Approximately 28% of data breaches in a given year involve small businesses, as per research compiled by Verizon. E-commerce sites, small publications, blogs, and other digital assets require protection since the digitization of business and the bigger reliance on cloud storage mean that all businesses, regardless of size, are at risk.
If you are a small business owner and you wonder the extent to which a data breach can endanger the hard work you have invested in your company for years, it is vital to take key steps to keep your data safe from cyber-attacks.
A Forbes Insight report has found that 46% of organizations suffer reputational damage because of data breaches. This can result in a big decrease in sales and a downturn in the number of talented employees who are keen to form part of your business.
A study published in the Journal of Cybersecurity, meanwhile, showed that firms experience a 5%-9% decline in reputational intangible capital following a data breach. Reputational intangible capital can be defined as the intangible assets of a business that affect its reputation. It includes reviews, brand identity, and news shared about your business.
A positive reputation helps you control your prices, be recognized by your peers, and create a reputation for being a thought leader. It also enables you to withstand crises with greater resilience, since in tough times, consumers tend to stick with brands they know won’t disappoint.
Businesses are constantly on the lookout for ways to improve ratings and reviews, answer customer complaints quickly, and establish and maintain a strong online presence. However, a data breach can erase hard work in one fell swoop, marking your business as one that cannot be trusted.
Data breaches hit your business where it hurts, resulting in significant economic loss. Research indicates, for instance, data breaches were 10% more expensive in 2021 than they were in 2020.
Approximately 29% of businesses that experience a data breach lose revenue, as customers who see that a website isn’t working will click onto a competitor’s site in no time. Moreover, breaches can cause complete IT systems to break down and interfere with a company’s work goals.
Paying Hefty Fines and Incurring Additional Expenses
Data breaches can do more than scare potential and existing clients. It can have big financial costs. If your company is found to be in breach of the GDPR, you have to pay significant fines, front up for legal fees, and pay for stricter security measures.
The damage to your reputation can also result in additional costs, such as investing in the services of a PR firm. The latter will usually focus on building a strategy that will help re-establish the trustworthiness of your business.
Hiring a PR is particularly important if your breach was covered extensively in the media, or if you deal in sectors in which cybersecurity is particularly important. This is the case, for instance, for businesses dealing in finance (both centralized and de-centralized), law, or the media.
Unwanted Changes to Your Website
Some hackers go beyond merely stealing a company’s data. They also make subtle changes on a hacked site that could land business owners in hot water. For instance, they can change contact numbers, post inappropriate or insensitive content, or add unexpected sentences to blog content and information pages.
One ‘capture and share’ of inappropriate content from your site is enough to upset anyone who has read it, even if you subsequently use your own social media pages to inform readers that you have been hacked.
Unless you own a large company whose security breaches are likely to be heavily publicized in the media, readers who have been offended by your content may simply block you or refuse to return to your site.
What Types of Breaches are Small Businesses Vulnerable to?
Business owners should be aware of the type of attacks they can be exposed to. These include APTs (attacked by hackers), inside attacks, malware, phishing, password attacks, and more. Another common type of attack is the DDoS (Denial of Service) attack, which involves overloading a server with requests until it closes down the target’s site or digital system.
A Case in Point: The 2021 Cyber Attack on a New Orleans Insurance Group
In March 2021, news of an attack on a New Orleans insurance company revealed the extent to which data breaches can affect the running of a business. Owing to the breach, policyholders were left only with an emergency email and phone attention to ask about their health and benefits.
For various days, the company had to deal with upset customers who face delays in processing their benefits. This type of breach puts undue stress on staff who have to deal with angry customers as well since they often lack knowledge as to the extent of the breach and the time frame involved in finding a solution. Preventing data breaches is vital for small and larger businesses alike, as it can help keep customer data private while also enabling them to receive faster claim insights from vendors. By using encrypted data exclusively, insurance providers can keep vendor breaches from affecting their own data.
Solutions for Small Businesses
Even if you have a small budget, consider approaching cybersecurity specialists so they can identify the type of attack you are likely to be exposed to and take appropriate solutions.
Your cybersecurity strategy should include data backup solutions, encryption software, and two-step authentication software to reduce the likelihood of passwords being stolen. Your process should start with a risk assessment, which you can conduct yourself or with professional help.
Data breaches have big consequences for small businesses. They affect a company’s reputation and can be very costly when legal fees are taken into account. These attacks can also incur a host of additional expenses, including those involved in hiring legal staff and a PR firm. Finally, don’t assume that hackers are simply in it to access your data.
Many have malicious intent and they can make small changes to your website content that you don’t initially notice. They can change your contact details or post insensitive content which, once shared, can be very difficult to ‘erase’ in your audience’s mind.
Investing in professional cybersecurity assessments and solutions can help you conduct your daily business in a more secure, confident manner. It can seem like a big investment but in fact, it can save you the time and effort involved in rebuilding a damaged reputation.