You have probably noticed that a major company suffers a data breach pretty much every week. However, when a small business has to file bankruptcy because of a hack, it doesn’t make as many headlines.

Hacks cost multinational companies millions of dollars, but they often recover. However, a single hack can be catastrophic to a small business, as 60% will have to close their doors 6 months after being hacked.

Here’s roughly how it unfolds.

The truly scary part is a small business made not know they’ve been hacked until days, weeks, or even months after the actual data breach.

From there, the inevitable “How the heck did this happen” conversations will take place. In most cases, the biggest cause is still human error. Your staff still poses the biggest risk of being the cause of a data breach.

This is because most small business employees simply don’t have the proper training. They most likely don’t know any sort of data center terminology or how to properly protect themselves online.

In most cases, you identify the problem and take steps to ensure it won’t happen again. However, this is not the worst part. What happens next often is.

If you’re lucky, you can communicate to your customers that you’ve encountered a data breach. If you’re less lucky, something else has told them on your behalf.

Your customers may see that you’ve been hacked on social media, in headlines, or through suspicious activity in their account… or god help you, their credit card activity. If this is the case, you are immediately behind the 8-ball and have to scramble to control at least part of the narrative.

 

As word spreads of your incident, your customer service, sales team and social media channels will start to be overwhelmed with irate customers who want to leave you.

As we said, billion dollar corporations can mitigate these losses, while they likely have a crisis plan and an army of employees with pre-approved scripts in place for these situations. You, however, may not.

The best you can do is hope to somewhat keep your head above water and go into to damage control mode, retaining as many customers as you can.

This is when it becomes clear whether your business will, or will not, survive this hack.

The fallout from this bomb going off has damaged your brand and your reputation in the eyes of your customers. The news has likely sent a large number of them to your competitors, who just received an influx of very qualified sales leads, giftwrapped.

At the same time, you may also be facing fines if you don’t report your breach properly, or even legal action in the wake of being hacked. This can be the final deathblow where business owners simply cannot afford to carry on with a damaged brand and company.

How does one avoid this? The simple answer is to take data security as seriously as possible. Go with a reputable hosting company, hire a competent IT staff, and train your employees to protect all of their devices. 

You may think you can’t really afford to invest heavily in security. The reality is that you can’t really afford not to.