The Cost of Cybersecurity for Small Businesses

The cost to secure your small- to medium-sized business (SMB) with cybersecurity measures varies based on several factors. In this article, you’ll discover expert insights on the expected cybersecurity costs for small businesses and the financial impact of cyberattacks.

With the rise of cyberattacks over the past few years, there’s no better time to review the cost of cyber security. Let’s take a look.

The Growing Threat Landscape

SMBs are appealing targets for hackers. They see your organization as weak – having less sophisticated security infrastructures. Generally speaking, they’re not wrong.

Almost three-quarters (73%) of US small business owners reported a cyberattack in 2023. Despite facing an unprecedented number of attacks, 85% of leaders reported feeling prepared to handle a cyber incident.

Unfortunately, only a small percentage of organizations are following cybersecurity best practices. Adoption rates for cybersecurity controls remain low (20-34%). This includes security measures like:

Multi-factor authentication
Mandatory strong passwords
Role-based access for employees

Unfortunately, the poor adoption of cybersecurity measures by SMBs leaves them vulnerable to increasingly sophisticated cyber crime, including:

The Financial Implications of Cyberattacks for Small Businesses

If the current rate of growth of cyber threats continues, the impact on small businesses will be significant. Damages will reach an estimated $10.5 trillion by 2025 – marking a 300% increase from 2015 levels. But what about the impact on an individual organization?

Unfortunately, IBM’s data supports this trend. They report the average cost of a data breach went up in 2023. It currently stands at $4.45 million – a 15% increase over three years. What you end up spending after a cyberattack depends on three things:

Direct costs
Indirect costs
Whether you need to hire support

1. Direct Costs of a Cyber Attack

When your organization experiences a cyberattack, you’re responsible for all the direct costs. These include costs such as:

Damages and repairs
Hiring customer service personnel to handle calls
Providing free credit monitoring to impacted customers
Offering free or discounted products and services
Paying fines

Please note: We’ve seen some organizations online mentioning paying ransomware as a direct cost. Never pay a ransom requested by a hacker. Even if you pay, they may not keep their word on whatever they promise you (they’re hackers, after all). Additionally, by paying you’re encouraging them to attack someone else.

2. Indirect Costs of a Cyber Attack

Indirect costs of an attack include how it impacts your normal operations. The indirect costs include:

Lost sales
Reduced or complete loss of productivity
Reputational damage
Cyber insurance premiums increasing

According to SorlarWinds’ Orange Matter, the average cost of downtime for small businesses is $427 per minute. That equates to $25,620 per hour. Every minute a cyber attack slows down your business, it’s costing you.

The impact of a cyberattack causing downtime can range from a few hours to several days or even longer. This type of disruption will significantly affect your business’s effectiveness and your bottom line.

3. Hiring External Support

If the attack is complex and your team isn’t experienced, you might need to bring in experts. The professionals you need to hire may include:

IT security consultants
Public relations consultants
Lawyers
Accountants
Risk-management consultants
Physical security consultants

When planning your small business’s cybersecurity, remember these costs to avoid surprises after a cyberattack.

Budgeting for Cybersecurity

Wondering how much cyber security costs? Well, the cost of cybersecurity for your small business will differ based on various factors, as we mentioned earlier. This includes the size and complexity of your business’s IT infrastructure, industry, compliance needs, and the sensitive data handled. That said, we can give you a rough starting point.

Cybersecurity Pricing In-house

Small businesses with effective security programs allocate around 10% to 20% of their total IT budget to cybersecurity measures. With a similar budget, you can support a wide range of cybersecurity activities, including:

Cybersecurity awareness training
Simulated phishing campaigns
Software purchases
Password managers
IT staff upskilling
Monitoring services
Firewalls

Cyber Security Services Prices

If you’re looking to reduce cybersecurity costs, consider partnering with a managed security service provider. Outsourced cybersecurity services prices are affordable. You can expect the cyber security pricing to be a set monthly fee ranging from $50 to $200 for each user.

The True Cost of Cybersecurity

The real cost of protecting your small business against threats largely depends on the level of cyber risk you’re willing (and able) to handle. As we demonstrated in this article, a data breach can heavily impact your financial stability. Improving your cybersecurity gradually can help reduce possible losses and build trust with your customers, partners, and stakeholders.

Does your organization have the foundational security solutions implemented? Evaluate your cyber readiness in just 10 minutes with this checklist.

Smart spending on cybersecurity will help you create a robust cybersecurity program. Allowing it to be cyber resilient and keep your business running efficiently.

Not sure where to start with your cybersecurity program? Follow this cybersecurity strategy crafted by our experts.