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.
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
Remote work devices that employees use for personal activities
Cloud applications that aren't properly configured
IoT devices like smart cameras and thermostats
Third-party software with weak security
Old systems that no longer receive security updates
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Keep systems updated and retire unsupported software quickly, since outdated technology is a common entry point for attackers.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.
Even if you reduce entry points, your risk doesn’t end there. The partners you trust could be your biggest weakness.
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.
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.
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.
Even if your vendors are secure, hidden risks may still come from inside your own workplace through Shadow AI.
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:
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.
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.
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.
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:
| THREAT | WHY BUSINESSES OVERLOOK IT | HOW TO FIX IT |
| Attack Surface | Too many devices and apps were added quietly | Inventory + MFA |
| Supply Chain | Vendors are assumed to be secure | Vet + monitor vendors |
| Shadow AI | Employees use tools without approval | AI policies + DLP |
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.
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.