The Hidden Cost of Cyberattacks on Small Businesses
August 27, 2025Running a small business can be tough. Owners are already dealing with rising costs, whether from supply chain increases, theft, and brick-and-mortar rental pricing. But there’s another cost that many overlook: the fallout of a cyberattack. Even the smallest companies rely on digital tools to manage sales, store customer data, and run daily operations. That means a single cyberattack can bring everything to a halt. And with cybercriminals getting smarter and faster, small businesses can often pay the price.
What Makes a Small Business a Big Target for Cyberattacks?
It’s easy to assume that cybercriminals only go after large corporations with millions of dollars at stake. But small businesses can be even more attractive targets.
First, small businesses often lack the resources to build strong defenses. Unlike large companies that can afford full-time cybersecurity teams, small businesses usually operate with limited budgets, fewer staff, and little to no IT support, leaving them vulnerable to attack. In one study, 46% of all breaches targeted businesses with fewer than 1,000 employees.
Hackers see small businesses as easy to exploit and less likely to fight back, even if the potential payouts are smaller. Many small companies are more likely to keep outdated software in use, which is more vulnerable to malware and other threats.
Smaller businesses are also less likely to have robust employee cybersecurity training. Cybercriminals often use phishing emails or fake websites to trick workers into giving up passwords or clicking harmful links. If employees don’t know how to spot these scams, the business can be compromised in seconds.
Legal and financial support can also be limited. A large company might have lawyers and insurance to help recover from a breach, but a small business typically doesn't have that luxury. The cost of lost data, system downtime, and customer trust can be devastating. According to recent reports, the average cost of a cyberattack on a small business is more than $25,000. Many never fully recover.
Finally, the rise of AI-powered attacks is bringing smarter, faster threats. Hackers now use artificial intelligence to create more convincing phishing messages, scan for weak points faster, and even automate attacks.
“Attackers often see SMBs as low-hanging fruit, companies with valuable data but weaker defenses. Whether it's financial records, employee data, or client information, your business is a digital goldmine to hackers.” —Julia Valentine, Founder of AlphaMille
The Most Common Small Business Cyber Threats
Small businesses face a range of cyberattacks, including
- Phishing—Hackers trick people into giving away passwords or personal info through fake emails or texts. In 2024, more than 22,800 phishing apps were found on Android devices alone.
- Malware—Malicious software can steal data or damage systems, often spread through fake downloads or infected websites.
- Ransomware—This malware locks files and demands money to unlock them. Some small businesses have paid thousands just to regain access to their systems.
- Man-in-the-Middle Attacks—Hackers secretly intercept data between two parties, like a customer and a business, to steal information.
- Denial-of-Service (DoS) Attacks—These attacks flood a website or system with traffic, making it crash and stopping normal operations.
How Small Businesses Can Protect Themselves from Cyberattacks
Even with limited resources, small businesses can take smart steps to reduce risk. They should exercise proper cyber hygiene when accessing workplace systems, like using strong, unique passwords for all accounts and storing them in a secure password manager. Turning on multi-factor authentication adds another layer of protection, making it harder for hackers to break in. Business owners should also train their employees to recognize phishing emails and suspicious links, as it is one of the most effective ways to prevent attacks.
Keeping software and systems updated is another simple but powerful defense, as updates often fix known security flaws. Backing up important data regularly and storing it offline ensures that even if a ransomware attack occurs, the business can recover without paying. Finally, using antivirus software and firewalls on all devices helps block threats before they cause damage. These steps may seem small, but together they can make a big difference in keeping a business safe.
Cybersecurity Education at Capitol Tech
Cybersecurity isn’t just an IT problem; it’s a business survival issue. For small business owners, being prepared can mean the difference between staying open or shutting down. And for students interested in tech, cybersecurity is one of the fastest growing and most important fields today.
Capitol Technology University is proudly designated as a National Center of Academic Excellence in Cyber Defense by the NSA and DHS. Our Cybersecurity programs prepare you for real-world cyberattacks and help you develop innovative defense strategies in our evolving, cyber-focused world.