GDPR for Small Businesses: The Complete Guide

The European privacy law GDPR applies not only to enterprises but also to small businesses. Contrary to popular belief, achieving GDPR compliance doesn’t have to break the bank. By implementing smart strategies, allocating resources, and using compliance tools, you can be GDPR-compliant. 

The General Data Protection Regulation (GDPR) is the pioneering legislation that protects European personal data. The law gives data subjects the ownership of their data and requires organizations to protect their privacy rights.

GDPR’s scope extends to businesses outside the European Union that process the personal data of EU citizens, regardless of their size. Therefore, small businesses fall within its scope even if they are not based in Europe. 

However, GDPR carves out exemptions for small businesses from certain obligations such as record-keeping or appointing a data protection officer if they do not engage in activities like large-scale data processing.

Breaches will be enforced by the Data Protection Authorities (DPAs). They are supervisory authorities with investigative and corrective powers over personal data breaches. Violators would have to face substantial fines of up to $20 Million or 4% of global annual revenue.

While non-compliance penalties are a significant motivator, GDPR compliance has more to offer. Being a small business gives you the advantage of starting small with fewer complexities. As you grow, it becomes easier, providing an opportunity to build trust, enhance customer relationships, and gain a competitive advantage. But that is not all, here are more reasons why you should care about the GDPR.

Customer trust and transparency

Being GDPR compliant hallmarks your respect for data privacy, which helps foster trust with your customers.  This is because, customers appreciate an organization that values their privacy, is transparent about data practices, and ensures secured personal data.

Personal information

It is hardly possible to conduct a business without data collection. Chances are you might also be doing it and that brings you under the law’s scope. For example, small businesses with home delivery collect names, phone numbers, addresses, and other personal information from their customers.

Fines

Data privacy is a legal obligation, and non-compliance fines can be a knock-out punch for small businesses. They are categorized into two tiers based on the severity of violations. The fines can reach up to $10 million or 2% of gross revenue for less severe breaches and $20 million or 4% of gross annual revenue for severe violations. 

Operational efficiency

GDPR adherence streamlines personal data processing, minimizes storage requirements, improves data quality, and identifies potential harms, and risk mitigation measures. It also standardizes data handling procedures. This will improve your operational efficiency and help you run milestones faster.

Reputation and competitive advantage

GDPR compliance positions you as responsible, accountable, and forward-thinking. This will be an added advantage for your brand, making you stand out from the crowd.

Whether it is a small business or not, GDPR is a level playing field for all. Though complying with GDPR requirements may seem arduous at first, it will get easier. Follow the essential steps given below for your success in winning GDPR compliance.

Data management

Ensure that you have a channelized data management system in place. Only collect the data that is required for the specific purpose of collection (data minimization). 

Conduct data auditing, identify the types of data you collect, and know their sources. For example, names and phone numbers collected for the newsletter through a form on your website. 

Also, keep the data up-to-date and do not keep it for more than a reasonable retention period.

Data processing activities

Do not process personal data for any other purpose than what it was collected for. Keep in mind to ensure that the processing activities are lawful and follow GDPR regulations. 

Avoid processing personal data without a legal basis for processing such as a legitimate interest, consent, contract, vital interest or to carry out a public task. 

For example, obtain cookie consent before deploying non-necessary cookies as they can collect personal data. 

Businesses often find it difficult to track and keep themselves updated with new cookies, implement cookie banners, and collect valid consent for each cookie separately on their websites. This can be solved in a few simple steps using cookie consent solutions like CookieYes.

Transparency

Inform customers about your data practices. Provide them with a clear and accessible privacy notice/privacy policy with details about the types of data collected, for what purposes they will be used, who has access to the data, data subjects’ rights, how they can exercise their rights, etc.

Opt-in consent

Unlike CCPA, the GDPR relies on explicit consent where individuals must opt-in for data collection. For the consent to be valid, it must be given without coercion or influence. Therefore, pre-checked boxes, consent obtained using dark patterns, or assuming consent are bad practices under the GDPR.

Security

Adopt internal policies and implement strict data protection and confidentiality measures like encryption, timely backup, pseudonymization, etc. 

The security measures must be appropriate to and proportional to the categories and amount of data you hold. Update your anti-virus software regularly. Conduct training sessions for your employees to create awareness about the importance of data protection, what they should watch out for, and how they can contribute.

Data protection impact assessments

Businesses that process personal data posing high risks to the rights and freedom of data subjects must conduct impact assessments. This includes large-scale processing of special categories of data and personal data used for profiling. 

Personal data that reveals racial or ethnic origin, political opinions, religious or philosophical beliefs, trade union membership, genetic and biometric information, a person’s sex life or sexual orientation, and health data are considered sensitive/special categories of data.

Be aware of data subject rights

Knowing your GDPR obligations is not enough. You should also recognize the rights granted to the data subjects. These include the right to access, correct, erase, object, restrict, portability, and rights related to automated decision-making.

Provide convenient mechanisms like a form, an active email address, or a toll-free number to receive data subject access requests. Fulfill these requests promptly, at least within a month.

Data breach

Knowing what to do in case of a data breach is as important as creating and implementing a fool-proof compliance strategy. As the law requires, you must notify supervisory authorities about serious breaches within 72 hours. Also, familiarize yourself with data breach notification templates.

Join industry associations

You can leverage the opportunity to socialize with others in the same industry. Chances are, they might also be going through the same challenges as you. This taps you in with collective and shared knowledge, thereby helping you grow.

Continuous process

Consider GDPR compliance as a process rather than a project. Stay updated with regulations, subscribe to privacy newsletters, and consult experts for legal advice. Appoint a data protection officer (DPO) if you handle sensitive data on a large scale.

Remember, GDPR compliance is a continuous process and you have to stay proactive.

As a small business owner, the journey towards GDPR compliance can be challenging and confusing. However, with the help of technology, you can simplify the process. Let’s examine some software solutions that businesses like yours prefer. We curated this list based on customer reviews and product claims.

CookieYes

Since the GDPR implementation, websites have been struggling with consent management. This includes cookie auditing, consent banners, granular consent, consent documentation, and consent preferences while also being compliant with the latest Google consent mode v2 and IAB TCF. If you own a website, you have likely encountered this issue. 

CookieYes is an all-in-one solution for all your consent management concerns. Using our tool you can audit cookies on your website, provide customized cookie banners, and obtain granular consent. Moreover, you can document user consent in a downloadable format as proof of compliance. 

CookieYes offers tailored pricing plans that cater to your business including a free plan and a free trial.

Sprinto

Sprinto is a security compliance software that provides solutions such as data protection loss management, compliance monitoring, and data encryption. It provides custom pricing plans for businesses.

TrustArc

This compliance software offers data subject request automation features, data mapping, vendor risk management, as well as a privacy program consultation service.

TrustArc claims to automate your compliance program and has a 24*7 live chat feature. It has customizable pricing plans and does not offer a free trial. 

OneTrust

OneTrust provides features such as data mapping, automated privacy impact assessments, and streamlined processing of data subject requests, including the erasure of sensitive information. It does not currently offer a free plan. However, according to G2, it provides free trials.

Data Guard

Data Guard offers solutions such as automated DSAR management, data security, privacy documentation, and risk management. It has compliance options dedicated to small businesses. The platform provides a three-tiered pricing structure and has no free plans included.

StandardFusion

With solutions for compliance challenges such as risk management, privacy management, data management, and audit management, StandardFusion claims to be designed for smaller teams and offers flexible pricing.