Small business face significant losses of $50,000 from cyber attacks
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In the digital age, small businesses increasingly rely on the Internet for marketing, sales, and customer engagement.
While the digital revolution has opened up a world of opportunities, it has also exposed businesses to the risk of cyber attacks, which can be financially devastating.
The harsh reality is that the average small business can lose a staggering $50,000 if targeted by cybercriminals. This isn't just a number; it's a potential threat to the survival of your business.
Take the cautionary tale of Oscar Valejjo, owner of Doglato, who saw years of hard work evaporate instantly when his social media accounts were hacked.
After mistakenly responding to a fraudulent message, he was locked out of his accounts, losing direct contact with his customers and a significant portion of his sales.
‘Suddenly, I realised I was blocked, and everything was blocked. That is when I realised what happened,’ he said.
‘I was disconnected from my customers immediately. Social media was the main platform where I engaged with them.’
‘I lost all engagement with my clients, and I was doing a lot of sales through my Instagram and my website, and sales were affected for sure.’
The hack cost him around $50,000 in lost revenue and customer engagement and resulted in the loss of valuable data, hindering his ability to conduct targeted advertising.
‘We had to start all over again, and I did not actually get all the followers back that I had before,’ Vallejo continued.
The aftermath was brutal: a 40 per cent drop in social media followers and the daunting task of rebuilding his online presence from scratch.
According to Commonwealth Bank data, nearly 90 per cent of scams reported by their business customers last financial year came from small businesses, with more than half related to investment scams.
The emotional toll on business owners and their staff can be severe, as seen in the case of a regional NSW bookkeeping business where a staff member suffered significant mental health impacts following a cyber incident.
Despite these risks, a report by Business NSW indicates that about 20 per cent of small businesses plan to reduce their spending on cybersecurity this year, mainly due to the rising cost of doing business.
This is a concerning trend, especially considering that 34 per cent of small businesses and 43 per cent of medium businesses experienced cyber incidents in the 12 months leading up to August 2023.
With business system hacking being less common than account hacking, the focus should be on preventing the latter, which is often the result of online scams.
Business NSW CEO Daniel Hunter has urged the government to offer a 20 per cent deduction on cybersecurity expenditures to encourage businesses to invest in necessary protections.
As overheads continue to rise, the risk of cybersecurity being de-prioritized grows, yet the average loss from cyber attacks is nearly $50,000—and the problem is only worsening.
Parramatta MP and special envoy for cyber security and digital resilience Andrew Charlton has emphasised that there are basic steps every small business can take to reduce cyber risk, often at little to no cost.
‘The good news is there are basic steps every small business could take to significantly reduce cyber risk, often at no or minimal cost,’ he explained.
‘This includes using strong, unique passwords, enabling multi-factor authentication, and keeping software up to date.’
‘On top of that, the Government’s cyber programs and the $20.8 million Cyber Health Check offer support to help protect your business without adding to your financial strain.’
Have you or someone you know been affected by a cyber attack? What measures have you taken to safeguard your business? Share your experiences and tips in the comments below.
While the digital revolution has opened up a world of opportunities, it has also exposed businesses to the risk of cyber attacks, which can be financially devastating.
The harsh reality is that the average small business can lose a staggering $50,000 if targeted by cybercriminals. This isn't just a number; it's a potential threat to the survival of your business.
Take the cautionary tale of Oscar Valejjo, owner of Doglato, who saw years of hard work evaporate instantly when his social media accounts were hacked.
After mistakenly responding to a fraudulent message, he was locked out of his accounts, losing direct contact with his customers and a significant portion of his sales.
Approximately $50,000 is lost by the average small business when targeted by cyber attacks. Credit: Shutterstock
‘Suddenly, I realised I was blocked, and everything was blocked. That is when I realised what happened,’ he said.
‘I was disconnected from my customers immediately. Social media was the main platform where I engaged with them.’
‘I lost all engagement with my clients, and I was doing a lot of sales through my Instagram and my website, and sales were affected for sure.’
The hack cost him around $50,000 in lost revenue and customer engagement and resulted in the loss of valuable data, hindering his ability to conduct targeted advertising.
‘We had to start all over again, and I did not actually get all the followers back that I had before,’ Vallejo continued.
The aftermath was brutal: a 40 per cent drop in social media followers and the daunting task of rebuilding his online presence from scratch.
According to Commonwealth Bank data, nearly 90 per cent of scams reported by their business customers last financial year came from small businesses, with more than half related to investment scams.
The emotional toll on business owners and their staff can be severe, as seen in the case of a regional NSW bookkeeping business where a staff member suffered significant mental health impacts following a cyber incident.
Despite these risks, a report by Business NSW indicates that about 20 per cent of small businesses plan to reduce their spending on cybersecurity this year, mainly due to the rising cost of doing business.
This is a concerning trend, especially considering that 34 per cent of small businesses and 43 per cent of medium businesses experienced cyber incidents in the 12 months leading up to August 2023.
With business system hacking being less common than account hacking, the focus should be on preventing the latter, which is often the result of online scams.
Business NSW CEO Daniel Hunter has urged the government to offer a 20 per cent deduction on cybersecurity expenditures to encourage businesses to invest in necessary protections.
As overheads continue to rise, the risk of cybersecurity being de-prioritized grows, yet the average loss from cyber attacks is nearly $50,000—and the problem is only worsening.
Parramatta MP and special envoy for cyber security and digital resilience Andrew Charlton has emphasised that there are basic steps every small business can take to reduce cyber risk, often at little to no cost.
‘The good news is there are basic steps every small business could take to significantly reduce cyber risk, often at no or minimal cost,’ he explained.
‘This includes using strong, unique passwords, enabling multi-factor authentication, and keeping software up to date.’
‘On top of that, the Government’s cyber programs and the $20.8 million Cyber Health Check offer support to help protect your business without adding to your financial strain.’
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