Why Cyber Security is Important for Small Businesses

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The importance of cybersecurity cannot be overstated. And if you think cybercrime is only a concern for larger corporations, think again. Often cybercrime is MORE likely to target smaller businesses. Small, successful family businesses can lose everything to data breaches if unprotected. Sadly, attacks on SMBs are increasing across all sectors, so cyber security is important for US companies of any size.

The last FBI Internet Crime Report found that cyber attacks on small businesses reached new highs. Cybercrimes cost $2.7 billion in the first year of the COVID-19 pandemic, and the threat is growing. SMBs attract cybercriminals for two reasons. First, they have data the hackers can exploit, and second, many lack basic security[1].

Businesses of all sizes are potential targets, but smaller concerns are low-hanging fruit for cybercriminals. This piece highlights the current digital threats and explains why the cybersecurity best practices below are important for small businesses in the US.

6 Reasons Cyber Security Is Important for SMBs

Managing family business security is no different from a non-family concern as the risks are equal. Hackers don’t care. They focus on small and large companies with weak cyber security that have what they want. So, which digital assets do criminals target?

The six most valuable digital assets cyber-attacks target (in order of value) are:

Customers and clients records
Intellectual property (IP), e.g., patents, trademarks, copyright, etc.
Customer & client credit/debit card information
Company financial information
Employee records
Business correspondence

Why Cyber Security Is Important for SMB Survival
Did you know that 60% of SMBs close their doors within six months after malicious cyber attacks? And most data breaches result from workers doing something they weren’t supposed to do[2].

Cyber Security Is Important to Protect Your Intellectual Property

It’s worth mentioning the growing intellectual property (IP) threat. A 2017 IP Commission Report found that many cyber thieves now focus on IP. That’s because it’s much easier than other forms of digital currency theft, such as credit card numbers. And the major risk to your business comes from highly sophisticated virus attacks [3].

The High Cost of Intellectual Property Theft

Criminals continue to flood the market with pirated software and counterfeit goods. According to the latest data, IP theft costs the US economy over $225 billion annually. And IP thieves steal small business owners’ ideas, inventions, technology, company secrets, etc. But how do cybercriminals do this?

Sophisticated Malware (Malicious Software)

Malware, short for malicious software, executes unauthorized actions on your company’s computer systems. These attacks include spyware, phishing emails, command & control, ransomware, and other specific digital hacks. Malware is not only used for IP theft but for all forms of cybercrime against US businesses.

Below is a brief definition of the common malware types that every SMB should be familiar with and protect against.

Spyware

Spyware is a malicious kind of malware that installs itself. It gets onto your company’s computer systems by tricking users into clicking on links or downloading programs. Spyware gathers information by discreetly monitoring user activity. It collects keystrokes, account information, login details, financial data, and more.

Phishing Attacks

Phishing attempts are most commonly performed by email. Where the offender sends an official looking email, masquerading as a legitimate organization requesting the recipient to renew their password, confirm their payment information, or other sensitive information.

Most often the email has a link that goes to a convincing copy of the official web page where unsuspecting victims directly give their information to the hackers.

Command and Control (C&C) Server

C&C creates a latent channel between the compromised host system and the attacker’s server. The attack starts when a user clicks on a link or downloads what seems like a legitimate attachment in a phishing email. These emails are often urgent-sounding, telling the user to update something to prevent a security breach.

Bad actors then communicate with the newly infected system or network. They can steal copies of data, remove it from your system entirely, or even remotely control your whole network.

Ransomware

Ransomware is a growing menace in the US and worldwide. Cybercriminals use ransomware attacks to prevent you from accessing your critical files. They may also lock down computers or your entire network, keeping you locked out until you pay a ransom.

Paying ransoms may not result in the bad actor restoring your access. Moreover, the criminals could still decide to use or sell the stolen data for other criminal activities.

These are the most common threats, but there are others. They typically include Adware, Bots, Bugs, Rootkits, Trojan Horses, Viruses, and Worms.

Most malware attacks occur from the usual four channels, namely:

Clicking links inside emails or downloading files from unknown sources
Visiting unsafe websites
Inadequate network security (including servers)
User unawareness

So, every SMB must be familiar with current threats and secure their systems accordingly. We’ll look at cybersecurity best practices later in the piece.

Why Cyber Security Is Important Against Ransomware
According to the latest State of Email Security Report, ransomware attacks rose by 61% from 2020 to 2022. A staggering 75% of organizations, large and small, have been victims of Ransomware attacks worldwide. Around 64% paid the ransom, while four out of ten did not recover their critical data.[4]

Avoid Closure, Invest in Cyber Liability Insurance

Cybersecurity insurance won’t protect your business from an attack, of course. But at least it offers some peace of mind, knowing that your SMB could recover and re-open after a serious hack. Furthermore, most insurers provide tailored insurance plans for businesses to help companies mitigate their cyber risks.

Now you can see why cyber security is important for smaller non-family and family-owned businesses. These threats are real, extremely worrying, and growing fast. Additionally, they are more targeted, dangerous, and sophisticated. So why is the small business owner so reluctant to invest in cybersecurity?

A 2017 Better Business Bureau Report shines a light on the issues around cybersecurity for small businesses. The chart below sums up the top five obstacles [5].

Lack of Resources

The resources needed to defend against cyberattacks cost money, but the aftermath of an attack costs more. Many SMBs say they have limited budgets—or none at all—to spend on software to protect against cyberattacks. It’s easy to think you’re safe until budget negligence leads to that first data breach.

Lack of IT Expertise

The lack of IT expertise comes at a cost to America’s SMBs. Insufficient investment in skilled in-house IT experts or IT consulting means less cyber resilience and higher vulnerability. Thus, companies that lack on-staff expertise remain at heightened exposure to data breaches and will have difficulty recuperating.

Lack of Information

Many small and mid-sized businesses do not have a large IT support team or leaders informed of current threats. The lack of up-to-date knowledge and best practices is dangerous as SMBs become lost when faced with complex security threats.

Lack of Time

SMBs report a lack of time to address all cyber threats, so they become deprioritized. This negligent approach is detrimental to cybersecurity efficiency and effectiveness that need to combat ever-evolving threats. But having the right tools and systems in place reduces IT overheads and the time needed to update and maintain systems.

Lack of Training

Cybercriminals target SMBs because the wider workforce lacks cybersecurity training. Because of this, everyday employees are a company’s weakest link, making them more susceptible to attacks. That typically includes spoofing emails, calls, and other methods to access networks.

The proper training, tools, and practices empower workers to behave more responsibly. It also helps foster strong cybersecurity cultures and mindsets.

5 Ways to Protect Your Business Against Cybercrime

Cybercriminals are evolving, and the way they do business is changing rapidly, and so must you. There’s only one way to protect your business from cybercriminals, and that is through preventative action. Cybersecurity is not an option today; it’s a priority. This final section looks at the five best practices to strengthen your digital defenses.

#1 Use Effective Security Tools

It’s tempting to cut corners and look to free tools to protect your SMB. But remember, the majority of hackers and cybercriminals target small businesses with the weakest security. And they can easily penetrate many free, cheap, and consumer-grade security software.

Why Cyber Security Is Important for Vulnerability Management
A new study found that 43% of SMBs have no cybersecurity defense plan. And one in three companies relies on free consumer security products for their defense.[4]

Business-class cybersecurity tools offer advanced functions to keep your sensitive data safe. A typical setup to secure your SMB network includes five tools:

Robust, up-to-date antivirus software on all internet devices
Hardware or software-based firewall protection
Data backup solution (local, cloud/remote, or both)
Encryption software to safeguard sensitive data
Password-security software

A basic setup doesn’t have to cost a fortune or be overly complicated. But if you do find it daunting, consider leveraging a cybersecurity consultant to advise, set up, and train you on the new system. Alternatively, hire a managed IT security service to manage all your security needs if you have the budget.

How a Cybersecurity Audit Works

If you think your network is vulnerable, a cybersecurity audit is a wise investment. It starts with a cyber risk review to look for network weaknesses and identify potential threats.

Other security audit checks will typically include:

Security controls assessment
Vulnerability scanning
Network penetration testing
Application penetration testing
Cybersecurity policy development
Supply chain inspection and validation

There may be others, depending on your setup. For example, you may assign someone in-house to oversee your cybersecurity updates and maintenance after the audit. In that case, your consultant can offer administrator security training.

#2 Have a 6-Part Incident Response Plan

A cyber attack represents the risk of severe disruption to your organization and its ability to continue operating. Quick recognition and response is key. So, you and your employees need to be educated on how to recognize the telltale signs of a data breach. And the faster you act, the more chance you have of mitigating the damage. This is where the 6-part incident response plan comes in.

A typical 6-phases incident response looks like this:

Preparation, i.e., you know how to identify and respond in the event of an attack
Recognition of a potential breach
Containment of the hack
Removal of the threat
Recovery of core systems and data
Post-mortem analysis, look at ways to prevent future attacks

How Prepared Are You to Respond to a Data Breach?

Do you know who to contact to help stop a potential data breach? Do you know where your database backup is and how to restore it if necessary?
The success of your incident response depends on how well and up-to-speed you and your people are on cybersecurity breaches. Consider the Federal Communications Commission custom Cyberplanner if you need help.

#3 Secure your WiFi Network

All new WiFi installations are insecure at the point of purchase. So the first thing to change is the default password as you set up your new router. It’s critical because cybercriminals are very familiar with default usernames and passwords. These common defaults are often the first things cyberattackers try to gain access to your systems. Thus, they check for default router logins first when they try to access WiFi networks.

Cyber Security Is Important for Securing WiFi Networks
A researcher at a well-known US security firm was able to break over 70% of 5,000 WiFi passwords. And he did this using simple, inexpensive equipment[7].

Once a hacker gets inside your WiFi network, they can lock everybody else out. They can change logins and other settings to gain complete control of your systems. That’s why you must create complex passwords that are difficult to crack.

What Are Strong Passwords?

Strong passwords can help protect against a cyber hijack. Secure passwords are unreadable and contain some or a combination of the following:

Alphabetical letters (a,b,c,d)
Consists of no words or names
Numerical characters or digits (1,2,3,4)
Upper and lowercase letters (Aa, Bb, Cc, Dd)
Symbols (! @#$%^&)

Here’s an example of a password with ultimate strength: kS!M%cD#t6s6Bo#!_6&*

Don’t worry; you won’t have to remember long, complicated passwords. The following section shows you how password management tools can help.

Consider Hiding Your SMB WiFi Network

Every wireless network has an identifier so that devices can connect to it. This is your Service Set Identifier or SSID, which is simply the name of your network. And your router constantly broadcasts data about your network with a beacon frame. The beacon frame is a packet of information that announces your WiFi’s SSID to the world.

Hiding your WiFi’s SSID won’t prevent talented and determined hackers from finding you. It only hides your network name, not the actual network itself. Even so, it does offer an additional layer of security against basic threats.

#4 Use a Password Manager

Every SMB should use a quality password (PW) manager. These low-cost tools are incredibly powerful. They can quickly generate complex passwords and securely store all your login data.

Additionally, some of the better PW managers offer other benefits, such as:

Dashboards with PW health status and PW suggestions
Automatic logins
A place to store personal information and notes
Staff, customer, and client detail storage
Secure payments, e.g., credit/debit card, banking details
Virtual private networks (VPN)
24/7 dark web scanning
Instant alerts

That’s a lot of security tools in a single app. Moreover, a good PW manager helps SMBs avoid costly security breaches and streamlines workflow. And the only password your business needs to remember is the one used to log in to the PW manager.

Cyber Security Is Important for Password Management
A recent workplace malpractice survey found that 57% of workers save passwords on post-its (sticky notes). And, 49% save their login credentials in unprotected, plain-text document files, while 62% share passwords via text messages and email[8].

#5 Train Your Workforce on Cybersecurity Awareness

Cybersecurity offers little defense if the people who work for you are unaware of best practices and company security policies. Therefore, you must invest in awareness training. It’s the only way to ensure workers remain engaged and educated on why cyber security is important for everyone’s safety.

Security Policies Your People Need to Know

Your staff must be conscious of phishing attacks, cyberstalking, social engineering, webcam awareness, strong usernames, and secure passwords. Ensure that your leadership and teams know your current company policies and best practices.

Also, train your people to report suspicious activity, such as:

Sluggish device performance
Internet-connected mobile device batteries draining faster than usual
Significant increase in data usage
Static, echoing, and or clicking noises on internet-connected devices
Suspicious communications via phone, text, email, chat, etc.

Don’t Let Your Guard Down

A 2022 Global Risks Report found that 95% of security breaches result from human error. Now, ask yourself if any employees have access to critical data they don’t need to access. If yes, consider an Identity Access & Management policy to restrict that access and thus reduce the risk of accidental security breaches [9].

Summing Up Why Cyber Security Is Important for SMBs

Cyberattacks on SMBs are already at alarming levels. But security analysts predict the threats for small businesses will be even bigger and more advanced from 2022 and beyond. Although some industries tend to be more vulnerable than others, no sector is safe, according to a CORO report on cyber security preparedness.

How ready are you?

Because cyberattacks are constantly evolving there is no 100% cybersecurity solution. Just like physical crime defenses such as locks, video cameras, and alarm systems, neither will stop motivated and talented criminals. But, by providing deterrents to crime you can make it difficult enough that criminals will look for an easier target.

The security setup your business needs depends on several factors. Examples are the size and nature of your company, the number of workers, and other factors.

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