The business landscape in the United States is dynamic and robust, driven largely by small businesses, which make up 99.9% of all businesses in the country. Within this percentage of small businesses, there are approximately 73,000 startups, making the U.S. the leading country in entrepreneurial businesses. These organizations can be more vulnerable to data breaches because they likely do not have the expertise of a dedicated data protection officer to implement the most effective information security measures. Small businesses are therefore targets for bad actors looking to do harm.
In any business, maintaining customer trust and loyalty is crucial. However, when a data breach occurs, the company's reputation can take a hit, and customers could lose faith. Statistics indicate that over 80% of affected consumers would stop supporting a brand following a cyberattack. This results in a loss of customer loyalty and, more significantly, a decline in trust, which can be long-lasting.
In addition, according to the 2023 IBM Cost of a Data Breach Report, the average cost of a data breach has reached an all-time high of $4.45 million (in U.S. dollars). This represents a 2.3% increase from the 2022 cost of $4.35 million. Businesses with fewer than 500 employees reported that the average impact of a data breach increased from
$2.92 million (in U.S. dollars) to $3.31 million. This underscores the importance of startups prioritizing data security. To help mitigate these risks, organizations should have a comprehensive data security plan that addresses digital and physical vulnerabilities, proactively minimizing the potential for breaches.
Physical Data Security Recommendations for Startups
Understand your responsibilities: Conduct thorough research into relevant privacy laws and regulations. The 2022 Shred-it® Data Protection Report (DPR) reveals that 58% of surveyed small business leaders (SBLs) struggle to track shifting privacy regulations, with 25% lacking an understanding of applicable laws. Data security can be a legal responsibility for startups in certain industries, and a business can be subject to requirements regarding the secure handling and proper disposal of sensitive information such as financial data, client records, and personnel files.
- Establish information security policies: Develop comprehensive policies outlining the identification and protection of sensitive data within and outside of the workplace such as a shred-it all policy and a remote work policy. The DPR found that 25% of those surveyed have experienced breaches and that SBLs recognize employee error as a significant vulnerability. Similarly, Verizon's 2023 Data Breach Investigation Report notes that 74% of last year's breaches involved human elements.
- Enforce document management protocols: Only collect and retain personal information that is essential to the business, and enforce stringent physical access control. All documents have a recommended retention period, depending on their importance and content. There may be laws and regulations that dictate which documents need to be kept and for how long. Follow document retention schedules to help keep offices free of clutter and to contribute to information security.
- Strengthen IT defenses: Employ leading technology safeguards for prevention, detection, and encryption. Invest in cybersecurity tools and apply them universally. Solutions that limit data access and theft risk include mobile device management software, anti-virus software, firewalls, and two-factor or multi-factor authentication. Your organization should use these tools for any equipment it owns. You should also consider using encryption when sharing sensitive information electronically to prevent theft or loss. Enabling automatic software updates for cybersecurity solutions is helpful to ensure protections remain current.
- Educate and empower your workforce: Regular employee training can help employees better understand their role in helping the organization remain secure and what actions to take in the event of a data breach. Security training during employee onboarding should also be required. The 2022 DPR reveals that although SBLs believe data protection training is important, only 58% of the SBLs surveyed mandate employee training and 65% remain concerned about adequacy of training.
- Emphasize physical safeguards: Institute strict visitor sign-in protocol, the use of lockable consoles for document collection prior to destruction, and a clean desk policy to help protect data. The policy encourages regular shredding or containment of physical documents and requires that all technological devices are password protected each time an employee leaves a workspace.
- Conduct thorough security risk assessments: Establish a structured risk assessment schedule to pinpoint vulnerabilities and devise solutions. Walk through administrative areas to identify high-risk areas, such as printing stations, work stations, and exposed trash and recycling bins. Flag these vulnerabilities and develop policies that can help to remove the threat.
- Evaluate your supply chain: As touch points in the supply chain increase, so does risk and businesses need to hold each other to a higher security standard. All it takes is one breach for many reputations to be damaged. Thoroughly assess potential partners' commitment to information security before forming business relationships. Do these partners also demonstrate a commitment to information security? By creating a far-reaching information security policy that encompasses business partners and suppliers, companies can do a more effective job of protecting confidential data.
- Secure document disposal: Shredding is one of the most secure ways to dispose of confidential information. Partner with a trusted shredding company that offers services for paper and hard drive destruction. Utilizing secure paper shredding services ensures that your confidential documents are properly disposed of and recycled, reducing waste and promoting sustainability.
By adhering to these recommendations and consistently updating their knowledge base, startups can help foster a work environment that takes ongoing data security seriously. Every proactive measure taken today is an investment into the business's long-term integrity and growth.
Learn more about how Shred-it® can help startups protect physical and digital data with secure document and hard drive destruction services.