It is now looking like 70 million Target customers had their personal information, including name, address, phone number, and email address, stolen during the holiday shopping hack.  Target has already experienced a loss of sales and earnings, stock price drop, and the cost of providing one year of fee credit monitoring to all the people who shopped in their stores over the time period.  In addition they will probably face a loss of customers as well as state and federal fines.  For Target this is going to hurt their business, but they will eventually recover.  But what if this happened to your small business?  Would you be able to recover?

In many cases a small or medium sized business may not be able to recover from this type of hack.  Although hacks to larger Businesses make the news, you often do not hear about security breaches at small and medium sized businesses.  A 2013 US small business survey by the Ponemon Institute showed the following results.  “55 percent of those responding have had a data breach, almost all involving electronic records, and 53 percent had multiple breaches.  Only 33 percent notified the people affected, even though 46 states require that individuals be contacted when their private information is exposed.”  That is a huge number of Small Businesses, and on November 3, 2010, the Privacy Rights Clearinghouse released a report that among other items showed that “80 percent of small businesses that experience a data breach either go bankrupt or have severe financial difficulties within two years.”

Small businesses still face the same potential loss of customers, sales, and fines as larger companies, but unfortunately they often do not have the money to recover.  And as the Ponemon Institute survey results show, small businesses are very easy targets.

The Target hacking is continuing to raise awareness of the huge potential of business hacking and loss of personal information. So your potential clients and customers are expecting to have their data protected.  If you have not read it already, please take a moment to read my 5 Step Data Security Plan for Small Businesses article.  And as always if you have any questions, please feel free to list them below in the comments section.

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