Privacy Policies: What Entrepreneurs Should Know

When you launch a website or app, legal concerns might not be top of mind, but they should be. If your business collects user data, you may be legally required to have a Privacy Policy. Even if not required, having one can protect your business and build trust with users. Additionally, many online services (such as payment processors and advertising platforms) require you to have a Privacy Policy before integrating their tools.

Related: Terms of Service 101 | DMCA Policies 101

What is a Privacy Policy?

A Privacy Policy is a legal document that explains how you collect, use, store, and share user data. It informs users about what personal information you gather and how it will be used, helping to ensure transparency and compliance with privacy laws.

Why You Might Need a Privacy Policy

While Privacy Policies are not universally required, regulations are trending toward stricter requirements. Some jurisdictions mandate such policies for websites and apps that collect user data:

• EU (GDPR): Requires clear disclosure of data collection and processing practices, even for non-EU businesses handling EU user data.
• California (CCPA/CPRA): Mandates privacy notices for businesses collecting California residents’ personal information.
• Colorado Privacy Act (CPA): Imposes similar requirements for businesses operating in Colorado or processing data from Colorado residents.

Even if your business is not directly subject to these laws, having a such policies reduces legal risks and enhances user trust. 

What to Include in Your Privacy Policy

Here are key provisions you may want to include:

• Types of Data Collected: What information you gather (e.g., IP addresses, analytics, personal details like names and emails).
• How Data is Used: Whether for service improvements, marketing, or user communications.
• Third-Party Sharing: If you share or sell data, disclose that practice.
• Payment Information: If applicable, explain how payment data is processed and stored.
• Law Enforcement Requests: Whether and under what circumstances you disclose user data to authorities.
• User Rights: Whether users can access, edit, or delete their data.
• Amendments: How and when you can update the Privacy Policy.

Smart Next Steps for Your Business

There are several ways to create a Privacy Policy:

• Write your own (not recommended unless you have legal expertise).
• Use language from other websites (but avoid copyright infringement).
• Generate terms using an online policy generator.
• Hire a startup lawyer to create a customized policy.

Even if you’re not legally required to have a Privacy Policy, it’s a smart legal safeguard. Whether you’re based in Kansas City, Boulder, or beyond, making privacy a priority can help you build a stronger, more compliant business.

*This article is general in nature and is not legal advice.