Cyber crime isn’t reserved just for big businesses. In fact, being a small business might make you more likely to be targeted. Here are four ways cyber crime can damage your business.
Internet security may not be your number one priority when starting a new business, but neglecting the potential dangers could put your business at a great risk. One common mistake for managers and executives is assuming that their small business is at a lower risk compared to other larger businesses. Contrary to this assumption, small businesses are at an equal, if not, greater risk to being the victims of cyber crime. A common reason for this is that smaller businesses may not have the budget and resources that many larger businesses may have, often leaving them more vulnerable to malicious attacks. According to a study conducted by the, smaller organizations incur a significantly higher per-capita cost than larger organizations.
When taking the security of your business into consideration, it is important to understand both the nature of cyber crime and how to prevent cybercrime from happening to your business. There are two general categories that an internet related crime may fall under. The first one is theft and the other one is digital vandalism.
Theft vs. digital vandalism considered
Theft may include the misappropriation of financial information, customer records, or even sensitive information regarding a particular product or strategic information regarding the business in general. Digital vandalism, on the other hand, may include viruses, denial of service (DoS) attacks, various forms of malware, or even attacks on the character of a business, often in the form of hacking a business’ website or related social media accounts. Regardless of which category a potential attack may fall under, it could cost your business immensely. There are four key areas where it could “cost” your business – and not all are directly financial though they become so over time…
1. Loss of Reputation and Consumer Confidence
For many small businesses a single attack can cause irreparable damage. For example, an attack resulting in the compromise of a customer’s financial information can freeze operations or permanently put an organization out of business. It’s almost impossible for a small business to recover from the potential damage to its reputation caused by a single attack. Many small businesses will most certainly struggle to regain the trust and confidence of their existing customers, not to mention the trust and confidence of new potential customers.
2. Cost of Fixing The Issue
A compromise in a business’ security will often require a business to halt online operations for a period of time, resulting in a loss of revenue. For primarily internet based businesses, this can be a devastating reality. However, the total cost of an attack may not be from the initial attack itself. There are other factors that must also be considered. A compromise in security resulting in the loss of customer financial information will require time spent researching how the breach may have occurred and time and money spent developing a solution to the problem. This may often require the organization to hire outside specialists (penetration testers, developers, network security specialists) to further investigate the issue.
3. Loss of Capital and Assets
During a security breach, an organization’s bank and credit information may be stolen. This will likely result in the theft of account funds. Many small business owners may misguidedly believe that their bank will help in alleviating the loss of funds, in a similar manner to consumer credit accounts. This is often not the case, leaving small businesses to lose some, if not, all of their working capital and funds.
4. Legal Difficulties
A breach in security can put a small business at great legal liability, especially if they have failed to implement and meet satisfactory security measures and standards. This means that the best way for a small business to avoid possible litigation in the event of a security breach is to work to prevent a security breach from ever happening in the first place. The security of a customer’s personal and financial information should be a business’ first priority when considering information security protocol.
Ultimately, a company’s security needs will depend on the type of information being transmitted and stored and through what avenues and mechanisms said information is being transmitted. The diversity of small businesses means that each company may have different areas of concern and vulnerability. The best practice for managers concerned about the security of their information is to educate themselves, and have experienced IT personnel. An alternative, of course, is to hire a consultant if the situation cannot be handled in-house. Whichever way you choose to go, it is best to take action sooner rather than later.