How Can a Data Breach Affect Your Business?

As a consumer, you may be aware of the number of data breaches making headlines. Major retail outlets, big box stores and chain restaurants have been targets of data breaches, potentially impacting millions of consumers and their personal information. Even credit reporting agency Equifax was affected by a massive data breach in 2017.

While big corporations may seem like an obvious target for data breaches and other security incidents, small businesses can be targeted by hackers and cybercriminals as well. As a small business owner, you might not have the same resources to defend yourself against a data breach as a larger corporation would. So, how can a data breach affect your business, and what can you do if your business’ information is accessed by hackers?

What is a Data Breach?

A data breach occurs when secure, private information is made available either intentionally or accidentally. Hackers often use malware or some other form of malicious software to access files, documents and other information stored in a company’s database or digital management system. Criminals who target retail stores, restaurants and online merchants typically gain access through a company’s point-of-sales system where consumers are most likely to use a credit or debit card to make purchases.

Information accessed in a data breach may include a person’s name, Social Security number, credit and/or debit card numbers, banking account information, driver’s license number, medical records, passwords and other personal information. Once this type of information is accessed, hackers can potentially use that information for other malicious purposes, such as identity theft and fraud.

How Can a Data Breach Affect My Business?

For many individuals, a data breach can prove to be an inconvenience more than anything else. It takes time to sort out what was accessed and recouping any financial losses can take additional time to resolve. In some instances, individuals whose information was accessed in a data breach may be at risk for identity theft and fraud.

For small businesses, the consequences of a data breach could be far more damaging. In addition to the initial effects a data breach may have on your business, your business’ reputation could be affected as well.

If your business deals with consumer goods and products, customers may choose to take their business elsewhere, leading to revenue losses and other financial deficits. In some cases, your business’ intellectual property may have been accessed, potentially affecting future business ideas and preventing your company’s growth and development.

What Should I Do If My Business Has Been Affected by a Data Breach?

Businesses may have more at stake in the event of a data breach than individual victims, and if customer information is at risk, you may be responsible for protecting that information as a business owner.

If your business has been the target of a data breach, it is important that you investigate the breach as soon as possible and work to contain the breach by restoring an uninfected backup of the affected system and change your passwords.

Once you have located and contained the breach, you will need to contact your local law enforcement agency, the FBI, and anyone who may be affected by the breach, including employees and customers.

At this point, you might need to handle media and public relations and begin working to mitigate any negative publicity. It is important that you accept responsibility and explain what you are doing to resolve the issue. In some cases, a business may offer to provide credit monitoring and work with customers’ financial institutions to stop fraudulent charges.

While there are a number of things you can do in the event of a data breach, you may want to begin considering what you can do to prevent one from happening before it’s too late.