Phishing attacks are not just a threat to large organizations. Like all cybersecurity threats, it’s just as much as concern for small and medium-sized businesses (SMBs), who can pay a high price if they fall victim.

Phishing is a social engineering tactic – threat actors use deception to trick employees into sharing sensitive information or access credentials to critical systems through emails or messages that look as though they are coming from a reliable source and requesting the user to act.

Because SMBs face resource constraints when it comes to cybersecurity, including training that helps employees spot phishing scams, they are more likely to fall prey to these tactics, and the price tag for the business can be high.

Among the immediate, direct consequences of a successful phishing attack for SMBs are monetary loss, reputation damage, and the recovery costs.

Bad actors use phishing to get users to share sensitive financial information that can lead to unauthorized and fraudulent transactions to steal company funds, which puts the stability of the business of risk – perhaps to the point of being insolvent. In addition to money, a phishing attack can steal valuable intellectual property, which is also a financial loss, and can lead to a loss of competitive advantage.

Depending on the nature of the breach caused by the successful phishing attempt, the business could be subject to legal and regulatory fines.

Phishing attacks are also used to demand ransomware payments by holding business systems or critical data hostage through encryption – payment terms can be high if the business wants to get the data back.

Investigating and mitigating the costs of a phishing-related breach also cost time and money, as do the indirect costs such as disruption to business operations – if you can’t serve your customers, you can’t make money.

Another indirect cost of a phishing attack is higher insurance premiums if it results in a data breach or financial loss because the business is now viewed by their insurer as a higher-risk client.

Depending on the length of the interruption, a disabling phishing attack can harm your reputation and damage your relationship with your customers and even prevent new customers from trusting you with their business. Suppliers and partners may also reconsider whether they can continue to do business with you.

A successful phishing attack can have both immediate and long-term consequences for SMBs. A managed services provider with security expertise can help you make the right upfront cybersecurity investments to prevent phishing from costing you a lot more money as well as your reputation.