Common Cyber Security Risks Faced by Small Businesses and How to Mitigate Them


Technology has become the lifeblood of small businesses, empowering them to thrive in a competitive landscape. However, as technology evolves, so do the threats that accompany it.

Cyber security risks have emerged as a formidable challenge that can cast a shadow over the very existence of small businesses. It is crucial for small business owners to recognise the gravity of these risks and take proactive steps to safeguard their digital assets.

In fact, data shows that 61% of data breach victims are small businesses*.

In this guide, we’ll shed light on the common cyber security risks faced by small businesses and equip you with essential strategies to mitigate them.

Summary (click to jump ahead):

Why is Cyber Security an Important Consideration for Small Businesses?

In today's digital landscape, the importance of proactive cyber security measures cannot be overstated, especially for small businesses. Here are three key reasons why cyber security should be a top priority: 

  • Limited Time and Focus: Small business owners and managers are often consumed with running the core elements of their business, leaving little time to devote to IT security. Unfortunately, this neglect can have severe consequences. By overlooking cyber security until it's too late, businesses risk falling victim to security breaches that can disrupt operations, compromise sensitive data, and damage their reputation.
  • The Illusion of Insignificance: Small businesses may mistakenly believe that they are not attractive targets for cyber attacks, assuming that hackers only target larger enterprises. However, this perception couldn't be further from the truth. Hackers are well aware that small businesses are often less protected and can serve as an entry point to larger organisations. Exploiting vulnerabilities in small business networks can provide hackers with a stepping stone to gain access to more valuable targets. Extracting ransoms or tricking smaller businesses into making payments can also still be very lucrative to hackers. It's therefore crucial for small businesses to understand that they are not exempt from cyber threats and must be prepared accordingly.
  • Budget Constraints: Small businesses often operate on tighter budgets, making it tempting to deprioritise cyber security as an unnecessary expense. However, failing to invest in adequate cyber security measures can prove to be a very costly mistake. The potential fallout from a data breach, including financial losses, legal liabilities, and damage to customer trust, can be devastating. In fact, studies show that many small businesses fail to recover from the aftermath of a cyber attack. Investing in robust cyber security safeguards is a critical investment in the long-term survival and success of a business.

By acknowledging the limited time and focus available, understanding that small businesses are attractive targets for hackers, and recognising the potential catastrophic consequences of a security breach, small business owners can begin to appreciate the vital importance of prioritising cyber security. It is imperative to allocate resources and implement comprehensive security measures to protect against the ever-evolving threat landscape.

In the next sections, we will explore practical strategies and best practices to help small businesses fortify their defences and safeguard their digital assets.

1: Phishing and Social Engineering Attacks 


Phishing and social engineering attacks pose a significant threat to small businesses, exploiting the human element to gain unauthorised access or obtain sensitive information. These tactics involve deceptive techniques that trick employees into revealing confidential data. Here's a closer look at this menacing threat and strategies to mitigate the risk: 

Understanding the Phishing Threat

Phishing attacks often come in the form of fraudulent emails, masquerading as legitimate entities, such as banks, government agencies, or reputable organisations. These emails entice recipients to click on malicious links or provide personal information, such as passwords or credit card details. Social engineering attacks leverage psychological manipulation to deceive employees into divulging sensitive data or granting access to protected systems. Attackers may impersonate co-workers, IT personnel, or trusted individuals to exploit human trust and goodwill. 

Common Phishing Techniques

Phishing techniques continue to evolve, becoming increasingly sophisticated. Attackers craft emails with compelling subject lines and urgent calls to action, urging recipients to act quickly without considering the potential consequences.

Fake websites, designed to mirror legitimate ones, deceive users into entering sensitive information, unknowingly handing it over to attackers. Additionally, phone calls from individuals posing as trusted entities can trick employees into revealing confidential details. 

Phishing Mitigation Strategies

Mitigating the risk of phishing and social engineering attacks requires a multi-faceted approach: 

  • Employee Training: Educate employees about the dangers of phishing attacks and social engineering tactics. Train them to identify suspicious emails, recognise warning signs, and avoid clicking on suspicious links or providing sensitive information. 
  • Email Filtering Systems: Implement robust email filtering systems to automatically detect and block phishing emails. These systems can identify and quarantine suspicious messages, reducing the likelihood of employees falling victim to phishing attempts. 
  • Two-Factor Authentication (2FA): Enable two-factor authentication for sensitive accounts and systems. By requiring an additional verification step, such as a unique code sent to a registered mobile device, the security of accounts is strengthened, even if passwords are compromised. 
  • Vigilance and Verification: Encourage employees to remain vigilant and verify the authenticity of requests for sensitive information, especially when it involves financial transactions or changes to account details. Establish a culture of caution, where employees feel comfortable questioning suspicious or unexpected requests.

By implementing these mitigation strategies, small businesses can significantly reduce the risk of falling victim to phishing and social engineering attacks. Protecting sensitive information and maintaining a vigilant workforce are critical steps towards fortifying the security posture of the business. Stay one step ahead of attackers by consistently updating security practices and fostering a cyber-aware culture within your organisation. 

2: Weak Passwords and Authentication Practices 

In today's digital landscape, weak passwords and lax authentication practices can leave small businesses vulnerable to malicious actors seeking unauthorised access. Let's delve into the risks associated with these vulnerabilities, understand their potential consequences, and explore strategies to bolster password security: 

Understanding the Risks

Weak passwords and inadequate authentication practices expose businesses to various threats. Attackers can exploit weak passwords to gain unauthorised access to sensitive accounts, networks, or systems. Additionally, the use of common passwords or reusing passwords across multiple accounts increases the risk of credential stuffing attacks, where hackers exploit stolen login credentials to gain entry into other platforms. 

Consequences of Password-Related Vulnerabilities

The consequences of password-related vulnerabilities can be severe. Unauthorised access to accounts can lead to data breaches, exposing sensitive information and jeopardising customer trust. Moreover, compromised accounts can be exploited to launch further attacks, distribute malware, or conduct fraudulent activities. Small businesses may also face legal repercussions and damage to their reputation, potentially resulting in financial losses and loss of business opportunities. 

Enhancing Password Security

To mitigate the risks associated with weak passwords and authentication practices, it is essential to implement robust security measures: 

  • Strong Passwords: Encourage employees to create strong passwords that are unique, complex, and not easily guessable. Promote the use of a combination of upper and lowercase letters, numbers, and special characters. Discourage the use of personal information or common phrases. 
  • Password Policies: Establish password policies that enforce password complexity, regular password changes, and restrictions on password reuse. Educate employees about the importance of adhering to these policies and regularly update them to stay ahead of emerging threats. 
  • Multi-Factor Authentication (MFA): Implement multi-factor authentication, which adds an extra layer of security to account logins. MFA requires users to provide additional verification, such as a one-time password sent to a registered mobile device or a biometric scan, along with their password. This significantly enhances account security by reducing the risk of unauthorised access. 
  • Password Managers: Encourage the use of password managers, which securely store and generate strong, unique passwords for each account. Password managers help eliminate the burden of remembering multiple passwords while ensuring strong password practices. 

Regularly reviewing and updating authentication practices, educating employees about password security best practices, and implementing multi-factor authentication are crucial steps towards fortifying password security within small businesses. By adopting these measures, businesses can significantly reduce the risk of unauthorised access, enhance their overall security posture, and safeguard sensitive information from potential threats. Remember, a strong password is the first line of defence against cyber attacks.

3: Outdated Software and Lack of Patching 

Using outdated software and neglecting to apply necessary patches and updates pose significant risks to the security of small businesses. Let's explore the vulnerabilities that can be exploited by attackers when software is not kept up to date and discuss strategies to mitigate this risk: 

Understanding the Risks of Outdated or Unpatched Software

Outdated software and the failure to patch known vulnerabilities create a prime opportunity for attackers to exploit security weaknesses. As software ages, developers discover and address vulnerabilities through updates and patches. When businesses do not keep their software up to date, they remain exposed to these vulnerabilities, leaving their systems and data at risk. Attackers can exploit these security gaps to gain unauthorised access, execute malicious code, or compromise sensitive information. 

Exploitation of Outdated Software

Attackers actively seek out and target businesses using outdated software because they know that vulnerabilities have not been patched. They may use automated tools to scan for systems running outdated software, identifying targets for potential exploitation. Exploiting these vulnerabilities can lead to data breaches, unauthorised access to systems, theft of sensitive information, or disruption of business operations. Additionally, attackers may leverage known exploits to deliver malware or ransomware, causing significant harm to the business. 

Mitigating the Risk of Outdated Software

To mitigate the risk of using outdated software and improve overall security posture, small businesses should consider the following strategies: 

  • Regular Software Updates: Establish a routine for regularly updating software to ensure that the latest versions and security patches are installed. This applies to operating systems, applications, plugins, and firmware. Regular updates help close vulnerabilities and strengthen the security of the business's digital infrastructure. 
  • Automatic Updates: Enable automatic updates where possible. This ensures that critical security patches and updates are applied promptly, reducing the reliance on manual intervention. Automatic updates provide a seamless and efficient way to keep software up to date, minimising the window of vulnerability. 
  • Vulnerability Management: Implement a vulnerability management program to proactively identify and address security vulnerabilities. This includes conducting regular vulnerability scans, prioritising patching based on criticality, and establishing a process for timely patch deployment. A robust vulnerability management program helps identify and remediate weaknesses before they can be exploited. 
  • End-of-Life Considerations: Be aware of software end-of-life (EOL) dates. When software reaches its EOL, it may no longer receive security updates, making it increasingly vulnerable to attacks. Plan for timely transitions to supported software versions or alternative solutions to maintain a secure environment. 

By prioritising regular software updates, enabling automatic updates, and implementing effective vulnerability management practices, small businesses can significantly reduce the risk associated with outdated software. Keeping systems and software up to date is a critical component of a strong security strategy, helping to protect against known vulnerabilities and thwart potential cyber attacks. Stay proactive in maintaining a secure digital environment and ensure that your business stays one step ahead of evolving threats.

4: Insufficient Employee Training and Awareness


Employee training and awareness play a pivotal role in preventing cyber security incidents within small businesses. Let's delve into the importance of training and awareness, the risks associated with employees' lack of understanding regarding security best practices, and recommendations for comprehensive training programs: 

Understanding the Importance

Employees are often the first line of defence against cyber threats. Without proper training and awareness, they may inadvertently become the weakest link in the security chain. Comprehensive training equips employees with the knowledge and skills needed to identify and mitigate potential risks, fostering a security-conscious culture within the organisation. 

Risks of Insufficient Training

Insufficient employee training and awareness can expose small businesses to various risks, including: 

  • Phishing and Social Engineering: Employees may fall victim to phishing attacks or social engineering techniques, inadvertently disclosing sensitive information or granting unauthorised access to attackers. 
  • Weak Password Practices: Without training, employees may use weak passwords or reuse passwords across multiple accounts, making them susceptible to credential theft and unauthorised access. 
  • Unsecure Data Handling: Insufficient knowledge regarding data handling procedures can result in accidental data leaks, data loss, or non-compliance with privacy regulations. 
  • Lack of Incident Reporting: Employees may fail to recognise and report security incidents promptly, prolonging the impact and increasing the risk of further damage. 

Recommendations for Comprehensive Training Programs

To enhance employee training and awareness, consider implementing the following recommendations: 

  • Security Best Practices: Conduct comprehensive training sessions to educate employees about security best practices. Cover topics such as identifying common threats, safe browsing habits, recognising phishing attempts, and avoiding suspicious downloads or email attachments. 
  • Password Security: Train employees on creating strong passwords, enforcing regular password changes, and using password managers to securely store login credentials. 
  • Data Handling and Privacy: Educate employees on proper data handling procedures, including encryption, secure file sharing, and adhering to privacy regulations. Emphasise the importance of confidentiality, integrity, and availability of sensitive information. 
  • Incident Reporting: Establish clear protocols for reporting security incidents. Encourage employees to promptly report any suspicious activities, potential breaches, or data loss incidents to the designated IT or security personnel. 
  • Ongoing Training and Awareness: Cyber threats evolve rapidly, so provide regular training updates to ensure employees stay informed about emerging threats and new security measures. Encourage a culture of continuous learning and awareness through newsletters, posters, and internal communication channels. 

By prioritising employee training and awareness, small businesses can empower their workforce to become proactive defenders against cyber threats. A well-informed and security-conscious team acts as a crucial asset in maintaining the integrity and resilience of the business's digital infrastructure. Remember, cyber security is a collective responsibility, and investing in employee training is an investment in the overall security posture of your small business.

5: Lack of Data Backup and Recovery Measures 

The lack of proper data backup and recovery measures can have severe consequences for small businesses. Let's explore the potential risks of data loss or corruption, emphasise the importance of regular backups, and provide suggestions for effective data backup and recovery solutions: 

Understanding the Consequences of Data Loss

Data loss or corruption can occur due to various reasons, including hardware failure, cyber attacks, human error, or natural disasters. Without adequate backup and recovery measures, small businesses face the following potential consequences: 

  • Operational Disruption: Losing critical data can disrupt business operations, leading to downtime, loss of productivity, and missed opportunities. The inability to access essential information can significantly impact day-to-day activities and customer service. 
  • Financial Loss: Data loss can result in financial implications, including the cost of data recovery efforts, potential legal consequences, reputational damage, and potential loss of business due to customer dissatisfaction.
  • Compliance and Legal Risks: Many industries have legal and regulatory requirements regarding data protection and retention. Failing to comply with these obligations can result in legal penalties, fines, or legal action. 

The Importance of Data Backup and Recovery

To mitigate the risks associated with data loss or corruption, small businesses must prioritise data backup and recovery. Regular backups ensure that critical data is protected, allowing for efficient recovery in case of an incident. Key reasons to emphasise the importance of data backup and recovery include: 

  • Data Resilience: Backing up data regularly ensures that even in the event of data loss, businesses can restore their information to a previous state. This resilience minimises the impact on operations and helps maintain business continuity. 
  • Protection Against Cyber Threats: With the rising number of cyber attacks, having backups in place acts as a safeguard against ransomware, malware, or other malicious activities. It allows businesses to restore their systems and data without succumbing to extortion or suffering permanent loss. 
  • Compliance and Risk Mitigation: Implementing data backup and recovery measures helps meet regulatory requirements and reduces the risk of non-compliance. It demonstrates a commitment to protecting customer data and business assets. 

Effective Data Backup and Recovery Solutions

To establish robust data backup and recovery practices, consider the following suggestions: 

  • Cloud-Based Backups: Utilise cloud storage solutions to securely back up critical data. Cloud backups offer scalability, accessibility, and data redundancy, reducing the risk of local hardware failures or disasters affecting the backup copies. 
  • Offsite Storage: Store backups in offsite locations, separate from the primary business premises. Offsite backups provide an additional layer of protection against physical damage or theft. 
  • Regular Testing: Regularly test backup and recovery procedures to ensure the integrity of backed-up data and verify the effectiveness of recovery strategies. Testing helps identify any potential issues or gaps in the backup process before they become critical. 
  • Incremental and Versioned Backups: Implement incremental and versioned backup strategies. Incremental backups capture only the changes made since the last backup, reducing backup time and storage requirements. Versioned backups retain multiple versions of files, enabling restoration to a specific point in time. 

Remember, data backup and recovery are ongoing processes as the type of data, location and quantity of data is constantly changing and the processes need to keep pace. It is crucial to regularly review and update backup strategies to accommodate changing business needs and technological advancements. By adopting comprehensive backup and recovery measures, including cloud-based backups, offsite storage, and regular testing, small businesses can safeguard their valuable data and minimise the impact of potential data loss incidents. Prioritise data resilience to protect your business's digital assets and ensure its long-term success.

6: Insider Threats and Employee Privileges


Insider threats, whether through malicious intent or unintentional negligence, pose significant security risks for small businesses.

Let's explore the risk of insider threats, the importance of implementing access controls and monitoring systems, and offer tips for maintaining employee trust while prioritising security.

Understanding Insider Threats

Insider threats refer to security risks originating from within an organisation, often involving employees or contractors who have access to sensitive information or critical systems. These threats can arise from various factors, including disgruntled employees, accidental data breaches, or social engineering attacks targeting unsuspecting staff members. 

Mitigating Insider Threats

To mitigate insider threats effectively, small businesses should focus on the following key strategies: 

  • Access Controls and Role-Based Permissions: Implement access controls and role-based permissions to limit employees' access to only the data and systems necessary for their job responsibilities. This ensures that sensitive information is accessible only to authorised personnel, reducing the risk of data misuse or unauthorised access. 
  • Monitoring and Detection Systems: Employ monitoring systems to detect unusual or suspicious activities within the organisation's network and systems. These systems can help identify potential insider threats by monitoring employee actions, access patterns, and data transfers. Prompt detection allows for swift response and minimises the potential impact of an insider incident. 
  • Employee Training and Awareness: Educate employees about the risks associated with insider threats and the importance of maintaining a security-conscious culture. Training should cover topics such as recognising and reporting suspicious activities, handling sensitive data securely, and understanding the consequences of negligent or malicious actions. 
  • Incident Response and Investigation Procedures: Establish clear incident response and investigation procedures to address any suspected insider threats. This ensures that any incidents are thoroughly investigated, evidence is properly collected, and appropriate actions are taken to mitigate the impact and prevent future occurrences. 

Maintaining Employee Trust

While implementing necessary security measures, it is essential to maintain employee trust and foster a positive work environment. Here are some tips for striking a balance between security and trust: 

  • Transparent Communication: Clearly communicate the reasons behind security measures to employees. Explain the importance of protecting sensitive information and the potential consequences of insider threats. Foster open channels of communication where employees can raise security concerns or report incidents without fear of reprisal. 
  • Training on Security Policies: Provide comprehensive training on security policies and procedures, emphasising that these measures are in place to protect both the business and employees' interests. Help employees understand that security measures are not aimed at monitoring individual actions but rather safeguarding collective assets. 
  • Employee Involvement: Involve employees in the development and review of security policies and procedures. Seek their input and feedback, empowering them to contribute to a culture of security and compliance. 
  • Recognise and Reward Security Awareness: Acknowledge and reward employees who demonstrate strong security practices and actively contribute to maintaining a secure work environment. This recognition reinforces the importance of security and encourages others to follow suit. 

By implementing access controls, monitoring systems, and maintaining open communication with employees, small businesses can mitigate the risks associated with insider threats. Striking a balance between security measures and employee trust creates a harmonious work environment while safeguarding sensitive information and ensuring the business's overall security posture. Remember, addressing insider threats is a shared responsibility that requires a combination of technical measures, employee education, and a culture of vigilance. 

Stay Vigilant Against Cyber Crime

Cyber security is an essential consideration for small businesses. As a small business owner, it is crucial to prioritise cyber security and allocate the necessary resources to protect your business from potential threats. By adopting a layered security approach, you can create multiple lines of defence against cyber attacks.

Remember that cyber security is not a one-time effort but an ongoing process. Stay vigilant and adapt to emerging threats by regularly monitoring your systems, updating your security measures, and conducting assessments of your security posture. Seek professional assistance when needed to ensure your business is well-protected.

Always remember that cyber criminals see small businesses as potential targets due to perceived vulnerabilities. By taking proactive steps to protect your business, you not only safeguard your own interests but also contribute to the overall security of the business community.

For expert business cyber security and small business IT support, contact The PC Support Group today. We’ll be happy to help identify areas of weakness and put together a robust defence strategy. Get in touch now for a free, no-obligation consultation.