What Is a Data Breach and How Can It Impact Your Small Business?

What Is a Data Breach and How Can It Impact Your Small Business?

If your business stores or collects information from customers, suppliers, partners or anyone else, you’re likely a potential target for a data breach.  A data breach occurs when someone unauthorized steals or accesses data like personal records, intellectual property or even financial information.

What is a Data Breach?

In a nutshell, a data breach is a cyber security issue where information falls into the wrong hands.

Even brick and mortar stores do some part of their business online these days. Technology has moved the dial toward an environment where there’s an overwhelming amount of information in the hands of businesses. That opens the door for data breaches from a variety of bad actors.

Data breaches can originate from a variety of sources from disgruntled ex-employees to loyal employees who answer phishing emails by mistake to professional cyber criminals. Each of these groups and some others can have a devastating effect on your business. If you think it can’t happen to you, consider the fact 50 percent of small businesses reported experiencing data breaches between 2015 and 2016.

A recent report from Verizon indicates a full 75 percent of these cyber crimes are committed by outside parties.

How Data Breaches Can Impact Your Small Business

So, how do these data breaches impact your small business? The consequences fall under three main categories.


Even if the breach is contained and fixed, the cost to your businesses’ reputation can be big. For example, if customer purchase and personal information gets stolen, customers might go and shop somewhere else where they feel more comfortable.


Hackers can access bank account information or even crash your small business website. The first scenario means they can drain your accounts. With a website that’s down completely, you lose revenue until it’s back up again.


Losing money and credibility in the marketplace is bad enough. However, having your ideas, templates and blueprints stolen can damage the ability of your company to grow. Intellectual property is quite often another casualty of data breaches.

What Your Small Business Can Do To Prevent A Data Breach

Although cyber criminals are constantly looking for ways in, small businesses can take some proactive steps to prevent data breaches.

Stay Patched

Software patches make sure your data stays protected. Implementing these as soon as they become available is a good line of defense.

Stay Vigilant

Taking advantage of two-factor authentication, meaning you need a password and one other piece of information to gain entry to a computer system, works well. Watching for suspicious emails with unusual attachments is another way to head data breaches off. Both these techniques combat malware.

Stay in the Cloud

If your small business isn’t using cloud services, you need to check them out. This is where your applications and data can be safely stored. The cloud offers scalable, secure solutions for all of your sensitive data.

Log-in Screen Photo via Shutterstock

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Rob Starr Rob Starr is a staff writer for Small Business Trends. Rob is a freelance journalist and content strategist/manager with three decades of experience in both print and online writing. He currently works in New York City as a copywriter and all across North America for a variety of editing and writing enterprises.

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