According to the FBI, the cost of cybercrime to small businesses in 2021 alone was estimated to be $2.4 billion. Small companies often maintain low-security budgets, making them prime targets for cybercriminals. Ransomware, data breaches, spyware—no type of cyber threat is exempt when it comes to small businesses.
43% of all cyberattacks target small businesses because it is easier for attackers to breach their less-secure IT structures compared to high-security IT facilities. It is easier for attackers to breach small businesses than the larger ones.
In 2021, according to a CNBC report, 56% of small businesses were not concerned in the first 12 months about being a victim of a cyber attack. The actual reason behind this is that they didn’t have the right people who could inform them about cyber attacks. Due to low-security budgets, most small businesses don’t hire cybersecurity staff or even conduct regular cybersecurity checkups. As a result, they were under attack but were unaware of it.
How do attackers breach small businesses?
There are several ways to breach a small business. Due to weak security policies, it becomes easier for an attacker to breach small businesses. RedNode explains here the top ways to do it:
- Vulnerable software and networks: This is the most effective way that an attacker can target business firms. Security vulnerabilities in office software or networks can result in unauthorized access for attackers. They can then compromise the entire IT system using their malware or breach data to sell it online or to business competitors.
- Chain Attacks: In simple terms, while developing your office software, some malicious individuals have injected their rootkit into the software. When you deploy the software, the rootkit connects itself to the attacker’s computer, granting them unauthorized access to your system.
- Insider Threat: If one of your employees is infected by attackers, such as their computer or network being compromised, the attackers can gain access to their account and launch an attack on your system. This type of attack is called an insider threat.
- Social Engineering: Cybercriminals are among the world’s most creative criminals. They can exploit human emotions and manipulate their victims, for example, by persuading them to install unauthorized software on their operating systems. This type of attack is known as social engineering.
- Malware: Most people think that malware only attacks personal computers, but they are wrong. In reality, the majority of malware is designed to target business organizations or spy on specific organizations or individuals. Malware attacks, such as ransomware, can be incredibly dangerous. Ransomware encrypts your entire data and then demands money in exchange for decrypting it. It’s akin to digital blackmail.
There are more ways that an attacker can breach small business firms. Attackers are becoming more sophisticated and creative day by day. It’s hard to predict exactly which way an attacker may attack your small business firm.
The cost of cyber security breaches on small businesses:
Verizon’s 2022 Data Breach Investigation states that small businesses are vulnerable in numerous ways, including data breaches, ransomware, social engineering, and brute force attacks, and may not survive a single incident. There are countless ways in which your business firm can experience losses. It turns the horizon into a gray area for business firms. Here are the top losses your small business firm can face due to cybersecurity breaches:
- Cost of Money: It’s not just money, a lot of money that a small business can hardly bear. According to IBM, the average cost for a small business is 2.98 million. The cost money can be divided in two ways.
- Direct Cost: Paying ransom on ransomware attacks, handling immediate damages, and free credit monitoring. Attackers may leak your online products for free or sell them at a lower price.
- Indirect Cost: Paying the cost of servicing, IT security consultants, risk consultants, and marketing after the breach to regain customer trust and management consultants. There could be lawyer costs and investigation costs.
- Cost of Reputation: When a business firm experiences an attack, it loses its reputation for being unable to protect its customers. This results in a severe backlash to its business reputation, with many customers discontinuing their association. Customers no longer wish to engage in business with such firms. Sometimes, companies cannot regain their standing, resulting in long-lasting negative consequences.
- Businesses are forced to increase their product price: According to IBM, due to the substantial cost of handling a cyber-attack, 60% of companies have increased their product prices. Due to the rising prices, many customers do not want to buy products from them. This has led to another kind of backlash for small businesses.
- Cost of Law: When a small business faces a serious kind of data breach, such as when a local e-commerce business’s customers’ payment data gets leaked, it can lead to the small business facing legal action and potential court involvement. Sometimes business firms lose their permission to do business.
In summary, the cost of a cyberattack on small businesses can be substantial. If small business firms fail to take necessary measures to prevent cyber attacks, it may become impossible for them to sustain their operations amidst the growing threat.