The report, Cyber Security and Fraud: the impact on small businesses, published by the Federation of Small Businesses (FSB), is the result of a partnership between the FSB, the Home Office and the Department for Business, Innovation and Skills (BIS) that examined the types of cyber crime affecting businesses in the UK and its impact on them and the wider economy.

The report shows that of 2,667 FSB members, surveyed between September and October 2012 as part of the investigation, 41% had been victims of cyber crime in the past 12 months.

Twenty per cent said their business had suffered as a result of virus infections in their software systems while 8% had been victims of hacking and 5% said they had been affected by security breaches.

The report found that almost 20% of businesses had no protection against cyber crime, a worrying statistic when the amount of businesses using the internet to trade increases year-on-year.

Of those affected 11% said they had lost between £1,000 and £4,999 as a result, 3% had lost between £5,000 and £9,999 while 1% had lost £50,000 or more. The average cost to a business was £3,926.

Launching the report, FSB national policy chairman Mike Cherry said cyber crime was a growing threat and businesses could not afford to ignore it.

He added: “Many businesses will be taking steps to protect themselves but the cost of crime can act as a barrier to growth. For example, many businesses will not embrace new technology as they fear the repercussions and do not believe they will get adequate protection from crime.

“While we want to see clear action from the government and the wider public sector, there are clear actions that businesses can take to help themselves.”

In response to the findings, the FSB has issued a list of top tips to help businesses safeguard themselves against potential attack by cyber criminals.

Tips include implementing a combination of security protection applications, carrying out regular security updates on all software and devices, implementing a resilient password policy and securing wireless networks adequately.

Cherry added: “I encourage small firms to look at the 10 top tips we have developed to make sure they are doing all they can.

“We want to see the government look at how it can simplify and streamline its guidance targeted specifically at small firms and make sure there is the capacity for businesses to report when they have been a victim of fraud or online crime.”