Businesses small and large rely on data more than ever these days, no matter the industry. Work is virtually impossible without it. With constant data reliance comes the need for robust data security measures.
Corporations typically have more than enough funds to spend on dedicated security resources. It’s not as easy for small businesses — but that doesn’t mean data security should fall to the wayside.
Despite added costs, consider data protection no less than a top priority. Otherwise, serious consequences ranging from financial loss to irreparable reputational damage may lie on the horizon. It only makes sense you want to protect your business and clients!
Here are nine compelling reasons why small businesses can’t afford to ignore data security.
[Related: Cyberthreats Are Changing. Is Your Protection Keeping Up?]
1. Risk of Data Breaches
Small businesses are far from immune to cyberattacks and data breaches. Although a larger company might have more available data to compromise, a small business’s information — including its clients’ — is just as important.
What’s more, cybercriminals often view small businesses as easier targets because they don’t always have the resources to hire IT support teams. In turn, they’re more vulnerable to attacks.
In fact, small businesses suffered about 700,000 cyberattacks in 2020 alone, resulting in close to $3 billion in damages. Data breaches are particularly harmful.
Exposed small business data often includes sensitive customer information:
- Personal data, such as contact information
- Financial data, such as invoices and bank account numbers
Breaches affecting these data types may lead to legal liabilities resulting in hefty fines alongside loss of customer trust.
[Related: Security Gaps Exist — Here’s How To Fix Them]
2. Financial Implications
The financial fallout from a data breach can be devastating for a small business. Budgets are already tight, so any unexpected expense is detrimental.
Costs go beyond potential fines and legal fees. Other costs include:
- Investigating a breach
- Notifying affected parties per Global Data Protection Regulation (GDPR) laws
- Implementing security enhancements to prevent future incidents
Moreover, the reputational damage may result in lost business opportunities and revenue.
3. Compliance Requirements
Many industries — education, law, construction, nonprofit, engineering and more — have stringent data protection and privacy regulations.
Small businesses that handle especially sensitive data, such as healthcare or financial information, must comply with laws such as the Health Insurance Portability and Accountability Act (HIPAA) or GDPR.
In short, ignoring data security can result in severe noncompliance penalties and tarnish your business’s reputation.
4. Loss of Customer Trust
Trust is paramount in business, bar none, especially for small enterprises building their customer base.
Put simply, a data breach erodes trust as customers question how secure their personal information is. No one looks forward to or enjoys feeling exposed or vulnerable. It’s certainly alarming, particularly when you have more at risk.
Unfortunately, once trust is lost, regaining it is quite challenging.
You might see decreased customer loyalty and negative word of mouth. Besides recovery efforts to fix any compromised data, you must consider immediate public relations efforts to clean up your reputation.
[Related: DKIM + DMARC = Enhanced Email Security]
5. Intellectual Property Theft
Small businesses often overlook the value of their intellectual property (IP) assets. The most well-known IP types include these major areas:
- Patents
- Trademarks
- Proprietary data
Cybercriminals looking to steal and exploit valuable IP for financial gain fervently seek this information. Neglecting data security leaves small businesses vulnerable to IP theft, compromising their competitive advantage in their industries.
[Related: Credential Theft Is the Leading Cause of Data Breaches]
6. Operational Disruption
Cyberattacks not only compromise data but also disrupt business operations.
For example, ransomware attacks can encrypt critical files, rendering them inaccessible until you pay a ransom. The financial amount cyberattackers ask for is often impossibly, unbearably high.
Such disruptions bring business activities to a standstill. Teams’ productivity suffers enormously, while missed deadlines and damaged customer relationships follow.
7. Supply Chain Risks
Small businesses are increasingly interconnecting with larger supply chains. This makes them potential entry points for larger-scale, enterprise-level cyberattacks.
Failure to prioritize data security both jeopardizes your small business’s operations and compromises vendors’ and partners’ security further down the supply chain.
8. Employee Error
Human error remains one of the leading causes of data breaches — whether accidental or purposeful. Remember that staff security protocols are in place for a reason!
No matter the case, an employee might expose your business to security risks.
That’s why properly training them and enforcing data security policies are essential. These efforts help prevent breaches while simultaneously mitigating risks.
[Related: Are Your Passwords Safe?]
9. Long-Term Viability
Data security isn’t just a short-term concern! It’s crucial for your small business’s long-term viability.
Cyberthreats evolve, and worldwide regulations become more stringent. Any business that fails to adapt and invest in robust data security measures risks falling behind its competitors and facing detrimental threats.
[Related: IT Support To Benefit Your Business]
Contact CMIT Solutions of Seattle for a Competitive Advantage in Data Security
Prioritizing data security gives your small business a competitive edge.
Commitment to protecting your customers’ data — while maintaining the highest security standards — is what may differentiate your business from your competitors.
To stay away from data breaches and close to your security, contact CMIT Solutions of Seattle. Our IT professionals are seasoned experts in a range of services who will help you stay on top of your game, positioned for long-term success.
