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Lock It Up: 8 Strategies for Keeping Your Company’s Data Safe

Jamie Johnson
Jamie Johnson Contributing Writer
Updated May 04, 2022

A data breach can have serious financial consequences and hurt your company's reputation. Learn to safeguard your critical data.

Most business owners know that data breaches are an issue, but they may not realize how many problems they cause. Companies that fall victim to a data breach can face serious legal, financial and internal problems. 

The rate of data breaches is only growing: An Accenture report found that data breaches increased 31% from 2020 to 2021. Many business owners have a false sense of security about data breaches, assuming only large companies are at risk. In reality, small and midsize companies are often attractive hacker targets.

It’s in the best interests of every business owner to prevent data breaches. We’ll explore data risks facing businesses today and provide eight data breach prevention best practices to help you protect your business and customers. 

8 ways to protect your business from data breaches

Data breaches impact your business long after they’ve occurred, costing you financially, impacting your company’s reputation, and causing you to lose customers. Fortunately, some straightforward measures can protect your business from a data breach. Here are eight strategies to keep your company’s data safe. 

1. Educate your employees on security.

Hackers aren’t the only threat your business faces. Disgruntled employees with a score to settle could wreak havoc on your company. Even more common, otherwise excellent employees may have a careless moment and forget security protocols, leaving sensitive files vulnerable to attack. 

Because your team plays such a vital role in your company’s security, it’s critical to train your staff on security best practices and preventing data breaches. 

Vet your employees well as part of the hiring process. During your training program, instruct employees on password security, recognizing phishing attempts and safely disposing of sensitive information. [Related article: How to Create a Successful Hiring Process]

Educating your employees on cybersecurity best practices can significantly reduce your odds of suffering a data breach.  

FYIFYI: Choosing a top document management system is an excellent way to boost your digital document security. For sensitive printed documents, use one of the best paper shredding services for safe disposal.

2. Change your passwords frequently.

Secure passwords are the cornerstone of data security. Require your employees to change their passwords at least every few months. Teach your employees how to create secure, unique passwords that hackers can’t easily guess. 

For added security, consider mandating multi-factor authentication for all employees, systems and services. Biometric authentication is another option for an even higher level of identity authentication.

3. Do your due diligence before working with vendors and partners.

Any time you hire a service to work with or for your business, do your homework first. Don’t hire based on price alone; this can end up causing more problems in the long run. Make sure any vendor or partner business you work with is trustworthy. Consider choosing businesses that security experts and professional associations recommend. 

4. Implement security systems and applications. 

Although they aren’t enough on their own, it’s critical to implement security applications like firewalls and antivirus software. However, you can’t just download security software and forget about it; ensure you regularly update, monitor and maintain it. You should augment any security measures you implement with human intervention and oversight. [Related article: VPN vs. Firewall vs. Antivirus – Which Is Most Secure?

TipTip: Read our reviews of the best internet security and antivirus software to find the right solution that will serve as your business’s first and last line of defense

5. Conduct regular security audits.

If your company houses sensitive data, like medical or financial records, you need to conduct cybersecurity risk assessments regularly. Cybersecurity risk assessments are security audits used to do the following:

  • Identify an organization’s most critical data and devices.
  • Determine how a hacker could access data and devices. 
  • Assess the potential risks of your data falling into the wrong hands.
  • Consider how vulnerable you are as a target.

For the highest level of security, hire a professional to initiate and stay on top of your security risk assessments. 

TipTip: Consider buying cyber insurance to cover your liability for any sensitive customer information breaches. You’ll need a cyber insurance risk assessment that identifies your organization’s vulnerabilities to get this coverage.

6. Use data encryption for sensitive records and information.

When you encrypt your data, you translate it into a new form so that only the individuals with a key can access it. Data encryption keeps your data safe from criminals, and it’s become an indispensable tool for many businesses.

However, you may not be able to encrypt all your data, so it’s essential to know which data to prioritize. It’s a good idea to encrypt sensitive customer information, financial records, and research and development data. 

7. Use an online backup service.

Despite your best efforts and training practices, a data breach could still affect your business. For this reason, it’s crucial to use an online backup service that safely stores and encrypts data in the cloud.  

When your data is safely backed up in the cloud, you’ll be able to recover it in the event of a devastating data breach and mitigate the damage to your company. Check out our reviews of the best cloud storage and online backup services to find a solution that fits your needs and budget. 

8. Hold on to your employees.

When an employee leaves, replacing them can be expensive and time-consuming. A significant portion of the expense involves resetting security protocols to revoking access to company data.

If your company has a high employee turnover rate, you’re at greater risk of a cyberattack, whether from a disgruntled former employee or an outside bad actor exploiting an opportunity to access critical data. 

Either way, reducing employee turnover will save your company money and reduce your odds of being the victim of a data breach. When employees do leave, debrief them and ensure they give up their passwords and company files before leaving. 

The most significant data risks facing small businesses

According to research from IBM and the Ponemon Institute, the average cost of a data breach is $4.24 million. Data breaches are so costly that just one incident could force many small businesses to close their doors. 

This figure represents the highest average data breach cost in more than 17 years. The increase in remote work since the pandemic is the biggest contributing factor to the rise in data breaches.

Here are some of the most common risks facing small businesses:

  • Ransomware: Ransomware is a type of software that blocks access to your computer until you pay a fee. In this cyber-extortion method, you’ll typically get a message on your computer stating that you’ve been hacked and can’t get your data back until you pay. This ransom could end up costing your business thousands of dollars.
  • Malware: Malware is software designed to disrupt or damage your computer system. If your business relies heavily on data, malware can be incredibly disruptive to your company.
  • Stolen information: It’s easy for employees to leave sensitive information lying around accidentally and for that data to be stolen and published online. This can be incredibly damaging if customer data or prototype information is released. 
  • Phishing: A phishing attack attempts to steal sensitive information by posing as a legitimate source. For instance, a hacker might pose as a bank representative and send an email trying to get account information. 

What are the primary sources of data breaches?

According to the IBM report, compromised credentials are responsible for 20% of data breaches in 2021. It’s often human error that opens the door to a data breach.

For instance, employees may choose weak passwords or reuse them across multiple accounts. That means a hacker needs to steal only one set of credentials to access multiple company accounts. A password manager, essentially an online access control system, can keep your passwords safe and boost company security.

Another common problem is employees falling for phishing attempts. This often happens through email, but hackers may also call you, send text messages, or use social media to find a vulnerable target.

Image Credit:

NanoStockk / Getty Images

Jamie Johnson
Jamie Johnson Contributing Writer
Jamie Johnson is a Kansas City-based freelance writer who writes about finance and business. She has also written for the U.S. Chamber of Commerce, Fox Business and Business Insider. Jamie has written about a variety of B2B topics like finance, business funding options and accounting. She also writes about how businesses can grow through effective social media and email marketing strategies.