We’ve all heard of the major cyber attacks against large corporations and enterprises—the Equifax breach and roughly 143 million jeopardized social security numbers, Target and 110 million of its customers’ data, and the 327 million affected by the 4-year-long Marriot breach—but have you ever stopped to think what hackers might gain from targeting your small- or medium-sized business?
Sure, your small business probably doesn’t host personal data on millions of customers and thousands of employees, but it doesn’t mean that the information you have isn’t valuable.
Why Hackers Target Small Businesses?
Cyber attacks against small businesses are on the rise, with 43 percent of all cyber attacks (or at least those that have been detected and accounted for) targeting smaller enterprises. As an owner of a small-time shop, you may wonder why hackers would want to waste their time with the little bit of data you may have when they could target much larger corporations.
This is because most small businesses underestimate the value of their information, are unaware of their vulnerability, and don’t have the proper security measures in place to protect their data. Attacking small businesses could also be considered lower risk, as many attacks can occur without the business even realizing it has happened, let along having the resources to source the attacker.
The ease of infiltration coupled with low risk makes small businesses a quick, easy, and lucrative target for hackers of any experience level.
Why small- to medium-sized businesses and enterprises often fold following a cyber attack:
Unfortunately, cyber attacks on small businesses often follow with a closed business sign. About 60 percent of small businesses will go out of business following a cyber attack. This is due to companies of this size lacking the finances, resources, and knowledge to overcome damages caused by data breaches, malware, and other cyber attacks.
4 main reasons small businesses fold following a cyber attack are because:
- The cost of recovery is too high. Protecting against cyber attacks and malware can be costly, but recovering from them can prove to be even costlier. During a cyber attack, critical software and digital infrastructures are left damaged, costing enterprises an average of $193,000 to repair. While this number can cause large corporations to rethink budget distribution for the following quarter, the cost of system recovery could topple small businesses and send them into bankruptcy.
- A lack of budget to pay off ransomware. Ransomware, a strategy designed to block a company’s access to their systems and information until a hefty ransom is paid, accounted for more than 60 percent of malicious emails. Not only are small businesses more susceptible to malicious emails, as employees are often not trained on how to spot phishing emails, but they are also less likely to have the budget to pay the attacker’s ransom request. This can paralyze a company’s operations, causing them to lose clients, profits, and more.
- Reputation is damaged and customer trust is lost. Not only is there the quantifiable cost of recovering from a cyber attack, but there is the reputational damage that can easily linger for months or even years. Many businesses lose loyal customers and important clients after an attack and have an even harder time obtaining new business. Employees may also choose to leave if their personal information has been jeopardized or if they fear the risk of the business closing its door. Restoring your reputation can cost time, money, resources—all of which most small businesses lack.
- There are no contingency plans or insurances in place. Knowing what to do following a cyberattack and having coverage from an insurance company can make a big difference between suffering a bit to shutting down completely. Contingency plans provide employees and leadership with carefully-considered steps on how they should react to such attacks. This allows your organization to minimize damages and recover quicker. Equally, insurance coverage allows companies to recoup all or some the monetary loses, keeping them financially stable while they work on repairing their reputation and other damages. Unfortunately, most small companies think that having such things is a luxury they can’t afford.
How small businesses and enterprises can shield themselves from attacks?
The best thing any company can do to protect themselves against the devastating effects of a cyber attack is to recognize the very probable likeliness of this happening to them and making digital security a priority investment. Understanding your vulnerabilities—what information is most valuable to your company, how hackers might infiltrate your system, and what the effects might be—can help you decide where you should invest your time and money in protecting your system.
Many enterprises also choose to outsource their digital security needs, freeing them to focus on the services or products they provide while those who are digital security experts work diligently to protect their assets.