How Cybercrime Can Destroy Small Businesses

Every year, hundreds of small businesses are launched, burn brightly for a short period before sputtering out just as swiftly as they emerged.

Such failures can occur for a variety of reasons, but in the age of the ever-present threat of cybercriminal activity, the most common cause of commercial faltering is more widely experienced and understood than ever before.

Cyber Security habits

Here is a look at the destructive properties of cybercrime in a small business context and the knock-on effect that this can have for those that run them.

Personal finances can suffer

While the failure of a small business venture is a disappointment in its own right, if the cause is identity theft originating from cybercrime, then it could have long lasting repercussions for your own personal financial reputation.

This is chiefly a concern for sole proprietors whose personal assets are inextricably linked to their business. If their identity is stolen then they might not only lose cash in the short term, but could experience serious issues further down the line when applying for credit.

This is where using a credit monitoring service makes a lot of sense. It allows you to automatically receive updates if your credit file is changed for any reason, for example in the event that an attempt to apply for a loan is made. Such alerts can help you to detect fraud and nip it in the bud before it festers and takes down both your business and your personal financial reputation with it.

Operational disruption is disastrous

While major global corporations are frequently identified as victims of serious cyberattacks, the scale of such organizations is such that they can weather the storms that these circumstances create and come out the other side without too much trouble.

The same is not true of small businesses, which is perhaps why they fail more frequently and are targeted more often by hackers.

It is an issue of resources; if disruption occurs when a ransomware attack hits home, malware compromises a mission-critical system or important data is mislaid, a startup will lack the peoplepower to recover quickly and cope with the implications of the aftermath.

Even if the disruption only lasts for a few hours or days, this is all time that small businesses cannot afford to lose. Thus the need to protect against common attack types is paramount.

Insurance expenses can spiral

Insuring against cybercrime is an emerging trend in the small business world, and it certainly makes sense to secure cover before a breach, rather than in the wake of one. Premiums will of course be higher if your organization has already been hit by an attack, as insurers will be less eager to let you make a claim.

Ultimately it is necessary for everyone from solo freelancers to small businesses made up of tight-knit teams of employees to take cybercrime threats to heart, and act to minimize the threats they face, or else risk disaster and outright collapse if they are targeted.

About Mohit Tater

Mohit is the co-founder and editor of Entrepreneurship Life, a place where entrepreneurs, start-ups, and business owners can find wide ranging information, advice, resources, and tools for starting, running, and growing their businesses.

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