Building and scaling a technology product means constantly prioritizing competing demands. Growing companies have urgent development, product, and sales needs, and meeting those needs is an IT leader’s first responsibility.

This often leaves little time and few resources for achieving security and compliance goals. Startups and small businesses rarely prioritize these as a strategic, value-generating initiative that deserves high priority.

But implementing robust security controls and demonstrating compliance are equally important for sustainable, long-term business success. Investing in security and compliance early gives your company a stronger foundation and helps it achieve more streamlined growth.

This guide will describe some of the challenges that startup and small business leaders often face when implementing application security and compliance. By the end, you will have a clear understanding of how these initiatives actually generate value and position your product for success in a competitive market.

Startups and Small Businesses Face Unique Challenges

Few startups and small businesses have a fully complete software product that comprehensively addresses the company’s founding vision. Completing that product is often the top priority, and everything else becomes subordinate. Security and compliance rarely get the time and attention they need until much later.

This leaves IT leaders with severe resource constraints. It’s hard to justify investments in security and compliance instead of driving business growth with product development and go-to-market efforts. Leaders often see security as a cost center rather than a value driver.

It’s easy to believe that your organization is too small a target for cybercriminals. The data suggests otherwise—41% of small businesses suffered a cyberattack in 2023—but the major long-term risk for software product developers is third-party risk. Every open-source dependency your product has is an additional risk, whether that’s a security risk, an open-source licensing risk, or a misconfiguration risk.

Uncertainty around compliance complicates things further. Leadership may not know which frameworks are worth pursuing. There may not be clarity about key elements of the organization’s long-term strategy, which can impact the choice to pursue certain compliance frameworks.

Having a compliance certification early on can simplify and reduce the manual work that goes into vendor security evaluations. Submitting a compliance attestation frees you from having to fill out lengthy security questionnaires with manual and potentially error-prone responses, which speeds up the sales cycle.

Key Compliance Frameworks for Startup and Small Business Leaders 

Part of the uncertainty around compliance comes from the simple fact that startup and small business leaders don’t know what their business will look like in the future. Sometimes it’s impossible to know what frameworks a business will need to comply with at an early stage.

Yet in some cases, compliance needs are well-known from the very beginning. Startup and small business leaders who gain familiarity with compliance are better-equipped to plan ahead for those needs.

Here are some of the most common frameworks today’s growing organizations may need to adhere to:

• SOC 2 is designed for service providers who store customer data on cloud infrastructure. It is a voluntary attestation, but many large enterprises require their partners to adhere to it. If you plan on selling to large, reputable organizations, you’ll need SOC 2 attestation.
• HIPAA covers all organizations that transmit or process protected healthcare data. If your organization operates in the healthcare industry and processes patient data, you will have to adhere to HIPAA or face steep fines and reputational damage.
• CMMC is mandatory for contractors who want to work with the US Department of Defense. It also applies to subcontractors that provide technology or support to prime contractors. Organizations can pursue a voluntary assessment to achieve CMMC Level 2 certification for three years.
• NIST CSF is a set of voluntary guidelines designed to help organizations achieve consistent cybersecurity performance and incident response outcomes. Many growing organizations pursue it because it is the basis of many other regulations and frameworks.
• ISO 27001 is an international standard with worldwide recognition. Pursuing ISO compliance can be complex, but it opens your organization’s market to reputable enterprise customers around the world.
• GDPR applies to organizations that operate in Europe or process the data of European residents. Organizations that plan on operating in the EU must demonstrate compliance with GDPR regulation or face steep fines and potential exclusion from the EU market.

Your compliance strategy depends on the type of software product your company is developing. Knowing which frameworks are mandatory and which ones are voluntary can help narrow down your commitments and make it easier to create a compliance roadmap.

Delaying Security and Compliance Comes with Costs

Startups and small businesses operate in high-pressure environments where speed and efficiency are critical. Building the product, acquiring customers, and securing funding are top priorities, leaving security and compliance as secondary concerns—until a crisis hits.

That crisis typically takes one of three forms: 

• A major customer requires a security audit
• A regulator mandates compliance
• A security breach exposes critical vulnerabilities

By the time any of these things happen, fixing security gaps becomes an expensive, disruptive, and stressful experience with an uncertain outcome. Instead of being a proactive part of the development process, it becomes a last-minute scramble.

Even if your organization successfully achieves compliance at a later stage of growth, the process won’t be easy. Some of the obstacles you can expect to face include:

• Higher costs and complexity – It’s cheaper and easier to build a compliance program early. Fewer employees mean less training, and a simpler tech stack makes security validation more manageable. Waiting only increases effort and expenses.
• Potentially lost deals – Many companies require SOC 2 (or a similar attestation) as a baseline for vendors. This is especially true of large enterprises, which may overlook your offering without you even knowing about it.
• Weakened customer trust – It’s not uncommon for companies to drop vendors over security concerns. Delaying compliance puts your company at risk of losing its existing customers. Even the suspicion of a security flaw may be enough.
• Reputation damage – Suffering a third-party breach will hurt the reputation of everyone involved. At the same time, few companies have deep visibility into vendor security—and a formal compliance program can strengthen trust and reduce the risk of harm.

Achieving compliance earlier in the growth cycle addresses these risks and comes with valuable benefits, especially for vendor security evaluations. Without it, demonstrating that you have the infrastructure and processes in place to protect their user and customer data is an uphill battle. Instead of filling out a security questionnaire to describe yourself as a responsible, trustworthy custodian of data, you can simply show them the attestation that proves it.

For example, showing potential customers your SOC 2 report from a recent audit makes a clear statement about your commitment to maintaining their trust. This is much more convincing than simply telling them they should trust you—no matter how persuasive you are. 

The bottom line: Having compliance programs in place makes vendor security evaluations easier and shortens the sales cycle.

How to Achieve Compliance Without Slowing Down Development

Startups and small businesses can’t afford to let compliance slow innovation, but ignoring it isn’t an option either. The key is to integrate security and compliance into existing development workflows rather than treating them as separate, burdensome tasks. Here’s how to do it efficiently:

1. Choose the Right Compliance Frameworks Early

Identify which compliance standards are relevant to your business, or likely to be in the future. Sometimes this process will be easy—for example, if you operate in Europe GDPR compliance is non-negotiable. In other cases, you only have the founding product vision to rely on.

Creating a shortlist of potential compliance frameworks to pursue can help. Large enterprises may not be interested in your software product right now, but if your product roadmap includes features that will appeal to these types of customers, pursuing SOC 2 attestation early can give you a strong advantage.

2. Automate Compliance When Possible

Manual compliance processes don’t scale. Use automation to streamline audits, track security controls, and generate reports. This will significantly reduce the operational burden associated with compliance initiatives.

Be aware of the options at your disposal for achieving automation. You probably do not need a full-scale enterprise-ready trust management platform at this point—the costs far outweigh the benefits for a growing organization. Smaller-scale solutions that automate specific high-impact risk mitigation tasks are a much more prudent investment.

Working with the right compliance partner can also get you bundled services that help you achieve compliance with much less complexity. Full-scale compliance management platforms can help you onboard specialist talent as part of a packaged deal with their tool. You might gain access to penetration testers thanks to SecureFrame or Certified Public Accountants (CPAs) with a vendor like Vanta, helping you shift some of your workload away from managing multiple agreements on your own, and this often also gets you a better price through service bundling.

3. Embed Security Into Development

Many startups and software-based small businesses make the mistake of conducting application security testing at the end of the development lifecycle. This is the traditional approach, but it can create expensive complications for growing development teams.

The shift left security approach offers a much more efficient solution for catching and addressing issues early in the cycle. Consider implementing the following tools to make security an integral part of your CI/CD pipeline:

• Software Composition Analysis (SCA) automatically identifies and categorizes your application’s dependencies. This helps developers proactively avoid open source licensing conflicts, and ensure components they rely on don’t have known vulnerabilities. SCA also generates reports, including SBOMs, which are vital for demonstrating compliance.
• Dynamic Application Security Testing (DAST) analyzes an application while it is running. By approaching your application the way an external threat actor would, it shows how resilient the application is. DAST is a common compliance requirement.
• Static Application Security Testing (SAST) analyzes source code to detect vulnerabilities, exposed secrets, and “smells” before the code is compiled. This helps developers resolve issues without breaking builds or accidentally committing vulnerable updates.

Altogether, these three tools help ensure application security doesn’t become a last-minute bottleneck that prevents timely software releases. Building these capabilities into your workflow early helps your team achieve success and maintain it as it grows. It takes time to embed security into development processes, starting with SCA and moving on from there. A small, committed team will be well equipped to maintain secure processes as it grows.

4. Implement Access Controls and Least Privilege

Limit who can access sensitive systems and data. Role-based access control (RBAC) and least privilege policies help meet compliance requirements while reducing insider threats.

Creating and enforcing this kind of policy can be incredibly challenging for an organization with hundreds or thousands of employees. By comparison, it’s almost trivial for a company that only has a few dozen employees. Extending and scaling these controls as your organization grows is much easier than building them from scratch later on.

5. Maintain Documentation Without Wasting Time

Compliance requires documentation, but that doesn’t mean your team needs to spend hours writing lengthy security policies from scratch. Consider starting with prebuilt policy templates tailored to your chosen compliance framework. 

You can store your documentation in a version-controlled repository like GitHub or Notion, as well. This ensures that policies stay up to date and accessible to auditors without becoming a maintenance burden. If you choose to use a compliance platform like Vanta or SecureFrame, you can automate security monitoring by integrating it with your cloud environment. This will help you enforce drive encryption on user endpoints, keep employees engaged with training, and make it easier to manage compliance tasks in general. Additionally, these compliance platforms are project management tools tailored specifically to one or many compliance efforts, making it much easier to ensure all of your controls and tests are in place compared to more manual efforts like tracking requirements and their current state in a spreadsheet.

If you are pursuing a voluntary framework like NIST CSF, you’ll find you have considerable flexibility in how documentation should be stored and maintained. Prescriptive standards like SOC 2, ISO 27001, or HIPAA are far more specific, and may require more in-depth tooling to accommodate.

6. Monitor and Improve Continuously

Compliance isn’t a one-time project—it’s an ongoing process. Set up continuous monitoring for security risks and compliance gaps so you can address them before they become bigger issues.

Many compliance frameworks require regular security assessments, like vulnerability scans, penetration testing, and internal audits. Configuring your security tech stack to capture important metrics and identify areas for improvement will help you achieve operational security excellence in the long term.

Conclusion: Make Security a Business Enabler

Startups and small businesses that invest in security early on gain a major strategic advantage over their competitors. A strong security and compliance foundation builds customer trust, accelerates the sales cycle, and opens the door to large enterprise deals.

Business leaders who view compliance as an asset instead of a roadblock can streamline growth and differentiate themselves in a competitive market. Integrating security into the development workflow helps growing companies stay agile while meeting regulatory requirements and customer expectations.

Find out how SOOS can help you get a comprehensive view of software development security risks. Empower your developers to fix important issues early on without interrupting their workflow.