Data breaches targeting massive organizations such as Facebook, Target, and Equifax grab the headlines, but the impact of data breaches is just as severe (if not more so) on small businesses, which may even force a company to close its doors or declare bankruptcy.
A report by the National Cyber Security Alliance based on the survey of 1,008 small organizations with up to 500 employees, revealed that nearly 10% of companies went out of business, 25% had to file for bankruptcy, and 37% of companies experienced substantial financial damage after suffering a data breach.
Overall, 28% of companies reported becoming a victim to a data breach in the last year. Out of these victims, 11% were businesses with 10 or fewer employees, while 44% were big firms with 251-500 employees.
Businesses today are in a dangerous cyber environment and this fact is not lost on business leaders, with 88% of them believing cybersecurity attackers are aiming at them as potential targets and 46% of leaders convinced that they are likely a target.
This led to 62% of the businesses saying cybersecurity is a high priority for them, however, the concerns for rising cybersecurity in small businesses dramatically dropped, with only 39% of them making cybersecurity a top concern.
Another interesting fact is that while big organizations often have the resources to overcome the drastic impact of a data breach, small businesses tend to suffer the consequences the most as they might not have the same amount of money, time, and resources to invest in overcoming a cybersecurity attack.
Despite the size of an organization, data breaches can have long-term effects on the company as a whole. It may lead to loss of revenue, decreased market valuation, loss of brand reputation, legal hitches, decrease in work efficiency, and unexpected downtime.
It’s not surprising that companies might even take years to completely recover from a data breach. Therefore, it’s imperative for businesses to maintain good security hygiene and educate their employees about the impacts of a data breach and how to avoid it.
Here are some of the long-term effects of a data breach on businesses you should know about:
