Five Cybersecurity Risks Every SMB Must Guard Against and How to Afford It
First things first, what is a Small to Midsize Business (SMB)?
According to the US Small Business Administration, a small business is one with fewer than 500 employees, and Gartner defines a small to midsize business (SMB) as 100 – 999 employees. Gartner adds another criteria: “small” businesses generate up to $50 million in revenue, while “midsize” companies generate between $50 million and $1 billion. So, we can agree – “small” is a relative term. These are sizable companies with valuable data.
So why are so many of them vastly under-secured against cybersecurity threats?
According to a recent Forbes article, 43 percent of SMBs don’t even have network-based firewalls – and firewalls are the most basic brick in cybersecurity. Today, your cybersecurity posture cannot not just be a brick; you need a wall. In fact, you need a multi-layered wall.
In 2024, one-third of SMBs, according to a Microsoft Security study, experienced a cyber attack. How can so many SMBs be failing to take action to protect themselves?
If you’re a CEO or technical leader at an SMB that’s historically considered itself “too small to be attacked,” today is the day to make a change. Until now, you’ve been lucky. But all indications are that your lucky days are numbered, and it is far less expensive to fortify your defenses before a breach than to (attempt to) recover from one after.
The Importance of Cybersecurity in Today's Digital Landscape
Today, digital transformation is the backbone of business operations, with connected solutions amplifying efficiencies and productivity, but also vastly expanding every company’s cyber attack vulnerabilities.
As the internet and technology (AI, anyone?) continue to evolve, so do the tactics employed by cybercriminals. What once were simple viruses have now turned into sophisticated malware, ransomware, and phishing schemes that can wreak havoc on a business’s financial stability and reputation. Complicating matters, the easy “tells” of cyber criminals are a thing of the past. No longer can you easily identify phishing emails or texts by their spelling and grammatical errors. In fact, some experts recommend that emails and texts that are too perfect should be considered suspicious.
For SMBs, which often operate on thinner margins and with more limited resources than larger corporations, the impacts of these accelerated advances in cyber attacks can be particularly devastating, but those thinner margins also mean that you might have been putting off investing in cybersecurity. We have some suggestions to help.
Five Common Cybersecurity Risks Faced by SMBs
SMBs face a myriad of cybersecurity risks that can come from both external and internal sources. The following are some of the key threat categories that SMBs need to consider as they work with a cybersecurity expert to advance their cybersecurity posture.
1. Phishing and Social Engineering
Phishing dominates as the most prevalent threat, with 81% of global organizations reporting increased attacks since 2020. These attacks often involve impersonating trusted entities to steal credentials or deploy malware. Business email compromise (BEC) scams, a subset of phishing, exploit internal email accounts to send fraudulent payment requests, causing financial losses.
2. Ransomware
Ransomware attacks surged by 38% year-over-year, with 71% targeting SMBs. Attackers encrypt critical data, demanding ransoms averaging $116,000, knowing smaller businesses are more likely to pay due to inadequate backups. The shift to Ransomware-as-a-Service (RaaS) has lowered barriers for attackers, enabling widespread campaigns.
3. Malware
Malware remains the most common attack type (18% of incidents), often delivered via malicious downloads or email attachments. It serves as a gateway for further exploitation, including data theft or network disruption.
4. Insider Threats
Weak internal controls and employee negligence contribute to breaches. Social engineering attacks occur 350% more frequently at SMBs than larger enterprises, highlighting vulnerabilities in staff training.
5. Supply Chain and Third-Party Risks
Attackers increasingly target SMBs through third party vendors (see the Target breach case study, and that’s not even a small to midsize business!), vulnerable IT service providers, or software dependencies, exploiting limited oversight in third-party integrations.
How can small businesses afford robust cybersecurity solutions
As previously mentioned, SMBs are often running on tighter margins than larger corporations, but that doesn’t mean that they cannot afford to invest in a cybersecurity posture that will ensure their protection. Here are a few key strategies that can get you there:
1. Leverage Scalable, Per-Seat Pricing
Look for a cybersecurity firm that offers subscription-based packages with per user pricing, built with a variety of technologies. These kinds of packages can make enterprise-grade protection accessible and per-user pricing will create budget simplicity, providing you with a known and steady monthly cost for total cybersecurity. An added benefit: it makes growth easy to plan for: with a per-user cost, you will know exact your added cybersecurity costs when hiring or considering acquisitions.
2. Prioritize Cost-Effective Essentials
There are several high-impact measures that you can implement right away at a low cost.
Multi-factor authentication (MFA): Free or low-cost implementation drastically reduces unauthorized access risks. According to Microsoft, MFA can prevent 99.9% of account hacks.
Automated software updates: Simply ensuring that all software is updated can reduce vulnerabilities in outdated systems at minimal expense.
Strong password policies: Enforce company-wide rules that require a password minimum length and complexity and mandate the use of a free or low-cost password manager.
3. Utilize Free Tools & Government Resources
The U.S. Small Business Administration (SBA) and CISA provide free cybersecurity toolkits, vulnerability scanners, and incident response guides.
4. Outsource your cybersecurity
If you’re leaning on your IT department for cybersecurity and attempting to staff up in an effort to create the security posture you need, that can come at a significant cost. Allow your IT department to focus on keeping your business technology and systems running, and hire an outside cybersecurity firm. Specialized cybersecurity engineers and specialists live in the cybersecurity space, and they can provide the additional expertise you require at fraction of the cost of hiring new employees.
5. Train Employees Proactively
According to Infosec Institute, 74% of breaches involve some element of human error. Training those humans is a brilliant way to make everyone on your team part of your cybersecurity defense. Some ideas for training:
Conduct simulated phishing exercises using affordable platforms to build resilience against social engineering.
Establish protocols for verifying requests to counter phishing emails and texts.
Adopt CISA’s cost-free employee cybersecurity training modules.
6. Mitigate Breach Costs with Insurance
Cyber insurance can cover some of the most expensive costs you would incur in a breach, such as downtime and incident response. Combine cyber insurance with professional cybersecurity management and you can add on two more benefits: you will likely save on your cybersecurity premiums, and you can ensure that your policy will actually pay out in the event of a breach, as a failure to provide compliance with security standards is a common cause of cyber claim denials.
Conclusion:
SMBs face a moment of truth. Cyber criminals increasingly target you, with the hope that you will continue to skimp on your own protection. With the aid of artificial intelligence, those attacks will only get more plentiful and sophisticated. The good news is that advancing technology is also on the side of SMBs. There have never been more options to help you build a cybersecurity posture that will meet you where your company is right now and grow with you in the future. And as always, if the JSCM Group team can be of help, give us a call!