The 3 Cybersecurity Blind Spots That Could Destroy Your Business

Small and mid-sized businesses often assume cybercriminals only chase after Fortune 500 corporations. The truth is the opposite. According to a recent study, nearly half of all cyber breaches (46%)  impacted businesses with fewer than 1,000 employees, and most aren’t ready to defend themselves.   

Cybercriminals know smaller businesses often run on tight budgets with lean IT teams, making them easier prey. A single attack can cost over $1.24M, enough to shutter many businesses permanently. 

But cybersecurity doesn’t have to feel overwhelming. By focusing on just three overlooked threats (attack surface expansion, supply chain vulnerabilities, and Shadow AI) you can drastically reduce your risk and keep your data, employees, and reputation safe. 

Blind Spot #1: Attack Surface Reduction  

Why More Doors Mean More Problems 

Your attack surface includes every way a hacker can reach your systems. Think of it like the doors and windows in your building. The more entry points you have, the harder it becomes to keep intruders out. 

Many small businesses accidentally create huge surfaces without realizing it. Every app, device, and service you connect to your network creates a potential entry point for attackers. 

CASE IN POINT

When an unauthorized person accessed systems at Optima Tax Relief, the company experienced a major data breach; they stole, encrypted, and leaked 69 GB of sensitive corporate and client data, including tax documents. The most common reason for this type of breach is due to a large and unsecured attach surface area

5 Common Ways Small Businesses Expand Their Attack Surface

1. Remote work devices that employees use for personal activities 

2. Cloud applications that aren't properly configured 

3. IoT devices like smart cameras and thermostats 

4. Third-party software with weak security 

5. Old systems that no longer receive security updates 

How To Protect Your Business with Attack Surface Reduction  

Start by identifying every device, application, and account connected to your network—because you can’t defend what you can’t see. Remove anything unnecessary, then strengthen defenses with multi-factor authentication on all accounts, Single Sign On (SSO) for remote workers, and continuous asset discovery tools that track changes in real time. 

Keep systems updated and retire unsupported software quickly, since outdated technology is a common entry point for attackers. For ongoing protection, work with a trusted cybersecurity partner or build an internal team to monitor threats and test defenses. By reducing your attack surface, you close more “doors” to hackers and make your business a much harder target. 

Your Cybersecurity Team or Trusted Vendor Should   

• Inventory Everything: List every app, device, and service connected to your network.
• Enforce Conditional Access: Remove old accounts, unused apps, and outdated hardware. Apply conditional access policies to the network that limit access based on roles and need to know. 
• Use Strong Authentication: Enforce MFA (multi-factor authentication) and SSO for remote workers. 
• Patch Regularly: Always update software and firmware. 
• Partner With Experts: Consider trusted cybersecurity solutions for small business providers for ongoing monitoring. 

Even if you reduce entry points, your risk doesn’t end there. The partners you trust could be your biggest weakness. 

Blind Spot #2: Supply Chain Risk 

When Your Vendors Sink Your Ship 

Even if your internal defenses are solid, your business is still at risk if your vendors aren’t secure. A supply chain attack happens when hackers infiltrate your systems through third-party providers you rely on, such as cloud services, hosting companies, or payment processors.  

Named the top ecosystem cyber risk by the World Economic Forum, supply chain vulnerabilities are the primary barrier to cyber resilience for 54% of large organizations. Small businesses face even greater risks because they often lack the resources to properly vet their suppliers. 

Vendors That Pose Cyber Risks: 

• Cloud storage providers
• website hosting companies 
• Payment processors
• Email and collaboration tools 
• Contractors with system access

When one of these companies gets hacked, criminals often gain access to their customers' data too. According to IBM's latest Cost of a Data Breach Report, the global average cost of a data breach in 2024 was USD 4.88 million, a 10% increase over last year. 

How to Manage Supply Chain Cybersecurity (C-SCRM)  

Ask your vendors about their security practices before signing contracts. Request proof of their security certifications and insurance coverage. Set up contracts that require vendors to notify you immediately about any security incidents. 

Monitor your vendors' security posture regularly. Many companies offer vendor risk management tools that can alert you when your suppliers face security issues. Limit what data you share with third parties and require strong authentication for any vendor accessing your systems. 

• Vet Vendors: Ask about their certifications, cybersecurity insurance, and incident response protocols. 
• Set Contracts Carefully: Require vendors to notify you of breaches immediately. 
• Use Vendor Risk Tools: Monitor supplier security posture with specialized tools. 
• Limit Data Sharing: Provide vendors with only the data they absolutely need 

Even if your vendors are secure, hidden risks may still come from inside your own workplace through Shadow AI. 

Blind Spot #3: Shadow AI 

The Hidden Productivity Risk 

Shadow AI refers to artificial intelligence tools that employees use without IT approval or oversight. While your team might think they're being productive by using ChatGPT or other AI tools for work tasks, they could be exposing your company to serious risks.  

 Like it or not, AI is changing the way we all work. In fact, 77% of employees admit to using GenAI at work (often without disclosure), and yet only 28% of leaders say their organization has a formal GenAI usage policy, according to a 2025 EY AI Pulse Survey 2025.  

Examples of Shadow AI Risks: 

• Employees uploading confidential documents to AI tools for summarization 
• Using AI chatbots to draft emails containing sensitive information 
• Feeding customer data into unauthorized AI applications 
• Creating presentations with proprietary information using AI tools 

CASE IN POINT

In June 2025, researchers uncovered a major security flaw in Microsoft’s AI systems that allowed hackers to view everything a user had open on their PC screen. Without proper encryption, even private work sessions were left vulnerable. 

Different situations, same challenge: rapid change in the unified communications landscape. The businesses that plan now will have more flexibility, more control, and fewer surprises in the months ahead.

The Legal and Compliance Risk 

AI platforms often store and process data on external servers. When employees feed financial records, trade secrets, or source code into these tools, that information may be retained outside your control. For small-to-medium-sized businesses subject to GDPR, HIPAA, or other compliance rules, this can mean serious violations and penalties.  

How to Control Shadow AI 

• Create AI Usage Policies: Define which tools are allowed. 
• Offer Approved AI Tools: Provide secure, enterprise versions of AI platforms. 
• Educate Employees: Train staff on data privacy risks.
• Use Data Loss Prevention (DLP): Monitor and block unauthorized data transfers. 

How to Protect Your Business from Shadow AI Cyber Security Breaches 

Don’t just control Shadow AI, channel it. Empower employees with the right tools, guardrails, and vision so AI becomes a driver of growth and innovation, not a compliance headache.  

Create clear policies about which AI tools employees can use for work. Provide approved alternatives that meet your security standards. Many businesses are setting up enterprise versions of popular AI tools that offer better data protection. 

Train your employees about the risks of uploading company data to unauthorized AI services. Monitor your network for unusual data transfers that might indicate shadow AI usage. Consider using data loss prevention tools that can detect when sensitive information leaves your network. 

Set up regular discussions with your team about the AI tools they want to use. This helps you stay ahead of shadow AI usage rather than playing catch-up after problems occur. 

Hear from a cybersecurity expert and corporate attorney about what to include in an AI policy and governance plan and how to keep your employees and business data protected in our upcoming webinar - September 17 | 1 pm ET.   

FAQs About Cybersecurity for Businesses 

Q: Why are small businesses such common cyber targets? 

A; They often lack large IT teams and enterprise-grade defenses, making it easier to breach. 

Q: What’s the average cost of a cyberattack for a small business? 

A; Breaches can cost more than $1.24 million, a figure that forces many businesses to shut down. 

Q: What is the most overlooked cybersecurity threat today? 

A: Shadow AI is currently the fastest-growing blind spot.  

Q: How often should cybersecurity measures be reviewed? 

A: At least every quarter, or whenever new vendors, apps, or devices are added.  

Q: Can small businesses afford strong cybersecurity? 

A; Yes. Many cybersecurity solutions for small businesses are affordable, scalable, and cloud-based. 

Q: Where can I find more information on best practices? 

A: Check the NCSC Supply Chain Cybersecurity Guide for expert vendor management strategies

Don't Wait Until It's Too Late 

Cyberattacks don’t just happen to large corporations. A major cybersecurity incident can cost a small business up to $1.24M and most small-to-mid-sized businesses admit that they are not prepared for a cyber-attack. In fact, while nearly half of all cyber-attacks are aimed at small businesses, only 14% are considered prepared, aware, and capable of defending their networks and data. 

The best way to protect your business is to focus on the 3 biggest blind spots: 

Whether you tackle these initiatives in-house or find a trusted cybersecurity partners to help.  Taking a few small steps now can prevent major disasters later. 

Ready to take control of Shadow AI in your business? 

Join our webinar Shadow AI: How to Go from Rogue to Regulated and learn how to protect your data, empower your employees, and build an AI governance plan that works.