How to Conduct a Cybersecurity Risk Assessment for Your SMB

A cybersecurity risk assessment is the foundation of effective security planning for Australian small and medium businesses. This step-by-step guide helps SMB leaders identify critical assets, assess vulnerabilities, and prioritize security investments to protect their business from cyber threats.

Step 1: Asset Identification and Inventory

Begin by cataloging all business assets that could be affected by cyber threats:

Information Assets

• Customer data: Personal information, contact details, payment data
• Financial information: Banking details, financial records, tax information
• Business data: Contracts, proposals, strategic plans
• Intellectual property: Trade secrets, proprietary processes, designs
• Employee data: Personnel records, payroll information

Technology Assets

• Hardware: Servers, workstations, mobile devices, networking equipment
• Software: Operating systems, applications, databases
• Cloud services: SaaS applications, cloud storage, hosted services
• Network infrastructure: Internet connections, Wi-Fi, VPN

Business Process Assets

• Critical processes: Sales, customer service, production, finance
• Dependencies: Third-party services, suppliers, partners
• Communication systems: Email, phone systems, collaboration tools

Step 2: Threat Identification

Identify potential threats that could affect your business:

External Threats

• Cybercriminals: Ransomware, data theft, financial fraud
• Hacktivists: Ideologically motivated attacks
• Nation-states: Advanced persistent threats and espionage
• Competitors: Industrial espionage and data theft

Internal Threats

• Malicious insiders: Employees with harmful intent
• Negligent employees: Accidental data exposure or system compromise
• Contractors and vendors: Third-party access risks
• Former employees: Retained access after termination

Environmental Threats

• Natural disasters: Floods, fires, earthquakes
• Power outages: Electrical grid failures
• Hardware failures: Equipment malfunctions and failures
• Software bugs: Application and system vulnerabilities

Step 3: Vulnerability Assessment

Identify weaknesses that could be exploited by threats:

Technical Vulnerabilities

• Unpatched software: Missing security updates
• Weak passwords: Default or easily guessed credentials
• Misconfigured systems: Insecure system configurations
• Unencrypted data: Data stored or transmitted without encryption
• Unnecessary services: Unused applications and services

Process Vulnerabilities

• Lack of policies: Missing security policies and procedures
• Inadequate training: Employees unaware of security risks
• Poor access controls: Excessive user privileges
• No incident response: Lack of incident response procedures

Physical Vulnerabilities

• Unsecured facilities: Poor physical access controls
• Unattended devices: Unlocked computers and mobile devices
• Visible information: Sensitive information in plain sight
• Disposal practices: Insecure disposal of devices and documents

Step 4: Risk Analysis and Prioritization

Evaluate and prioritize risks based on likelihood and impact:

Risk Calculation Formula

Risk Matrix

Use a risk matrix to visualize and prioritize risks:

Step 5: Control Assessment

Evaluate existing security controls and identify gaps:

Technical Controls

• Access controls: Authentication and authorization systems
• Encryption: Data protection at rest and in transit
• Network security: Firewalls, intrusion detection, monitoring
• Endpoint protection: Antivirus, EDR, device management
• Backup systems: Data backup and recovery capabilities

Administrative Controls

• Security policies: Written security policies and procedures
• Training programs: Security awareness training
• Incident response: Incident response procedures
• Vendor management: Third-party security requirements

Physical Controls

• Facility security: Building access controls and monitoring
• Device security: Laptop locks, secure storage
• Document security: Secure disposal and storage

Step 6: Risk Treatment Planning

Develop strategies to address identified risks:

Risk Treatment Options

Risk Assessment Tools and Templates

Free Assessment Tools

• ACSC Small Business Cyber Security Assessment: Government-provided assessment tool
• NIST Cybersecurity Framework: Comprehensive framework for risk assessment
• ISO 27005 Risk Management: International standard for information security risk management

Simple Risk Assessment Template

Common SMB Risk Scenarios

High-Priority Risks for Australian SMBs

Email Compromise and Phishing

• Likelihood: High (4/5)
• Impact: High (4/5)
• Risk Score: 16 (High Risk)
• Mitigation: Email security, MFA, user training

Ransomware Attack

• Likelihood: Medium (3/5)
• Impact: Very High (5/5)
• Risk Score: 15 (High Risk)
• Mitigation: Backups, endpoint protection, network segmentation

Data Breach

• Likelihood: Medium (3/5)
• Impact: High (4/5)
• Risk Score: 12 (Medium-High Risk)
• Mitigation: Access controls, encryption, monitoring

Implementation Roadmap

Immediate Actions (Week 1-2)

1. Complete asset inventory: Catalog all critical business assets
2. Identify top 5 risks: Focus on highest-impact scenarios
3. Implement quick wins: Enable MFA, update software, backup data
4. Document findings: Create risk register and treatment plan

Short-term Actions (Month 1-3)

1. Deploy security controls: Implement prioritized security measures
2. Update policies: Create or update security policies
3. Train employees: Conduct security awareness training
4. Test procedures: Validate incident response procedures

Long-term Actions (Month 4-12)

1. Regular assessments: Quarterly risk assessment updates
2. Continuous monitoring: Implement ongoing security monitoring
3. Compliance validation: Ensure ongoing regulatory compliance
4. Security maturity: Advance security capabilities over time

When to Seek Professional Help

Consider Professional Assessment If:

• Your business handles sensitive customer data
• You're in a regulated industry (healthcare, finance)
• You've experienced security incidents
• You're preparing for investment or acquisition
• You lack internal cybersecurity expertise

Working with Cybersecurity Professionals

Many Australian SMBs benefit from professional risk assessments. Leading cybersecurity providers like Affinity MSP offer comprehensive risk assessment services including:

• Professional cybersecurity risk assessments
• Vulnerability scanning and penetration testing
• Compliance gap analysis and remediation planning
• Security roadmap development and implementation
• Ongoing risk monitoring and management