How to Write A Privacy Policy For Your Small Business

Imagine this: You’re browsing the Web, clicking through informational articles for work or recipes for dinner, and an “accept cookies” pop-up blinks onto the screen. How often does this scenario happen to you? 

If you’re like 25% of Americans, this occurs at least once a day.

Unfortunately, these cookies aren’t the kind that are made from flour, sugar, and butter. But these pop-ups are more important than you might think.

When you “accept cookies,” you’re allowing that website to collect information about you (such as your address, credit card number, or how you browse the Web). As a consumer, you want to know what the company is doing with your private data. And as a business owner, you’re required to tell them—which is where a good privacy policy comes in.

In this article, we’ll walk through why privacy policies are so important for your business. We’ll also break down some privacy policy examples to serve as inspiration. Learn how to write a privacy policy for a small business that reassures your customers their data is safe.

Let’s dive in!

What is a privacy policy?

A privacy policy is a legal statement that describes how your business collects and stores personal information. This document should explain what customer data you collect and what you plan to do with it.

Privacy policies are important because they reassure your customers that their sensitive data is safe. By crafting a strong privacy policy, you can: 

• Build customer trust
• Boost your SEO ranking (by signalling trust to search engines)
• Comply with regulations and laws that require business transparency

Understanding the importance of a privacy policy

Privacy policies aren't just a legal requirement for businesses that operate online and collect personal data from their users, but also a cornerstone of building trust with your clientele.

By clearly stating how you handle personal information, you reassure your customers that their data is in safe hands. This transparency is essential for fostering a trustworthy relationship and ensuring that your business complies with various data protection laws.

Do small businesses need a privacy policy?

Yes! You need to have a privacy policy along with other policies for your small business. After all, you collect personal information just like bigger companies do. And your customers need to know what you plan to do with it.

Creating a privacy policy is simply the right thing to do. It reassures your customers about what you’re doing with their data (such as their contact information or payment details).

But more than that, federal, state, and global laws such as the European General Data Protection Regulation (GDPR) actually require businesses to have privacy policies in place. So do many third-party apps and services like Google Analytics. And if you don’t have a privacy policy in place (that you and your team abide by), you might have to pay—literally.

You could be fined or sued if you don’t comply with legal privacy acts. Take it from Amazon, who was fined $888 million for misusing customer data.

At the end of the day, a strong privacy policy is important for businesses of all sizes—whether you’re Jeff Bezos or a local business owner. 

What to include in your privacy policy

Ready to get started? Here’s what to include in your privacy policy:

• Legal business name and address: Start with the basics—add your legal business name and full address. Include contact information, too, so customers can reach out if they have a question about your privacy policy. 

• What information you’re collecting: Next, explain the type of collected personal information you’re gathering, how you get it, and how you process data. This could include things like location data, demographic data, and more. For example, are you gathering contact information, payment information, analytics data, or all of the above? You should also state how you’re gathering the information, such as using cookies or device fingerprinting.

• How you collect personal information: Are you using third-party services to collect or enrich existing data? Do you collect data from all website visitors or just people who fill out forms? If you're using electronic documents (like signing contracts digitally), where are those being stored?

• Why you’re collecting it: Explain why you’re collecting user data and how you plan to use it. For instance, if you operate in multiple locations, you might use location data to provide customers with more personalized recommendations. Whatever the case, this step is important to nail down considering that 61% of Americans feel privacy policies are ineffective at describing how a company uses customer data. 

• Where you store it: Note where you store the customer data, such as on a secure server. You’ll also want to explain how long you plan to keep the data. Another important element here is to include if 

• How you protect it: Briefly describe the security measures you take to keep client data safe from prying eyes and malicious hackers. For example, YouCanBookMe customers have the ability to password-protect their booking page.

• How users can opt in or out: Users have the right to opt-out, withdrawing their permission to let you collect their data. State how they can reach out to you about this.

• Whether or not you sell customer information: Do you sell customer information to a third party, like a marketing company? State that in your privacy policy.
• Privacy laws: What privacy laws are top of mind and that you're abiding by? For example, if you're a Canadian company, you may include CASL in your privacy policy. Or if you're EU-based, you'll likely mention GDPR.

Collecting and processing personal data

Let's quickly walk through all of the different types of personal data that businesses collect to make sure you're covering all of your bases in your privacy policy template. 

Best practices for writing a privacy policy

A privacy policy doesn’t need to be long or complex. The simpler, the better. But it does need to be accurate and comprehensive, describing everything your customers need to know in a way they can easily understand.

Follow these tips on how to write a good privacy policy:

Be clear

You don’t want your customers to get bogged down in legalese or jargon. 63% of Americans don’t understand data privacy laws, and complex wording won’t help. Instead, opt for clear, straightforward language that’s easy to understand. Plain language and short sentences will help your audience get a clear picture of your privacy practices. Plain language also helps clearly inform users about their rights and the information being collected. When it comes to important business policies like privacy and cancellation policies, clarity is your best friend.

Seek legal advice on data protection laws

Before your privacy policy goes live, consult with a local expert. A lawyer can review your policy to ensure it covers all relevant information and is written clearly and accurately. Attorney review isn’t required, but it’s a smart idea, especially if your business works with children and teens or collects and transfers larger amounts of data. 

Use a template

It’s not okay to copy your privacy policy from someone else’s website. But it is okay to gain inspiration and work from a privacy policy template to kickstart your own. You can take a privacy policy for small businesses template or a legal document and customize it to your needs. All you need to do is add your information to create a comprehensive resource that’s targeted for your specific customers. You could also use a privacy policy generator instead of a template and work from there. 

Make it accessible

Finally, when your privacy policy is ready to be posted, make sure it’s easy for customers to find. Regulations such as the GDPR and the California Online Privacy Protection Act (CalOPPA) state that your policy must be easy for people to spot.

Share your policy in locations like:

• Your website footer
• Your website checkout screen
• The bottom of emails
• Your booking forms or signup screen 

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6 Real-world privacy policy examples from small businesses

Get started brainstorming your own privacy policy by scrolling through these privacy policy examples from real-world small businesses:

1. InvestHER Fiduciary Solutions: Crystal clear

This privacy policy from InvestHER Fiduciary Solutions does a great job of writing in clear, straightforward language that’s easy for the average reader to understand. Any terms or phrases that might cause confusion are immediately explained. For instance, in this section, the company clearly defines what counts as its “affiliates.” 

2. Junkyard Dog Marketing: Team effort

Junkyard Dog Marketing has a simple privacy policy example that splits information into skimmable lists, making it easy to digest. We especially like the final section, which not only includes the company’s contact information but directly invites clients to reach out with questions or issues. This is a great way to initiate dialogue and cement customer trust.

3. My Salon Suite: Covering all the bases

My Salon Suite, which is owned by Propelled Brands, has a comprehensive privacy policy that’s made easier to navigate thanks to a menu at the top. In addition to the usual privacy policy information, MSS targets specific sections of its audience by explaining information that pertains to the California Consumer Privacy Act for their California-based clients.

4. The Entrepreneur’s Source: Getting specific 

In this privacy policy example, The Entrepreneur’s Source describes exactly what kind of data its site collects. When website visitors understand what they’re consenting to—for example, that “personal data” means their name or address—it’s easier for them to make an informed decision about interacting with the website. 

5. Studio 28: Staying safe

As you consider how to write a privacy policy, specificity is good—for the most part. Don’t reveal too much public information about the security measures you use to protect customer data. Otherwise, you’ll be giving hackers a blueprint on how to best target your site. Studio 28 simply mentions vague “physical, electronic, and procedural safeguards” rather than describing exact security measures. 

6. YouCanBookMe's privacy policy example: Privacy laws

As mentioned earlier, it's important to outline the different privacy laws that your business abides by, especially if you have customers across the globe. That way people internationally can feel comfortable that the businesses they choose to work with are in compliance with their local privacy laws.

YouCanBookMe clearly states that in our privacy policy example by highlighting which privacy laws we're compliant with, including: 

• EU GDPR
• UK GDPR

We also include which third-party services we use, including Amazon Web Services.

FAQ about privacy policy for small businesses 

How do you structure a privacy policy?

Most privacy policies start with your business contact information. Next, you’ll want to cover what personal information you’re collecting; why you’re collecting it (including whether you sell information to a third party); and how you protect it. Finally, describe how users can opt in or out.

What should be included in a business privacy policy?

A privacy policy for a small business should inform users everything they need to know about what information you’re collecting; why you’re collecting it; and how you keep that data safe. 

Is it a legal requirement to have a privacy policy?

Whether you’re legally required to have a privacy policy depends on where your customers are based. GDPR applies to businesses who sell to consumers in Europe. A variety of other federal and state privacy laws cover companies in the U.S. Most likely, you are legally required to share information with customers about how you use their data.

How do I write a simple privacy policy?

Start by clearly describing what personal information you gather from your website visitors. Then explain where you store the information and what you do with it. Ask an attorney to review your policy before linking the policy in obvious places on your website. 

Is there an easier way to create a privacy policy?

Fortunately, creating a privacy policy is much easier if you use a tool like a website privacy policy generator. Generators ask you simple questions about your small business and its data processing activities and create customized policies based on your answers. 

A reputable generator can help you comply with several data privacy laws and updates often to account for new legislation entering into force.