When you run a small business, your to-do list already includes payroll, inventory, customer service, and keeping the lights on. Cybersecurity often gets pushed to the bottom of that list. But with a few smart changes, you can protect your business without adding more stress to your plate.
The good news is that most cybersecurity for small business doesn't require a massive budget or a dedicated IT department. Many of the biggest risks come from simple mistakes that are easy to fix once you know what to look for. A password manager like LastPass is one of the fastest ways to close common security gaps, since it handles password generation, storage, and secure sharing for your entire team.
This guide walks you through ten common cybersecurity mistakes that affect small businesses. More importantly, it shows you exactly how to fix each one.
Key Takeaways: 10 common cybersecurity mistakes SMBs make and how to fix them
- Your business size doesn't keep you off hackers' radar. Automated attacks target thousands of small businesses at once.
- Reusing passwords is one of the quickest ways to turn one breach into many. Unique passwords for every account make a big difference.
- Adding multifactor authentication means a stolen password alone won't get attackers into your accounts.
- A little employee training goes a long way. Most successful phishing attacks can be stopped when your team knows what to look for.
- LastPass makes it easy to fix several of these mistakes at once, from generating strong passwords to removing access when employees leave.
Top cybersecurity mistakes small businesses make
1. Thinking your business is too small to be a target
Many small business owners assume hackers only go after big corporations. In reality, automated scanning tools don't discriminate by company size. They look for common security gaps wherever they can find them.
Small businesses hold valuable data like customer credit card numbers, employee social security numbers, and banking information. That data has value regardless of how many employees you have. The good news is that basic security measures block most automated scans effectively.
The fix: Accept that your business is a target regardless of size. Start treating cybersecurity for small businesses as a core business expense, not an optional add-on.
2. Relying on weak or reused passwords
Your employees are busy. They don't want to remember 50 different passwords. So they use "Company123!" for everything and call it a day. It's understandable, but it creates a real security gap.
When a website gets breached, attackers often try those stolen credentials on other sites. If your employee uses the same password for their email, your accounting software, and your customer database, one breach gives attackers access to all three.
The fix: Implement a password manager that generates unique, complex passwords for every account. Built-in password generators create strong credentials automatically, so employees don't have to think about it.
3. Skipping multifactor authentication
A strong password is great. A strong password plus a second verification step is significantly better. Multifactor authentication (MFA) means that even if someone steals a password, they still can't get in without that second factor.
MFA options include authenticator apps, SMS codes, hardware security keys, and biometric verification. Each adds a layer that blocks most automated login attempts. Yes, it adds a few seconds to the login process. That tradeoff is worth it.
The fix: Enable MFA on every business account that supports it. Start with email, banking, and any system containing customer data. Look for cybersecurity solutions for small businesses that support multiple MFA methods.
4. Storing passwords in spreadsheets or shared documents
We've all seen it. A Google Sheet titled "Company Passwords" sitting in a shared drive. Or a Word doc passed around via email whenever someone needs access. These habits feel convenient, but they come with some downsides.
Spreadsheets and documents weren't designed for password storage. They lack encryption, access controls, and audit trails. Anyone who gains access to that file can see every credential inside.
The fix: Move all credentials to an encrypted password manager with proper access controls. Good cybersecurity solutions for small businesses let you share passwords securely while tracking who accessed what and when.
5. Not training employees on phishing and social engineering
Your employees are your first line of defense, and with the right training, they become one of your best security assets. Phishing emails have gotten sophisticated enough to fool even tech-savvy workers, so recognizing them takes practice.
Social engineering goes beyond email. Attackers call pretending to be IT support, send text messages about fake deliveries, and create convincing fake websites. Training helps your team spot these tactics before they click.
The fix: Run regular security awareness training. Teach employees to verify requests through separate channels, hover over links before clicking, and report suspicious messages. Make it part of onboarding and refresh annually.
6. Failing to update software and apply security patches
Software updates feel like interruptions. That "remind me later" button is tempting. But those updates often contain security patches that fix known issues.
Once a vulnerability becomes public, it's only a matter of time before automated tools start scanning for it. Staying current with updates keeps your systems protected. This applies to operating systems, browsers, extensions, and every application you use.
The fix: Enable automatic updates wherever possible. For systems that need manual updates, schedule a weekly maintenance window. Document which systems need attention and assign responsibility for keeping them current.
7. Giving employees more access than they need
The principle of least privilege sounds technical, but it's simple: only give people access to what they need to do their job. The intern doesn't need admin access. The marketing team doesn't need financial records. Keeping access focused makes managing permissions much easier.
When everyone has access to everything, it's harder to track who changed what and when. It also means that if one person's login credentials are stolen, the person who stole them has broad access to your systems. Keeping permissions focused to each role simplifies management and limits exposure.
The fix: Audit who has access to what. Remove permissions people don't actively use. Create role-based access groups and assign employees to appropriate groups rather than granting individual permissions.
8. Not having a plan for when employees leave
When someone leaves your company, revoking their access to business accounts should happen right away. Without a clear offboarding process, old credentials tend to stick around longer than they should.
Former employees with active credentials create loose ends. Those old accounts can be compromised later, even if the person who used them is long gone. Removing access promptly keeps your accounts tidy and secure.
The fix: Create an offboarding checklist that includes every system and account. Use a password manager with automated deprovisioning to revoke access immediately when someone leaves. Directory integrations with providers like Microsoft Entra ID or Google Workspace automate this process.
9. Ignoring mobile device security
Your employees check work email on their phones. They access company apps from tablets. They might even store passwords in their browser on personal devices. Mobile devices are part of your security picture too, and they're easy to overlook when setting policies.
The fix: Implement mobile device management policies that cover screen locks, remote wipe capabilities, and secure connections. Choose cybersecurity for small business tools that sync securely across all devices while maintaining encryption.
10. Lacking a backup and recovery plan
Ransomware encrypts your files and demands payment for the decryption key. Hardware fails unexpectedly. Employees accidentally delete critical data. Backups ensure you can bounce back from any of these scenarios.
Many businesses set up backups once and assume they're covered. But backups can become corrupted or incomplete over time without anyone noticing. Regular testing confirms your backups actually work when you need them.
The fix: Follow the 3-2-1 backup rule: three copies of data, on two different types of media, with one copy stored offsite or in the cloud. Test restoration quarterly to ensure backups work.
How LastPass helps you avoid common cybersecurity mistakes
Password-related issues appear throughout this list because credentials are central to how we access everything online. That's why a password manager is one of the most effective tools for small businesses. LastPass makes password management simple, with features that address several of the mistakes covered above.
The platform generates strong, unique passwords for every account and stores them in an encrypted vault. Your team never has to remember complex passwords again, and you can securely share credentials with the right people when needed. The automatic save and autofill features work across all websites and applications.
For cybersecurity for small businesses, LastPass Business offers 100+ customizable security policies through a simple Admin Console. You can enforce password requirements, set up role-based access, and manage security at individual, group, or organizational levels. No dedicated IT expertise required.
The Security Dashboard gives you a clear view of password health across your organization, flagging weak or reused credentials so you can address them. Dark web monitoring adds another layer by alerting you if any credentials appear in known data breaches.
When employees leave, directory integrations with Microsoft Active Directory, Google Workspace, Okta, and OneLogin automate the offboarding process. Access gets revoked right away, so you don't have to track down every account manually.
LastPass Business also supports multiple MFA methods including authenticator apps, TOTP, YubiKey, and FIDO2 biometrics like Windows Hello and Touch ID. Plus, 24/7 live technical support is included across phone, email, and chat.
Start protecting your business with LastPass today.
