The number of cybercrime threats is increasing with the increase in entrepreneurial activities. Ransomware is the most prominent threat to most entrepreneurs across the world. To survive in the business world, entrepreneurs need effective cybersecurity measures to protect their businesses from fraudsters.
Research shows that approximately 450,000 new malicious programs and potentially unwanted applications are developed daily. Failure to protect the business’s valuable information has cost many entrepreneurs dearly – both in terms of finances and brand reputation. Here are different ways cybercrime is a threat to entrepreneurs.
Reputational damage
Most companies that have suffered cyber attacks find it hard to revive their brand name again. Customers feel insecure leaving their personal information to the entrepreneurs who cannot store them effectively. On the other hand, suppliers find it hard to deal with entrepreneurs who have suffered ransomware attacks.
That’s because most of them suffer huge financial losses to the point of being unable to meet the cost of the supplied goods. The suppliers may also feel insecure leaving their transaction documents with a company whose IT infrastructure was once broken into by hackers.
Research suggests that a company’s sales are likely to fall with the huge percentage in case of cyberattacks. That poses a huge threat to the entrepreneurs as they have to keep their security measures updated as many times as possible to maintain their reputation.
Increased cost
Entrepreneurs who rarely put the effort to protect their businesses from cyber-attacks are likely to pull out their wallets to compensate for the damage caused in case of an attack. Securing a business from cybercrime threats requires a lot of money, especially with the increased internet connectivity providing a favorable environment for launching attacks. The expenses incurred in preventing these malicious activities tend to increase the cost of operating the business.
Entrepreneurs incur the following outlay; public relations support, insurance premiums, notifying infected parties of the breach, and cybersecurity technology and expertise.
Additionally, ransomware that requires a ransom fee to allow the users to access the system can be a major financial burden to the entrepreneurs. That means that the entrepreneurs have to look for alternative sources of funds to cater to the amount being asked or lose the organization’s sensitive information.
This repeatedly happens in case the computer systems are not thoroughly cleaned and scanned to detect the presence of any malware program. In some cases, the entrepreneurs have to hire lawyers and other experts to remain compliant with the government regularities.
Disruption of operations
Cybercrime is a big threat to entrepreneurs as it disrupts the entire business operations. Without a proper backup plan, the entrepreneurs may never recover from the losses made in case of an attack. That’s why the rise in the cases of cyber-attacks worldwide is giving young and advanced entrepreneurs sleepless nights.
The newbie entrepreneurs working on shoestring budgets do not have enough capital to buy advanced software for security measures. In contrast, advanced businesses have to update their security measures regularly to ensure that their customers’ details are safe. Whenever a company suffers a cyber-attack, there is a high possibility that the disruption caused will result in a loss in profits.
There are various ways hackers use to handcuff the company’s normal activities. Some infect the computer systems with malicious programs that erase the company’s important information. In contrast, others install codes that block the customers and employees from accessing the business’s website.
An unrequired shift in business practices
Cybercrime threats have impacted the way most entrepreneurs carry out their businesses. Most entrepreneurs are rethinking how to collect their customer data safely and store it effectively while ensuring that the information doesn’t leak. A slight change in the data collection may result in the overhaul of the whole system used by the organization, which is expensive.
If a competitor is attacked, this prompts the other entrepreneurs in that line of business to keep altering their business practices. That’s because the customers don’t feel safe when keeping their details with a company that hasn’t improved data handling practices. The new data management helps to minimize the potential errors through establishing processes and new policies for usage in the organization.
Entrepreneurs who can’t keep up with the changes in security measures tend to be vulnerable to attacks. Most entrepreneurs have recently stopped keeping customers’ financial and personal data like credit cards and birth dates. In extreme cases, several entrepreneurs have shut down their businesses for failing to keep up with the government’s current requirements of cybersecurity standards.
Stealing of intellectual properties
Research shows that the human costs associated with intellectual property are on the rise. Several entrepreneurs are losing their companies and the lives of their customers being put in danger from counterfeit goods that are being sold unethically.
That’s why it’s challenging for most young entrepreneurs to rise, especially if they do not have enough capital to secure their intellectual property from theft. That’s because they are losing the competitive edge in business. Stealing intellectual property has led countries like the U.S to use the reports as the initial justification for the tariffs against the competitors.
That’s because most of the startups in the U.S were storing their intellectual property data on the cloud, where it was vulnerable to cyberattacks. This theft was costing U.S companies about $50 billion annually, which means most entrepreneurs were making huge losses.
Loss of revenue
The revenue margin of many online businesses indicates e-commerce business growth. Revenue gives entrepreneurs insights into their business operations. To increase the business profits, the entrepreneurs must also increase the revenue. Through the revenue, the entrepreneurs measure the effectiveness of the company’s sales and marketing strategies.
Loss of revenue is one of the major effects of cybercrimes as it results in a sudden drop in the revenue margin. That’s because most cautious customers move to other businesses to protect themselves against cyberattacks.
Entrepreneurs also lose money to hackers who ask for money and fail to sabotage the whole system, and this cripples down the whole business. That’s why the federal government invests a lot of capital to protect the entrepreneurs in the country against cyberattacks.
