The Top 10 Cybersecurity Mistakes SMBs Make (and How to Fix Them)

Every week, we talk with business leaders who think their cybersecurity is covered until it’s not.

For many small and midsized businesses (SMBs), a cyber incident isn’t just an IT problem. It’s a business interruption, a compliance headache, and a reputational hit that can take months to recover from.

The truth is, most cyber risks are preventable. You don’t need a huge IT budget. You need awareness, good habits, and a plan.

At Preferred Communication Systems, we’ve spent more than two decades helping Chicagoland organizations protect their people, data, and reputations. We’ve seen what works and what doesn’t. Below are the 10 most common cybersecurity mistakes SMBs make, along with simple, actionable ways to avoid them.

1. Believing “We’re Too Small to Be a Target”

This is one of the biggest myths out there, and one of the most dangerous. 

Hackers aren’t sitting in dark rooms targeting Fortune 500 companies one by one. They’re running automated scans across the entire internet, looking for weak passwords, outdated systems, and unprotected networks. If your company connects to the internet (and who doesn’t?), you’re already a potential target.

According to CrowdStrike’s 2025 Small Business Cybersecurity Report, which analyzed FBI Internet Crime Complaint Center (IC3) data, the number of reported cyberattacks in the U.S. reached 880,418 incidents in 2023 — a 10% increase over the previous year. Estimated losses topped $12.5 billion, up more than 22% year over year.

And yet, while 60% of small businesses now identify cyber threats as a top concern, many still underestimate their risk. That’s exactly what makes them such an easy mark. As large enterprises have hardened their defenses, attackers have shifted focus to the SMB market — companies that may not have enterprise tools, but do have something hackers want: data.

Fix it: Start with a cybersecurity assessment. You can’t protect what you can’t see. Knowing where your vulnerabilities are is the first step toward closing them. Even small actions like enforcing strong passwords, enabling automatic updates, and implementing managed monitoring can dramatically reduce your risk.

2. Forgetting That People Are the Front Line

Technology doesn’t cause most breaches. People do. In fact, more than 60% of breaches begin with human error. Someone clicks a bad link, downloads a fake invoice, or uses “Password123” across multiple accounts.

That’s not carelessness; it’s reality. Cybercriminals are experts at social engineering and tricking busy employees into giving away credentials or installing malware.

Fix it: Make cybersecurity part of your culture, not a checkbox. Conduct ongoing training that teaches employees how to spot phishing attempts and suspicious links. Encourage a culture where it’s safe to ask questions and report issues early. A culture of awareness costs little but protects a lot.

3. Skipping Backups or Never Testing Them

Backups are your last line of defense. Yet many businesses either forget to back up regularly or assume their backups are working until they discover otherwise during a crisis.

Ransomware, hardware failure, or even a simple human mistake can erase critical data instantly. Without a tested backup, that data is gone, business operations halt, and it can harm your revenue and reputation.

Fix it: Automate your backups and test them quarterly. Use both local and cloud storage. Make sure your backups are isolated from your production environment so ransomware can’t encrypt them too. A verified, working backup can turn a business-ending event into a short inconvenience.

4. Ignoring Software Updates

We get it, no one likes updates. They interrupt your day and sometimes cause temporary slowdowns. But, attackers love outdated systems. When software isn’t updated, it’s like leaving your office door unlocked after hours.

Every update exists for a reason. Most patch known vulnerabilities that attackers actively exploit. When you delay updates, you give hackers time to take advantage.

Fix it: Turn on automatic updates wherever possible. For systems that can’t update automatically, schedule regular maintenance windows or rely on a managed IT partner like Preferred to handle them for you. Staying current is one of the easiest, most effective defenses you can implement.

5. Using Weak or Reused Passwords

Managing passwords is a hassle, but reusing them is a disaster waiting to happen. If you use the same password for multiple accounts, one breach can expose all of them — including business email, financial systems, and cloud storage.

Fix it: Use strong, unique passwords for each account. A password manager can help make this easy. And always enable multi-factor authentication (MFA), especially for email, banking, and file-sharing platforms. MFA adds a critical second layer of protection — even if a password is stolen, the attacker can’t get in.

6. Overlooking Personal and Mobile Devices

Your company’s data doesn’t live only on your office computers anymore. Employees work from laptops, tablets, and phones, and most often their own. Each device is a potential doorway into your network.

If those devices aren’t properly secured, your business isn’t either.

Fix it: Create a clear Bring Your Own Device (BYOD) policy. Require basic protections such as device encryption, screen locks, and the ability to remotely wipe data if a device is lost or stolen. Managed mobile device (MDM) tools can help enforce these policies automatically.

7. Not Having an Incident Response Plan

Even the best security measures can’t guarantee you’ll never experience an attack. The real mistake is being unprepared for what happens next.

When a breach occurs, confusion is the enemy. Without a plan, valuable time is lost deciding who to call, what to shut down, and how to communicate with clients and employees. That delay can turn a minor incident into a major disaster.

Fix it: Develop a written incident response plan. Define roles, communication protocols, and steps for containment and recovery. Practice it at least once a year. Just like fire drills, cybersecurity rehearsals ensure everyone knows what to do when every second counts.

8. Treating Cybersecurity as a One-Time Project

Cybersecurity isn’t a set-it-and-forget-it initiative. Threats evolve daily, and your defenses need to evolve with them.

Too many SMBs view cybersecurity as a project and something you “get done” after an audit or insurance renewal. In reality, it’s an ongoing process that should be reviewed and adjusted regularly.

Fix it: Schedule recurring cybersecurity & technology reviews (BCTR). These reviews align your technology and security posture with your business goals, compliance needs, and growth trajectory. Cybersecurity is a habit you build, not a checklist you complete.

9. Overlooking Compliance and Cyber Insurance Requirements

If you handle client data, process payments, or work in regulated industries like healthcare, finance, or manufacturing, cybersecurity isn’t just best practice. It’s mandatory.

From HIPAA and CMMC to PCI and cyber insurance questionnaires, compliance requirements are tightening across the board. Many SMBs get caught off guard when their insurer or customer suddenly asks for evidence of security controls.

Fix it: Don’t wait for an audit to get compliant. Preferred’s SmartSecure™ program helps SMBs meet compliance and insurance requirements by documenting controls, monitoring networks 24/7, and producing audit-ready reports. Proactive compliance protects your reputation — and often saves money on premiums.

10. Thinking Technology Alone Is Enough

Firewalls, antivirus software, and monitoring tools are essential, but they’re only part of the solution. Technology alone can’t create a secure organization. 

True cybersecurity combines people, process, and technology. Your team needs training, your business needs policies, and your IT systems need oversight. It’s the intersection of all three that keeps you safe.

Fix it: Partner with a provider who understands your business and not just your network. The right IT partner will align technology decisions with your business strategy, ensuring that security enhances productivity rather than slowing it down.

Proactive, Not Reactive: The Cybersecurity Mindset Shift

At Preferred, we call this the proactive vs. reactive difference.

Reactive IT waits for things to break. Proactive IT prevents them from breaking in the first place.

Cybersecurity is the same way. You can either wait for an incident and scramble to recover, or you can put proactive systems, training, and monitoring in place to minimize risk. 

That mindset shift from reaction to prevention is what separates resilient businesses from vulnerable ones.

Peace of Mind Starts with a Plan

Cybersecurity isn’t just about technology. It’s about protecting your people, your reputation, your business, and your future.

At Preferred Communication Systems, we help small and midsized businesses strengthen their cybersecurity without adding complexity.

Our SmartSecure™ program includes: 

• 24/7 threat monitoring and rapid response
• Employee awareness training and phishing simulations
• Dark web scanning for compromised credentials
• Compliance support for CMMC, HIPAA, and cyber insurance
• Strategic Business Cybersecurity & Technology Reviews 

Every piece of it is designed to deliver what our clients value most: peace of mind and a better bottom line.

Ready to See Where You Stand?

If you’re not sure how your current defenses measure up, we can help. 

Request an expert consultation, and we’ll see if a Complete Cybersecurity Assessment is right for your business. We’ll show you where your risks are and how to fix them.  

Because in today’s world, cybersecurity isn’t optional. It’s the foundation of business resilience.

Let’s make sure you’re protected, prepared, and positioned for growth.

Contact Preferred Communication Systems today to schedule your consult.