From the February 2008 issue of Entrepreneur

Michael Kogon, 38, founder and CEO of IT consulting and interactive marketing firm Definition 6, has a simple philosophy when it comes to sensitive data: "If you don't need it, don't store it."

Common sense is a big component of data security. "You can solve 99 percent of your problems with 1 percent of the effort by doing simple things," says Ira Winkler, security expert and author of Spies Among Us. For digital data, a strong bundle of security software, including anti-virus, anti-spyware, firewalls and encryption, is a must.

While digital data gets a lot of attention, paper data can be especially vulnerable. "We have both personal shredders and a company shredding area," says Kogon, who projects 2008 sales of $11 million for his Atlanta company. "We have a third party handle our document disposal." Winkler reminds entrepreneurs not to overlook things like notes written on scraps of paper or passwords taped to monitors.

And the same security policies that are used in the main office should be enforced with telecommuters, says Winkler. To protect off-site data, Definition 6 gives workers remote access to computers that are monitored by the central office and keeps comprehensive logs of who accesses what.

Laptops are another source of concern for mobile entrepreneurs. Biometrics, password protection and encryption can all be used to stymie laptop thieves. Still, don't let your laptop out of your sight, and be aware of where you're using it. But the best policy is to prevent sensitive information from ever making its way onto a laptop. "Our consultants are trained to leave business information that is confidential on the encrypted servers and to not download it locally," says Kogon. Most important, train employees to handle sensitive information properly. It's not just about protecting data; it's about protecting your business and your customers.