We often hear about the devastating effects of cyberattacks on businesses, but recent research has managed to quantify the damage caused by security breaches.
The US National Cyber Security Alliances found as many as 60% of small companies that suffer a cyberattack are out of business within six months.
This unfortunate statistic sheds light on the fact that cybersecurity is crucial for any company.
A firm data security plan could be the difference between business success and destruction.
But why do cyberattacks on businesses lead to company failure?
Here are a few of the reasons why these attacks are so devastating to so many companies.
Financial ruin
It requires much more money and resources to clean up after a cyberattack than to be preventative and avoid one in the first place.
Many companies are simply unable to financially recover from a security-related incident.
READ MORE: How To Create A Cybersecurity Plan For Your Business
Damage to your reputation
Even if you salvage your data, you are required by law to tell consumers if a breach has put their information at risk.
This can cause your customers to lose confidence in your business, seeing it as unreliable.
Once your reputation is damaged, clients may look elsewhere. You become less competitive, and your profits are likely to take a hit.
Legal issues
When security breaches compromise your customers’ personal data, it can result in class-action lawsuits.
Big companies like Target and Neiman Marcus have had to pay millions in settlements due to security breaches.
Business disruption
In the event of a major security breach, companies often have to shut down their entire operations to focus on recovering data, locating the reason for the breach, and resolving any related issues.
All these reasons add up, often creating destruction that companies cannot recover from.
Do what you can to establish solid cybersecurity for your business today and save yourself from these troubles in the future.
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