The SMB Cybersecurity Crisis: Why Small Businesses Are Big Targets

SMBs are 60% more likely to be attacked than enterprises, but have 1/10th the security budget. Learn how managed services level the playing field.

Small and medium-sized businesses have become the preferred targets of sophisticated cybercriminals, not because they have the most valuable data, but because they offer the path of least resistance. Black Hat 2025 research reveals a disturbing trend: attackers are systematically targeting SMBs as stepping stones to larger breaches, while SMBs remain fundamentally unprepared for enterprise-level threats.

The SMB Target Shift

Robert Johnston, General Manager at N-able and former Pentagon cyber operations specialist, has witnessed a fundamental transformation in cyberattack patterns: "SMBs are 60% more likely to experience a cyberattack than large enterprises. It's not that they're more attractive targets—they're easier targets."

N-able's research across their MSP partner network, which serves over 500,000 SMBs globally, shows that small businesses face enterprise-level threats with consumer-level defenses.

The Economics of SMB Attacks

The mathematics strongly favor attacking smaller organizations:

• Resource Imbalance: Large enterprises spend an average of $18.8 million annually on cybersecurity, while SMBs spend less than $50,000 

• Response Time: SMBs take an average of 287 days to detect breaches, compared to 197 days for enterprises 

• Recovery Costs: SMBs pay proportionally higher ransom demands relative to their revenue 

• Success Rates: Attackers achieve 67% higher success rates against SMBs than enterprises

The MSP Multiplication Effect

Johnston revealed one of the most concerning trends: cybercriminals targeting managed service providers (MSPs) to amplify their attacks: "By breaking into that single target, you can gain access to 500 separate organizations. If you take over their remote monitoring management capability, their screen connect capability, it gives you instantaneous single pane of glass access to 500 organizations all at once."

This architectural vulnerability creates perfect conditions for scaled attacks, where compromising one MSP enables simultaneous ransomware deployment across hundreds of client organizations.

The Security Maturity Gap

SMBs face unique challenges that enterprises don't experience:

• Limited Expertise: Most SMBs can't afford dedicated security professionals 

• Budget Constraints: Security investments compete directly with growth investments 

• Technology Gaps: Legacy systems that can't support modern security tools 

• Compliance Confusion: Understanding which regulations apply to their business

The False Economy of Cheap Security

Many SMBs attempt to address security through consumer-grade or basic business solutions:

• Inadequate Endpoint Protection: Using a consumer antivirus instead of an enterprise endpoint detection and response system 

• Basic Email Security: Relying on built-in email filters instead of advanced threat protection 

• Minimal Backup: Using simple backup solutions without disaster recovery capabilities 

• No Incident Response: Having no plan for responding to security incidents

Johnston noted: "What we see consistently is SMBs trying to solve enterprise problems with consumer solutions. It doesn't work."

The MSP Security Revolution

Managed service providers are evolving their business models to address SMB security needs:

• Security as a Service: Offering enterprise-level security tools through managed services 

• 24/7 Monitoring: Providing continuous threat monitoring that SMBs couldn't afford individually 

• Incident Response: Delivering professional incident response capabilities 

• Compliance Support: Helping SMBs understand and meet regulatory requirements

Johnston emphasized this transformation: "Security services are now the number one revenue driver for MSPs. It's no longer just break-fix—it's comprehensive cyber protection."

AI Leveling the Playing Field

Artificial intelligence is enabling SMBs to access enterprise-level security capabilities:

• Automated Threat Detection: AI can identify threats that would require dedicated security analysts 

• Intelligent Response: Automated responses to common threats reduce the need for human intervention 

• Predictive Analytics: AI can predict potential security issues before they become incidents 

• Cost Efficiency: AI-powered security tools provide enterprise capabilities at SMB prices

The Supply Chain Risk

SMBs often serve as entry points into larger organizations through supply chain relationships:

• Vendor Access: SMBs with access to enterprise customer networks become high-value targets 

• Data Staging: Attackers use SMB networks to stage attacks against larger targets 

• Trust Exploitation: Leveraging trusted relationships between SMBs and enterprise customers 

• Lateral Movement: Using SMB access as a launching point for broader attacks

Real-World SMB Attack Patterns

N-able's threat intelligence reveals common SMB attack scenarios:

• Email Compromise: 73% of SMB attacks begin with email-based social engineering 

• Credential Theft: Attackers target SMB credentials to access larger customer networks 

• Ransomware Deployment: SMBs receive the same sophisticated ransomware used against enterprises 

• Data Exfiltration: Attackers steal SMB data to use in attacks against their customers

The Compliance Challenge

SMBs increasingly face enterprise-level compliance requirements:

• Industry Regulations: Healthcare, finance, and other industries require specific security standards 

• Customer Demands: Enterprise customers requiring security certifications from SMB vendors 

• Insurance Requirements: Cyber insurance policies requiring specific security controls 

• International Standards: Global business requiring compliance with multiple jurisdictions

Strategic SMB Security Recommendations

1. Partner with Security-Focused MSPs: Leverage managed services to access enterprise-level security capabilities

2. Implement Layered Security: Don't rely on single solutions; build a comprehensive defense

3. Invest in Employee Training: Human-based attacks are the most common threat vector

4. Plan for Incidents: Develop and test incident response procedures

5. Regular Security Assessments: Conduct periodic security evaluations to identify gaps

The Insurance Reality

Cyber insurance is becoming critical for SMB survival:

• Rising Premiums: Insurance costs are increasing as SMB risks become better understood 

• Coverage Requirements: Insurers require specific security controls before providing coverage 

• Claim Denials: Inadequate security measures leading to insurance claim rejections 

• Business Continuity: Insurance providing critical funding for business recovery after attacks

The Future of SMB Security

The SMB security landscape will continue evolving toward:

• Managed Security Services: Comprehensive security delivered as a service rather than products 

• AI-Powered Protection: Artificial intelligence providing enterprise-level capabilities at SMB prices 

• Industry-Specific Solutions: Security tools designed for specific SMB verticals 

• Compliance Automation: Automated compliance monitoring and reporting

The Bottom Line

SMBs can no longer afford to ignore cybersecurity or assume they're too small to be targeted. The combination of sophisticated threats and limited resources requires innovative approaches, typically involving managed security services and AI-powered tools.

As Johnston concluded: "SMBs face the same threats as Fortune 500 companies but with a fraction of the resources. The only way to level the playing field is through managed services that democratize enterprise-level security."