Life among America’s nearly 32 million small businesses has never been easy. According to the Small Business Administration, about 20% of small business startups fail in their first year and half succumb to failure within five years. Bigger businesses have always had more capital, better access to loans, and more staying power.

Lately, survival has become even more difficult for two reasons – one relatively obvious, and one less so. Strong demand amid short supply and high inflation is the economic backdrop today, and big businesses largely have been holding their own because of their heft, sophistication, and strong vendor ties. It has been a tougher road for many small and medium-size businesses, however, reflecting less supply chain buying power and less ability to boost wages amid a tight labor market.

This was largely predictable given the times, but the second small business headache today – heightened cybersecurity woes – was not.

Because many SMBs haven’t been taking cybersecurity seriously, they’re being breached markedly more. Small businesses have accelerated their adoption of new digital technologies for remote work, production, and sales, just as big companies have. But they haven’t followed through with significant cybersecurity spending, even though their expanded computer networks have created new vulnerabilities for phishing and ransomware attacks.

As a result, the risk of a cyber-attack for SMBs – already typically higher than the risk for big companies – has grown dramatically over the past couple of years. During 2020 and 2021, data breaches at small businesses globally soared 152% in comparison to the two previous years, according to RiskRecon, a MasterCard unit that assesses companies’ cybersecurity risk. This figure is twice as large as it was among larger companies in the same period.

In addition, a 2021 study by IBM revealed that 52% of small businesses (Read more...)