Regulatory violations don’t just incur significant penalties – they also result in business interruption, damage to the brand, and countless other impacts. But compliance is about more than just doing the right thing and avoiding legal consequences: in today’s complex geopolitical and regulatory climate, it’s also a business imperative.
Here’s how to reap the benefits of proactive compliance in your startup.
Building customer trust
More access to information about business activities and an ever-increasing amount of choice in where to shop have left consumers more discerning about who they trust with their money and their personal data.
As a result, building customer trust has never been more important. It’s profitable, too – research by Deloitte identified that customers were 88% more likely to buy again from brands they trust. Abiding by compliance laws demonstrates to potential customers that you care about your responsibilities and can be trusted to securely manage their personal data.
While some standards may not be mandatory, that doesn’t mean they should be overlooked. In some industries, customers and other businesses won’t even consider working with a business that doesn’t have a certain certification, such as ISO 13485 for medical devices or ISO 22000 for food manufacturers.
Complying with voluntary standards
Beyond your regulatory responsibilities and commitment to industry minimum standards, some standards are truly voluntary – and that’s where the real opportunities to build trust are.
By complying with these measures, such as becoming a certified B Corp or reducing your carbon footprint, you’re demonstrating a commitment to being accountable and upholding consistently high standards.
Additionally, compliance also mitigates the huge risks that come with breaking trust. Avoiding reputational and financial damage, as well as the huge time commitment of recovering consumer trust, is usually worth the extra administration time.
Improving efficiency and workforce engagement
If your startup isn’t in a highly regulated industry like the financial sector, best practice guidance may seem unnecessary and burdensome, especially if you’ve already got systems and ways of working in place.
But these guidelines are considered best practice for good reason, and they’re worth considering to unlock efficiencies and streamline processes. This is particularly the case if you’re new to running a business and may not have been exposed to how other organizations do similar things.
Saving time isn’t the only way in which prioritizing compliance can result in a more effective startup – doing the right thing for your people will go a long way, too.
Complying with regulations is the minimum standard for employers, but going over and above can boost workforce engagement. They’re more likely to be loyal to your business, produce high-quality work and think innovatively – all drivers of business growth.
Plus, when it comes to hiring, advertising that you subscribe to voluntary standards like offering a living wage or committing to equity, diversity and inclusion practices will make sure you attract the best talent to drive your business forward.
Giving investors confidence
Raising investment becomes central to any startup’s growth plan at some point. But like customers, potential investors often face overwhelming levels of choice.
By demonstrating that you are aware of the changing legal landscape and are taking action to remain compliant, investors will feel confident that:
- You take your responsibilities seriously and will deliver on your promises
- Your business is agile and can adapt to changing circumstances
- The information you’re providing about your business is true and accurate
- Investing in your business will be lower risk
An easy way to provide this evidence (and to make compliance monitoring simpler) is to keep a legal register. This is a live list of legal requirements that apply to your specific business.
You could even invest in automated legal register software to take the administrative burden out of this process. Simply configure the software with what your business does and your location, and it will generate an automated register which updates as regulations do. Otherwise, check with your local authority for regulations that apply to your business.