Does my small business really need a Privacy Policy?
One of the questions we are increasingly asked by clients is:
“We're a small business; do we actually need a Privacy Policy?”
Many business owners assume Privacy Policies are only relevant to large corporations collecting vast amounts of customer data. In reality, most businesses collect some form of personal information every day.
The answer is not always straightforward. While not every business is legally required to have a Privacy Policy, many are. Even where there is no strict legal requirement, having one is often a sensible and practical risk management step.
What is a Privacy Policy?
A Privacy Policy is a document that explains how a business handles personal information.
It typically outlines:
What information the business collects
How that information is collected
Why it is collected
How it is stored and protected
Whether it is shared with third parties
How individuals can access or correct their information.
Personal information can include far more than people expect. It may be as simple as a customer's name, email address or phone number collected through a website enquiry form.
Doesn't the Privacy Act only apply to large businesses?
In many cases, yes.
The Privacy Act 1988 (Cth) generally applies to organisations with an annual turnover of more than $3 million, as well as certain smaller businesses operating in specific industries or handling particular types of information.
However, that does not mean smaller businesses can ignore privacy issues.
Many businesses below the $3 million threshold still:
Collect customer and client information
Maintain employee records
Use online booking platforms
Operate e-commerce websites
Run email marketing campaigns; or
Engage third-party software providers to process information on their behalf.
Those activities can create privacy, contractual and reputational risks if information is not handled properly.
The practical question
For most businesses, the real question is: "Do we collect information about people?"
If the answer is yes, it is worth considering whether your business should have a Privacy Policy.
Customers increasingly expect transparency and are more aware of how their information is collected and used.
Why we recommend having one
Even where a business is not strictly required to have a Privacy Policy, there are clear advantages.
It builds trust
A clear and accessible Privacy Policy shows that your business takes privacy seriously.
It encourages good practices
Preparing a Privacy Policy often prompts a a review of internal processes, where information is stored, who can access it, and whether it is shared.
It can reduce disputes
Many complaints arise because individuals do not understand how their information is being used.
A well-drafted Privacy Policy helps set expectations early.
It prepares your business for growth
Putting appropriate privacy documentation in place early is far easier than trying to fix gaps later as your business expands.
A common mistake
One of the most common mistakes is copying a Privacy Policy from another website or relying on generic AI-generated content.
While this may seem like a quick solution, a Privacy Policy should reflect how your business actually operates.
If it refers to practices you do not follow, or fails to address ones you do, it may create more risk rather than reduce it.
Key Takeaway
Privacy compliance is no longer just an issue for large organisations.
If your business collects personal information, whether through a website, customer database, mailing list or booking platform -it is worth considering whether your current practices and documentation are fit for purpose.
With increasing scrutiny around data handling and cyber security, a Privacy Policy is a relatively simple step that can provide meaningful protection.
Need Advice?
If you are unsure whether your business requires a Privacy Policy, or would like your existing policy reviewed, the team at Hicks Oakley Chessell Williams can assist.
We regularly advise businesses on privacy compliance, website terms and conditions and broader commercial risk management.
