Cybersecurity Is No Longer Optional: How Small and Medium Businesses Can Protect Themselves Against Growing Threats

Cybersecurity is no longer just a Fortune 500 issue. In today’s digital-first economy, small and medium-sized businesses (SMBs)—especially SaaS companies—are increasingly in the crosshairs of cybercriminals.

Why? Because they’re often easier targets.

They store valuable customer data, run complex systems, and frequently lack the robust defenses that large enterprises invest in. According to Verizon’s 2024 Data Breach Investigations Report, 61% of SMBs experienced a cyberattack in the past year, and over 40% of those never recovered financially.

At Sea Change Advisors, we’ve seen firsthand how a single breach can derail operations, destroy customer trust, and tank valuations, especially for startups preparing to raise capital or exit. In this post, we break down the rising threat landscape for SMBs and offer practical strategies to protect your business.

Why SMBs Are Now Prime Targets

Cybercriminals have evolved. They're not just targeting big banks and governments, they’re looking for easy wins with fast payouts. That makes small businesses, especially SaaS startups with digital infrastructure, tempting targets.

Common attack types include:

• Phishing (via email or SMS)
• Ransomware (locking data for ransom)
• Credential stuffing (using stolen logins from other breaches)
• Business email compromise (BEC) (posing as vendors or executives)
• Data exfiltration (stealing customer or IP data)

Even startups with fewer than 50 employees are seeing attacks, especially if they store:

• Personally identifiable information (PII)
• Financial data
• Healthcare or insurance records
• Intellectual property

The Cost of Doing Nothing

Cyberattacks aren’t just an IT issue, they’re an existential threat. Consider the ripple effects:

• Operational downtime
• Lost customer trust
• Regulatory penalties (e.g., GDPR, HIPAA, CCPA)
• Legal liability
• Valuation discounts during funding or M&A

A breach right before a fundraising round or acquisition can cost you the deal—or severely lower your negotiating power.

7 Steps to Protect Your Business Now

You don’t need a 50-person security team to protect your company. Start with these practical, high-impact steps:

1. Implement Multi-Factor Authentication (MFA)

Require MFA across all systems, especially for email, cloud platforms (Google Workspace, AWS, Azure), and admin dashboards.

2. Conduct a Risk Assessment

Evaluate what systems are most vulnerable, where data lives, and who has access. Tools like Vanta, Drata, or even an external audit partner can help.

3. Train Your Employees

Human error is still the #1 cause of breaches. Conduct regular security awareness training and phishing simulations.

4. Use a Password Manager

Eliminate shared passwords on spreadsheets. Tools like 1Password or LastPass help teams manage secure logins with minimal friction.

5. Encrypt Data at Rest and in Transit

Ensure all sensitive data is encrypted—both on your servers and when sent over networks.

6. Perform Regular Backups

Set up automated, secure backups of all critical data and test your restore procedures. This is your insurance policy in a ransomware attack.

7. Invest in Cyber Insurance

For SMBs handling sensitive data, cyber insurance isn’t a luxury, it’s a smart investment. Make sure your policy covers ransomware, legal costs, and customer notification expenses.

Bonus: If You’re Raising Capital or Selling—Be Ready for Cyber Diligence

Sophisticated investors and acquirers now require cybersecurity documentation as part of due diligence. Expect to provide:

• Security policies and procedures
• Proof of employee training
• Penetration test results
• Incident response plans

Lack of documentation can trigger deal slowdowns, valuation reductions, or outright disqualification.

Final Word: Security Is a Strategy

Cybersecurity isn’t just about protection—it’s about resilience and reputation. A secure company operates with more confidence, earns customer trust, and commands better valuations.

At Sea Change Advisors, we work with founders and executives to operationalize cybersecurity as part of a broader growth and investment readiness strategy. Whether you're preparing for a capital raise, expanding your SaaS infrastructure, or managing vendor risk—we can help you align security with scale.

Worried about your cybersecurity posture?
Let’s conduct a quick assessment and put a protection plan in place.
Contact Sea Change Advisors to get started.