The Impact of Cybersecurity Threats on Small Businesses

In today’s interlinked digital landscape, the impact of cybersecurity threats on small businesses has become a pressing concern.

As technology continually advances in power and influence, so do the methods cybercriminals employ. This poses significant risks to the stability and security of small enterprises, especially those that lack cyber insurance.

With limited expertise and resources, these businesses are particularly prone to attacks that often result in devastating consequences.

This article delves into the many-sided nature of cybersecurity threats and explores their detrimental impact or effects on small businesses. It also highlights the urgent need for highly robust protection measures.

Types of Cybersecurity Threats Small Businesses Face

Here are some of the cybersecurity threats that many small businesses face daily:

1. Ransomware and Malware attacks

Ransomware is a form of malware – or malicious software known to infiltrate and damage computer systems – that locks out users from their systems or encrypts data until a ransom is subsequently paid.

Examples of ransomware include Locky, Petya, and WannaCry. Malware examples include Trojans, adware, and spyware.

Ransomware and malware attacks have dire effects on small businesses. They bring about data breaches, financial loss, reputational damage, and loss of sensitive information.

Most small businesses lack the expertise and resources to combat or recover from such cyberattacks, resulting in potential business closure and prolonged downtime.

Statistics or Case Studies Ransomware/Malware Attacks

In 2017, there was a WannaCry ransomware attack that severely affected more than 250,000 computers in 150 countries, including several small enterprises. When the dust settled, the estimated global damage of the cyberattack reached up to $4 billion.

Malwarebytes conducted a survey and discovered that at least 22 percent of small businesses hit with a ransomware attack ceased operations almost immediately. About 15 percent of small companies lost their revenues for more than 30 days as ransomware locked their data.

The United States National Cyber Security Alliance released a report that 60 percent of small enterprises that experience cyberattacks usually shut down within 6 months.

These go to show the overall impact of cybersecurity breaches on small businesses.

2. Insider Threats

Insider threats signify security risks that originate from within a business enterprise. Some malicious insiders may intentionally misuse their access. Inadvertent insiders also exist, and individuals in this category often unknowingly compromise security.

Excellent examples include employees that intentionally delete files, steal sensitive data, or fall prey to phishing attacks that conveniently compromise the entire organization’s security.

Combating insider threats is a huge challenge for small businesses. This is due to their limited resources in monitoring systems and implementing stringent access controls. The profound and significant impact of cybersecurity breaches on small businesses can be felt with a single insider incident.

Therefore, the only ways of battling insider threats include the following:

• Regular auditing and monitoring of user activities to detect any unauthorized access or abnormal behaviour
• Carrying out extensive background checks when hiring new employees to pinpoint potential risks.
• Implementing data loss prevention measures and robust data encryption, etc.

Implementing these measures will go a long way in mitigating insider threats.

3. Social Engineering and Phishing

Social engineering is a broad term that covers numerous manipulative strategies hackers use to gain unauthorized access, deceive individuals, or exploit human psychology.

On the other hand, phishing is a method cybercriminals use to trick individuals or employees of an enterprise into revealing sensitive information like financial details or login credentials.

Small businesses receive the brunt of social engineering and phishing due to weak cybersecurity measures and limited resources. Hackers can impersonate clients or trusted partners, send malicious emails with links, etc.

Real-World Examples of Social Engineering and Phishing

Small businesses get hit with social engineering techniques. An excellent example includes phone calls from defrauders posing as technical support reps. These scammers trick employees into granting remote access to their systems, resulting in dire financial loss due to data breaches.

In September 2019, spear phishing – which is another phishing technique – was reported by Armorblox, one of the top 50 innovative companies worldwide. The email, which targeted one of the executives at the company, came with an attachment that looked like an internal financial report. The report led to a fake Microsoft Office 365 login page with that executive’s username pre-entered on the page. This further added to the disguise of this fraudulent website page.

As you can see, the financial impact of cybersecurity can be too massive for small businesses. This is why many of these small enterprises shut down their businesses after suffering a cybersecurity attack.

Cybersecurity Best Practices for Small Businesses

The financial impact of cybersecurity can be massive. This has led to the development of some government policies. The impact of cybersecurity policies in the last 10 years has been instrumental in limiting data breach problems over the years.

For example, the GDPR (General Data Protection Regulation) by the European Union came into effect in May 2018. This requires organizations – irrespective of size – to implement robust data protection measures. Organizations are also mandated to notify the authorities immediately when there is a data breach.

This regulation has compelled small businesses to invest heavily in protection measures in compliance and prioritize cybersecurity.

In light of this development, here are some best practices that small businesses should implement to improve their cybersecurity posture:

1. Multi-factor authentication and strong password policies

Small businesses should prioritize strong password policies, including multi-factor authentication. Passwords should be made of a combination of alpha-numeric characters, including lowercase and uppercase letters, symbols or special characters, and numbers.

These passwords should never be used across multiple accounts and must be changed regularly, i.e., weekly, bi-weekly, or monthly.

Multi-factor authentication is an additional layer of security that small businesses should never joke with. Employees will need to provide additional credentials to be granted access to sensitive data. These credentials may include one-time verification codes, fingerprints, etc.

2. Data recovery and backup tactics

As a small business, you should make data backup one of the most regular activities. This is crucial to protect against data loss via hardware failures, cyberattacks, or even natural disasters.

Backing up your data regularly ensures swift recovery whenever the events mentioned earlier occur. This means your business doesn’t have to experience downtime due to data breaches or natural disasters.

Therefore, you should adopt an extensive backup strategy, including offsite and onsite backups. You shouldn’t forget to employ encryption and periodic testing of these backups to ensure 100 percent data reliability and integrity.

3. Patch management and regular software updates

It is crucial for small businesses to prioritize installing patches and software updates promptly to deal with bugs. Most updates generally include vital security patches addressing worrisome vulnerabilities that software vendors unearth.

Staying up to date minimizes the dire risk of exploitation by hackers or cybercriminals who often target outdated software.

Excellent patch management processes help streamline software update processes. Small businesses should employ automated patch management tools to ensure every application and system is patched regularly. Thorough testing must be carried out before deploying any updates to mitigate potential disruptions that may affect operations.

4. Employee awareness and education

Small businesses should ensure every employee undergoes cybersecurity training. Training sessions should be organized to make employees aware of common cybersecurity threats such as social engineering, phishing emails, malware, etc.

By promoting this culture of cybersecurity awareness, employees should know enough to report any suspicious activities. You should also promote safe browsing habits in the workplace and emphasize the importance or significance of sticking with cybersecurity policies via regular reminders and communication.

The cybersecurity field continues evolving rapidly, making it mandatory for policymakers to remain proactive, especially when promoting secure digital environments and combating emerging challenges.

Frequently Asked Questions (FAQs)

1. What are the cyber threats to small businesses?

The most common cyber threat to small businesses is ransomware attacks. Hackers can also infiltrate small businesses via malicious texts and phishing emails.

2. Why small businesses are at risk for cyberattacks?

Small businesses are at risk for cyberattacks due to their employees and their work-related communications. This is one of the most prominent avenues in which data breaches occur. Work-related communications and employees in small businesses are direct pathways into an organization’s systems. But when employees are well-trained on basic internet usage best practices, it goes a long way in mitigating or preventing cyberattacks.

3. How much of a small business budget is cybersecurity?

The amount of money that several small businesses spend on cybersecurity service varies. But it usually falls around 10 percent of the annual IT budget. Some organizations spend up to $250,000 on cybersecurity training and solutions, though these companies have yearly IT budgets of $2.5 million.

Conclusion

The devastating impact of cybersecurity threats on small businesses cannot be understated.

As technology advances and cybercriminals continually become even more sophisticated, small businesses are increasingly prone to cyberattacks.

These threats can lead to dire consequences, including reputational damage, huge financial losses, and even complete business closure.

Therefore, it is highly crucial for small businesses to always prioritize robust cybersecurity measures. They should also stay updated on the latest cybersecurity practices.

By educating their employees, investing massively in robust security systems, and seeking professional assistance, small businesses can safeguard their valuable assets. At the same time, mitigate risks, ensuring a secure and resilient future and profound peace of mind.

Did you learn anything new? How have you dealt with a cybersecurity threat in your small business? Please, share in the comments section below!