Why Small Businesses Get Hacked (and How to Stop It)

Small businesses are not collateral damage in the cybercrime ecosystem — they are primary targets. The misconception that cybercriminals only go after large enterprises with massive data stores and deep pockets is dangerously outdated. In reality, small businesses represent the ideal target: valuable data, limited defenses, and constrained resources for response and recovery.

Understanding why your business is targeted — and how attacks typically unfold — is the first step toward effective protection.

The Numbers Do Not Lie

The statistics paint a clear and concerning picture for small businesses.

• 43% of cyberattacks target small businesses, according to Verizon's Data Breach Investigations Report — the most comprehensive annual analysis of breach data available.

• Only 14% of small businesses rate their ability to mitigate cyber risks as highly effective, according to Accenture research.

• 60% of small businesses that suffer a significant cyberattack go out of business within six months.

• The average cost of a cyberattack on a small business is between $120,000 and $200,000 — a potentially fatal blow to a company with limited reserves.

• Small business attacks increased by 150% between 2020 and 2023, as remote work expanded attack surfaces and automated attack tools became more accessible.

• Ransomware demands against small businesses average $170,000, with total costs (including downtime and recovery) often exceeding $500,000.

Why Attackers Specifically Target Small Businesses

Cybercriminals are rational economic actors. They target small businesses because the risk-to-reward ratio is favorable.

Weaker Defenses

Large enterprises employ dedicated security teams, deploy enterprise-grade tools, and conduct regular testing. Most small businesses have no dedicated security staff, rely on basic antivirus, and have never conducted a security assessment. This gap makes small businesses dramatically easier to compromise.

Valuable Data

Small businesses hold the same types of valuable data as large enterprises — customer personal information, financial records, payment card data, health information, intellectual property, and business credentials. A 10-person law firm may have access to as much sensitive client data as a firm 100 times its size.

Supply Chain Access

Small businesses often serve as vendors or partners to larger organizations. Compromising a small business can provide attackers with a backdoor into the larger enterprise's network. Some of the most devastating breaches in history — including the Target breach that exposed 40 million payment cards — originated through compromised small business vendors.

Willingness to Pay Ransoms

Small businesses are more likely to pay ransoms than large enterprises. Without reliable backups and with limited ability to absorb downtime, many small business owners conclude that paying the ransom is their least-bad option. Attackers know this and calibrate their demands accordingly — high enough to be profitable, low enough that the victim will pay rather than try to recover independently.

Automated Attack Tools

Modern attack tools are automated and indiscriminate. Bots scan the entire internet for vulnerable systems, and they do not distinguish between a Fortune 500 company and a family business. If your systems have a known vulnerability, automated tools will find and exploit it — regardless of your size or industry.

The Most Common Attack Vectors Against Small Businesses

Understanding how attacks typically reach small businesses helps you focus your defenses where they matter most.

Phishing and Email-Based Attacks

Email is the number one attack vector, responsible for over 90% of initial compromises. Phishing emails impersonate trusted entities to trick employees into clicking malicious links, opening infected attachments, or providing credentials. Business email compromise (BEC) — where attackers impersonate executives or vendors to request wire transfers — is particularly devastating for small businesses, with average losses exceeding $125,000 per incident.

Ransomware

Ransomware encrypts your files and demands payment for the decryption key. For small businesses without reliable backups, this can be business-ending. Modern ransomware gangs also practice double extortion — stealing data before encrypting it and threatening to publish it if the ransom is not paid.

Credential Theft and Account Takeover

Stolen credentials from previous data breaches are sold in bulk on dark web marketplaces. Attackers use these credentials in automated credential stuffing attacks, trying stolen username/password combinations across thousands of websites. Because most people reuse passwords, these attacks have a disturbingly high success rate.

Exploiting Unpatched Software

When software vulnerabilities are publicly disclosed, attackers immediately begin scanning the internet for unpatched systems. Small businesses with inconsistent patching practices are prime targets. Some of the most exploited vulnerabilities are months or years old — patches exist, but they were never applied.

Insider Threats

Not all threats come from outside. Disgruntled employees, careless data handling, and excessive access permissions all create insider risk. Small businesses, with their flat structures and informal access controls, are particularly vulnerable to insider threats.

Protection Strategies for Small Businesses

You do not need an enterprise budget to significantly reduce your risk. These strategies address the most common attack vectors and are achievable for businesses of any size.

1. Enable MFA on everything. Multi-factor authentication blocks over 99% of credential-based attacks. It is free on most platforms and should be the first security measure every small business implements.

1. Invest in email security. Advanced email filtering that detects phishing, BEC, and malicious attachments is the highest-ROI security investment for most small businesses.

1. Deploy EDR, not just antivirus. Traditional antivirus misses more than half of modern threats. EDR provides behavioral detection that catches what antivirus cannot.

1. Maintain tested backups. Offline, tested backups are your ultimate safety net against ransomware. Test your restore process regularly — a backup you cannot restore is useless.

1. Train your employees. Regular security awareness training with phishing simulations dramatically reduces the success rate of social engineering attacks.

1. Patch consistently. Establish a patching cadence — critical patches within 48 hours, all others within 30 days. Automate where possible.

1. Implement least-privilege access. Every employee should have access only to the resources they need for their job. Review and prune permissions quarterly.

1. Get cyber insurance. Cyber insurance provides financial protection when other defenses fail. Ensure your policy covers ransomware, business interruption, and regulatory penalties.

1. Create an incident response plan. Know what you will do before an attack happens. Document roles, communication procedures, and recovery steps.

1. Engage professional help. A managed security provider gives you access to expertise and monitoring capabilities that would be impossible to build internally.

Stop Being an Easy Target with Bellator Cyber Guard

Small businesses are targeted because they are perceived as easy victims. Bellator Cyber Guard changes that equation. We help small businesses implement layered security defenses that make attackers move on to easier targets — including email security, endpoint protection, employee training, backup solutions, and incident response planning — all tailored to your specific risk profile and budget.

Contact us at guard@bellatorit.com for a complimentary security assessment and discover how to protect your business from the threats specifically targeting small organizations.