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, as the business scales, 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.
If managing contracts between multiple platforms is a headache for your startup, it'll get worse as the business scales. To find out how Juro can stop your team wasting time on contract admin, hit the button below to get in touch.