The Importance of Data Loss Prevention in Small Business 

Brad Dorsey

8 min read ·


Data stored in your office isn’t safe. Hackers and cybercriminals find new ways to exploit weaknesses in a company’s digital assets every day. Particularly in the last two years, the number of cybercrime attacks has risen sharply

Contrary to popular belief, digital security is as important for small businesses as large ones – if not more so. Big companies have more data to steal, true. But smaller businesses may have fewer defenses for network security. Criminals may profit more and risk less by targeting small companies rather than big conglomerates.  

Besides the risks of data theft by malicious outsiders, small businesses also have to face internal threats. These may include malicious employees, carelessness, ignorance, or a lack of appropriate security training.  

But regardless of the cause, if you don’t have proper data loss protection (DLP) procedures in place, you’re doing your small business a disservice.  


What is Data Loss Prevention? 

Data loss prevention is a blanket term. It refers to the tools and strategies you use to protect your sensitive data. DLP is used to prevent cyberattacks from internal and external sources. You can also employ DLP to prevent unauthorized employees from illegitimately accessing or misplacing confidential information.   


Common Causes of Data Loss 

You can lose data in several ways, though they boil down to two mechanisms: internal and external threats.  


Internal Threats 

Even companies with rigorous hiring practices sometimes have a bad apple slip through, and 88% of companies are unable to consistently detect insider threats. On a less malicious note, it’s far more common for a poorly trained and well-intentioned employee to pose a security risk by misplacing or misusing data. And even well-trained employees can download malware through email or online links.  


External Threats 

Of course, you can also lose data to external threats like hackers and cyberattacks. Data is a treasure trove for your marketing team and business partnerships. So too, is it valuable for cybercriminals. (Especially contact and financial data!) 

Unfortunately, if your data falls into the wrong hands, it can bring about the downfall of your business. But hackers rarely strong-arm their way into a network. Instead, they exploit lax or nonexistent security practices, human error, and weak passwords to worm their way in.  


Why Do Companies Need Data Loss Prevention? 

If you don’t have a robust DLP system in place, it’s easy for sensitive information to fall into the wrong hands. This includes: 

  • Intellectual property and trade secrets 
  • Contact information 
  • Financial data 
  • Social Security Numbers 
  • Data protected by HIPAA 

The implications and aftermath of a data breach are severe and can even put you out of business. Let’s take a deeper look at why you should institute data loss protection for your small business sooner rather than later.  


Small Businesses Aren’t Exempt from Cyberattacks 

Businesses of all sizes should prioritize data loss prevention. But it’s especially important for small businesses. They’re as likely to be targeted by criminals who have learned to assume the business doesn’t have the proper protections in place. This makes small businesses vulnerable to hackers and internal misuse.  


Regulations Demand It 

All businesses need to comply with federal, state, international, and industry regulations. For businesses that gather any kind of confidential data, that includes data protection. Failure to comply with these regulations can lead to penalties and fines, a loss of customer trust, and decreased revenue.  

If you fail to adhere to crucial regulations, your business may be subject to legal action. 


Data Thieves Continue to Evolve 

Hackers, data thieves, cybercriminals. Whatever you call them, they’re evolving with modern technology, which means they’re creating new ways to access sensitive networks.  

Some of these bad actors can end up inside your organization. Whether a thief slips through your hiring process or a disgruntled employee steals data to exact their revenge, the consequences for your business are the same.  

The good news is you can avoid these threats by the proactive implementation of a data loss prevention (DLP) strategy. As we’ll see below, you’ll also want to ensure that your employees are trained on data procedures to prevent damage before it occurs.  


Work-From-Home Has Changed the Working Landscape 

As our technological abilities expand, new channels for transmitting data crop up regularly. This is especially true in the work-from-home and bring-your-own-device (BYOD)  era, when it is reported that over 67% of employees use their own devices at work.  

Unfortunately, tracking and securing the mobile devices on your network is an evolving challenge thanks to these developments. Not to mention, poorly implemented BYOD policies can contribute to businesses leaking sensitive information. This is especially true if your employees aren’t aware of the security measures used by their own devices.  

But DLP software and strategies can help you navigate these avoidable problems. By monitoring employee devices, creating robust BYOD protocols, and installing the right software, you can help safeguard your data before the worst happens.  


Cloud Storage 

Cloud storage presents another challenge in the work-from-home and BYOD landscape. Employees can now store data in networks like Google Drive, Microsoft OneDrive, or Dropbox on a whim. While this simplifies their work lives, it can exacerbate your data protection issues.  

But as a small business owner, it’s up to you to institute network security measures. In doing so, you should ensure that only authorized employees can access sensitive data. Data should only be stored in secure locations – preferably your company network.  


The Consequences of Not Having DLP Policies Cost More 

If you mismanage or lose sensitive data, you may be liable for  any negative outcomes. You might face hefty fines, lawsuits, financial losses, and ruined customer relationships. That’s why, even as a small business, putting DLP measures in place is crucial to help protect your brand image and your bottom line.  


How to Prevent Data Loss 

You can take several steps to build an effective data loss prevention strategy and prevent data leakage. Of course, the level of security you require depends on your industry, data usage, and regulatory authority. That said, every business should do the following to help protect their data:  


1.  Install Data Loss Prevention Software and Tools 

The right DLP technology depends on the type of data you need to protect. Moreover, many businesses may need to use several tools together to achieve their goals. But at the very least, your repertoire should include: 

  • Antivirus software 
  • Firewalls 
  • Intrusion detection systems 
  • Activity or employee monitoring software (on company-owned devices) 

But this is the bare minimum. Many advanced DLP tools now offer AI and machine learning to further enhance your security. You should also update your tools often to ensure that you’re safe from newer, more dangerous viruses. It may also be wise to perform frequent penetration tests to assess the effectiveness of your defenses.  


2. Backup Your Data Often 

Regular backups – daily or weekly – ensure that you don’t lose data after a sudden event. It’s wise to backup software codes, customer and financial data, and crucial internal documents. You should also consider creating three copies of your business files and storing them in separate locations.  


3. Establish a DLP Employee Policy 

Employing a data loss prevention policy helps to let your employees know that you take security seriously. Moreover, it helps build a culture where employees respect and engage with your cybersecurity efforts. While every company’s policy looks different, you can start by: 

  • Defining protected data, suitable storage and archive locations, and conditions for accessing data
  • Setting up a document organization system with restricted permissions 
  • Creating rules for BYOD employees, software installations, and company internet use
  • Limiting personal activities like checking personal emails and social media 
  • Enforcing strict password protocols, including: 
    • Complex passwords 
    • Regular password resets 
    • Multi-factor authentication 
  • Clear, defined disciplinary actions for violators – and enforcing them at all levels of your business 

Another step that many businesses take is installing user activity monitoring software. Such software is useful in tracking employee behavior, limiting website and data access, and remotely accessing and deleting data.  

However, you will need to consider whether this type of software implicates state law or compromises your employees’ privacy, especially under BYOD policies. In addition, you want to ensure you’re not punishing employees for falsely flagged activities, as you may open your organization to legal action.  

To help keep your company on the right side of the law, you should consult a legal professional about your DLP policy before it goes into place. You should also keep abreast of changes in privacy and technology laws to help avoid accidental violations of new laws.  


4. Train Employees on Cybersecurity Best Practices 

All the policies and procedures in the world can’t protect you if you don’t educate your employees. That’s why a crucial component of any data loss protection strategy is hiring and training the right people in the right way.  

It’s often wise to start with an initial meeting to train your employees upfront. This may occur when you enact your policy as well as when you hire new employees. Make sure that everyone is familiar with your DLP software and educated on your policies.  

Moreover, it’s never a bad idea to ensure your employees know what illicit data activity looks like, such as: 

  • Phishing
  • Whaling 
  • Security breaches 
  • Suspicious emails and links 

After the initial education, you should arrange regular refreshers to keep employees up to date on your procedures. This is also a great time to inform employees of any new changes and answer any questions that may arise.  


5. Safeguard Your Physical Assets 

When you think about data loss prevention, digital data comes to mind. But the damage to your information storage devices is another leading cause of data loss. If your small business relies on external storage equipment, you should take care to safeguard your physical assets, too. For instance, you might: 

  • Place computers and servers in dry, well-ventilated areas 
  • Keep signages for server rooms and data centers as non-descriptive as possible 
  • Restrict access to data storage offices and equipment for nonessential personnel 
  • Invest in rack-mount servers that bolt to the floor to reduce chances of theft 

Investing in a simple security system is wise. Locks, cameras, and shatter-resistant windows could make a huge difference. 


Types of Data Loss Prevention Solutions for Small Businesses 

We’ve gone over how to protect your sensitive data. Now let’s look at some of the tools you can implement to boost your security. DLP software can protect the information in several ways, such as by: 

  • Monitoring, controlling, and blocking data transfers through unauthorized routes  
  • Encrypting data en route via internal or external networks 
  • Monitoring data currently in use by applications or employees 
  • Safeguarding stored or archived data 

Let’s look at the three main types of software used to protect your data:  


1. Cloud Data Loss Prevention 

Cloud DLP software prevents sensitive data from being insecurely stored, used, or transferred. In particular, it protects data en route to the cloud by encrypting before it’s uploaded. Cloud DLP systems can also remove or alter classified information before files enter the cloud network.  

Cloud DLP systems have grown more useful as remote and work-from-home situations become more common. And as we continue to build reliance on cloud-based sharing and storage processes, the trend is likely to grow.  


2. Network Data Loss Prevention 

Network DLP solutions focus on securing both internal and external communications, such as: 

  • Emails 
  • Phone calls 
  • Texts 
  • File transfer protocol (FTP) networks 

Network DLPs work by scanning all content for tracking and reporting. Many also have features that inform employees of unintentional policy violations, which can save you hours of retraining. 


3. Storage Data Loss Prevention 

Storage DLP systems secure data at rest. That is information in the storage on hard drives, flash drives, or other systems. Storage DLPs also help identify sensitive files and prevent data leakage.  


Data Loss Prevention is Crucial to Keep Your Small Business in Business 

Small businesses are as susceptible to data loss as big businesses – if not more so. It’s best to be proactive and set up proper data loss prevention software, policies, and procedures. Doing so can help you protect your small business from the worst-case scenario.



Tomas Pospisil is a growth marketing specialist at Safetica, a company that protects business data for its clients all over the world. 



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Brad Dorsey