Small businesses are devastatingly affected by data breaches ― but why?

In 2020, 28% of small businesses worldwide were involved in a data breach. Although it doesn’t sound like it’s a lot, the consequences of these cyberattacks are in the long term. A big company can recover from such an event in some time. Still, a small business could be terminated because customers won’t trust them anymore with their information, and the financial aftermath can lead to the company’s loss. But why do these breaches happen, and can they be prevented? Read along to find out. 

Why are small businesses the main target? 

It’s fair to say that data breaches are sometimes tricky to spot beforehand or acknowledge their seriousness (the best example is the Yahoo! Data breach from 2013 to 2016). But it’s easy to see the patterns and take precautions accordingly. Small businesses are the most to experience data breaches because:

  • They invest less in IT security and don’t train their staff on the potential risks; 
  • They’re more vulnerable to social engineering (manipulating people to share confidential information).
  • They choose to pay ransoms because they don’t seem to have other choices, which is why hackers still get into small businesses’ systems.
  • They may be partnered with bigger organisations so hackers can access them from smaller businesses.
  • They sometimes are the collateral damage in large-scale cyberattacks. 

According to, data breaches include personal data loss, destruction of personal data or unauthorised access to personal data. This is why maybe small businesses think that their personal information is not attractive to hackers. Still, as you’ll see in the following paragraphs, this is exactly what they’re looking for.  

What are the most common data breaches?

Usually, some cyberattacks are more likely to happen to small businesses than to bigger companies or individuals. These are:


Malware describes software created to cause data, network and system damage. It includes other types of attacks: ransomware, viruses and spyware. Usually, hackers will prevent or limit user access until people agree to pay a fee to have their information unencrypted.

Compromised credentials 

This might be one of the most known attacks because weak passwords cause it. People are still not convinced that short and simple passwords don’t provide the proper security, but that’s what makes them the perfect target for hackers. 

Backdoor attacks 

The best example of this attack is the Trojan Horse. Similar to the classical story, a Trojan cyberattack will hide within harmless programs (or try to trick you into installing them) and infect your computer. It can make changes to your security system to get in so that hackers can spy on you to get your passwords or credit card details. 

Device theft or loss

Even if it doesn’t happen in an online setting, when someone loses their device or gets stolen, it’s basically a threat to their information, especially when they don’t protect their devices (mobile phones) with a strong password. The best solution for keeping your accounts is to have two-factor authentication for any account.

Out-of-date software 

Another reason for data breaches is the old software that some companies use because they’re cheaper or easier to understand. But because everything must be updated these days to perform accordingly, old software is much more vulnerable to data breaches, lacking the upgraded versions for keeping up with hackers. 

What are the consequences of a data breach?

When a company is experiencing a data breach, the press isn’t too forgiving, and we can see this from the articles regarding bigger companies going through such situations. But it would be more important to talk about the consequences businesses suffer from a data breach, which include:

  • Negative search results on your corporate brand. The media heavily affects a company’s reputation, which sometimes is hard to fix by the marketing team.
  • Loss of sales. Losing customers means a decrease in sales because they’ll turn to other companies that are safer and implement better security solutions.
  • Unexpected expenses. Because most companies downsize their cyber insurance or do not purchase it at all, they should expect unpredictable costs to cover the losses or pay the ransom.
  • Legal penalties. Maybe the most unpleasant of them all, legal penalties are difficult to avoid because businesses will have to document and report solutions to protect the company (to ensure that state and federal laws are followed regarding consumer notification).
  • Employee turnover. A small business with few employees is doomed to be shut down. After a data breach, a company is less attractive to new employees, and the current ones will leave. Replacing them would be challenging, especially when they would have to start with post-incident clean-up. 

Can small businesses avoid data breaches?

Short answer: yes. But it’s not that simple. As the safety technology gets stronger, hackers find new ways of breaking patterns and getting into businesses’ systems. Although you can significantly minimise the risk of experiencing a data breach if you rigorously implement security rules and practices, you should consider:

  • Having good software for businesses. Even if you’re at the beginning of the journey, investing in security software won’t cost too much, and you’ll benefit from more features than a free solution. Antivirus software is able to detect viruses, malicious software, worms and much more. 
  • Creating a culture of security. While having a small business means you’ll have a smaller team, it’s important to create a corporate culture that will benefit both you and your employees. Therefore, it would be best to conduct continuous training, approaching the security problem from different perspectives. If they are able to grasp the concepts of security and threats, it’s more likely they won’t enter malicious websites, have weak passwords or leave their accounts open for anyone to access. 
  • Managing IT services. As a small business, you might not have the same resources as a bigger company but managed IT services can help you monitor threats and scale your business. This way, you won’t be a weak target anymore. 

Final thoughts 

Data breaches can happen anytime, anywhere, but small businesses are the most targeted because they’re not equipped with the right software and training. If you want to keep up with the latest cybersecurity threats, you should also implement new and updated security solutions.

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Nathaniel Villa
Nathaniel Villa
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