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Would Your Small Business Survive a Data Breach?

Would Your Small Business Survive a Data Breach?

Computers and networks are invaluable to small businesses, and it can be difficult to compete without computer tools. However, computers often serve as the primary means through which businesses store their data, from customer information to financial information. Unfortunately, malicious actors are constantly on the lookout for vulnerable networks, and small businesses are increasingly being targeted. Here are a few of the ways a data breach can threaten your small company’s survival.

Customer Data Breaches

Perhaps the most costly type of data breach is that which leaks your customer data. Building a strong customer base is the key to building a successful business, and losing your customer data sends the message that your business is negligent with regard to your customers’ security. Leaked data can compromise your customers’ credit cards and bank accounts, and it can even lead to costly and time-consuming identity theft. Ensuring your customer data is protected is critical for maintaining trust, which is essential for keeping customers around.

Many small businesses rely on at least maintaining their customer bases to survive, and even if most of your customers stick around, losing a small percentage of your customers can lead to disastrous results. Furthermore, having your customer data leaked shows that your system is not as secure as it needs to be, and it can be expensive to identify your security holes and close them. While there’s rarely a way to guarantee that your customer data is safe, it’s worth noting that most hackers primarily target poorly secured systems. Investing in even basic security measures can cause most hackers to move on to easier targets.

The Cost of Customer Data Breaches

Unfortunately, the cost of a customer data breach can go far beyond lost trust. Payment merchants have significant power if they discover a business is at fault for leaking customer data. Businesses typically must incur the cost of notifying customers that their data was leaked, and failing to meet certain criteria often requires companies to repay the cost of stolen credit and debit cards, often paying for any fraud that resulted. In many cases, the cost per credit or debit card leaked can be hundreds of dollars or even more.

On top of these expenses, businesses also have to spend time to recover. Beyond sorting through paperwork, businesses also need to spend time communicating with customers and card merchants. Furthermore, the cost of auditing the system to find vulnerabilities and patching them can drag on significantly, and any potential attack vectors will need to be closed until they’re safe. This can lead to effectively losing computer access for an extended period of time, a cost many small businesses can’t cover.

Lost Data

Another potential threat, especially to small businesses, is so-called ransomware. If hackers can access your data, they’re likely able to delete it as well. Some of these programs hold your company’s data as a ransom, and if you don’t pay what the hacker demands, the program can delete your files. Unfortunately, these programs tend to be sophisticated, and even many law enforcement agencies advise that it’s often best to simply pay what is demanded if your data is worth more.

While proper security is the best means to prevent these types of attacks, it’s also important to maintain proper backups. Most people who install ransomware will release your data if you pay, but this is never a guarantee, and even a mistake on their end can lead to lost data. Backups, if done frequently enough, might make it worth simply reinstalling your operating system and programs and recovering your data. Ransomware programs often demand victims pay tens of thousands of dollars, which is less than the cost of a robust backup system appropriate for small businesses. Online backup tools are worth exploring as well since your company might not be able to continue functioning without some of the data your computers store.

Strong Data Security Practices

The first step to protecting your data is to ensure your business is using up-to-date software that’s regularly patched for potential security vulnerabilities. It’s also worth paying for security experts to give you system an examination to uncover any potential problems, and you’ll want to conduct these security audits on a regular basis. These services show that your business is proactive and makes data security a high priority.

The basics of computer security can help as well. Enforcing a strong password policy prevents some of the easiest, and most common, attacks, which encourages many would-be hackers to look elsewhere. Employees need detailed guidelines for how they can access their systems and know that they’re not permitted to install unapproved software. Ensure these policies are understood and enforced as many data breaches can be traced to employee behavior.

Running a business is difficult, and many small businesses simply can’t afford the cost of a data breach. While some are able to afford the various fines involved with a customer data breach, the cost of recovering can push many over the edge. Furthermore, data breaches risk one of your company’s most valuable assets: trust. Even if your business can survive in the immediate aftermath of a breach, the long-term erosion of trust can spell doom.