Small Business Optimism Grows, Despite Rising Fears of Cyber Attacks

[Audrey McNeil <audrey () riskbasedsecurity com>]

http://www.inc.com/graham-winfrey/as-small-business-optimism-grows-so-do-fears-of-cyber-attacks.html


Small business owners are growing increasingly optimistic about the future,
reversing a trend seen between 2012 and 2013.

Slighty more than half of U.S. small businesses (51 percent) reported
"positive" feelings about the year ahead, compared to 45 percent in 2011,
according to a recent survey from small business insurer Hiscox. The
surveyed gathered data on 500 owners or partners of U.S. companies with
fewer than 50 employees.

Factors that may be contributing to the improving sentiment include the
declining percentage of customers making late payments to small businesses,
which fell from 39 percent in 2011 to 26 percent today, and the percentage
of small businesses describing new funding as "difficult to find" which
dropped from 74 percent to 65 percent during the past year.

At the same time, however, the threat of hackers is a growing cause of
concern among small businesses, with 11 percent reporting fears related to
cyber attacks, up from 7 percent in 2013.

While many small business owners consider their companies too small to be
targeted by hackers, the size of one's business has little to do with
whether or not it's likely to be the victim of a cyber attack.

"It's about what systems they're using that may be used by other businesses
and then are the entrée into a whole bunch of data and potentially customer
information and bank account information," says Hunter Hoffmann, head of
U.S. communcations at Hiscox. "Look at the Target hack. They're pretty sure
that the way [hackers] got into the system was through the HVAC installer."

Despite the rising concern of cyber threats from small businesses, only 6
percent of U.S. respondents reported having e-risks insurance. Some of the
expenses associated with being the victim of a cyber attack include
repairing security systems, hiring legal representation and notifying
customers that may be affected.

"You can also be sued for breach of contract from one of the payment card
processing companies or the banks that issue the credit cards," Hoffmann
says, adding that two out of three small businesses that are sued end up
going out of business within six months due to a lack of resources to pay
legal fees.

While small businesses with little or no IT departments are viewed as "weak
links" for hackers, companies of all sizes risk being victims of cyber
attacks, according to Hoffmann.

"Target had 100 people spending all their time making sure their system
didn't get hacked, and it still did," he says. "Unless you do everything
with a paper and ledger, you're going to be exposed to this."

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