In today’s hyperconnected world, no smaller business operates alone. You rely on vendors for payroll, IT support, cloud services, payment processing, and maybe even that new AI-driven widget your team can’t live without. But here’s the catch: every third-party you invite into your ecosystem can also invite risk. This is what we call Third-Party Risk—and it’s one of the fastest-growing threats to smaller businesses today.

What Is Third-Party Risk?

Third-Party Risk is the possibility that your vendors, contractors, or partners could expose your data, networks, or operations to harm. Sometimes it’s accidental: an employee at your payroll company clicks on a phishing email. Sometimes it’s malicious: an IT vendor’s remote access is hijacked. Either way, it’s your business, your customers, and your reputation on the line.

As Reg Harnish, CEO of OrbitalFire discusses in our recent webinar “Good Fences Make Good Neighbors: Managing Third-Party Risk”, most smaller businesses don’t have sprawling global supply chains. But they do have a handful of vendors that touch critical systems, and that’s more than enough to create real exposure.

A Wake-Up Call: Target’s Breach

Think Third-Party Risk is only a “big company” problem? Think again. The 2014 Target breach—one of the most infamous cyber incidents in history—didn’t start with Target’s systems. It started with a small HVAC vendor whose network access was compromised. That single weak link gave attackers the keys to Target’s payment systems, affecting 40 million credit cards.

The lesson? You may not be Target, but you are somebody’s vendor. And if you can be used as a steppingstone to something bigger, or if you simply hold valuable data yourself, you’re fair game.

Why Smaller businesses Struggle

Here’s the uncomfortable truth: most smaller businesses don’t know which third parties pose the greatest risk. In our webinar poll, the majority of attendees admitted they couldn’t identify which vendors introduced the most risk to their organization. That lack of visibility is exactly what attackers count on.

The Third-Party Risk Management Process (Without the Jargon)

Managing Third-Party Risk isn’t about building a fortress around your business, it’s about building smarter fences. Here’s how to start:

1. Inventory Your Vendors
   Make a list of every third party with access to your systems, networks, or data. This includes IT providers, cloud apps, contractors, even the cleaning company if they have a keycard.
2. Classify the Risk
   Not all vendors are equal. A food delivery app isn’t as risky as your payroll processor. Rank vendors by how much access they have and what kind of damage they could cause if breached.
3. Set Expectations
   Bake security into your vendor contracts. Require basics like multi-factor authentication, incident reporting, and proof of compliance where relevant.
4. Monitor and Reassess
   Risks change over time. That shiny new cloud app you installed last year may not be so shiny after its third data breach. Review your vendor list at least annually.

Risk Treatment: What to Do When You Find a Problem

Here’s where smaller businesses often get stuck: what do you do once you’ve identified a risky vendor? At OrbitalFire, we teach four classic options:

• Avoid the risk – Don’t use the vendor.
• Transfer the risk – Insurance or contractual liability.
• Mitigate the risk – Add controls (like restricting access).
• Accept the risk – If it’s low-impact and unavoidable, you may decide it’s worth it.

The key is to make that decision consciously, not by accident.

The OrbitalFire Perspective

At OrbitalFire, we believe Third-Party Risk management doesn’t have to be overwhelming. We help smaller businesses cut through the complexity with straightforward processes: identifying your riskiest vendors, putting the right fences in place, and making sure those fences stay strong over time. Because in cybersecurity, as in life, good fences really do make good neighbors.

The Bottom Line

Third parties extend your capabilities, but they also extend your attack surface. Managing Third-Party Risk isn’t just an enterprise problem—it’s a smaller business survival skill. Inventory, classify, set expectations, monitor, and treat risks before they treat you to a headline-making breach.

Because at the end of the day, your security is only as strong as the weakest vendor in your chain.

For more, watch our recent webinar: Good Fences Make Good Neighbors: Managing Third-Party Risk

Ready to protect your smaller business against Third-Party Risk?  We’re Here for You.