CYBERSECURITY threats affect all businesses, including startups. From external attacks like malware and phishing, to internal risks from untrained staff, cybersecurity measures must be a priority when setting up a business.
Graeme Donnelly, CEO and Founder of company formation agent, 1st Formations, is sharing the different types of threats faced by startups, the consequences of a cyberattack and how businesses can bolster their defences.
What are the main types of cybersecurity threats faced by startups?
With increased reliance on IT systems, more businesses are vulnerable to cyberattacks. The increase in remote/hybrid work models also introduces new cybersecurity risks, with unsecured WiFi and personal devices.
Startups typically face two main cyber threats: external attacks and internal risks. While external attacks are often mitigated by up-to-date software, endpoint protection, firewalls and secure network configurations, untrained staff can pose a greater risk through mistakes such as falling for phishing emails or mishandling sensitive data.
Common types of cyberattacks
There are thousands of specific types of cyberattacks, but some of the most common include:
Malware and ransomware
Malware is malicious software that installs itself on a device without the user’s knowledge. Ransomware is a particularly harmful type, locking systems and demanding payment, while other forms, such as spyware, silently collect sensitive data like passwords.
Phishing
Phishing attacks use deceptive emails or messages that appear legitimate to trick recipients into sharing personal or security information. More targeted versions, known as spear phishing, use personalised details to increase their chance of success.
Distributed Denial of Service (DDoS)
DDoS attacks overwhelm websites or online services with excessive traffic from multiple compromised systems, causing networks to slow down or shut down entirely.
Brute force cracking
This involves automated software repeatedly guessing passwords until the correct combination is found, exploiting weak or simple credentials.
Social engineering
Cybercriminals use manipulation, often via social media or direct contact, to persuade individuals into revealing confidential information or access details.
The consequences of a cyberattack on a small business
A cyberattack can have serious consequences for small businesses in three main areas.
First is data protection: under the UK’s General Data Protection Regulation (GDPR), businesses must safeguard personal data using appropriate security measures. Failures can lead to significant fines depending on the severity of the breach – potentially up to £17.5 million or 4% of annual global turnover, whichever is higher.
Second is reputational damage, as breaches involving customer data can quickly undermine trust and damage a company’s reputation.
Third is operational disruption, as many businesses rely heavily on IT systems, so even limited attacks, such as losing access to email, can significantly disrupt day-to-day operations.
What to do after a cyberattack
Once an attack is identified, businesses should act quickly. Assess the type and scale of the breach, secure systems by closing vulnerabilities and updating passwords, and notify the ICO within 72 hours if the breach is likely to result in a risk to individuals’ rights and freedoms. Where necessary, impacted individuals should also be informed. Finally, record the incident and the steps taken for compliance and future reference.
Time is of the essence after a cyberattack, so it’s important to involve a professional cybersecurity expert or IT professionals to guide you through the process, collect the right evidence and enhance security protocols.
Cyber liability insurance is now a necessity and can help mitigate financial losses in the event of a serious breach
How can a startup avoid a cyberattack?
Most small-scale cyberattacks can be prevented with basic awareness and good cyber hygiene. It’s important that these protocols extend to remote environments too, including the use of VPNs, secure WiFi and device management policies.
Small businesses can significantly reduce risk by taking a few practical steps.
- Regularly audit IT systems and data security to identify weaknesses.
- Keep all software and operating systems up to date, as these often fix known vulnerabilities. Outdated third-party plugins or shadow IT, such as unauthorised apps used by staff, can also be a target for attackers.
- Use strong, unique passwords and enable multi-factor authentication wherever possible. Passwords should be managed by reputable password managers.Protect sensitive information through encryption, particularly for personal or financial data.
- Reputable cloud-based systems can offer greater flexibility and built-in security features such as encryption and access controls, but startups must still evaluate providers carefully and configure these systems correctly.
- Train staff to recognise common threats such as phishing and introduce clear IT and data protection policies so everyone understands their responsibilities.
- Maintain secure, regular, and offline backups of critical systems and data.
Together, these measures help protect data, reduce risk, and keep your business operations running smoothly.
Author profile:
Graeme Donnelly is the Founder and CEO of 1st Formations, with 25 years of experience driving innovation in the startup and SME sectors. A passionate advocate for entrepreneurship, Graeme has led the development of numerous cutting-edge business products and services through his leadership at 1st Formations and BSQ Group.
