How Does a Cybersecurity Risk Assessment Work?

Cyber threats pose a wide range of risks—to your finances, your operations, your reputation, and your relationships with customers and partners. The complexity of these threats continues to grow, making it more important than ever for organizations of all sizes to take a proactive approach to digital security.

A cybersecurity risk assessment is a structured process that helps organizations evaluate their current risk landscape, identify vulnerabilities, and put controls in place to reduce the likelihood and impact of an attack. It’s not just a technical exercise—it’s a strategic one.

In 2021, phishing remained one of the top threats globally. A Cisco study shared in Security Magazine found that 86% of organizations had at least one user connect to a phishing site. And that was just one type of attack. For businesses that rely on digital trust, a breach can damage more than data—it can unravel the goodwill you’ve spent years building.

So how does a cybersecurity risk assessment actually work? And how do you know if your business is doing it right?

What Is a Cybersecurity Risk Assessment?

In its simplest form, a cybersecurity risk assessment helps you understand your digital environment, pinpoint weaknesses, and make informed decisions about how to reduce risk. Like any other kind of assessment—whether academic, financial, or operational—it starts with information gathering, followed by analysis, prioritization, and action.

Cybersecurity, of course, comes with its own nuances. Threats are constantly changing, and risk isn’t uniform—it depends on your size, industry, customers, regulations, and infrastructure. That’s why effective assessments require a combination of technical expertise and strategic thinking. No two are exactly the same, but most follow a similar set of best practices.

Here’s a breakdown of a typical five-step process used in cybersecurity risk assessments.

Step 1: Frame the Organization’s Objectives

Before you jump into identifying vulnerabilities, it’s important to take a step back and ask some foundational questions about your business:

What is the mission of your organization?
What core services or products do you offer?
Who do you serve—and what do they trust you with?
What information systems and digital tools are central to your operations?

This step is often overlooked, but it’s critical. The way your organization defines success should influence your approach to risk. If your business depends heavily on customer data, uptime, or digital platforms, your risk profile will differ significantly from one that’s more analog or compartmentalized.

It’s also worth asking: How can security and privacy become part of your value proposition? For some organizations, trust and transparency are market differentiators, not just compliance checkboxes. Framing security in terms of organizational purpose helps set meaningful priorities later in the assessment.

Step 2: Identify Privacy Policies and Procedures

Once you’ve defined your business objectives, turn your focus to what rules and standards apply to your operations. These could be internal or external:

Do you have a formal privacy policy?
Are you subject to industry regulations (e.g., HIPAA, PCI DSS, GDPR)?
Do you follow any security frameworks like NIST, ISO/IEC 27001, or the CIS Controls?

This isn’t just about compliance—it’s about knowing where your baseline is. Every policy you have (or don’t have) informs your current level of risk tolerance. Many small to mid-sized organizations operate with informal or partial practices in place. The goal here isn’t to pass judgment, but to identify gaps and understand where your current protocols support or hinder risk mitigation.

This step also brings clarity to which stakeholders are involved—legal, HR, operations—and who might need to be part of future cybersecurity planning efforts.

Step 3: Identify and Analyze Risks

Now we begin the core of the assessment: identifying the specific threats and vulnerabilities your organization faces. While this step often includes a mix of interviews, technical scans, and internal audits, the real value comes from honest evaluation.

Common risks include:

Phishing and social engineering
Poor password practices
Unpatched software or outdated hardware
Misconfigured cloud services
Inadequate employee training
Lack of backup or disaster recovery plans

The key questions are:

What could go wrong?
How likely is it to happen?
What would the consequences be if it did?

It’s easy to treat this part of the process like a checklist, but it’s more useful as a strategic conversation. If your business were targeted, what would happen next? Could you identify it quickly? Could you recover?

Many organizations find this step humbling—but that’s exactly the point. A strong cybersecurity posture starts with a clear-eyed view of your current position.
To guide this step, many organizations refer to the NIST Cybersecurity Framework, which offers a structured approach to identifying, assessing, and managing cybersecurity risks. This framework is widely recognized for helping businesses of all sizes—especially those without dedicated IT teams—understand where vulnerabilities exist and how to prioritize them based on potential impact and likelihood.

Step 4: Prioritize the Risks

Once risks are identified and understood, they need to be prioritized based on likelihood and impact. Some threats are both common and dangerous (e.g., ransomware), while others may be rare but still deserve consideration due to their potential damage.

This is where tools like a risk matrix come in handy. You can visualize each risk in terms of how urgent it is and how costly or disruptive it could be.

One way to think about this is similar to how you manage your inbox:

Do – Act immediately on high-priority risks
Delegate – Assign medium risks to your IT provider or internal team
Defer – Monitor low-impact, low-likelihood risks
Delete – Recognize risks that are no longer relevant or already resolved

By creating a prioritized list, your organization can allocate time, budget, and resources more effectively—and avoid spreading your security efforts too thin.

Step 5: Document and Monitor

A cybersecurity risk assessment is not a one-and-done task. The real value comes from making it a repeatable process. That starts with documentation.

Key details to track include:

Risk identified and the date
Current controls in place
Risk level (low, medium, high)
Treatment plan and status
Residual risk after mitigation
Risk owner responsible for follow-up

Documenting risks over time allows you to build institutional memory, spot patterns, and stay ahead of emerging threats. It also supports compliance efforts and gives your leadership team confidence that cybersecurity is being addressed proactively.

Monitoring can be as simple as monthly internal check-ins or as advanced as 24/7 managed threat detection. The right approach depends on your size, industry, and exposure level.

Make Cybersecurity Risk Assessment Part of Your Business Culture

Every organization is unique—and every cybersecurity risk assessment reflects that. What’s universal, though, is the need for intentionality. A strong assessment doesn’t just identify risk—it creates a roadmap for becoming more resilient, more responsive, and more trusted.

At a time when more employees are working remotely, more data is stored in the cloud, and more attackers are targeting small businesses, security can’t be left to chance. The goal isn’t perfection—it’s awareness, alignment, and action.

Need Help Getting Started?

Cybersecurity risk assessments can feel overwhelming if you’ve never done one—or if your organization has grown faster than your IT can keep up. At eMPiGO, we help businesses evaluate their risk, improve their defenses, and build cybersecurity into their long-term strategy.

Contact our team to learn how we can support your security goals with practical, experience-backed guidance.