Safety First Keep your customer and employee data on lockdown.

When it comes to identity theft, entrepreneurs have to worry about safeguarding not just their own personal information, but also that of their employees, customers, clients and partners. The concept of identity theft has grown as awareness of the problem has risen. "The parameters of what is considered identity theft [have expanded] to include things like account takeover and stealing someone's information but not actually using it," says Judd Rousseau, COO and director of fraud operations for identity theft solutions company Identity Theft 911. That means business owners have to pay attention and safeguard everything from their employees' Social Security numbers to their customers' credit card information.

Harish Rao, 27, co-founder and CEO of online community-building firm EchoDitto, is well aware that his business needs to be vigilant when it comes to identity theft. His $2.5 million company discourages people from sending personal information like Social Security numbers and health forms via e-mail and has set up a secure online portal for employees. Sensitive paperwork is kept in a locked office. When discarding files, Rousseau says, "Shred anything that's sensitive." That's advice Rao and EchoDitto already follow.

Washington, DC-based EchoDitto works with clients that accept payments and donations through their websites to make sure they have the proper security in place. "It is nice to be able to take payments and orders online, but along with that comes a responsibility to ensure that you are using proper encryption and security protocol to safeguard that information," says Rousseau. He suggests having a policy that addresses what information you absolutely need to collect, how you will store such information and for how long.