Startups are about tech, energy, excitement, investment, growth, disruption and fun, right? So why should you care about contract process?
You need contracts to grow your startup. Without contracts you can't recognize revenue and you can't compel customers to actually pay you for the service you provide.
For the people who build sales-led businesses, like high-growth startups, contracts often seem like a necessary evil. Building the product is exciting; hiring new colleagues is rewarding; closing deals is exhilarating. But paperwork? Nobody wakes up in the morning excited to draft some new contracts. Well, except lawyers.
But contracts are an essential building block for your startup’s success. They’re how you recognize revenue, how you do meaningful forecasting - and when you come to raise your next round of funding, you’d better have your paperwork in order. Due diligence processes are thorough, and top-class investors are going to dive deep into your contracts.
However, for too many entrepreneurs, contracts become a headache - a process plagued by manual workflows, bottlenecks, lost data, multiple systems and poor user experience. Data from the IACCM shows that 83% of people are dissatisfied with their contract process. With 80%of the revenue that flows through B2B deals governed by contracts, you need to change that experience if your startup is going to grow and thrive.
We're fortunate to work with hypergrowth AWS startups like Deliveroo, Babylon Health and Cazoo on their contract process every day, and we've picked up a few lessons. Here are their five tips for making sure contracts don’t block deals from closing, and enable growth instead.
1. Tackle contract process early
In the early days, you might be signing five contracts a month. With decent growth, that will quickly become ten, then 20, then 50, then hundreds - some companies create more than a thousand each month in Juro. A bad process will break extremely quickly if volumes increase. Make sure you tackle contract process early, so the only thing you need to worry about at quarter end is how to celebrate.
2. Don't use multiple systems for your contracts
Lots of businesses still manage contracts by creating documents in Word, amending them through multiple versions in tracked changes, emailing them, between parties, eventually converting them to PDFs and wet-signing or e-signing them. This creates issues around version control, data integrity, legal risk - but above all, speed. So much time is lost chasing documents between systems. Reducing your contract process to one system of record and moving to contract management software is the surefire way to fix this.
3. Start with high-volume contracts
Some contracts are high in complexity and likely to be negotiated - your venture funding agreements, for example. But there’s a constant stream of contracts passing through a high-growth startup that are low-risk, and don’t need much negotiation. That’s why startups and scaleups usually start by automating their low-value contracts, like non-disclosure agreements. Start here and get the process working smoothly before you scale it.
4. Integrate your contract process with other systems
Once your sales team gets up and running, they’ll be living all day in their systems of record for communications and CRM. They’re not going to want to jump into other systems - so don’t make them. Integrate your contracts process with those systems, so they can create and manage contracts in Salesforce, and be notified about their progress in Slack. If contracts live where your sales team does, it’s easier to keep them on task, and motivated when new deals close.
5. To drive startup growth faster, collaborate
Sales isn’t the only department of a high-growth startup where a frictionless contract process is useful. The talent team needs a slick contract process in order to secure the best candidates quickly. Procurement needs a robust contracts platform in order to manage all its vendors. The founders need a single source of truth for contracts when it comes to managing funding rounds. The more contract workflows in the business move to a single software platform, the easier it will be for teams to collaborate - which can only help the business to move faster and grow faster.
Don’t let contracts slow your startup’s growth. By following these steps, you can make contracts a growth enabler, rather than a necessary evil. So many key business documents are moving to digital, collaborative platforms - wikis into Notion, spreadsheets into Airtable, Word into Google Docs. There’s no reason for your contract process to be stuck in the 80s - find a modern contract automation platform like Juro and make paperwork one less thing for your startup to worry about.
If you're an AWS Activate customer, you can access a 25% year-one discount on a contract automation plan with Juro. Head back to AWS to find out more, or simply hit the button below to talk to the team today.