Just 16 per cent of SMBs consider improving their cyber security a priority, according to the government.
SMBs are risking valuable data and a third of their earnings by failing to understand basic IT security issues, yet two-thirds mistakenly believe their firms are not vulnerable, suggests research from the government's Cyber Streetwise campaign.
Its survey of 1,000 small and medium businesses found that many are falling for simple misconceptions around cyber security, with 26 per cent believing only firms that accept online payments can be hacked.
Another 22 per cent of respondents believed small companies weren't targets for hackers, though the Cyber Streetwise campaign warned that 33 per cent of SMBs suffered a cyber attack last year.
John Allan, national chairman of the Federation of Small Businesses (FSB), warned: "Cyber crime is a major business resilience issue. Business owners and managers need to see and understand this threat clearly and take the steps necessary to protect themselves.
"We also know that, as firms' reliance on tools like cloud computing increases, they also become more aware of the threats these services can pose. We need to give these businesses the knowledge and tools they require to prevent [hacks] from happening."
The consequences for SMBs that fail to protect themselves can be dire, with the average cost of the worst security breach standing between 65,000 and 115,000, according to Whitehall's Information Security Breaches Survey, conducted last April.
Still, 24 per cent of small businesses told the Cyber Streetwise campaign that protective measures are too expensive, and 22 per cent admitted they didn't know where to begin on IT security.
Ed Vaizey, minister for culture and the digital economy, said SMBs should look at the government's cyber security guidance for help with protecting themselves.
It includes free training courses in cyber crime protection under the Cyber Essentials scheme, and a guide tailored for smaller companies to help protect themselves against the most common issues.
"There are some simple steps firms can take to protect themselves, their cash flow and their data," said Vaizey.
"I encourage all small and medium-sized firms to take these simple steps and fully benefit from our growing digital economy."
