The Dangers of Small Business Data Loss


Small Business Data LossIt’s no secret that we live in a data driven, technologically dependent world. Today, businesses compete for customers on a global scale; they are no longer limited to their geographical business location. And with a finite pool of customers to compete for, data and intelligence are more important than ever! Small business data loss is a big risk; with such a big dependence on data, your business simply cannot risk not having data available at critical times.

Small businesses are effectively on a level playing ground with other businesses. It is the data collected and intelligence gained that helps them to compete. Small business data loss events can be catastrophic; small business data loss can undermine and destroy your competitive advantage. And in a fiercely competitive global marketplace, your small business could suffer dramatically.

Data loss is a significant threat to businesses in the modern world. It’s not to be taken lightly – as you’re about to find out, data loss can have a dramatic, long-lasting, detrimental effect on a small business.


Data & Its Role In Business

Data are raw facts collected by an organization. Data is transformed into information through analytic and trend monitoring, made possible through software packages, or even simple analytics.

This data is collected from a huge range of devices; from browsing habits on your computer, right through to GPS coordinates on your smartphone. It’s this data that forms the competitive advantage of your business in the modern business world. It crafts a picture of your customers, helping to uncover their needs and wants, and how they use your products or services. It also allows you to obtain feedback about how well your product or service satisfies the needs of your ideal customer. It is this in-depth, comprehensive knowledge that can pave the way for increased competitive advantage.

Before the marketplace became global, and before the growth and popularity of the internet, businesses could compete and differentiate on products and services offered. These days, however, it is extremely easy for a business to produce a product or service that imitates or replicates another, and effectively destroy the unique selling point and competitive advantage. The same can be said for commodity industries; price wars can ensue, meaning the lowest price wins the business.

Data allows you to engage with clients/customers in more meaningful ways. Small business can use data to see how well they are performing in their market, and find ways to improve relationships. By knowing how well you’re performing in your market, you can pinpoint areas for improvement. Analysing and gaining feedback from your clients is even more powerful; the more you know about them, the better you can serve them. In a globally congested marketplace, customer intelligence is where competitive advantage lays.


The Effects of Small Business Data Loss

Small business data loss can be crippling. Statistics show that 60% of businesses that lose their data will inevitably close their doors and cease to trade within 6 months. To make matters worse, 22% (more than one in five) businesses have reported a data loss event. The reliance on data for business operations, coupled with a fiercely competitive marketplace, with organizations looking to capitalize on any opportunity, places pressure on small business. These reasons alone allude to the detrimental effects of small business data loss; if you don’t have the right data at the right time, you will lose out on opportunities, and your competitors will capitalize on them.

But what about if small business data loss doesn’t cause a business to cease trading? Data loss still has a detrimental, sometimes irreparable, damaging impact. The Ponemon Institute mentions that 50% of businesses report loss in productivity, 41% reported loss of customer loyalty, and 25% reported a decline in company share prices, all directly attributed to a data loss event.

The reduction in productivity and customer loyalty because of a small business data loss event can place incredible pressure on sales teams. The inability for sales teams to interact with customers, be it due to the unavailability of systems or reputational damage, reduces profitability and revenue of the business. This compounds issues further; costly data recovery services, combined with hesitation from customers provides an extremely difficult operational environment for the small business.

Finally, data breaches and data loss are fraught with legal and regulatory hurdles. In most countries, information is protected by strict laws, legislation and regulations. As such, data loss events could lead to legal problems arising from:

  • Privacy infringements, such as customer data being leaked
  • Litigation if the data loss event causes your business not to perform services you are contracted to do
  • Issues with credit reporting and adherence to the Sarbanes-Oxley Act

Small business data loss is something to be taken very seriously. The effects of data loss can be catastrophic and long-lasting.


Avoiding Small Business Data Loss Events

Data loss can come in a variety of forms, each of which a business has a varying degree of control against. The most common causes of data loss are:Small Business Data Loss

  • Human error, including accidental deletion, formatting and incorrect handling of data
  • Data corruption, which can be caused by hardware malfunction or natural disasters
  • Physical damage to devices, such as being dropped or basic wear-and-tear of devices
  • Viruses and malware, such as Trojan’s or ransomware
  • Natural disasters, like flooding, earthquake or fires

By far, the simplest way to defend against data loss events is through a comprehensive backup policy. A comprehensive backup policy will utilize the 3-2-1 model for backing up data:


At least 3 total copies of your data, 2 of which are local but on different mediums, and at least 1 copy offsite.


The 3-2-1 model data backup is an efficient and effective strategy for data backup and data loss prevention. It utilizes multiple means of backup in multiple locations, to ensure the safety and security of your data.

Backing up your data is effective in fighting against small business data loss, because:

  • It ensures that there is a current version of your data backed up, ready to be restored
  • Mitigates the threat of human error, data corruption, physical damage and malware by having stored copies readily available
  • Offsite backups ensure that, in the event a natural disaster affects your businesses premises, a copy is stored in a safe and secure location away from the disaster

Ensuring that your business follows the 3-2-1 model on a frequent basis will go a long way towards defending against small business data loss. Remember to backup your data frequently; this is especially true if your data is frequently updated, modified, new data added or is sensitive and business critical.

Backups are simple and easy to implement, so there’s no excuse not to have one. The evidence is clear throughout this article; you risk business closure if small business data loss strikes. Don’t take the risk – secure your data!


The Future of Your Business Depends on Data Loss Prevention

By placing increasing importance on data loss prevention, and being vigilant, you can take significant steps towards securing your data, and the future of your business. Don’t become a statistic like so many others. The business world and your customers won’t wait for you – you need to be ready at all times to capitalize on opportunities. And that means having the right data accessible at the right time.

You’ll thank us for this advice when a data disaster strikes.



Digital Marketing associate, working for a high-end, premium data recovery firm.