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The True Cost of a Data Breach on Your Small or Medium-Sized Business

By now, you’ve probably heard the horror stories about data breaches. A recent report stated that, on average, a company will lose $7.01 Million due to technology replacements, customer turnaround, labor to remedy the problem, and loss of productivity while the network is down.

However, that doesn’t make sense to a small business because it’s impossible to LOSE $7M if you never had it in the first place!

Data Breach

Although there are very few stats that are published about small businesses, the following 9 costs related to a data breach should give you a better idea of where you stand if a situation were to arise in your business. After reading this report, you will have a better understanding of how fast the cost of a data breach can add up.

If you think you may be at risk of a data breach or have not taken any precautions to avoid it, and then contact us right away for a FREE network assessment.

Alltek Holdings, Inc.

Below are the 9 main areas where you will see an immediate monetary loss in the event of a data breach.

Loss #1: Network Analysis

The moment you think that your system has been breached there’s a lot of research involved to figure out if it was a real breach, as well as the extent of the breach. You must determine exactly how much information has been lost or stolen, and what information was sensitive and should be taken seriously.

At this point you will require a “Digital Forensic Examination” which takes a very long time. It also requires someone with a very specific skillset. This will typically cost you $400 to $600 per hour.

Loss #2: Outsourcing

Usually business owners will decide to bring in a cybersecurity expert after they’ve experienced a breach. At this point you will need to fix your weakened network and implement new safety measures to guarantee a breach doesn’t happen again.

This “Reactive” approach to IT security will typically cost between $4,400 and $19,400. If you’ve experienced a breach that you need to quickly recover from, contact {company} now at {phone}.

Loss #3: Customer Support

In many states and provinces, companies are legally obligated to pay for their customers’ credit monitoring for one year after a breach has occurred. There’s a good chance that your customers will experience a data breach of their own if sensitive information has been lost.

This will typically cost between $120 and $250 per customer for one year. Depending on the type of business you have, that can add up fast.

Loss #4: Customer Call Center

Although this isn’t required, after a breach you will be bombarded with calls from all of your current and previous customers. They will want to know exactly what information has been breached and how they can protect themselves.

By providing a phone number that is directed to a call center, you can get back to fixing and maintaining your business.

Loss #5: Professional Legal Support

It’s vital that you consult legal support in the event of a breach. You must find out what your next steps are to protect you and your business from potential lawsuits, and how you should report the incident. In many states and provinces you are required to report the breach to the Attorney General if more than 500 records have been stolen or lost.

Loss #6: Employee Time

Every time a business has a data breach they lose countless hours of employee productivity. This is an extremely stressful time because time is money, and everyone is rushing to get the network back up as fast as possible. Even something as simple as notifying customers of the breach takes an enormous amount of time.

Loss #7: Customers Run for the Hills

There will be quite a few customers who will leave your company after a data breach. Fair or not, you will be considered unprofessional by a select few. It’s just the price that you must pay for not being proactive.

Loss #8: Your Competitors Win

If you were about to close a deal with a few new customers, you’ll find that they’ll suddenly stop returning your phone calls. This is because they view your company as too risky after a breach, and will choose a competitor who hasn’t suffered such an unfortunate mishap.

Loss #9: A Tarnished Reputation

There really is such a thing as “Bad Press” and it involves a data breach. There will be (what seems like) endless conversations surrounding your breach. From Yelp to word-of-mouth, people will be talking about your unfortunate circumstance.

I know we’ve always been told that all publicity is good publicity, but that’s just not the case during a data breach. The reputation that you’ve worked so hard to maintain will be instantly demolished.

The Takeaway

As a small or medium sized business owner, a data breach can “kill” your business. The cost associated with a breach is often too much to recover from. The handful of clients you have will dwindle down to about 50%, and the remaining half will lose faith in your abilities.

It’s really not worth the risk. You need to learn to protect yourself starting today, by being proactive.

If you would like to learn more about how you can protect your business from a devastating data breach, please contact Alltek Holdings today.

We will schedule a FREE Network Analysis where we’ll come to your business and examine your network. We’ll tell you exactly what your weaknesses and strengths are.

This is not a sales pitch. We just want to get to know you, and help protect you from a potential data breach. Contact us today.

Tim Haner

Tim Haner

Having a reliable and enthusiastic partner in the realm of IT services and solutions is essential for achieving long-term growth using proven technological strategies. Tim, our CEO, is fully dedicated to supporting clients in optimizing their technology to gain a competitive edge in their industries. At Alltek, Tim Haner heads a team of committed professionals who are laser-focused on providing exceptional IT services and solutions. With his extensive knowledge and hands-on experience, Tim guarantees that clients receive unparalleled support and guidance for their IT projects. Count on Alltek to elevate your business systems and stay ahead in today's highly competitive business landscape.