Calculating the ROI of Security Compliance for Small Businesses
Security compliance can often feel like a burden to small businesses and startups, especially when resources are tight and priorities lean toward developing new features. But treating compliance as a low-priority task or box-ticking exercise is a costly mistake. Neglecting compliance costs businesses an average of $4 million in lost revenue and up to $5 million in business disruptions due to data breaches and other security failures.
Instead, think of compliance as a critical investment that safeguards your business, builds trust, and positions you as a competitive player in your industry landscape. Today’s customers have increasingly high standards for data security, and organizations without compliance certifications often miss out on valuable contracts and other business opportunities.
Let’s explore why compliance isn’t just a “nice-to-have” but a genuine growth driver, especially for startups and small businesses.
3 Key benefits of compliance for small businesses
For startups and SMBs, it’s common to see compliance as a one-time requirement, especially if it’s driven by a specific client request. But viewing compliance as a box-checking exercise overlooks the immense, ongoing value it brings to your business. Let’s explore the reasons maintaining a strong security and compliance posture can be a game-changer for your growth trajectory.
1. Attracting new revenue and improving customer retention
A one-off audit may help you meet a single customer’s requirements, but consistent compliance strengthens your credibility and widens your potential market, opening doors to future contracts. Many customers now see security as a minimum requirement, so a proactive compliance program can shorten your sales cycle by easing security concerns and fast-tracking trust. Plus, as you expand and aim for larger clients, having an ongoing compliance program gives you a leg up on competitors who don’t maintain it. Many mid-market and enterprise clients require consistent proof of security practices, and your compliance history will help you stand out in crowded markets.
In a world where 84% of users feel more loyal to businesses with strong security practices, and 48% have outright stopped buying from companies over privacy concerns, your compliance stance becomes a decisive factor for potential customers. And the impact on business deals is tangible. Last year, 29% of organizations lost potential contracts because they lacked a compliance certification, and 72% completed compliance audits specifically to secure new business. And when asked why they implemented a compliance program, 23% of organizations cited the goal of winning new clients — that number jumps to 34% for companies with over a billion in revenue.
If you’re targeting larger deals or aiming to grow rapidly, achieving compliance early on not only helps you close those deals faster but also strengthens customer trust and retention for sustainable growth. Compliance becomes a powerful credibility signal that shows you’re serious about security and prepared to protect your customers. Even if you’re currently managing without reports or certifications like SOC 2 and ISO 27001, consider that reaching upmarket will almost certainly require them. Compliance isn’t just a ticket to do business; it’s the competitive edge you need to win new business, close deals faster, retain customers, and open doors to clients who expect high security standards from vendors and partners.
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2. Preventing data breaches and regulatory fines
While it’s easy to assume that cyberattacks primarily target large corporations, the reality is very different. Small businesses make up 43% of cyberattack targets annually, and the impact is severe: 60% of small businesses go out of business within six months of a cyberattack.
Then there is the issue of regulatory compliance. Violation penalties can also be hefty, with the average citation cost for small businesses an average of $30,000 over five years. Yet noncompliance costs for small businesses extend beyond fines — they include an average of $4 million in revenue loss and up to $5 million in business disruptions.
Investing in compliance is an essential safeguard for your business. It’s a way to avoid regulatory fines, prevent costly business disruptions, and maintain secure, trusted operations that give you reliability and your customers peace of mind. While initial compliance investments may seem high, the cost of neglecting them is far higher.
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3. Driving operational efficiency and lowered costs
For growing businesses, a strong compliance program doesn’t just protect against threats — it’s a pathway to improved operational efficiency and a leaner business model. As you scale, it’s easy for redundancies to creep into your operational processes: duplicated software, overlapping tasks, and inconsistent protocols that introduce inefficiencies. Standard compliance tasks like routine internal audits can catch these redundancies early and optimize routine processes. Organizations that embed security practices into their operations see an average productivity gain of 10%.
Adopting a compliance framework also leads to reduced human error and better workflows, creating a scalable operation that stays efficient even as it grows. A strong security posture, coupled with employee training and automated processes, can reduce human error-related incidents by up to 80%.
Prioritizing compliance from day one ensures that efficiency and best practices are built into the DNA of your business. Not only does this save time and resources, but it also helps you stay lean as you grow.
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The value of automation: Achieving the benefits of compliance without the burden
For small businesses and startups, resource constraints often make compliance feel overwhelming. But compliance automation tools eliminate most of the manual work, making it possible to build an effective, scalable compliance program without exhausting time or resources. A recent survey by UserEvidence shows that automating security processes like continuous monitoring and evidence collection can reduce employee workload by nearly 20%, freeing up time for employees to focus on higher-impact projects.
With the right compliance automation tool, you eliminate countless hours of manual work, freeing up time to focus on strategic growth areas. In fact, 92% of businesses using Secureframe say they’ve been able to allocate more time to product development and customer engagement by automating manual security and compliance tasks. Automation saves the average Secureframe user approximately six hours a week on manual tasks, which translates into two months every year that can be redirected toward growing the business.
In addition to pure time savings, automation solutions like Secureframe offer expert support to help you navigate the complexities of compliance, from understanding which standards you need to comply with to implementing controls and fielding evidence requests from your auditor. With an automation solution, compliance no longer requires a team of experts or expensive consultants.
By investing in compliance automation, you’re not only achieving certification faster and with fewer resources, but also future-proofing your operations.
The Compliance Automation Platform Buyer's Guide
Learn how a compliance automation platform can help streamline and scale your security and compliance efforts, then use an evaluation form to fast-track the vendor evaluation process.
How Secureframe customers experience the long-term benefits of compliance
When you prioritize compliance early, it becomes a critical asset across all facets of your business. And with the help of automation, you can skip the manual effort that often deters growing companies from implementing compliance programs. The ROI on security compliance is multi-faceted: it unlocks revenue opportunities, improves operational efficiency, and, with the right tools, allows you to run compliance programs at scale without sacrificing resources.
The sooner you embrace compliance, the sooner you can unlock the benefits of increased customer trust, better security, improved operational efficiency, and ultimately, stronger growth.
The average Secureframe customer achieves ROI in less than six months. They not only improve efficiency by nearly 20%, but 66% have been able to develop new products or services, 47% have improved customer engagement, and 25% have increased sales activities as a direct result of using our automation solution.
Learn more about how your business can automate compliance to grow faster and more efficiently by scheduling a demo with our team.
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FAQs
What is ROI in compliance?
ROI (Return on Investment) in compliance refers to the measurable benefits and financial returns a business gains by investing in compliance programs. This can include new revenue from clients who require compliance certifications, cost savings from avoiding regulatory fines, and operational efficiencies like reduced redundancies and minimized risk of disruptions due to security incidents.
What is ROI in security?
ROI in security is the financial return a business sees from investments in security measures. This includes direct benefits, like preventing costly data breaches, and indirect gains, such as increased customer trust and streamlined operations. Security ROI can often be calculated by comparing the costs of security initiatives with the savings from avoided incidents and the enhanced value these protections bring to business continuity and reputation.
What is the rate of return on security?
The rate of return on security measures quantifies the financial benefits achieved relative to the investment made. While it varies by industry, a positive rate of return is often seen through reductions in incident response costs, lower regulatory penalties, and avoided downtime. Calculations typically include factors like incident reduction rates, cost avoidance, and improvements in efficiency.
How to calculate ROI for cybersecurity?
To calculate ROI for cybersecurity, subtract the cost of cybersecurity investments from the financial savings or gains achieved (such as avoided costs from incidents, fines, or downtime), then divide by the total cost of the investment. The formula is: Cybersecurity ROI = (Avoided Losses + Gains) − Investment Cost. Consider elements like reduced incident frequency, faster recovery times, and gains in operational efficiency for a more accurate measure.