Here is a look at some of the impacts a data breach can have on a small business.
Regulatory Fines & Legal Fees
When a business suffers a data breach, the regulatory organizations will perform an investigation. If a company is found to not have complied with the regulatory requirements, they will be required to pay extensive fees. Then there is the potential of legal fees should customers bring a lawsuit against the organization.
Depending on the type of breach a small business encounters, it may have to replace servers, POS equipment, or anti-virus software. Just the cost of one of these upgrades can impact a small business, but if you have to change multiple items, the cost can be impossible to manage. According to the 2016 Ponemon Cost of Data Breach Study, each lost or stolen record that has sensitive and confidential data costs the business owner $158.
Loss of Customer Trust
Then there's the cost that you can't assign a dollar value to – the loss of customer trust. A data breach to a small business can make it appear unsecured and unprofessional. This can make it easy for a customer to choose to take their business elsewhere.