As we near the end of the year, business leaders are firming up budgets for 2024 while facing financial pressures due to inflation and rising prices. Difficult decisions will need to be made on budgets and priorities, and one of those essential priorities should be properly addressing information security risks to the organization.

Information security is essential — especially with the potential impact it can have on the long-term success of small businesses. The financial implications from a data breach –the current U.S. cost averages $9.48 million – could cripple a small business due to remediation costs as well as potential regulatory actions, fines, and legal fees. Given these ramifications, small business owners should better understand how data breaches occur and how to best prepare and protect themselves.

Small businesses are not the only ones worried and affected by data breaches. Consumers are fearful, too. The threat of data theft is driving consumers to change how they interact with businesses – if they choose to interact at all. According to one consumer report, 81% of consumers would cease online interactions with the affected brand after a data breach. Of this percentage, 25% would discontinue all forms of engagement with the brand entirely.

Shred-it^®, a leading information destruction service owned by Stericycle, recently launched its 13th Annual Data Protection Report (DPR), which found that nearly three in four (73%) small business leaders (SBLs) and almost all (94%) consumers surveyed are concerned about future data breaches. Yet only 60% of SBLs responded that they are proactive in protecting their data, leaving small businesses exposed to the threat of a data breach.

The good news is that there are actionable steps business leaders can take to help navigate the complex data protection environment and help protect their business and customers.

Implement Active Information Security Measures

SBLs recognize the importance of data protection (92%), but many (78%) admit they are not taking a proactive approach to reduce their physical and digital security risks. Passive actions, like software updates and anti-virus deployments, can only do so much to protect the sensitive data and information of your organization, employees, and customers. Active tactics need to be deployed to be more effective in mitigating potential threats, such as frequent employee training, active monitoring programs, detailed risk analyses, active record retention, and destruction policy (e.g., Clean Desk, Shred-it-All).

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Provide Employee Education and Training

One of the most effective tactics small businesses can employ to help curb the risk of a data breach is to provide ongoing information security training for all employees. In fact, IBM’s 2023 Cost of a Data Breach Report shows that the costs of data breaches can be significantly reduced with employee training. Employees can either be your first line of defense against breaches or an easy target for bad actors. According to the Shred-it^® DPR, while almost all of the SBLs (92%) surveyed believe that data protection and compliance training are critical, only 15% of them require their employees to complete such trainings.

To help employees gain the skills they need to recognize and avoid threats that could result in a data breach, small businesses should provide mandatory periodic information security training for all employees. New hires should also undergo in-depth security training as part of the onboarding process. Comprehensive training will help employees identify threats and risks and learn how to try to mitigate them in an approachable and engaging way.

Stay Updated on Evolving Regulations

While most SBLs surveyed in the DPR say they actively support new data protection regulations to advance consumer safety, 64% feel they cannot keep track of changing regulations and worry that the regulations will only become more complicated and burdensome for them in the future (76%). SBLs also reported that they believe that larger businesses have an easier time complying (84%) because they have more resources to help them navigate the complex data protection regulatory environment.

Many of the SBLs surveyed are not making any adjustments to address regulatory changes, with only half (52%) saying they are actively monitoring changes. However, by collaborating with a trusted third-party security partner, small businesses can get the support where they need it most, such as managing their digital and physical data and information, strengthening current protection policies, and providing continuous employee training and monitoring of compliance. Almost all SBLs who reported to Shred-it^® that they are working with a third-party partner for information security feel their partnerships are deeply valuable.

Partnering with a trusted third-party to assist with information security management and compliance can help businesses navigate the often-complex regulatory environment and feel more confident in their organization’s ability to protect their company’s sensitive data and information.

Small business leaders recognize that information and information security is paramount in building and retaining strong relationships with their customers and employees. Without proper information security strategies and solutions in place, small businesses are at risk of damaging their brand reputation and, as a result, losing customers. There is an opportunity for small businesses to protect themselves from the harmful effects of data breaches, and their customers expect them to take the necessary steps to safeguard their information. Instituting active information security measures, offering regular employee training, and developing a partnership with a trusted third-party data and information protection provider are a few key steps to help protect organizations from future data breaches. Taking these steps toward better information security protection can benefit a small business’s bottom line and reputation today and in the future.

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