Why a Startup Business Needs a Privacy Policy
Starting a new business can be daunting. If you have never owned or helped to manage a business, trying to be successful with your own company is an uphill struggle. There are many things to keep track of, so it can feel like failure is always waiting around the corner. A young business is indeed at greater risk of folding than established industry leaders
One of the biggest headaches is the legal side of a business. Owners of new startups mainly want to focus on growing their brand, engaging with their customers, and turning a profit. It is admirable to care about customer and staff satisfaction, but legality is something that a CEO can never neglect.
Many legal potholes can slow new startups down. Worse still, most new businesses have neither the time nor the legal or financial backing to win court cases. Talented and enthusiastic entrepreneurs can be shut down by innocent errors before they get a chance to thrive.
Background: The Internet, Data & Increasingly Strict Laws
Companies have had to move online in this digital age to stay competitive and to reach more people with their products and services. This, by and large, has changed the nature of how customers and businesses interact. By being online, people and their activities are more exposed than in the past.
Websites collect data about user presence and activity. This applies whenever somebody browses for information, makes a purchase, or fills out an application. These data can include country of origin, time spent on different web pages, and even bank details. Such information is dangerous in the wrong hands.
Of course, customer data can be gold dust for organisations hoping to better understand their clients. Gaining an insight into customer behaviour is key to improving customer experience. Through optimizing your website and advertising campaigns, you could multiply conversion rates. That said, every website has a vital responsibility to protect any sensitive data it collects.
What Is a Privacy Policy?
A privacy policy is a transparent statement of how an organisation collects, uses, and discards customer data. A privacy policy must also detail where and for how long the data are stored. This is technically a legal piece of writing and so needs to be precise and thorough, yet accessible for average people.
There are several ways to gather data about people visiting a website. The most obvious is when a user voluntarily enters relevant details while ordering/booking something or when filling out a form. Another method is through “cookies”. Many websites give people the right to opt out of certain tracking cookies and thereby hide some of their information.
It is also necessary to tell visitors whom they can contact to access their data, as well as what protection measures they enforce. Anybody who has browsed the internet in recent years has likely come across numerous privacy policy messages.
Why Do You Need a Privacy Policy?
Countries want companies to handle their confidential customer information with water-tight security. New business legal requirements such as the GDPR apply worldwide, so a privacy policy signals honesty to authorities.
A privacy policy is important because it ensures all parties know which data are collected as well as how they are used. If a website presents this information to a visitor, then that person continues to use the site based on his or her agreement to the privacy policy.
You might run advertising on your website to generate revenue. Or, you might use external plugins to collect information for retargeting adverts. In those cases, you are required to publish a privacy policy on your site. Google and Facebook platforms both enforce a privacy policy if you retarget customers using their services.
Some customers may be unhappy with what a business does with its data. If they take legal action later, a privacy policy confirms that they were not misled about data handling. If your business strictly adheres to what you claim in the privacy policy, this simple and short piece of text can save you a lot of hassle down the line. Instead of worrying about lawsuits for data breaches, you can concentrate more on running your business.
Privacy Policy: What Should Yours Contain & How Should You Implement It?
The contents of a privacy policy are not uniform across websites because one size does not fit all. What a business needs to tell its customers about its website strongly depends on how it operates.
If a business website exists as an information source, then the owner may only wish to track the number of visitors and where they are from. These purposes only need a simple declaration for clarity. If a website uses visitor data to inform marketing decisions, that is a much more thorough use of the data and should be spelt out transparently.
The most critical case is when users have to enter personal details on a business site. When people entrust a website with their sensitive information, they have the right to know how it is protected from hackers and misuse. A business should also reassure clients about the data’s safe storage and disposal.
A privacy policy could exist as a footnote or standard page on a website, but no one is likely to read it. The most common tactic is to present a user with the privacy policy upon entering the website which they must accept before continuing. This option avoids confusion because everybody sees it. In case of a future dispute, nobody can claim that you hid key information about data usage.
How Can You Get One?
The more sensitive the data and the more important it is for the business, the more pressing the need for a unique privacy policy. Looking at the websites of businesses in your industry will give you an idea of what your policy might contain.
It is best to consult a legally trained professional to write or correct your privacy policy. Any changes (however minor) to your business operation may impact how you use data, so you must update the privacy policy to reflect this.
If you wish to try yourself, online tools exist to help you craft your personal policy. If you do attempt this, it is still worth asking a lawyer to check it.
Conclusion
A privacy policy does not guarantee a small business owner immunity from disputes and challenges. But a privacy policy, when followed strictly, does shield the business from scrutiny with regards to data.
Data usage and privacy are complex topics that could easily overwhelm an inexperienced CEO. Thankfully, a well-defined privacy policy simplifies the process.
It is very easy to set a policy up, and this is almost a prerequisite for operating online nowadays. Therefore, you should quickly define a privacy policy so you can focus on the more important task of running your company.
