According to a study from security firm Kapersky Lab, a third of micro businesses in the UK would not know what to do if they suffered a data breach.
The survey consisted of 250 micro firms, with 40% of employees revealing that they would struggle to recover lost data and 25% admitting they would not be able to recover any data at all.
Most firms believe they will not be hit by a security attack, despite 68% having computers connected to the internet.
Staggeringly, 82% believe they are not a target for attack because they feel they are too small and do not have anything worth stealing.
Kirill Slavin, UK managing director at Kapersky Lab said: "While it is encouraging that micro firms are embracing the new technologies, this must go hand in hand with a strong approach to internet security.
"One in ten of those surveyed admitted that an IT security breach would probably cost them their business. This must be addressed, and quickly."
Alex Grant, managing director of fraud prevention at Barclays said: "Fraud can happen to any type of business in many different ways, impacting their revenue, reputation and the long-term health of the business, with no business being too small to be targeted.
"The most important investment a business can make is to take the time to identify where they may be at risk from fraud and reduce those risks where possible to stay in control."
According to the Federation of small businesses 41% of small firms were hit by cybercrime in 2013, with one in ten falling victim to online fraud.
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