A new study showing that consumers are losing faith in brands over data use is a wake-up call for small businesses dealing with GDPR compliance. Alternative finance can help owners manage cashflow to meet the costs of compliance.
The results of the survey by Databoxer showed that over 80% of those questioned do not trust social media companies with their data. A further two thirds said that they do not trust the brands that supply the products they buy. This is a damning insight into the relationship between consumers and brands, and has serious ramifications for SMEs.
While big brands have the resources and scope to bounce back from data privacy breaches, it is much harder for smaller businesses to win back trust and sales. The impact of a loss of consumers and contracts can have a much more serious impact. Hence, is it vital that small business owners prioritise GDPR compliance and give their customers the peace of mind that comes from knowing their data are being handled properly and are fully protected.
However, a significant amount of small businesses are struggling to meet the May 25th deadline (when the GDPR data-protection laws come into force). Recent research from the Institute of Directors claims that many businesses are still not ready. According to the data, 40% of directors are not confident that they will be fully compliant in time. A similar amount reported that they are unsure how the new rules will affect their firms.
So, what’s stopping them? One of the biggest barriers to compliance is cost. The extra pressure on company finances comes at a time when most small businesses are already straining under the weight of a long list of other policy and non-policy related costs. These include costs relating to cybersecurity and late payment and compliance with pension auto-enrolment and living wage- and apprenticeship-related legislation.
Capital is being spread increasingly thinly and, with traditional lenders welded to their cautiousness, this puts pressure on cashflow. Hence the go-slow approach to GDPR compliance. However, alternative finance can help small business owners access cash and invest in the resources that they need to protect themselves and their customers.
With trust in big bank small business lending remaining low, alternative finance is going from strength to strength. More and more SMEs are using the likes of invoice finance, asset finance, peer-to-peer lending and crowdfunding to fund investment and safeguard cash flow.
This is how a Sussex business used peer-to-peer lending, through a commercial finance broker that specialises in alternative finance, to raise money to buy new equipment.
GDPR compliance is proving tougher than expected for many businesses and it seems clear that cost is a key contributory factor. While it is easy to understand why some firms are taking longer to prepare, there is no escaping the fact that they cannot afford not to. This is why alternative finance is so important.
To find out more about A&T Business Associates services, contact Tony on 01903 602211 or firstname.lastname@example.org.