Have you heard that 60 percent of cyberattacks are now directed to small businesses?
If your small business has never been a victim of a cyberattack, you might not be alarmed by this stat. You might even doubt its accuracy. After all, why should hackers go after small businesses instead of targeting the big corporations that can be held at ransom for tens of millions of dollars?
Or maybe you don’t give a hoot about cybersecurity breaches. What’s the worst that can happen to your business anyway?
Well, glad you asked! Read on to learn how a data breach can harm your small business.
Big Financial Losses
How does someone hacking your computer systems translate into financial loss?
There are direct and indirect ways a cyberattack can affect the finances of your business. One, if a hacker steals important data from your business, they can hold you at ransom. They know your business can’t afford to lose the data, so you will be compelled to heed their demands or at least negotiate with them.
Hackers can steal money from your business. With enough information about your dealings, for instance, they can send you fake invoices. If you’re not careful, you’ll make payments to con artists thinking it’s your supplies.
In 2020, the average cost of a data breach was $3.86 million. You do the math. Will your business afford this? It’s no wonder 60 percent of small companies go out of business six months after a cyber breach.
Reputational Damage
In a world where almost everyone is shopping online, more and more consumers are being conscious of online security. They want to shop from businesses that are putting their security first.
It’s why cybersecurity is now a big part of any online company’s reputation. If your business suffers a data breach, your customers will lose trust in your ability to protect their data. And no, the breach doesn’t have to be publicized by news outlets to result in reputation damage.
This damage won’t just affect your customers or clients. It can also cause your employees to quit since your company handles their personal data as well.
Your cybersecurity insurance providers can also raise your premiums. This, besides being a consequence of the reputational damage, will add to your financial losses.
Lawsuits/Fines
Ashley Madison, a dating services provider, suffered a data breach in 2015. It consequently faced several data breach lawsuits, resulting in an over $10 million settlement.
If your business handles confidential data belonging to other parties such as customers or employees, you have the legal responsibility to keep it confidential. After a cyber breach, this data can fall into the wrong hands and, worse, can be leaked online.
Expect a flurry of lawsuits and regulatory fines. Even if you have the financial muscle to fight off the lawsuits, there’s no doubt your resources would be better spent elsewhere.
Don’t let it get there. Most of what you need to do is implement these cybersecurity tips for small businesses.
A Cybersecurity Breach Can Ground Your Business
There are fewer things more lethal to a modern business than a cybersecurity breach. The financial losses are unimaginable, the reputation you’ve worked so hard to build will go to the dogs, and you’ll spend most of your time in court fighting lawsuits.
Explore our blog to learn how to protect your business from online hackers.