Whether your family business is established and successful, or just starting out, you likely have a web site. It's hard to imagine not doing business on the internet. Risk management issues specific to e-commerce need to be a part of your business plan. The concerns might take a different form, as can the solutions; learning to view and cope with risk management from another view is key to success on the web.
No two businesses are exactly alike, and needs and action plans will differ. However, it's a good idea to be familiar with potential problems and solutions so you're ready to get help and put your plan in action.
Key Areas for Concern
Some key areas you'll want to keep an eye on are information security, computer security and information assurance. Information security relates to keeping data confidential, secure and available. Computer security centers on making sure computer systems are sound, secure and working. Information assurance includes issues such as whether information is accurate and those who access or edit it have permission to do so.
What does it all mean for your usual business day? You've sized up weak areas, risks and threats that could derail your business, you have a plan and are ready. Hopefully, it means business runs smoothly, and should a problem arise, you've got a response ready to put in place.
What Could Happen - and the Consequences
A lack of information security is a good example. If your internet business leaves credit card or account data vulnerable, and you ignore the risk and threat someone could steal and misuse that data, it could be a big problem. Remember to assess the key areas:
- Vulnerability - is there a weak spot?
- Risk - what's the chance something bad will happen?
- Threats - are there forces or people out there looking for the chance to do harm?
There are many direct and indirect consequences. If credit card data is stolen, your business may have to answer to credit card companies and card holders at the very least. Know what could happen if you don't follow proper standards and procedures. Even if you're not at fault, an event such as a credit card data breach could do major harm to your business including:
- Harming goodwill
- Customer loss
- Business-to-business loss, such as suppliers
- Losses due to business interruption
- Losses due to cost in fixing the problem
Depending on your business' size and maturity, your needs and solutions will vary. Technology providers offer products and services to identify and meet risk management needs, and response plans in case the worst happens.
Business standards and policies play a role too, governing how your staff conducts themselves. This can include meeting required compliance rules and laws.
Insurance coverage plays a role as well. Insurers now offer policies tailored to the needs of e-commerce. The familiar general liability policy doesn't contemplate many e-commerce risks.
Nobody knows your business like you do. Know about possible issues, and work with your business resources, from your lawyer, technology consultants and your insurance agent to make sure you're set for success.
Questions for Your Attorney
- Is my business big enough to be concerned with e-commerce risk management issues?
- My family business is new to e-commerce, with a long bricks-and-mortar history. Are these just separate branches of my business? Should I have separate entities for these two parts of my business?
- Does e-commerce expose my business to regulation beyond my local area and my state?