1 in 8 Businesses Are Destroyed by Data Breaches. Don’t Be a Statistic

I have frequently stated that one of the leading causes of business failures is poor cash flow management.

According to a study by US Bank, 82% of all businesses that fail did so because they were unable to maintain a sufficient cash flow. Unfortunately, this statistic masks a number of problems that frequently hurt cash flow, so the root problems often go unaddressed until it is too late.

New research shows that data breaches are a huge factor in business failures. This is hardly surprising, because there were around 30 major data breaches in 2017 alone.

Why You Should Stay Safe from Data Breaches

The consequences of data breaches are severe for small businesses.

One study found that 60% of all companies that suffer a data breach are forced into bankruptcy within six months. Despite the frightening lesson that they should learn from this, many small businesses are still reluctant to take their cybersecurity seriously. They believe that the probability that their company will be targeted by a cyberattack is too low to worry about.

The sad reality is that around 20% of all companies will suffer a cybersecurity breach in the next year. This figure might actually start to increase as hackers become more brazen and invest more resources targeting small businesses.

It doesn’t take much math to see the horrifying reality here.

Nearly 1 out of eight small businesses will be driven into bankruptcy this year, simply because they were the victim of a cyberattack.

The chances are even higher if your business has a strong online presence. Hackers will be more likely to go after your company if you have a large digital footprint. The costs will also be higher, which means that the likelihood you will suffer unrecoverable financial losses increase as well.

As a small business owner, you can’t treat cyber security as an afterthought. You must make it one of your highest priorities. Here are some tips that will help you reduce the risk of a data breach.

Set aside your stereotypical image of a cybercriminal

I recall watching the movie Hackers with Angelina Jolie back in the late 1990s. An older friend that I watched it with said that the movie was unrealistic for presenting the hackers as fun-loving characters. He said that the average hacker was a dorky guy in glasses in his mom’s basement.

This conventional archetype has proven to be wrong in recent years. Hackers are actually often very socially sophisticated.

They are gifted in the art of social engineering.

They will often find clever ways to track their victims into revealing important information like the answers to online security questions or installing malware that would not have otherwise been installed.

One colleague of mine said that his PayPal account got hacked after a hacker pretended to be a customer and tricked him into installing a keylogger and capturing his PayPal login details when he was asked to send an invoice.

You need to be aware of the different types of social engineering strategies they use to guard against them.

Upgrade your free malware protection software immediately

Far too many people rely on free software to protect against malware. This might not be the biggest mistake if you are a consumer, but it can make the difference between the life and death of your business.

Free malware protection tools are not updated in real-time. Hackers are regularly developing new types of malware to exploit their targets. If your malware protection software is not up-to-date, you will be vulnerable.

Use CDNs and other tools to prevent traffic that is likely to be harmful to your Network

It is important to know where harmful online traffic tends to originate. If you look at geographic maps of different originating sites of hackers, you will see that they tend to come from Russia, China and a number of countries in Eastern Europe. He will also see that many of them come from known Tor nodes.

It is a good idea to use a CDN to filter this traffic to minimize the risk of a DDOS attack or other cyberattacks.

Common Cybersecurity Mistakes Small Businesses Make

Small businesses often assume they’re not prime targets for cyberattacks due to their size, but this misconception can leave them highly vulnerable. Here are some of the most common cybersecurity mistakes:

• Assuming They’re Too Small to Be Targeted: Many small businesses mistakenly believe that hackers only target large companies. In reality, smaller businesses are attractive targets because they often have weaker security measures and valuable customer data.
• Neglecting Employee Training: A significant number of breaches result from human error, such as clicking on phishing emails or using weak passwords. Without proper cybersecurity training, employees may inadvertently expose the business to cyber threats.
• Relying on Outdated Software and Free Security Solutions: Outdated software and free antivirus programs don’t offer the level of protection that businesses need. They often lack real-time updates, leaving networks open to newer threats.
• Failing to Regularly Update and Patch Systems: Ignoring regular updates and patches creates vulnerabilities. Hackers actively exploit known software weaknesses, so businesses that don’t keep their systems up-to-date are at increased risk.
• Poor Password Management: Weak, reused passwords and a lack of two-factor authentication (2FA) make it easy for attackers to gain unauthorized access. Password policies should enforce strong passwords and require 2FA to bolster security.

How to Build a Cybersecurity Culture in Your Business

Creating a cybersecurity culture within your business means making security a priority across all levels of your organization. Here’s how to get started:

Educate Employees on Security Awareness

Regularly train employees to recognize phishing attempts, use strong passwords, and follow security best practices. Provide ongoing training to keep them updated on the latest cyber threats.

Establish Clear Security Policies and Procedures

Develop policies for data handling, password management, and device usage. Make sure every team member understands and adheres to these protocols.

Promote a “Zero Trust” Approach

Adopt a zero-trust model where no one is automatically trusted inside or outside the network. Require authentication and verification at every step to reduce the risk of unauthorized access.

Lead by Example

Management should demonstrate a commitment to cybersecurity by following the same protocols as employees. When leaders take security seriously, it reinforces its importance across the organization.

Encourage Open Communication

Encourage employees to report suspicious activities immediately without fear of retribution. A collaborative approach to security strengthens the business’s defenses.

Cybersecurity Tools Every Business Should Use

To protect your business, it’s essential to have the right cybersecurity tools in place. Here are some essential tools every business should consider:

1. Firewalls: Firewalls act as the first line of defense by monitoring incoming and outgoing traffic and blocking unauthorized access. They are essential for protecting the network from external threats.
2. Antivirus and Anti-Malware Software: These programs detect and remove malware, spyware, and other malicious software from devices. Use software with real-time scanning and automatic updates to protect against evolving threats.
3. VPNs (Virtual Private Networks): VPNs secure internet connections by encrypting data transmitted online. This is particularly important for remote employees accessing sensitive business data over public Wi-Fi networks.
4. Data Backup Solutions: Regular backups prevent data loss from ransomware, hardware failures, or accidental deletions. Cloud-based backup solutions are particularly valuable as they store data securely offsite.
5. Multi-Factor Authentication (MFA): MFA requires users to provide two or more verification factors to gain access, significantly enhancing security beyond just a password.
6. Intrusion Detection and Prevention Systems (IDPS): IDPS tools monitor network traffic for unusual or suspicious activity and can alert administrators or automatically block potential threats.
7. Password Management Tools: Password managers generate, store, and encrypt complex passwords, making it easy for employees to use strong, unique passwords without memorization.

Conclusion: Securing Your Business’s Future through Strong Cybersecurity Practices

The survival of a business increasingly depends on its ability to protect itself from cyber threats.

With alarming statistics showing that cyberattacks can be devastating – especially for small businesses – it’s clear that cybersecurity is not just a technical issue but a fundamental business priority.

Poor cash flow management has long been a cause of business failure, but now data breaches are posing an equally dire risk, with nearly 1 in 5 businesses falling victim to a cyberattack yearly and many facing bankruptcy as a result.

To safeguard your company’s financial stability, reputation, and operational continuity, investing in comprehensive cybersecurity measures is essential.

Moving beyond the stereotypes of hackers, recognizing the importance of real-time malware protection, and implementing proactive defenses like content delivery networks (CDNs) are all critical steps toward building a resilient business.

Overlooking cybersecurity isn’t an option — it’s an urgent necessity. By prioritizing protection, you’re not only reducing risk but also building trust with customers and positioning your business for long-term success.