As a business owner, the last thing you want to deal with is the added headache of a cyberattack. The devastating effects of such an incidence, no matter how small, can cripple your business. Yet cyber criminals don’t care and are always looking for businesses to hack into and steal information.
Many entrepreneurs only understand the total cost of a cyberattack once it is too late. This lack of knowledge is part of the reason they do not plan. So, how hard can a cyberattack hit your business?
This article discusses the impact of cybercrime on business and provides several steps you can take to mitigate against these emerging threats.
Financial Loss
The financial impact of cyberattacks is so severe that it might take years for your business to recover. Companies risk losing millions of dollars from just a single attack.
Imagine a scenario where hackers infiltrate your business and steal considerable money through fraudulent transactions. From a business owner's point of view, the effects of this attack will seem never-ending, especially if you don’t have solid cyber insurance coverage.
For starters, the attack itself will cost you money. There’s a possibility of losing more money through hefty fines from regulatory bodies and lost sales and contracts due to diminished capacity. Finally, the constant investigations and mitigation measures you employ post-attack will still cost you a lot of money. This domino effect kind of consequences can follow you for years and affect the trajectory of your business.
Reputational Damage
Your business might also lose its reputation in the wake of a cyberattack. According to an IBM report on the average cost of a data breach, cyberattack reputational damage, and lost customers contributed to a rise in lost business costs of $1.47m in 2024, up from $1.3m in 2023.
For example, customers and investors may feel less secure in a company whose security breach results in the theft of sensitive data like credit card information. The business can suffer serious reputational damage because it failed to protect this information. Often, it takes a lot of time and resources to recover from such reputational damage.
Loss of Intellectual Property (IP)
If your business owns any Intellectual property, including product designs, marketing strategies, code bases, recipes, etc., a cyberattack involving the theft of IP could have devastating effects. Losing such valuable assets can result in loss of business, loss of competitiveness, decreased business growth, and even closure.
Such events have already been witnessed in attacks, such as Operation CuckooBee, where APT41, a Chinese state agent, stole intellectual property from approximately 30 multinational companies, causing an estimated loss of trillions.
Operation Disruption
A cyberattack can also disrupt your operations. For example, a ransomware attack on a hospital can devastate the facility’s ability to provide essential health services. It’s worse if you operate an SME because small businesses often lack a dedicated security team to handle such events and are more likely to suffer from such disruption.
Increased Running Costs
The current surge of cyberattacks also means that businesses will spend more money preventing cyberattack damage or mitigating these incidences. Some studies show an increasing trend in companies spending more on cybersecurity. While this might sound like a good idea for cybersecurity professionals, it sometimes limits what some companies can spend on other crucial areas, such as R&D.
Also, a small business will likely bear the brunt of these attacks if you lack the financial muscle to keep up with the ever-changing cybersecurity landscape.
How to Minimize the Impact of Cyber Attacks on Businesses
Reducing the impact of cybercrime on business remains one of the most important decisions entrepreneurs make. Below are several ways to safeguard your business and ensure that these attacks do not cause irreparable damage.
Invest in Proper Training and Sensitization of Your Staff
Human beings are often considered the weakest link in securing any system. Due to varying factors, your staff will willingly or unwillingly expose your business to cyber-attacks. As such, proper training and sensitization ensure that employees do not engage in behaviors that might put the company at risk.
For example, teach your employees about phishing attacks and how to avoid them. This step helps improve their overall resilience. Also, make a point to create a regular training schedule that keeps your staff and employees updated on emerging cyber threats.
Keep your Systems Updated
Regularly updating your software will reduce the chances of getting attacked through known vulnerabilities. Software tends to develop vulnerabilities as cybercriminals find new ways to exploit it. For this reason, software vendors update their software to fix these issues and add more functionality and security.
Failure to update your software in time means missing out on important security upgrades meant to protect your business. Therefore, keep up with regular patch releases to stay ahead of cybercriminals and protect your business from an attack.
Invest in Endpoint Protection
Endpoint protection involves securing user devices from attacks. These devices provide people with access to the network and include computers, mobile devices, smart watches, tablets, and more. Cybercriminals use these devices to access networks and exfiltrate data, among other bad things. The more the devices access the system, the more chances of an attack.
Endpoint protection helps businesses reduce/protect the attack surface by preventing access through individual devices. Currently, there are Endpoint Protection Platforms that employ different techniques to keep threat actors from accessing a network through individual devices.
Have a Good Data Backup Plan
Data backup involves keeping copies of available business data when you lose it. It is part of the cyberattack crisis management process where copies of the data are stored away from the original data and are used to restore the original data.
Regular data backup is one of the best ways to secure sensitive business information. For example, you can back up your customer information to protect yourself from malicious attacks that destroy data, natural disasters, and catastrophic outages. Businesses can take advantage of third-party data backup services such as Azure Backup.
Implement Solid Access Management Solutions
Access management is the practice of controlling who can access business data, applications, and backend systems and the actions they can take. Access management solutions make this easier by providing a way to authenticate, authorize, and audit who has access to these business components.
For example, not everyone in your business should access customer credit card information. Therefore, investing in a solid access management solution can help strengthen your security posture and reduce the risk of a cyber attack.
Final Take
The negative impact of cyberattacks on businesses is usually too serious to ignore by business owners. These incidents affect more than just the financial aspect of the business, and many businesses cannot recover after a cyber attack.
Some effects you can expect from a cyberattack on your business include loss of finances, reputation, intellectual property, operational disruption, and increased running costs. Cyberattack recovery costs usually tend to be higher, adversely affecting how you do business.
Luckily, it is possible to protect yourself and the business by adopting a proactive approach that incorporates best practices such as training your staff, running up-to-date systems endpoint protection, having a good data backup plan, and having a solid access management process.
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