The opinions expressed by Entrepreneur contributors are their own.
Technology has provided endless benefits to businesses around the world and is vital to their growth. Today, data can be shared at breakneck speed between companies, their leaders, suppliers and customers, but this also allows inaccurate and false information to be spread at the same rate, most recently by AI-powered bots . It has metastasized throughout society in general and the Internet in particular, both in the form of social media feeds/online forums and in news articles and other traditional media. Much of this is intentional, including attempts to mislead consumers and gain a competitive advantage.
While this often affects individuals, it can also cause serious harm to businesses and entrepreneurs who rely on their reputation and credibility. It is vital, therefore, that they understand the risks of misinformation, how to avoid participating in its spread, and how to reduce the damage it can cause to a professional and personal brand.
How misinformation negatively impacts small businesses
Whether it comes in the form of rumors, hoaxes, fake news or misleading narratives, misinformation poses a particular danger to small businesses: they often lack teams of marketing and public relations professionals to address such issues and are therefore more prone to resulting in disruptions, loss of customers, negative press, reduced revenue and legal consequences.
Let’s explore some effects in more detail:
- Reputation damage: Entrepreneurs depend, of course, on the honesty and integrity of their brands in the minds of customers, investors and partners. Misinformation can tarnish these resources, eroding the trust that has been so difficult to establish. This can be especially difficult for a small business to deal with since it likely cannot distance itself from an owner or other principal, for example, in a way that a large organization might be more capable of.
- Bad decisions: Falling for false data/narratives regarding market trends or what is happening with competitors could lead a business owner to make a poor move in terms of staffing, sales or customer service, with potentially disastrous consequences.
- Loss of customers: Incorrect/misleading information can turn away existing and potential customers who understandably fear doing business with a company or individual associated with it.
- Legal implications: Deliberate distribution Misinformation about a company or individual can lead to defamation lawsuits, among other dangers.
Related: AI is not evil, but entrepreneurs need to keep ethics in mind while implementing it
How to fight it
As a small business owner, you are likely solely responsible for managing inaccurate information about your company, your customers, and your suppliers, and having a strategy in place to do so can significantly reduce the negative effects. The correct answer will depend on the type and severity of the misinformation shared – each situation likely requires a customized solution.
Also remember that some incidents may be nothing more than misunderstandings. For example, in the Battle of Constantinople in 1453, mysterious lights were seen over the city. Rumors quickly spread that they were a sign from heaven that the Ottomans would be defeated in battle. It turns out that what was witnessed was none other than St. Elmo’s Fire, a natural and harmless phenomenon in which ionized plasma looks like a bluish flame.
If the misinformation you’re dealing with is similarly harmless, you can address it by simply taking responsibility, apologizing, or otherwise setting the record straight. Companies that demonstrate responsibility will almost always come out on top.
Related: 7 ways to promote a corporate culture of responsibility
In other cases, the misinformation is intentionally harmful. Another historical example concerns Benjamin Franklin, who in 1782 created a fake version of the Independent news of Boston newspaper. Inside, a false story claimed that the British had hired Native Americans to terrorize American soldiers and civilians across the frontier. Soon it was republished throughout the colonies, sparking growing hostility towards Native Americans.
In more severe cases, a company may have to go on the offensive to stay ahead of the intentionally harmful narrative. This might include launching a public relations campaign or hiring a lawyer.
Of course, the best way to eliminate misinformation is to avoid it altogether. At the very least, you can minimize the damage by catching it early. Here are some good practices that entrepreneurs can apply to this end:
- Fact checking and other checks: Before sharing information on websites, social media profiles or other media, business owners should be vigilant and verify it carefully, ideally from at least two reputable sources. It’s much easier to stop misinformation before it starts than to put the genie back in the bottle.
- Build a solid reputation: Companies known to be honest, trustworthy and ethical are less likely to be affected by misinformation. Half the battle is the degree to which people are inclined to believe the negative things presented to them. If you run a shady operation, people are more likely to act on something bad they hear, while those who know you run an honest business will be more likely to come to your defense.
- Monitor your online presence: A good practice for spotting misinformation before it gets out of control is to regularly monitor online mentions about your business or you as a person. Consider setting Google Alerts to be notified of such new content.
Related: 7 tips for making quality business decisions
