There is a common misconception that small businesses are less vulnerable to security breaches than larger operations. Nothing could be further from the truth. According to a BBC article small businesses are three times more likely to face cyberattacks than large businesses.
This one point should emphasize the importance of robust security, but that isn’t the end of the story. For small businesses, freelancers, and other digital enterprises, the impact of a security breach can be devastating. According to the same article about 60% of small businesses will have closed their doors within six months of a successful attack. This is not just about securing your business, it is about securing your livelihood.
In this article, we cover the eight most important security challenges facing small businesses. We also offer practical advice on how to address them.
Why Small Businesses Are Often Targeted
Small businesses are the lifeblood of American commerce. According to the U.S. Chamber of Commerce, they account for 99.9% of all American businesses. Statistically, this point alone illustrates why small businesses are so frequently targeted. However, it is far from being the only relevant point.
Other key reasons that small businesses are frequently attacked include
Remote working: The switch to remote working in small businesses led to an upsurge in the use of personal devices like laptops, smartphones, and tablets to access sensitive business information.
Limited resources: Unlike large businesses that have dedicated cybersecurity departments, small businesses may lack the necessary budget to implement the same level of protection. They may also lack the technical know-how of larger operations.
Perceived as easy targets: Hackers assume small businesses have weaker defenses, making attacks easier to execute.
Valuable customer data: Despite their size, small businesses handle sensitive data that can be exploited.
The prevalence of attacks on small businesses illustrates why robust security is essential. But before we look at the specific challenges and how to address them, it is worth taking a deeper look at why this is a topic that all small businesses should take heed of.
The Importance of Security for Small Businesses
Ultimately, all security measures aim to protect your business assets. However, as already noted, it’s much more important than merely this. A security breach for a modern business means more than just the loss of a few assets and the hassle of an insurance claim – it can wreak financial and operational havoc. Ultimately, it could mean closing the doors for good.
For instance, according to Statista, in 2023 the average cost of a data breach amounted to $9.48 million. While small businesses are unlikely to face such a large loss, it does demonstrate the scale of the problem.
Here are some of the key aspects of security that go beyond just asset protection:
· Protecting customer trust: Essential for maintaining business credibility.
· Regulatory compliance: Avoid penalties by adhering to legal standards.
· Safeguarding intellectual property: Protect proprietary information and innovations.
· Ensuring business continuity: Prevent disruptions that could cripple operations.
· Competitive advantage: Security can differentiate your business in the market.
· Preventing financial loss: Minimize the risk of costly breaches.
The nature of the challenges that modern businesses face is such that digital enterprises are as vulnerable as operations with a more defined physical presence.
Security Challenges Facing Small Businesses
It doesn’t seem that long ago that robust security consisted of a solid lock, a basic alarm system, and an anti-virus program. Today, such an approach would be a recipe for disaster.
The digital workplace has evolved rapidly and continues to do so. This is good for business, but also good for cybercriminals. Today, small businesses operate in an environment where new threats emerge almost daily. Staying secure in these circumstances requires a more comprehensive and proactive approach. This approach needs to tackle a variety of security challenges, both physical and digital.
Modern businesses face an array of challenges, key among them are:
1. Cyberattacks
Cyberattacks are undoubtedly the biggest single security challenges facing small businesses and freelancers. According to Cybercrime Magazine’s cybersecurity almanac, the cost of cybercrime damages in 2024 is expected to be around USD 9.5 trillion. As the magazine notes, this would place cybercrime as the world’s third-largest economy trailing only the U.S. and China.
Addressing this challenge begins with understanding the different forms that cyberattacks can take. It is, unfortunately, an extensive list. For instance, Crowdstrike lists 12 common forms of cyberattacks, prevalent threats include:
Phishing: Deceptive emails which are designed to trick recipients into revealing sensitive information.
Ransomware: Malicious software that locks users out of their systems until a ransom is paid.
Malware: Harmful software designed to damage or disable computers and networks.
Other notable entries include IoT-based attacks, code injection attacks, and Denial-of-Service attacks. Taking steps to secure against cyberattacks and protect your business from hackers has to be a top priority for small businesses, freelancers, and other digital enterprises.
While each business will have to tailor a solution to its needs, the following key steps will help to build a strong foundation:
Implement robust cybersecurity systems: Use comprehensive antivirus software, vpn services and firewalls.
Keep software updated: Regularly patch and update all software to close security vulnerabilities.
Conduct staff training: Educate employees on recognizing and avoiding phishing and other cyber threats.
2. Protecting Customer Data
While protecting customer data falls under the broader umbrella of cybersecurity, it remains a distinct security challenge in its own right. A cyberattack might aim to disrupt systems or steal intellectual property, but a breach of customer data can have far-reaching consequences, including a loss of trust that is often impossible to rebuild. Moreover, data breaches can result in severe financial penalties due to violations of data protection laws, as well as long-term reputational damage.
Most countries will have legislation in place ensuring that you provide reasonable security for such information. For example, the Federal Trade Commission in the US lists the Gramm-Leach-Bliliey Act and the Fair Credit Reporting Act as two such laws. For European businesses, there is the General Data Protection Regulation (GDPR) to consider. Freelancers and other small digital businesses are not exempt from these laws and must ensure that customer data is “adequately” protected.
Key steps to securing customer data include:
Implement end-to-end encryption: Secure data during storage and transmission.
Introduce two-factor authentication (2FA): Add an extra layer of security for customer accounts.
Conduct regular audits: Ensure ongoing compliance with data protection regulations.
3. Insider Threats
Insider threats pose a unique challenge, as they originate from within the organization. These can involve employees, contractors, or partners who intentionally or unintentionally compromise security. Insider threats are particularly concerning because insiders often have access to sensitive information that can be exploited.
This is often dismissed by freelancers and other small businesses, but insider threats are a real and present danger. For instance, many times contractors will have access to client lists, or code that is under development. Even when malicious intent isn’t involved, one careless mistake—like sending a sensitive document to an unsecured device—can result in significant damage. Recognizing and mitigating this risk is essential for securing your business from within.Key measures to help mitigate insider threats include:
Conduct background checks: Screen employees and contractors before granting access to sensitive data.
Restrict access to sensitive information: Apply the principle of least privilege to limit data access.
Encourage an open culture: Encourage employees to report suspicious behavior or concerns.
4. Physical Security
So far, we have concentrated on the importance of digital security. However, physical security shouldn’t be overlooked. For starters, a large percentage of data breaches are physical. One report for a UK insurer found that 35% of data breaches were physical.
A physical breach can also lead to theft, operational disruptions, and increased insurance premiums. Furthermore, environmental threats like unauthorized smoking or vaping can cause harm and damage within an office setting.
To safeguard the physical premises, a comprehensive approach is needed. Installing a robust manufacturing security system can help monitor sensitive areas, deter unauthorized access, and protect valuable assets, particularly in environments where physical threats can be as damaging as digital ones.
Install surveillance and access control systems: Monitor and restrict access to sensitive areas.
Enhance device security: Use cable locks, secure cabinets, and device tracking systems.
Implement smoke and vape detectors: Most offices will already have smoke sensors installed. But today this needs to include vape detectors to prevent unauthorized vaping, ensuring compliance and safety.
5. Cloud Security
Increasingly, modern digital enterprises are reliant on cloud computing as a central part of their business strategy. While cloud computing is undoubtedly convenient, it does introduce vulnerabilities that businesses must protect against.
Securing data access was a relatively simple matter when it was safely tucked away in an internal works network. Nowadays, it’s almost as likely to be accessed from a coffee shop or airport lounge as it is from an office computer.
Ensuring the security of data stored in the cloud is essential as the impact of a cyberattack can be devastating, some of the key steps that can help prevent this include:
Choose a reputable cloud service provider: Ensure they offer strong security features.
Implement backup and encryption policies: Protect data from loss and unauthorized access.
Regularly review settings and permissions: Ensure access is appropriately controlled and updated.
6. Weak Password Policy
All the security protocols and strategies in the world can be rendered useless with inadequate passwords. By now, most people are savvy enough to know that “password123” is not conducive to robust security. Yet, despite the known risks, many businesses still use weak or repetitive passwords, making them an easy target for cybercriminals.
A study commissioned by Forbes Advisor shows the scale of the problem with 46% of Americans having their passwords stolen in the past year.
To improve password security, adopt the following practices.
Enforce multi-factor authentication: Add an extra layer of security beyond passwords.
Implement strong password policies: Require complex passwords and regular updates.
Utilize password managers: Help employees manage and generate strong, unique passwords.
7. Mobile Device Security
One thing that has facilitated the rise of freelancing and smaller digital enterprises is the rise of remote work. However, while this has undoubtedly changed the how, where, and when of our working lives, it has opened a range of vulnerabilities that the unscrupulous are – as ever – quick to exploit.
Mobile devices are particularly susceptible to cyberattacks, data breaches, and physical theft. The mobility that allows employees to work from anywhere also makes it easier for sensitive business data to be exposed. Unsecured Wi-Fi connections, lost devices, and outdated security software are all potential weak points that cybercriminals can target. One report published by Statista found that 9% of all cyberattacks were targeted at mobile devices. Or to put it another way, by ignoring the mobile threat your security strategy is already compromised by almost 10%.
For small businesses and freelancers, mobile device security must be a top priority here are some key steps to help keep mobile devices secure:
Use encryption software: Ensure that all data stored on mobile devices is encrypted. Independent platforms like G2 regularly assess encryption tools, offering comparisons that can help users make informed choices based on real-world feedback.
Implement remote wipe capabilities: Enable remote wiping to erase data if a device is lost or stolen.
Require strong passwords and 2FA: Secure access to mobile devices and apps with strong passwords and two-factor authentication.
8. Third-Party Vendor Risks
We work in a world that is interconnected like never before. This is undoubtedly a convenience for small businesses and freelancers. However, the introduction of third-party for various services including payment processing, invoicing, IT support, and cloud storage opens up a range of security risks that must be addressed. Without due diligence, the interconnectivity that powers modern business practices can quickly become an unwelcome burden.
In effect, security is only as strong as the weakest link in the chain, and this needs to be accounted for before any third-party vendors are integrated into your operations.
Among the steps freelancers and small businesses can take to help mitigate third-party vendors are:
Conduct thorough vendor vetting: Ensure vendors meet industry-standard security protocols before working with them.
Establish clear security agreements: Create contracts that define each party’s responsibility in protecting sensitive data.
Perform regular audits: Continuously monitor and evaluate vendors’ security practices to ensure compliance.
Securing Your Future: Key Takeaways
Effective security measures are crucial for safeguarding small businesses against various threats. By addressing cyberattacks, protecting customer data, managing insider threats, enhancing physical and cloud security, and enforcing strong password policies, you can ensure a more resilient and secure business environment. Implement these strategies to secure your future.
Author Bio
Sean Toohey is a freelance journalist and digital media specialist with extensive experience covering news, developments, and emerging trends in the healthcare industry. Currently focused on safety, security, and compliance with regards to modern healthcare institutions, Sean’s work explores actionable ways to support patients and healthcare providers using smart technologies and advanced software solutions.
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