What Is GDPR for Small Businesses: A Comprehensive Guide


Whether you’re a legal expert or an owner of a small business or a startup, you should know how important it is to know the basic rules of the law and abide by them. After all, you want your company to prosper. On the other hand, penalties resulting from failure to comply with some rules and regulations can put entire businesses on hold. Not to mention, these regulations are, more often than not, extremely confusing, making the whole process even more difficult.

One of the most recent challenges that small businesses face is addressing GDPR compliance, which often forces them to seek help from GDPR consultancy agencies to avoid legal trouble. If you’re unsure what it is about and how you should act on it, don’t worry! In this article, we’ll provide you with useful information regarding GDPR and what it entails. If you want to learn more, keep on reading!

What Is GDPR?

GDPR, or The General Data Protection Regulation, is an international privacy law created by the European Union (EU) that took effect on May 25, 2018. Basically, it regulates how companies, both big and small, collect, manage, and protect personal data. Its goal is to provide strong safety measures, unified across all EU countries, and give EU residents efficient ways to protect their data and privacy online.

Personal Data 101

You may be wondering what stands behind personal data or Personally Identifiable Information (PII). Simply put, these are information anyone can use to identify a living person accurately. These include, but are not limited to:

  • A name and surname
  • An email address
  • A home address
  • A location
  • An ID number
  • An IP address

There’s also a category called sensitive information, which can be extremely damaging if breached. As such, GDPR puts great emphasis on the protection of these data:

  • Genetic data
  • Biometric data
  • Racial or ethnic origin
  • Trade union membership
  • Political opinions
  • Religious or philosophical beliefs

GDPR and Small Businesses

GDPR applies to businesses that operate within the EU or offer goods and services to other businesses and individuals in the EU, which handle and process their personal data. Even if your company hires fewer than 250 people but still uses any personal data, you need to comply with GDPR and designate a Data Protection Officer (DPO).

There are, however, some exceptions to this rule. These include situations where small businesses process the personal data of EU residents only occasionally, and where these businesses rarely offer any goods or services to potential customers in the EU.

GDPR Compliance Requirements for Small Businesses

Here’s a checklist of some of the requirements that small businesses need to implement in order to be compliant with GDPR:

  • Data Protection Officer (DPO). A person or people hired to be DPOs ensure compliance of your business with GDPR, communicate between companies and supervisory authorities, and educate other employees on the latest regulations,
  • Each company and organisation has to display a form of freely given consent from anyone subjected to data collection, processing, and storage.
  • GDPR states that companies must implement appropriate data protection measures to safeguard data and privacy of their customers against loss and exposure.
  • You can still perform direct marketing. However, you need to inform all data subjects that you’re using their data for these purposes.
  • Data Breach Notification. In case of a data breach, organizations and businesses must notify their respective supervising authorities within 72 hours of becoming aware of it.

GDPR Penalties

Dealing with sensitive data requires a lot of effort and responsibility. GDPR has been designed to protect it, which is why it’s so important to comply with it. Failing to do so can result in a number of penalties, including:

  • Prosecutions for deliberate data breaches, including prison sentences.
  • Obligatory undertakings, when a company needs to comply to GDPR and perform any actions to do so.
  • Maximum fines of 4% of annual global turnover or up to €20 million – whichever is higher. GDPR increased the severity of this penalty, as the previous rules under DPA stated that the maximum fine would be of £500,000.

The fines increased significantly, possibly putting non-compliant businesses at the risk of insolvency. What’s more, individuals also have the right to sue a company that failed to comply with GDPR and led to data breaches.

The Bottom Line

Just like many other EU regulations, GDPR has been implemented across all countries of the EU. However, it’s a complex legal procedure that requires both knowledge and abilities to interpret and carry out its regulations. As such, many companies and organizations ask third-party consultation agencies to assist them with the entire process.

All companies and organizations that operate in the EU, both big and small, are required to comply with GDPR. Otherwise, they can face penalties that can potentially prevent them from being operational. That’s why it’s so important to hire people who provide legal assistance and are able to implement new regulations to all areas mentioned in GDPR.