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6 min read

Here’s Why Privacy Compliance is Critical for SMEs

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Working as a small business owner is tough. You’re responsible for marketing your business, managing employees and closing sales. Privacy compliance is probably the least of your concerns, but that needs to change now. Privacy laws have already been strictly implemented in the European Union (EU), and several states in the US are following suit. You may become liable, so it’s crucial to be proactive now and put a plan for privacy compliance in place.   

Data privacy is no doubt a complicated and confusing space, but we’ll break it down for you in a series of blog posts so that you can develop a clear, actionable plan for achieving compliance. First things first — we’ll help you understand what privacy compliance is about and why you need to start planning for it now. This article will answer three big questions we often hear from clients.   

What is data privacy?   

Data privacy refers to handling sensitive data such as financial information, intellectual property, and, most importantly, personal data. Take note: Data privacy and data security are not the same. Data security is about protecting data from unauthorized leaks or unlawful third-party access. Data privacy, on the other hand, is composed of three fundamental principles:   

  1. Individuals have the right to control their personal data.  

Through the General Data Protection Regulation (GDPR), the EU asserts that data privacy is a fundamental human right. Consumers care more and more about how companies use their data —as indicated by 84% of respondents in a 2019 Cisco survey. As a result, consumers trust companies that show they respect individuals’ data privacy.   

  1. Procedures must be put in place to handle personal data appropriately.  

You need policies that dictate what data you collect, how you process it, with whom you share it, and when it should be archived and eventually deleted. These policies must be set following the law. Still, generally, the safest practice is to collect minimum data and share it only with those external parties that have a legal need to access such data. You must also be transparent with what you’re collecting ordering and how you will use it. That’s why cookie consent forms have become the norm.   

  1. Compliance with data protection regulations wherever you do business.  

Even if your organization is registered in a country or state where no data protection laws exist, you’re liable if you carry out business where regulations are in place. For example, your business may be registered in Oklahoma, where there are no plans for data privacy laws to take effect yet. However, you still need to comply with varying California, Virginia, and Colorado statutes.   

Why is privacy compliance important?   

Privacy compliance is critical to protecting your business from legal repercussions. It also reduces the impact of potential data breaches because privacy laws restrict you to collecting the bare minimum of information from consumers. Companies tend to have a “collect as much as you can, just in case” mindset, which is understandable because technology and consumer trends change quickly. Unfortunately for businesses (but fortunately for you, as an individual), more data can now be less of a competitive advantage and more of a liability. For instance, Facebook and Google have been fined billions of dollars for violating privacy laws because they collected and shared personal data without consent.   

Besides the legal aspects, privacy compliance is also helpful for building consumer trust. Consumer trends change quickly, and expectations are trending towards increased care towards customer data.    

When your company follows best practices for data privacy, it shows that you are taking customer privacy seriously and are committed to protecting their information. Think of it as brand building and get ahead of your competitors.   

Privacy compliance is also essential for employee engagement and productivity. A study by the Ponemon Institute found that employees who feel their employer respects their privacy tend to increase productivity and loyalty. Employees need to trust that your company is protecting their information and not sharing it without their consent.    

Who is responsible for privacy compliance?   

Typically, different departments will have different mandates for privacy compliance. For instance, the head of your marketing team should ensure proper transparency and handling of email subscribers, website visitors, and other data related to marketing activities. However, the head of your HR team has no business dealing with that data, unless your team is small and the same person manages both job functions. No matter the size of your team, though, it makes sense to appoint one person to lead the effort towards achieving compliance.    

Ultimately, though, the buck stops with you, the business owner. You must ensure that your employees understand the importance of privacy compliance and follow all applicable privacy laws and regulations.   

Privacy compliance is now a high priority.   


Privacy compliance ensures that your business adheres to all applicable privacy laws and regulations across states and nations. Privacy violations have become so commonplace that various jurisdictions now have laws requiring businesses to notify customers of a privacy breach. The European Union has enacted strict regulations that require companies to disclose how they collect and use customer data. Other countries worldwide have adopted similar laws requiring the proper disclosure of personal information practices.    

It’s essential to understand which specific laws apply to your business. You may feel that small businesses like yours don’t have the time, budget or staff to devote to privacy compliance. However, as your business grows, the risk of privacy violations increases. It’s best to be proactive and build data privacy into your company’s core principles now. Otherwise, you may spend even more time and resources doing so later.   

The best way to ensure privacy compliance across your entire organization is to develop clear policies about what constitutes personal information, how it should be protected, who has access to it, and when it needs to be stored or securely destroyed. This can be a daunting task. If you’re not sure where to start, here's how we can help you quickly and thoroughly implement the necessary policies, and equip your team with the knowledge and tools to keep your business safe.    

The bottom line is this: Privacy compliance is essential for your company’s long-term sustainability. By following best practices for data privacy, you can protect your customers, employees and vendors while building trust and enhancing your company’s reputation.