Mistakes happen but when it comes to a small business’ reputation, there’s little room for error. After all it only takes one bad review that goes viral or one data breach left unchecked to sink a small business.

“One bad house can take down the whole neighborhood and one bad complaint can take down the value of the business,” says Eric Schiffer, creator of Reputation Management Consultants. “You don’t want any broken windows within Google or social media.”

Rewind a decade and most people found small businesses by opening up the yellow pages or getting a referral from friends and family. While referrals still matter, today they are accessible to hundreds of thousands of people -- thanks to online review sites and social media. Those reviews, just like word of mouth referrals, carry a lot of clout online and offline -- and so do the responses of the business.

For many business owners the common reactions to bad online reviews is to either ignore or aggressively defend the business. Both actions, however, are the wrong ways to deal with it, say business experts.

“All reviews need to be responded to and not in a snarky way,” says small-business consultant Denise O'Berry. “Dissatisfied people speak a whole lot louder and a whole lot more than people who are happy.” 

According to O'Berry, if the complaint is something that can be fixed by giving a refund or sending a new product -- then do it. If it’s not something that can be easily rectified, you should at least acknowledge the dissatisfaction and express some sort of remorse over the incident.

“Your response to whatever the person said is going to have more of an impact than the positive reviews that are posted,” she says.

Ellen Rohr, the business makeover expert, says small business owners should go to great lengths to either get the dissatisfied customer on the phone or to address the problem in a face-to-face meeting. She says to avoid email if at all possible because it is easy for things to get misinterpreted, especially if the customer is irate or emotional.

“You can’t do it in an email,” says Rohr. “It’s the biggest mistake people make.”

Hand in hand with reacting positively to any negative feedback or reviews is staying on top of your reputation on the Internet. For some small business owners that could mean setting up Google alerts to monitor any time the business is mentioned and for others, who have a big reputation problem, it could mean hiring a company to track and fix it. 

“You have to be involved or hire a professional monitoring company,” says Schiffer. “You have to make sure your reputation is pristine. This is a 24-hour reputation environment.”

In the case of a security or data breach, speed is of the essence to keep your reputation intact. The last thing you want to do is hide or lie about the data breach and watch it implode when customers do learn about it. According to O'Berry, small business owners should follow the “triple T method” when dealing with a crisis. This means to tell it all (explain all the facts and avoiding any speculation), tell people fast and tell the truth (don’t lie or be evasive).

O'Berry says every small business owner should have a plan in place to deal with any business crisis ahead of employing the “triple T method.” The plan should not only include how to respond but who the company’s spokesperson will be.

“Many small business owners are just not ready,” says O'Berry. “It takes them so long to respond when something happens.”