Every Business Has A Sales Cycle – do you know yours?

Scaling / January 30, 2012 / Admin

If you’re an independent freelancer, or own a small business or startup, or even if you think your role at a more established company has nothing to do with “sales”, everyone sells. From the custodian to the CEO, everyone is responsible for representing their company and this either helps or hurts a business’s bottom line. I think many of us don’t think of ourselves in this way, or even actively dislike the word “sales”. But the reality is that there are simple activities everyone does to gain new clients, and how efficiently you do these things will directly impact your revenue. Having a habitual system that you follow, even when the “real work” of business monopolizes your time, will help your cash-flow improve and avoid missing out on the big opportunities you are seeking.

No Magic Words

If you are looking for magic phrases to say at closing, or ways to convince people their objections aren’t valid (“The sale starts when you hear the first ‘no.'” – Some-guy-from-the-80’s), this probably isn’t going to be for you. Nothing is worse for sales than putting on some fake persona and saying things you wouldn’t normally. Be real. Improving your sales has more to do with forming good habits than anything you could possibly say.

What We Believe

We at Marketcircle very strongly believe that a key aspect to growing a business is focusing on getting new business. It seems like an obvious statement, but I’m sure we can all think of someone we’ve met in our lives whose default mode is to sit back and wait for customers to come through the doors. While this may work for some companies who have worked for years to build a brand and make some of the greatest consumer products ever (see Apple, Inc.). But for the rest of us, sales and revenue may take a bit more effort and hustle.

Where to Start?

I’d like to start by talking about sales cycles and how understanding your own sales cycle can help improve your cash flow.

Without going all MBA on this, cash flow is the movement of money into or out of a business (as defined by the borg collective). Usually, one prefers to have more coming in than going out. I believe this, in financial circles, is called positive cash flow. So increasing sales obviously results in more money coming in and we should be good to go, right? Well, only if you have enough **time** to sell to the next customer before the repo man comes to take away your Aeron chair. Think of your sales cycle as the time it takes from first identifying a prospect to finally signing a contract and receiving payment from your new customer.

I have a friend who is starting out his career as an architect and is trying to build up his own independent practice. He told me about this guy he met who bought a huge old mansion downtown and was looking to develop it into apartment units. Four months later, we ran into each other again and I naturally asked about it. He said that they had only just recently finalized contracts and gotten the project underway. I remember him clearly saying, “I had no idea how long it was going to take to get everything sorted out before we could start work”.

Just like most people who decide to start a business, we tend to focus our efforts on our craft first and doing good work and hope that the business stuff doesn’t take too long. Problem is if you have no idea how long it takes to close another deal, you can easily get caught off guard and find yourself staring at next month with no projects booked and thus no money coming in. I asked my friend to recall how long it took from meeting that guy to getting a cheque from him.  I suggested that if it took four months last time, and he has scheduled this project to take nine months, then as of five months from now, he better have met his next customer. And then, he’ll need to juggle his time between completing his current project and developing that next sale. He said, “Oh,” his lip slightly quivering and with what looked like a small tear developing in his left eye.

So, do you know how long your sales cycle is? If not, find the last three (or more) contracts you signed and then go through your email and figure out when your first met those clients. Average those times out and now you’ve got a very rough idea how long your cycle is. In the next article, we’ll discuss some ways of shortening your cycle so ramen cup’o’soup can become fancy japanese udon noodles instead.

No Responses to “Every Business Has A Sales Cycle – do you know yours?”

  1. […] their approval process. Whatever the factors are you should now have a much better idea what an average sales cycle is for your […]

  2. I like to think of the cycle in two steps. 1st is the sourcing of suspects or potential prospects (I only categorized a prospect if they are QUALIFIED by set standards. All others are suspects, futures, archived or dead (delete from database)

    Therefore you have CYCLE 1, which includes the original date of contact and CYCLE 2 which starts when they are qualified. You may meet with them on multiple occasions and timeframes, (Based on complex sale vs. simple sale) but )

    Both should be measured and both should be improved upon. Sourcing and selling can have different skillets, requirements and process. Break it down to imposer each step.

  3. […] the Marketcircle blog: So, do you know how long your sales cycle is? If not, find the last three (or more) contracts you […]

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