At any given time, the average business leader is worried about a million different things. Securing new funding, establishing a foothold in the market, attracting and retaining new employees, expanding the business, and reaching new customers are just a handful of those concerns. With so many high priority challenges to consider, it comes as little surprise that compliance isn’t always the first thing on their mind. That is, until they realize how far behind they’ve fallen—and how much they need compliance to scale the company and achieve their goals. Smaller companies, including startups and SMBs, face a particularly steep challenge.
Compliance isn’t a can businesses can kick down the road forever. Compliance, in the form of government regulations, regional or industry standards, and voluntary frameworks, are becoming increasingly important as today’s businesses grow. Potential partners and vendors want to know that the companies they work with take security seriously, particularly as even small businesses are gathering more sensitive data than ever and breaches are becoming more common and costly. And as cloud usage expands across all industries, compliance frameworks like SOC 2 and ISO 27001 have become all but mandatory. Startups and SMBs can no longer take a “we’ll cross that bridge when we come to it” approach. Compliance needs to be a priority.
Establishing the Right Mentality
There are a million justifications for ignoring compliance. Startup founders, for example, are entrepreneurs often looking to disrupt existing industries and create new ones. Compliance, on the other hand, represents established rules and order, often from an outside authority. Similarly, it’s tempting for SMB leaders to assume that compliance is something they can worry about later, if and when the business grows.
Unfortunately, this mentality has resulted in many business leaders downplaying the importance of compliance. Many currently view it as little more than a box to be checked. That simply isn’t the reality for today’s most important compliance standards and frameworks. Data protection standards like the EU’s General Data Protection Regulation (GDPR) or the California Privacy Rights Act (CPRA) are not “set it and forget it” regulations. Likewise, SOC 2 audits are not a one-time occurrence. And imagine if healthcare providers only had to demonstrate Health Insurance Portability and Accountability Act (HIPAA) compliance once. Would you trust them to maintain it?
That word is at the core of today’s compliance standards: trust. Rather than thinking of compliance as a box to be checked, think of it as a critical way to establish—and maintain—trust in the marketplace, no matter the age or size of the business. A clean SOC 2 report does more to prove that a business takes data security seriously than all the marketing copy in the world. Compliance standards and attestations serve as a tangible and verifiable way to demonstrate that trust has been earned over time.
How Early Is Too Early?
When should businesses start their compliance journey? The short answer is that it’s never too early. At the very least, startups and SMBs should be aware of the “must-have” compliance standards for the jurisdictions and industries they are operating in. Businesses operating in the cloud know they will eventually need to maintain a clean SOC 2 attestation. Those operating (or planning to someday operate) across international borders may eventually need to pursue ISO 27001 certification. Some frameworks, like CPRA, only apply to businesses of a certain size, which means SMBs may not need to worry about them – at least not yet. But those with plans to expand should be aware of the standards they may eventually need to meet.
“Tech debt” is a term entrepreneurs know well. Startups and SMBs often aren’t building for scale. They are prioritizing speed and convenience – the things they need to get off the ground quickly. While helpful in the short term, this does come with sacrifices when systems later need to be updated or replaced to sustain the needs and requirements of a growing business.
Compliance debt works the same way. The more businesses ignore compliance standards, the more time, effort, and money they will eventually need to put into correcting the problem. Unfortunately, modern data privacy and security frameworks can be particularly difficult to comply with if no groundwork has already been laid. Entire data storage systems may need to be reconfigured, data access policies written and implemented, and new security tools integrated with existing systems. What’s more, companies will then need to train their employees on these new systems and processes, and “untrain” them out of older security practices. Orchestrating a culture shift of this magnitude can be costly and time consuming for a business of any size. Building compliance into the foundation of the business can alleviate that.
Setting compliance aside to focus on building the company quickly might yield positive short-term results, but eventually that bill will come due. And whether the spend is made early or late, it is always worth it. After all, the penalties for noncompliance (including fines, reputational damage, and loss of business) are significantly steeper.
Resources are often at a premium for startups and SMBs, and it’s understandable that many don’t want (or can’t afford) to spend the time or money on hiring personnel to focus on compliance. Or at least, it used to be understandable. But today’s businesses don’t necessarily need a “compliance wizard,” and they don’t need to spend hundreds of hours manually checking security controls against compliance standards. Advances in automation now allow businesses to seamlessly compare their security posture against a host of different compliance standards, giving them the power to immediately address any potential violations.
For startups and SMBs with limited resources, this is a game changer. These automated platforms can be integrated into the system from an early stage, evolving with the needs of the company and providing a real-time look into how its security controls stack up against today’s compliance standards. Today, it’s important for businesses to be able to see how their current system measures up against existing frameworks and to begin planning for future ones. This ensures that there will be no surprises when it’s time for an audit, and that any necessary fixes will be minor corrections rather than dramatic overhauls. Instead of spending hundreds of hours preparing for an audit, companies should be proactive, making sure they have systems in place that can detect potential compliance violations as they occur.
This sort of monitoring also helps ensure that company leaders are familiar with the requirements associated with certain compliance frameworks. This is a big deal—in the past, smaller businesses have struggled to even know where to begin preparing for an audit. For example, a company might know a SOC 2 report is something they need, but lack an understanding of the requirements. They might bring on a consultant (itself a considerable investment of time and money) in order to familiarize themselves with the dozens—even hundreds—of SOC 2 controls associated with the Trust Services Criteria. It is up to the company to implement any missing controls and demonstrate to an auditor that they are working effectively. Knowing what controls to put in place and how to design them properly, implement them, and continuously collect evidence to show to an auditor in the future is a full-time job—and then some.
It’s also important to remember that when it comes to trust, potential prospects and partners value longevity—they want to ensure the companies they work with can always demonstrate effective and secure methods of handling their data. This is as true for SMBs as it is for major enterprises. It’s not uncommon to start the process for achieving certain frameworks or regulations at least a year before the actual audit, which means having a system in place to continuously measure against these requirements can make the process of preparing for and obtaining a clean attestation significantly easier. Instead of throwing time, money, and bodies at the problem, businesses that automate the compliance process early can proceed easily and with confidence.
Compliance Is a Continuous Journey
Like cybersecurity, there will never be a time when an organization is “done” with compliance. Existing frameworks change, new frameworks emerge, and businesses grow and evolve. For both startups and small and mid-sized businesses, integrating automated compliance processes can make the difference between growing the business or stalling out at the first SOC 2 audit. Today’s automation tools mean compliance doesn’t have to be a chore, or even a hassle—it can be an essential and integral part of any business’s growth journey from the very beginning.