Preparing for SOC 2: Guide for Startups and SMBs
- ESKA ITeam
- May 28
- 8 min read
For startups and small-to-medium businesses (SMBs) handling sensitive customer information, achieving SOC 2 compliance is a critical step in building credibility, gaining customer trust, and differentiating your business in competitive markets.
SOC 2 (System and Organization Controls 2) is a rigorous audit framework established by the American Institute of CPAs (AICPA) to assess how companies manage customer data based on five Trust Service Criteria: Security, Availability, Processing Integrity, Confidentiality, and Privacy.
This guide will walk you through everything startups and SMBs need to know to prepare for a SOC 2 attestation — from understanding requirements to implementing controls and managing the audit process.
What is SOC 2 and Why Does It Matter for Startups and SMBs?
SOC 2 is designed specifically for service providers that store, process, or transmit customer data. It verifies that your organization has implemented effective internal controls to protect data and systems.
For startups and SMBs, SOC 2 compliance is a powerful tool to:
Demonstrate commitment to security and data protection.
Meet regulatory and contractual requirements.
Win new business and build partnerships.
Reduce risk of data breaches and costly incidents.
What Companies Need SOC 2?
SOC 2 attestation is particularly important for companies that provide services involving customer data, such as:
SaaS (Software as a Service) providers
Cloud computing and hosting companies
Data centers and managed service providers
Fintech startups and financial services
Healthcare technology firms
Any business handling sensitive personal or financial information
If your customers require assurance that their data is handled securely and with integrity, SOC 2 compliance is often a mandatory or highly recommended certification.
When Do You Need SOC 2 Attestation?
Startups and SMBs typically need SOC 2 attestation when:
Signing contracts with enterprise clients who require security assurances.
Preparing for or responding to vendor security assessments.
Seeking to enter markets with strict compliance requirements (e.g., finance, healthcare).
Planning to scale operations and wanting to build trust with prospective clients.
Demonstrating internal commitment to cybersecurity and risk management.
Early preparation is key—SOC 2 audits require documented processes and operational controls in place for some time before assessment (especially for Type II reports).
Why Is SOC 2 Framework Important?
SOC 2 matters because it:
Provides a standardized framework for managing data security risks.
Aligns with industry best practices to protect sensitive information.
Enhances your company’s reputation as a trustworthy service provider.
Helps identify and fix security gaps before they cause damage.
Supports compliance with other regulations like HIPAA, GDPR, and PCI DSS by emphasizing controls that overlap.
SOC 2 is recognized widely by customers and partners as a benchmark for strong data protection and operational controls.
How Does the SOC 2 Attestation Process Work?
The SOC 2 attestation process typically involves several key stages:
Readiness Assessment: Your organization reviews current policies, procedures, and controls to identify gaps versus SOC 2 requirements.
Remediation: Address any weaknesses found by updating policies, implementing controls, and training staff.
Audit Engagement: A licensed CPA firm or auditor performs the SOC 2 examination. Depending on the type of report, this might be a point-in-time (Type I) or over a period of time (Type II).
Evidence Collection: Provide documentation, logs, configurations, and records demonstrating control implementation and operation.
Testing Controls: The auditor tests the design and effectiveness of controls against SOC 2 criteria.
Report Issuance: After successful audit completion, you receive the SOC 2 report outlining your compliance status, controls tested, and any exceptions.
Continuous Monitoring: SOC 2 is not a one-time event. Maintaining compliance requires ongoing monitoring, updating controls, and preparing for future audits.
Step 1: Understand SOC 2 Trust Service Criteria
Before diving into compliance, familiarize yourself with the five Trust Service Criteria that SOC 2 reports evaluate:
Security: Protection of system resources against unauthorized access.
Availability: System is available for operation and use as committed.
Processing Integrity: System processing is complete, valid, accurate, timely, and authorized.
Confidentiality: Information designated as confidential is protected.
Privacy: Personal information is collected, used, retained, and disclosed according to privacy policies and regulations.
Most organizations focus primarily on the Security criteria but may choose to address additional criteria depending on customer or industry demands.
Step 2: Conduct a Readiness Assessment
Perform an internal SOC 2 readiness assessment to identify gaps in your current policies, procedures, and controls. This includes:
Reviewing existing security policies and documentation.
Mapping out data flows and asset inventories.
Identifying risks related to people, processes, and technology.
Evaluating current controls against SOC 2 requirements.
Many SMBs engage SOC 2 consultants or use automated tools to simplify this step.
Step 3: Define and Document Policies and Procedures
Documentation is a cornerstone of SOC 2 compliance. Ensure you have written policies covering:
Access controls and user management.
Incident response and monitoring.
Change management.
Data backup and disaster recovery.
Vendor management and third-party risk.
Privacy and confidentiality commitments.
Well-crafted documentation demonstrates your organization's control environment and accountability.
Step 4: Implement and Test Controls
SOC 2 requires practical implementation of controls that enforce your policies. Examples include:
Multi-factor authentication (MFA) for system access.
Encryption of sensitive data at rest and in transit.
Network security measures like firewalls and intrusion detection.
Regular vulnerability scanning and patch management.
Logging and monitoring user activity and system events.
Test these controls continuously to ensure effectiveness and readiness for the audit.
Step 5: Train Your Team
Your staff must understand their roles in maintaining compliance. Provide security awareness training to:
Educate on security best practices.
Highlight procedures for reporting incidents.
Clarify responsibilities for access management.
Regular training reduces human error and strengthens your security culture.
Step 6: Choose the Right Audit Type and Auditor
SOC 2 reports come in two types:
Type I: Assesses the design of controls at a specific point in time.
Type II: Assesses the operational effectiveness of controls over a period (usually 6 months).
Select an experienced CPA or auditing firm familiar with SOC 2 requirements and your industry. Their guidance can be invaluable throughout the process.
Step 7: Prepare for the Audit and Continuous Improvement
During the audit:
Provide requested documentation and evidence of control operation.
Be transparent about any gaps or incidents.
Collaborate closely with auditors for clarifications.
After passing the audit, SOC 2 compliance is an ongoing effort:
Continuously monitor and improve controls.
Update policies based on evolving risks.
Prepare for annual or periodic audits to maintain compliance.
Common Challenges and Expert Tips for SOC 2 Preparation
Insights from a GRC Expert
Preparing for SOC 2 attestation can be a complex and demanding process, especially for startups and SMBs that often have limited resources and immature compliance programs. Drawing from extensive experience helping companies navigate SOC 2, here are the most common challenges we see — and practical strategies to overcome them.
1. Lack of Formalized Policies and Procedures
Challenge: Many startups and SMBs operate with informal or undocumented security processes. During SOC 2 audits, auditors require clearly written and approved policies that define controls and operational procedures. Without them, demonstrating compliance becomes difficult.
Expert Tip: Start early with documentation. Use SOC 2 frameworks and templates to draft policies covering key areas like access control, incident response, change management, and vendor risk. Don’t aim for perfection initially — focus on “good enough” policies that reflect your current practices and improve them continuously. Involve leadership to review and formally approve policies, which strengthens governance.
2. Insufficient Control Implementation and Monitoring
Challenge: Organizations sometimes have policies but lack the actual technical or procedural controls to enforce them consistently. For example, a policy may require multi-factor authentication (MFA), but it isn’t enabled for all systems or users.
Expert Tip: Pair policies with concrete control implementations. Prioritize controls that have the biggest impact on security risks (e.g., MFA, encryption, logging). Use automated tools for continuous monitoring — such as SIEM solutions and vulnerability scanners — to provide evidence that controls operate effectively over time. Document control failures and remediation efforts as part of your audit evidence.
3. Managing Third-Party and Vendor Risks
Challenge: Many SMBs rely heavily on third-party vendors for cloud services, SaaS, or data processing. Auditors will want to see how your organization manages risks related to these vendors, which can be difficult without formal processes.
Expert Tip: Establish a vendor management program early. Maintain an inventory of third-party providers, request their SOC 2 or equivalent reports, and assess their controls relative to your risk appetite. Formalize contracts with security and confidentiality clauses. Regularly review vendor performance and security posture as part of your ongoing compliance.
4. Resource and Budget Constraints
Challenge: Startups and SMBs often face limited budgets and small teams, making it hard to dedicate personnel to compliance activities or invest in expensive technology solutions.
Expert Tip: Leverage cloud-native and affordable security tools designed for SMBs. Focus on high-value controls that deliver strong risk reduction without overwhelming resource consumption. Consider outsourcing aspects of compliance — for example, hiring a virtual CISO or engaging a compliance consulting firm. Prioritize training key staff members to multiply your team’s effectiveness.
5. Continuous Documentation and Evidence Collection
Challenge: SOC 2 auditors require evidence that controls were not only designed well but also operated effectively over time. Collecting, organizing, and maintaining this evidence is often overwhelming for smaller organizations.
Expert Tip: Implement a centralized documentation repository (e.g., SharePoint, Confluence) and create a compliance calendar that tracks control activities and evidence collection deadlines. Automate evidence gathering where possible — for example, using logging tools that archive user access logs and system configurations. Assign responsibility for evidence maintenance to specific team members to ensure accountability.
6. Keeping Up with Changing Requirements and Business Growth
Challenge: As your business grows or changes, your security risks and control requirements evolve. Many companies struggle to keep their SOC 2 program up to date with these changes, risking audit failures or gaps.
Expert Tip: SOC 2 compliance is not a “set it and forget it” task. Adopt a risk-based approach to review and update policies and controls regularly — at least annually or when significant changes occur (e.g., new systems, mergers, regulatory updates). Schedule periodic internal audits or gap analyses to prepare for external audits proactively.
7. Employee Awareness and Training
Challenge: Human error remains one of the biggest vulnerabilities. Employees unaware of SOC 2 requirements or security best practices can inadvertently cause compliance failures or security incidents.
Expert Tip: Invest in ongoing security awareness training tailored to your team’s roles. Use practical examples and simulated phishing exercises to engage employees. Encourage a culture where security is everyone’s responsibility, and provide clear channels for reporting suspicious activities or incidents promptly.
SOC 2 compliance is more than just a checklist — it’s a journey toward building trust and safeguarding your customers’ data. For startups and SMBs, preparing early and methodically can make the audit process smoother and boost your reputation in the market. By understanding SOC 2 requirements, assessing your readiness, implementing strong controls, and working with the right audit partners, your organization will be well-positioned to meet and maintain SOC 2 compliance successfully.
Preparing for SOC 2 can feel overwhelming, but with the right approach, startups and SMBs can achieve compliance without disrupting daily operations. Focus on building a scalable compliance foundation—start with strong policies, implement key controls pragmatically, and continuously improve through monitoring and training.
The ESKA Security GRC Team has extensive experience and deep expertise in preparation for SOC 2 attestation, tailored specifically for startups and SMBs. We understand the unique needs of small and growing businesses, which is why we approach each project not just as technical experts but also with a strong business perspective.
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