert compromise.
- Passwords should not include any personal information.
Another really good process for securing your network is utilizing multi-factor authentication to ensure access is granted after a second validation source is checked. This will provide security for your application by requiring a second validation source before access is provided to the end-users.
An employee must enter a password and an extra code generated by an app accessible only via a personal device.
Encrypting Data
Encryption tools play a very significant role in prevention against unwarranted access to your data. They change the data into unreadable formats that get decrypted only by an encryption key known to authorized users.
Make sure to encrypt all company devices, including tablets and smartphones, and keep the key or password secure. Never include the key or password within the encrypted document itself.
Employee Training
Ongoing and thorough cybersecurity education for every employee is essential. This training needs to address spotting and evading security risks, identifying fraud, generating secure passwords, and protecting confidential data.
Securing Your WiFi Network
The WiFi network for your business serves as a gateway for hackers to reach sensitive information, so it’s crucial to protect it from possible breaches.
Protect your WiFi by implementing robust passwords, turning on WPA2 encryption, and turning off remote access. Frequently check your WiFi settings and update your password regularly.
Cyber Insurance Protection
Small enterprises ought to explore cyber insurance options, which offer crucial help in managing substantial expenses resulting from cyber incidents and the harm caused by data breaches, both financially and to their reputation. Insurers usually provide guidance during claims and can recommend suitable recovery partners.
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