Cyberattacks pose biggest business threat, small companies say

Dive Brief:

Six out of 10 small businesses view a cyberattack such as ransomware, phishing and malware as their biggest threat, yet less than half (48%) have trained employees on cybersecurity measures, the U.S. Chamber of Commerce said.
Still, 73% of small businesses feel prepared for a cyberattack, with professional services companies and those with 20 to 500 employees most focused on cybersecurity, the U.S. Chamber found in a survey conducted with MetLife.
Along with cyberattacks, small businesses identified supply chain breakdowns and another pandemic as top concerns, with 27% of the companies saying they are just one disaster away from shutting down, the chamber and MetLife said.

Dive Insight:

The rise of generative artificial intelligence will likely favor cyberattackers over the short to medium term, compounding a multi-year increase in cybersecurity risks for businesses, Moody’s Investors Service said in a recent report.

Cyberattacks annually surged 26% on average from 2017 until 2023, the rating firm said, citing University of Maryland data. Meanwhile, annual global ransomware payments exceeded $1 billion for the first time last year, Moody’s said, citing Chainanalysis, a cybersecurity firm.

Twenty-three percent of small businesses said they are very prepared for a cyberattack and half consider themselves “somewhat prepared,” the U.S. Chamber and MetLife said, citing a survey of 750 small business owners from Jan. 26 until Feb. 12.

“Small businesses in professional services feel significantly more concerned about cybersecurity threats than those in manufacturing or services, but also feel more prepared than those in manufacturing or services to handle them,” the U.S. Chamber and MetLife said.

“In contrast, small businesses in the manufacturing and retail industries feel most concerned about a supply chain breakdown, though only about three in five feel prepared to handle one if it occurs,” according to the U.S. Chamber and MetLife.

More than half (52%) of small businesses said persistent price pressure is their leading worry, the U.S. Chamber and MetLife said, noting “concerns about inflation remain stubbornly high.”

The finding parallels a report from the National Federation of Independent Business, which said that 25% of small businesses saw inflation — or rising labor and input costs — as their biggest operational problem, up 2 percentage points from February.

“Inflation has once again been reported as the top business problem on Main Street,” NFIB Chief Economist Bill Dunkelberg said in a statement.

The consumer price index in March rose more than forecast for the third straight month, prompting futures traders to bet that 2024 will end with fewer Federal Reserve cuts to borrowing costs.

Big gains in transportation and shelter prices helped push up the CPI 0.4% in March and 3.5% on a 12-month basis, well above the Fed’s 2% target, the Bureau of Labor Statistics said Wednesday.

The rise in core CPI, excluding volatile food and energy prices, also exceeded expectations, increasing 0.4% for the month and 3.8% over the previous year.