What Are The Effects of Cyber Attacks on Small Businesses?
Cyberattacks can have a huge impact on your operations – particularly if you’re running a start-up or small business.
Many small and medium-sized enterprises (SMEs) may not have the security or infrastructure that major corporations have access to, which is one of the main reasons why they are targeted by online attacks over bigger corporations.
To help you understand the cybersecurity challenges faced by small businesses, we'll explain why smaller organisations are often more vulnerable to cyber-attacks and how you can prevent your company from falling victim.
- Cyberattacks are carried out on individuals or organisations to cause financial harm, steal sensitive information, or disrupt day-to-day business activities. The damage caused can include financial loss, reputational damage and loss of customer trust.
- SMEs are at a higher risk of cyberattacks because they generally have fewer resources in place to deal with attacks due to lower budgets, which makes them easy targets. Cybercriminals also use attacks on small businesses to gain access to larger organisations.
- The most common cyberattacks on SMEs include phishing, malware, ransomware and remote access and DDOS attacks.
- SMEs can protect themselves against these attacks by using strong passwords, running regular computer updates, using antivirus software, training employees, securing WiFi, backing up data and creating a cyber response plan for the worst-case scenario.
Why are online attacks conducted?
Cyber-attacks are malicious online activities carried out by cyber criminals over the internet. They’re often carried out to cause financial harm, steal sensitive information, or disrupt normal operations. However, the severity and intent can vary depending on who is targeted.
Personal attacks are focused on individuals and are generally intended to steal sensitive details or money. Cyberattacks on businesses can carry a bigger threat as organisations tend to have a lot more equity and personal data at stake. As well as financial loss, companies can also suffer from reputational damage, leading to a loss of customer trust and overall profits.
Cyberattacks have become increasingly sophisticated and prevalent in recent years, posing significant threats to businesses, governments, and individuals.
Why are SMEs more vulnerable to online attacks?
Not all businesses will be targeted in the same way. SMEs are likely to be more vulnerable to online attacks, compared to larger corporations, because:
Small businesses have fewer resources to respond to attacks
Smaller organisations often have limited resources to respond to cyber-attacks. In fact, a UK government cyber security study revealed that only 31% of micro and small businesses had cybersecurity policies in 2021.
Unlike larger corporations, SMEs are less likely to have dedicated IT departments to manage their cybersecurity. Therefore, in the event of an attack, they may struggle to contain the damage or even prevent it from doing more harm. This gives cybercriminals more of a chance of successfully getting the money or data that they’re after.
In addition, they may not have the necessary software to investigate the source and extent of the attack. This can not only make it more difficult to recover but could leave a business vulnerable to future attacks.
SMEs have less budget to implement strong security measures
SMEs may also have less budget for cybersecurity measures compared to bigger, more established businesses. This can limit their ability to invest in advanced security solutions or hire expert personnel to manage their cybersecurity.
As hackers grow more sophisticated and their tactics become even more difficult to identify and protect against, smaller organisations may struggle to keep up, leaving them at risk of becoming an easy target.
Learn more about how to tell if your business has been hacked with our guide.
Small businesses are used as gateways to larger companies
While smaller companies may be more likely to fall victim to online attacks, they aren’t always the intended targets. Some cyber criminals see SMEs as a gateway to access larger businesses, which would otherwise be more difficult to penetrate because of their more advanced security defences.
For example, hackers may target SMEs because they are subcontractors or affiliated with larger businesses through channels like human resource work, cleaning, or providing third-party solutions. This way, if an SME is successfully hacked, the attackers can access the systems and networks of the larger organisations they are connected to, leading to more significant damage.
Essentially, small businesses can be seen as a weak entry point into more desirable targets, which puts them at a higher risk of attack.
Small businesses can be more dependent on digital processes to run their operations
Finally, technology has made it much easier for small businesses to operate efficiently and at a lower cost; many independent companies rely on technology for financial transactions, marketing, and communications. But, if they depend more on digital processes to operate, it gives online hackers more opportunities to launch a cyber attack.
What are the most common cyber attacks on SMEs?
To deter online attacks, becoming familiar with how cyber criminals can target businesses is crucial.
Today, the list of cyber attacks continues to grow as hackers adopt newer methods and technology. Here are some of the most common ones to be aware of:
- Phishing – Attackers send emails to trick businesses into sharing sensitive information. They may also encourage the recipient to download an attachment or file that installs malicious software onto their device. Discover our guide to phishing scams for more information.
- Malware – Malware can come in various forms, but viruses are one of the most popular types. Viruses and malicious software infect company devices to steal information or cause widespread damage to internal systems.
- Remote access – Attackers may attempt to gain remote access to a business computer to gain sensitive company details, such as passwords and financial information.
- Ransomware – Ransomware isn’t technically an attack, but it’s malicious software used to extort money from a target. The software infects a device and restricts access until a ransom is paid. Learn more about ransomware attacks here.
- Distributed Denial of Service (DDoS) attack – DDoS attacks are different to other cybercrimes as their aim isn’t to steal money or information. DDoS attacks slow down or completely shut down an internet service. For example, a common DDoS attack is to overwhelm a website’s server by creating a large number of requests. This prevents intended users from accessing a site. Learn more about DDoS attacks and how to protect your business with our guide.
These are just a few examples of how cybercriminals prey on small businesses. Find out more about cyber security for your business with our complete guide.
Have there been recent cyber attacks on SMEs?
The Dorchester school cyberattack - on the 6th of June 2023, computer systems at the Thomas Hardye School in Dorchester were hacked. Staff suffered from locked computer screens and disabled email and payment systems. Data on employees and students were at risk, including exam results and assignments. The attacks demanded a ransom to be paid but the school refused. Read the full story here.
As you can see, schools, charities and any small to medium organisation
What are the effects of cyber attacks on small businesses?
A cyber attack can affect your business in all sorts of ways, such as:
They can be costly to resolve
Cyber security attacks often require extensive experience and know-how to resolve, which can be expensive to fund – especially if you’re a small business without a dedicated IT team to deal with these situations.
Therefore, you may need to hire cybersecurity experts to investigate the source and extent of the attack, repair any damage caused, and implement new security measures to prevent future attacks. These costs can quickly add up, putting a strain on finances.
They can cause operational disruption
The consequences of online attacks can cause significant operational disruptions for small businesses. You may experience system downtime or lose access to critical data and information, leading to delays and lost business opportunities. This disruption can have a ripple effect, impacting your organisation's ability to meet customer demands and fulfil orders on time.
They may require new business practices to be put in place
If your business gets hit with an online attack, it could force you to change your everyday business practices. To protect your digital assets, you may need to implement new security protocols, such as two-factor authentication or regular password changes.
While it’s strongly recommended to have security measures in place, it can be costly to set up and maintain.
They can cause damage to a business’s reputation
If a cyber attack is caught and prevented at an early stage before it can cause any damage, it’s possible that customers may not find out about it. However, it can be impossible to contain if it causes severe and notable effects. In particular, if customers’ data has been compromised, businesses have a duty of care to let them know what has happened.
This can seriously damage a business’s reputation. SMEs may lose the trust of their customers, suppliers, and partners. It can take time and effort to rebuild trust and restore the organisation's reputation after a cyberattack.
They can cause a loss of revenue
In the aftermath of a cyber attack, businesses may not only lose money by having to pay to fix the damage. If the direct consequences cause trading to pause for a significant period of time, businesses may fail to fill orders and may need to repay their customers due to operational disruptions.
The longer it takes for a business to recover, the higher chance that the attack will have more significant effects on its finances.
Although it's impossible to know whether your business will be targeted, there are a number of ways you can minimise the risk of cyber-attacks.
How to protect small businesses from cyber hackers
Cyber attacks can be bad for business, but there are some things you can do to protect yourself.
Use strong passwords
Passwords are the first line of defence against cybercriminals who attempt to hack into a business. Encourage your employees to use strong passwords that are difficult to guess or crack; strong passwords should be at least 12 characters long and include a mix of upper and lowercase letters, numbers, and symbols.
It’s also recommended to avoid using common words or phrases that could be easy to guess. Similarly, do not reuse passwords across multiple accounts and change them regularly for maximum security.
Implementing two-factor authentication can also add an extra layer of security. This requires a second form of verification when logging in, such as a code sent to a mobile device, in addition to a password. In the event that an attacker manages to steal your company passwords, two-factor authentication can stop them from getting any further.
Keep software up to date
Small businesses should also keep all software, including operating systems, applications, and plugins, up to date with the latest security patches. If you’re using outdated software, attackers can exploit unresolved vulnerabilities to gain access to your systems and data.
One of the easiest ways to ensure you’re using the latest software version is to turn on automatic updates wherever possible.
Use antivirus software
Having certified and up-to-date antivirus software is essential for all businesses to protect internal systems against viruses, malware, and other threats. Not only can antivirus software be a defensive measure to safeguard against potential attacks, but it can also isolate malicious attempts to hack into your internal systems and prevent them from doing further damage.
Be sure to choose antivirus software from a trusted provider and keep it up to date with the latest versions.
Educate your employees
Keeping your security systems updated can be extremely beneficial for protecting small businesses against online attacks, but providing the right training to your employees is also crucial. Cybersecurity training can teach them how to recognise and respond to potential threats, such as phishing emails or suspicious websites.
Make them aware of the importance of strong passwords and safe browsing habits, and immediately report any security incidents or suspicious activity. Make cybersecurity training a regular part of your employee onboarding and ongoing education.
Secure your WiFi
Your business’s WiFi network provides an entry point for hackers to access private data and must be secured against potential attacks.
Secure your WiFi network by using strong passwords, enabling WPA2 encryption, and disabling remote access. Regularly review your WiFi network settings and change your password regularly.
Find out more about securing WiFi for businesses here.
Backup your data
In the event that an attacker manages to gain access to your business’s data, regularly backing up sensitive information means that you can recover it if it is tampered with or deleted.
Backups should be stored securely and regularly tested to ensure that they can be restored if needed. Consider using a cloud backup service to automate backups and ensure that your data is always protected.
Develop an incident response plan
Forming a response plan that outlines the correct steps to take in the event of a cyberattack can help to mitigate any damage. Make sure that all employees are familiar with the plan and know their roles and responsibilities by offering yearly training. The plan should include steps for detecting and containing the incident, notifying stakeholders, and restoring systems and data.
Keep your business secure today
Any and every business is susceptible to online attacks, but targeted small business cyber attacks are becoming increasingly common. With more organisations operating online, having the proper cyber security measures in place has never been more important to keep your business and customers safe.
Speak with a member of the Bionic team today to help you find the best deal on your business essentials, from insurance and business energy to broadband services. You can also learn more about how to keep your company secure with our connectivity guides.