November 03, 2025

Why All Small Businesses Need a Data Security Policy – and How to Implement One

Many small businesses may assume they’re not large enough to be targets of data theft – but this can be a costly misconception. Even the smallest of organizations store sensitive information that could be exploited for identity theft or other crimes if it falls into the wrong hands.

Small businesses (typically defined as those with fewer than 1,000 employees) often manage confidential data about employees, customers, and company operations – exactly the kind of data and information identity thieves seek. According to Verizon’s 2025 Data Breach Investigation Report, small businesses experienced 3,049 data security incidents in 2024, including 2,842 confirmed data breaches. At the same time, IBM’s Cost of a Data Breach Report 2025 found the average breach cost U.S. businesses a record $10.2 million – a 9% increase over 2023.

For small businesses, the financial and operational fallout from a data breach could be substantial. That’s why taking proactive steps to strengthen data security is essential. Below are some ways to help build a strong information security policy for your small business:

• Prioritize Data Protection – Treat data security as a core business priority. Allocate budget and resources to safeguard company information.
• Foster a Security-First Culture – Leadership should foster a security-first mindset that permeates every level of the organization, ensuring all employees understand the importance of safeguarding data.
• Assess Possible Risks – Identify all assets that contain confidential information and conduct risk assessmentsto pinpoint physical and digital data security vulnerabilities. Evaluate existing databases to see if any bugs have gotten through. Establish a data management lifecycle process from creation to disposal.
• Manage Physical Records – Implement a Record Retention Policy that identifies and classifies confidential information and defines storage methods. Ensure compliance with all applicable federal, state, and regulatory retention requirements.
• Apply Technical Controls – Protect and manage all internet-connected devices, such as computers, smart phones, tablets, and any web-enabled devices. Use firewalls and the latest security software, web browsers, and operating systems, and keep them patched. Always scan USBs and external devices with security software. Use strong passwords too. Limit access to information.
• Train Employees Continuously – Educate employees on identifying and avoiding digital and physical security threats to help minimize the potential impacts of some common occurrences. In 2024, phishing and pretexting are still the main techniques thieves leverage to trick employees, according to Verizon.
• Embed Data Security into Daily Business Operations – Standardize information security by embedding processes into daily business operations. Consider working with a document and hard-drive destruction provider that offers locked consoles for storing paper documents that need to be securely destroyed. Consider implementing a shred-it-all policy that ensures all documents that are no longer needed are securely destroyed. Introduce a clean desk policy so confidential information is protected when employees are away from their desks. Also, regularly monitor employee activity to detect any unusual behavior that could signal insider fraud.
• Be Prepared – Establish an incident response plan to streamline actions and reduce stress for staff in the event of a data breach. Ensure all team members are clear about their roles and responsibilities. Having a comprehensive plan in place is vital to minimize the impact of a breach, enabling prompt breach detection and response.
• Seek Professional Support – If your business lacks the internal resources or expertise to create a thorough data security policy or to deliver effective employee training, consider partnering with a reputable service like Shred-it^®. Shred-it^® provides tailored support, including Shred-it^® policy templates and trainings designed to help organizations of all sizes educate employees with resources that are interactive, customizable, accessible, and compatible with existing systems.

Learn more about how Shred-it^® can support your organization with flexible, easy-to-implement data security training and tools.

^{**This article is for general information purposes only and should not be construed as legal advice on any specific facts or circumstances.}