Sales Cycles - How Long Is Yours?

Posted by Nick Niesen on October 28th, 2010

Sales cycles vary but it is important that you understand how much revenue your average small-business client is going to generate during a 12-month period. You need to know how long it takes to earn revenue from the point your prospect enters the sales cycle.

Your sales cycle starts when you receive the initial lead and doesn't end until the point where that person writes their first deposit check and signs their first contract with you. The sales cycle encompasses all the time and energy you put into changing the relationship from a lead to a paying customer.

When you first start your business it will be your responsibility to estimate the total sales cycle time. You want to know how long it's going to take to go though the sales cycle with an average lead.
Each section of the sales cycle involves time. Things to consider include:

How long are you typically in a qualification stage?
How long does it take you set the appointment?
How long does it take you to do some pre sales-call research to understand what you're up against before you walk in the door?
How long does it take you to do the sales call?
How many weeks are you on the sales call in the deep analysis and proposal?
How long is your follow-up cycle?

You should also consider what kind of funds are going to be required for each stage of the sales cycle and what activities you will need to do in order to convert leads into paying clients.

The Bottom Line on the Sales Cycle

Knowing the average time of your sales cycle is a large part of the business planning process. You won't know exact numbers but you need to estimate the total time involved. Think about how long you're going to be at different stages of the sales cycle. Knowing how much time each stage of sales cycle is going to take will help you figure out how long it's going to take to start generating revenue and producing a positive cash flow.

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