9 Cybersecurity Small Business Risks You Should Be Aware Of

Your small business is not immune to cyber threats. Remember the cyber attacks against Equifax and Yahoo? Such incidents might make you wonder why hackers would target small companies when larger corporations and government agencies seem like bigger prizes. However, a staggering 60% of all targeted attacks are aimed at small to medium-sized organizations. Research shows that 82% of these businesses lack a robust cybersecurity strategy, making them particularly easy targets.

Cyber attacks can severely damage your business’s reputation. Shockingly, 60% of small businesses that suffer a breach go out of business within six months. These statistics underline the critical need for a solid cybersecurity plan.

Cybersecurity Small Business

9 Cybersecurity Risks Common for Small Businesses:

1. Lack of Adequate Training:

Most cybersecurity breaches result from human error. Phishing scams trick employees into revealing their passwords. These emails might appear legitimate, like a routine credit card statement, but they’re from malicious actors. Employees fall for these due to a lack of training in identifying such threats.

What to do about it:

Regular security education is essential. Drive these training initiatives, especially for small businesses that often overlook this aspect.

Why it matters to small business:

While larger companies have dedicated cybersecurity teams, smaller businesses often don’t, making them more vulnerable to threats due to untrained staff.

service set identifier

2. Inadequate Protection Against Malware and Ransomware:

Hackers have long targeted businesses with malicious software. Ransomware attacks, where hackers lock you out of your data and demand a ransom, are increasingly common. The dilemma often is choosing between paying a hacker or losing access to vital data like customer information or financial files.

What to do about it:

Employee training is paramount. Additionally, businesses should install security apps, use antivirus software, and maintain continuous cloud backups with a trustworthy cloud service provider.

Why it matters to small business:

Small businesses may not have the financial resources to pay ransoms, and losing critical data can be devastating. Ensuring protection against malware is crucial to maintain business continuity.

3. Outdated or Unpatched Software:

Keeping software updated is vital for cybersecurity. Many software updates address security vulnerabilities. Cybercriminals constantly search for weak points in outdated software.

What to do about it:

Update and patch all applications regularly. Prioritize those that handle critical data.

Why it matters to small business:

For small businesses, outdated software can exponentially increase the risk of a breach, potentially leading to significant financial and reputational damage.

data breaches

4. Poor Data Management Practices:

Many businesses handle sensitive data, like human resources files or proprietary processes. However, numerous small businesses share this data via email, which poses risks.

What to do about it:

Implement a policy for data backup and security. Consider using password managers and multi-factor authentication.

Why it matters to small business:

Data breaches can lead to loss of customer trust and potential legal repercussions. Proper data management ensures business integrity and customer confidence.

5. Lax Access Control:

Transmitting data securely is vital, but controlling who has access to specific data is equally crucial. This principle is known as the “principle of least privilege” in the cybersecurity community.

What to do about it:

Audit employee access to data and applications. Adjust access based on the principle of least privilege.

Why it matters to small business:

Unauthorized access can lead to data breaches, theft of proprietary information, and other security incidents that can harm a small business’s reputation and bottom line.

6. Insecure Network:

Whether data is on a corporate network or in the cloud, its security is paramount. Guest devices, employee mobile devices, or personal laptops should not connect to networks storing sensitive data.

What to do about it:

Regularly audit network and cloud security. Implement strict access policies.

Why it matters to small business:

A compromised network can lead to extensive data breaches, disrupting business operations and leading to significant financial losses.

internet connection

7. Weak Password Policies:

Password security is a significant concern. A recent study found that 19% of business passwords are easily compromised.

What to do about it:

Set regular intervals for password changes and ensure they meet strength requirements. Consider multi-factor authentication.

Why it matters to small business:

Weak passwords can be the gateway for cybercriminals to access sensitive business data, leading to breaches that can be costly to rectify.

8. No Disaster Recovery Plan:

Accidents and cyber breaches happen. Having a disaster recovery plan ensures a quick response.

What to do about it:

Identify potential threats and establish responsive policies.

Why it matters to small business:

Without a recovery plan, small businesses might face prolonged downtimes, loss of customer trust, and significant financial losses.

9. Lack of Documented and Enforced Security Policies:

Every business needs documented IT security policies that are communicated and understood by all employees.

What to do about it:

After risk assessment, consult with cybersecurity experts and develop documented policies.

Why it matters to small business:

Without clear policies, employees might inadvertently engage in risky behaviors, leading to security incidents that can damage the business’s reputation and finances.

separate user account

How Can IT Ally™ Help?

IT Ally™ offers several cybersecurity and risk advisory services tailored to address the risks highlighted above. Our goal is to provide enterprise-level value to small businesses. Whether it’s setting up a virtual private network, ensuring Wi-Fi security, or offering guidance on additional security obligations, we’re here to assist. Cybersecurity is a journey, not a destination. With the ever-evolving landscape of cyber threats, it’s crucial for small businesses to stay proactive. IT Ally™ is here to guide you every step of the way. Reach out to start a conversation or schedule a consultation with one of our experts. Protecting your business is our top priority.

install security apps


A wireless access point extends your Wi-Fi network’s range. Ensure it’s secure to prevent unauthorized access.

Password protect these files, use separate user accounts, and store them in secure platforms.

Such collaborations offer additional resources, validated tools, and best practice insights.

Conduct regular audits, set reporting procedures, and ensure strict security standards for all connected devices.

Control physical access, use security apps, and train key personnel.

Cybersecurity for small businesses involves understanding and managing the cyber risks and threats to an organization. The goal is to secure and keep the business safe against cybersecurity threats.

To set up cybersecurity for your small business:

  • Assess the situation to get a clear picture of the cyber risks, threat landscape, and residual risk.
  • Identify gaps in risk to understand the best ways to bolster capabilities and ensure compliance.
  • Automate real-time compliance monitoring and reporting to keep track of how your cybersecurity program is performing.
  • Ensure your IT environment is operating securely and efficiently with proven service delivery platforms.

The amount a small business should spend on cybersecurity varies based on several factors, including the nature of the business, the sensitivity of the data they handle, and their exposure to online threats. Generally, it’s recommended that small businesses allocate a portion of their IT budget to cybersecurity. Industry benchmarks often suggest that businesses should spend anywhere from 5% to 20% of their IT budget on cybersecurity, but this can vary widely. It’s essential for businesses to conduct a risk assessment to determine their specific needs and allocate resources accordingly.

Many small businesses are becoming increasingly aware of the importance of cybersecurity, and a growing number are implementing measures to protect themselves from cyber threats. However, the exact proportion of small businesses with comprehensive cybersecurity measures can vary widely based on region, industry, and other factors. It’s essential for all businesses, regardless of size, to consider cybersecurity given the rising prevalence of cyber threats.

Michael Fillios

Michael Fillios

Founder and CEO of ITAlly

Michael C. Fillios is the founder and CEO of IT Ally, a business and technology advisory firm for family owned and private equity backed small- and medium-sized businesses (SMBs). He is a former Fortune 500 global CIO, small business CFO, technology entrepreneur and management consultant with more than 25 years of experience. His first book, Tech Debt 2.0®: How to Future Proof Your Small Business and Improve Your Tech Bottom Line, was published by the IT Ally Institute in April 2020. His new book is, Tech Equity, How to Future Ready Your Small Business and Outperform Your Competition (IT Ally Institute, May 4, 2023). Learn more at itallyllc.com.