A cyber attack can cripple critical infrastructure and businesses and generate negative press. In other cases, it could open you and your business to litigation. This and other factors can seriously hurt a business, and it forces many of them to pay for data recovery or IT security services to undo the damage.
However, many businesses are never able to recover, and they are far more likely to go out of business. In this article, we’re going to take a look at the data behind this trend. Then, we’ll explain why cyber attacks can be so devastating to businesses.
The Hard Data
It was reported that around sixty percent of small businesses went out of business after a cyber attack. One of the problems for small businesses is that they are deliberately viewed as a soft target by hackers.
About two-thirds of all cyber attacks are against small and mid-sized businesses, up from 40 percent in 2015. This is because they typically lack the resources to put up the same defenses as large firms. One study said that there are around four thousand cyber attacks against small businesses each day.
An estimated 75% of all organizations have had some sort of cybersecurity breach in the past twelve months. The problem is so bad that around 80 percent of all Social Security numbers have been hacked at least once. Worst of all, hackers have no reason to slow down, because cybercrime is a business running into the trillions of dollars.
Why a Cyberattack Can Kill a Small Business
As a business owner, your data is your lifeblood. If you cannot process customer orders or access patient records, your customer service craters, or you may not be able to serve your clients at all. The loss of financial information could allow hackers to drain your bank account or hit all of your client’s credit cards. And you’ll ultimately have to pay for that in a variety of ways.
Data breaches, losses, or critical cyber attacks could also affect your brand as well. The admission that you’ve lost their personally identifiable information and financial information makes them lose confidence in your firm. Many go out of business because their sales declined on top of the costs incurred by the cyber attack.
One researcher found that small businesses that were hacked paid around 700,000 dollars to clean up their business. For middle market companies, the tab was over a million dollars. Many small businesses simply cannot afford to take a financial hit like that and remain in business.
When they have to pull existing resources from profitable projects to try to repair the damage, they slowly strangle their core business, too. That’s just a slower death than being wiped out overnight because hackers deleted your database and you don’t have a backup.
Solutions for Small Businesses
To minimize the risk, create an incident response plan so that you know what to do immediately when you know that your systems have been compromised. Have a business continuity plan so that you can continue to operate when key systems or resources are compromised.
Don’t let cyber-protection be just the responsibility of your IT department, because you can’t afford to ignore the human element. Train all of your employees. Basic training can stop many low-level threats like clicking on a malware link or attachment in a phishing email. For example, teaching people to delete the suspicious message if in doubt can stop many attempts to steal information. However, this isn’t enough and other solutions have to be implemented to safeguard your business.
You need to establish data security protocols, practices and procedures to achieve a higher level of protection. Every employee must follow them. You can learn how to develop business processes and implement systems to enforce them as part of an MBA program like the one at Suffolk University.
Their online MBA will teach you how to create actionable solutions to any problem and implement them. You’ll learn how to make analytical decisions when weighing options and manage the constant change necessary to stay ahead of cyber-threats. If you know more about their online MBA degree and what you can expect, you can learn more about their program here.
It’s also very important that you maintain your security software on every device that connects to the internet. Having the latest anti-malware software on every computer and keeping browsers and operating systems up to date is one of the best defenses against viruses and other online threats.
Ensure that every smartphone, laptop, and tablet that connects to your network have appropriate protections against malware. Scan every external device before you access the data on it. And think twice before instilling a ‘bring your own device’ policy.
Unless you have the proper safeguards in place, having too many devices connected to your network is just a tragedy waiting to happen. Unless you have a qualified IT team on board, or work with a reputable IT team that can implement this kind of policy for you, then you continue doing things the old way.
Consider getting cyber insurance as well. This is essentially an insurance policy that pays out when you’re hit with a cyber attack. While the premiums may seem high, the risk is going out of business. A side benefit of these policies is that it ensures you can hire the best IT security experts to restore your systems and upgrade your defenses.
Encrypt sensitive files via either hardware or software. Hardware encryption is performed by a dedicated processor or hardware encrypted device, while software encryption uses resources on the device to encrypt and decrypt the data. Either way, this means that stolen files are unintelligible to those who lack the key or password to decrypt it.
Hackers are targeting small businesses, and small businesses pay a hefty price for it. You can take steps to protect your business and minimize the damage if struck. You cannot afford to do what you’re doing and hope you’re never hit.