5 Reasons Why Compliance Matters for Startups


There are various aspects of starting a business that makes it challenging to look at the bigger picture. Limited resources play a significant part in deciding to set things on the backburner, be it too few employees or insufficient funds for contractor hiring.

One of the areas that often gets overlooked is compliance. However, it is integral for the longevity and success of the business to take compliance seriously. Here are five reasons why compliance matters for startups.

Knowledge is Power

With startups, everything is fast-paced with growth and sustainability being at the forefront of everyone’s mind. Compliance is often viewed as a work in progress, with founders figuring it out as they go. With the majority of startups following this train of thought, why should you do it differently? In this case, the answer is in the question.

Many times, learning what you must do to be in compliance with regulatory bodies is more daunting than putting those policies and procedures in place. Mountains of paperwork might indicate that you simply need proper security and storage for information stored on the cloud, leading you to purchase cloud backup solutions for small business. When the regulatory bodies inevitably catch up with everyone and start handing out fines, you’ll be in the clear whereas your competition could take a detrimental hit to their bottom line.

Cost Implications

On the note of taking a hit to the bottom line for failing to be compliant, you have to consider the costs of your actions (or inaction, as the case may be). For example, failing to comply with the recently updated GDPR standards which flooded inboxes around the globe in 2018, could cost a business tens of millions of dollars. Hence why everyone who uses email marketing was flooding your inbox for permissions.

The early years of running a business are a fragile time financially. While it may seem like you can’t afford to invest in your compliance efforts, the reality is that you can’t afford not to.


Cybersecurity is of the utmost importance when people share their personal information in an online setting. Whether it’s your customer’s payment information or address, they want to know that everything they share with you is protected.

Being compliant, whether it pertains to private information or shipping products to and from foreign countries contributes to a strong reputation and trusted brand. Your customers will feel safe giving you their hard-earned money, and your investors will feel confident in your business decisions.

Stay Ahead of Changes

We live in a society that is developing exponentially. We now have to consider ethics and compliance for things our ancestors would never have dreamed of, like identifying whether a person is talking to a human or a bot during a business transaction. Being in compliance with today’s rules will make the transition easier when new regulatory considerations arise.

Cunning organizations are even able to get ahead of the regulatory considerations. Savvy organizations are on the lookout for potential changes and start discussing implementing those changes before regulatory catches up to make it mandatory.

Hearing the buzz about banning plastic straws caused many organizations to start brainstorming immediately. Businesses that learned of China moving toward a ban on adjectives in packaging started rethinking their brand strategy for that market, while close-minded competitors were left scrambling.

It’s The Law

All other reasons aside, compliance and regulatory considerations are legal considerations. Failure to comply with the standards outlined is failing to comply with the law in your state, country or industry. As such, there’s no gray area or validation for being out of compliance, and in our global community, you could face penalties from multiple governing bodies.

Being in compliance has a strong ROI; you receive a better business reputation, cost savings, and a competitive edge. For a startup, the investment is well worth it.