Are you aware that hackers and cybercriminals target small and medium enterprises much more than they do larger companies? Why not? Smaller companies have smaller budgets for cybersecurity. They don’t spend as much as the bigger companies do. More than half of all cyberattacks target small businesses. These crimes don’t only cause a suspension of operations, but they also cause businesses to close.
The Cost of Cybercrimes for Small Businesses
A cyberattack can cost a business to lose almost $100,000 on average. For small businesses, this will be enough reason to close their operations. Businesses that don’t even have this capitalization to spare will need to close down temporarily. Why is it such a huge amount? Cyberattacks lead to lawsuits. If you lose customer information to hackers, and those hackers use the information to steal your customers’ identities and financial data, your business will face a lawsuit coming from those customers.
When they purchase something from your store—whether physical or online—they are confident that you have the security measures in place to protect their data. When a breach happens, they will need to fix erroneous financial transactions, cancel their credit cards, and clean up their credit records. All of these will cause undue stress. Your company is liable to your customers and, thus, the lawsuits.
Lawsuits are enough to make a small company go under. Even if you manage to reach an agreement with your customers, the chances are that you’re going to spend so much money on lawyers, consultations, and many other things. Not to mention, your insurance premium will take a beating.
Altered Business Practices
If expensive lawsuits and operational shutdowns don’t convince you yet of the need for cybersecurity services, then maybe the fact that you have to change your business practice will do. In case your business survives a cybercrime, you are looking at the possibility of a complete alteration of your business practice. Some online businesses that suffered from a cyberattack shut their online stores completely out of fear that they do not have the resources to protect their customers from another cybercrime adequately.
As a result, they will lose revenues and customers. Their client’s list will thin down. Customers are more likely to patronize businesses that can protect whatever information they share with them.
Bigger companies have also fallen into the hands of cybercriminals. A small gap in the system will allow hackers to come in and steal whatever information they can get their hands on. But the cost of reputational damage is something that most small businesses cannot manage afterward. While big companies can hire a whole public relations team to manage their reputation, smaller enterprises don’t have that kind of resources. As a result, they lose many of their loyal customers since they are unlikely to patronize businesses that have failed them at least once in terms of cybersecurity.
It is not only the company’s reputation that takes a hit whenever a cybercrime happens; their profits take a plunge, too. Small businesses are reliant on these everyday financial transactions. They don’t have as much of a buffer as larger companies do.
As mentioned above, cybercrimes will lead to revenue loss. Customers will want to protect themselves against future cybercrimes, so they will look for a company that can manage their information. They are known to close bank accounts and transfer to other banks when there’s even the slightest chance that their data is up for grabs. Even if they were not the cybercrime target, they would feel that they must transfer banks.
This transfer of loyalty to other companies will not only result in revenue loss now but in the future as well. No customer will want to transact with your company again after you put their personal and financial information in jeopardy. Even your suppliers will think twice about transacting with you unless you promise not to store information about them anymore.
Protecting a business against imminent cyberattacks is costly; however, this is a price you have to pay for operating a business in the 21st century. Cybercriminals have become more sophisticated. They are better skilled than ever, and they have access to a lot more tools than a decade ago. At the same time, businesses also have tools, programs, and people to fight against these crimes. Take advantage of the same technology that hackers are using to get into your systems. The technology they use to steal information from you is the same technology you must use to stop their activities.