In May of 2018, a new privacy initiative started in the European Union, the General Data Protection Regulation, or GDPR. This new regulation stands to impact billions of people who do business in the EU as well as their customers.
Here are the essentials to know about GDPR for small business owners.
What is GDPR?
GDPR was passed to help protect consumers in the EU. Officials of the EU wanted to put digital rights, privacy, and data protection as a priority for protecting citizens. The GDPR regulates the use of email addresses, demographics, IP addresses, names, and any other personal information. This type of data is commonly collected by businesses for marketing and other purposes.
This measure protects individuals but puts businesses on the line. Companies, especially, need to ensure the understanding of GDPR compliance for small business. Failing to follow the regulation could result in hefty fines.
How to ensure compliance
You may be wondering, does GDPR apply to small businesses? The answer to that question is yes. Now is the time to ensure your company is GDPR compliant. The most important thing is to get a clear understanding of the laws and regulations. You also need to determine whether or not the GDPR applies to your company. If you are headquartered in the EU or do business there, it likely does apply.
Additionally, since this measure is about consumer protection, it may apply if you do business elsewhere. If your current customer base includes members of the EU, you may be required to follow this initiative.
Understand your current use of customer data
Before you start preparing to follow the GDPR, you need to know your current use of data. Small businesses need to look carefully at their current marketing plans. Find out how your company collects customer data. You may need to consult with your company’s IT department and the marketing team.
Determine what kind of information is stored from consumers. You also need to figure out where you store the data. Does anyone else have access to customer data? Don’t know? Find out. Is your customer data at risk of being accessed by unauthorized persons? Assess your risk and figure out how you protect current customer data.
Decide what you need for the future
The next step to ensure compliance is to revamp your data needs for the future. You may have to pare down your current data collection methods. This is not just to protect your customers but also to protect your business. Make a plan to remove any data that is no longer needed. Then, choose the most essential information to keep in your current archives. For future data collection or marketing, focus only on the necessities.
Evaluate how your company secures customer data
Another element of compliance is your plan for security. Data security is a huge issue in maintaining privacy rights. Many companies choose to outsource their data security. Doing so does not keep you protected if something happens. If a data breach occurs, you need to deal with it immediately. Your team needs to have a solid plan of action that helps manage the damage. Not addressing a data breach properly could have you in violation of the GDPR.
Update your privacy documentation
Companies also need to revamp their privacy documentation. Most businesses have an online privacy document for visitors to read. Now, you’ve got to go much further than the simple checkbox. You’ll need to work with your team to develop a comprehensive privacy consent form. You’ll also need to decide how to deliver consent forms and get visitors to access them. If you use apps to handle marketing, you’ll need to plan for some big changes.
Demonstrate your commitment to privacy
The last way you can prepare for GDPR is to show a consistent commitment to the entire measure. This commitment can help you demonstrate your care for your customers and help them trust your business practices. Besides updating your privacy documentation, you’ll need to design a data deletion plan, too.
Business owners also need to be prepared to update their process of confirming identities for data purposes as well. Some consumers may reach out to companies and ask for their data. It’s on the business to provide this information. It’s also on you to confirm the individual’s identity.
In today’s world, data is more valuable than ever. Companies have realized this and been using data for years to learn about customers. Now, the EU has implemented strong measures designed to fight data breaches and restore privacy, and other government bodies may follow.
Your company can continue to responsibly use data to help you with marketing and other goals. It’s vital to get a complete understanding of the components of the GDPR. Knowing the GDPR can help you navigate the new world of customer data effortlessly.
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MileIQ’s blog does not constitute professional tax advice. You should contact your own tax professional to discuss your situation.