The digital world we live in today is filled with conveniences that make running a business easier in many ways. However, it also comes with growing threats that can severely impact small companies.
Data breaches, meaning hacks that access private customer or company information, are skyrocketing. In 2023, the number of data breaches nearly doubled from the year before. This huge upswing signals serious and increasing risks for small business owners.
While data breaches threaten all companies, evidence shows that small and medium-sized businesses are attacked much more frequently. In fact, 70% of cyber attacks target smaller companies.
Many small businesses can’t financially recover after an attack and some even close down permanently as a result. No company can assume they are safe or would recover from a serious hack.
Protecting against cyber threats needs to be a top priority for any savvy business owner.
If a business experiences a data breach, immediate financial consequences typically follow.
Organizations like the Payment Card Industry Security Standards Council require investigations and levy fines against companies that fail to protect private data.
Fines can include a $90 charge for each stolen credit card number plus hundreds of thousands more in penalties.
The costs for forensic investigations to uncover exactly how the attack happened also fall on the affected business, often reaching $10,000 or more.
Ongoing credit monitoring for impacted customers also becomes the responsibility of the breached company.
In addition to upfront fines, companies that get hacked face longer term ripple effects from diminished customer trust.
Multiple studies reveal that a majority of consumers lose confidence in businesses post-data breach. Many customers then avoid further dealings with the breached company, severely impacting future revenue and company reputation.
This customer alienation represents huge, though harder to quantify, damages.
Beyond just customer data, companies run the risk of losing proprietary business data to hackers.
Intellectual property like innovative designs, unique strategies and product roadmaps often represent what sets a business apart from competitors.
Losing such key company secrets can completely derail growth plans for the foreseeable future. It also hands competitors an unfair inside look at precious trade secrets.
While threats exist, companies can take proactive steps to reduce vulnerability.
Educating staff on strong password protocols and how to detect phishing attempts gives a first line of defense.
Enabling two-factor authentication, requiring secondary login approval, adds an extra layer of security on company devices and accounts.
While not flawless, these measures provide base-level preparation against cyber attacks.
On top of internal training and policies, businesses need to devote resources to comprehensive cybersecurity systems.
Advanced antivirus software that detects and targets intrusion attempts is a must. Bringing in cybersecurity professionals to monitor networks and respond to threats quickly can help enormously.
The financial investment pales in comparison to the potential ruin hackers can inflict on an unprotected company.
In closing, data breaches should alarm any business owner. However, with awareness of the risks, consequences and solutions, small companies can equip themselves for the growing threats of our digital world.
The financial and operational health of a business depends on making cybersecurity readiness non-negotiable.
