Underestimating the duration of the sales cycle at your Startup 2020

Underestimating the duration of the sales cycle at your Startup 2020

I read some of the most famous webs such as Medium or Forbes articles and tips for startups. However, I missed in their lists and articles the factor of: Underestimating the duration of the sales cycle.

I found out how some entrepreneurs underestimate the duration of the sales cycle and this impatience leads them to burn out their budgets, employers or even relationship with partners and potential customers. 

What is the duration of the sales cycle?

Let’s start to define the sales cycle: It is the period of time from the the customer is a prospect till the customer make the purchase order. 

Which factors are conditioning the length of the sales cycle?

There are several conditioning factors for the sales cycle. This is my personal list cooperating with technology vendors:

  1. Customer budget and costs.
  2. Direct needs covered by the product or service.
  3. Target public: Companies or Individuals.
  4. Company size.
  5. Sector: Private or public.
  6. Brand recognition.

Let’s have a look step by step.

Customer budget and costs

I use one sentence to summarize this factor. “You can have the best solution in the market, cover their requirements, solve time and money. If they don’t have a budget, it will never happen and the sales cycle will last forever.”

However, if the other factors spoken on this post are matching properly with the customer. It exists different alternatives and techniques.

What about if the customer doesn’t have budget but they need your product or solution?

I will give you a practical example: They need your solution very urgent but they don’t have a budget because it is very expensive or it is the end of the fiscal year and they are out of the budget.

My tips: How much money do you spend on branding? You may spend thousands of dollars every year. What about if you agree “Free” public reference or case study with the customer in exchange of huge discount.

Sometimes, you may get the objection: Giving something free means that we are cheap. It’s your choice in the way you build your own brand. In my personal case, I decided to give my knowledge and experience by my own blog in order to show up how I can help you building your own startup.

Direct needs covered by the product or service.

this factor makes a huge impact on the process and period of the sales cycle.

Is your product covering critical needs? How do you cover these critical needs? Is your product “Good to have” as added value?

I will help you with these practical examples. You should also have in consideration that this is not the only factor. Therefore these examples may vary depending on the other factors spoken in this post.

Example of fixing.

The company “A” has a critical IT problem. If your product is fixing this critical IT problem, then the sales cycle is going to be very short.

Example of preventing.

The company “A” suffered a critical IT problem in the past. Your product is preventing that is going to happen again. Then the sales cycle maybe short-medium.

Example of added value.

The company “A” suffers usually some critical IT problems. Your product is helping to stop this IT problem, but it is not fixing and neither preventing. Then the sales cycle depends on the technology development of the customer. It means if the company has already covered the previous examples they will consider your solution with a medium-long term. If the customer hasn’t covered the previous issues, then you should consider focusing on different prospects cause opportunity is not a “hot” deal.

My tips.

After reading these examples, you have to analyze which of these examples would best suit your prospects. Classify them and prioritize those in which the sales cycle is the shortest.

Target public: Companies or Individuals.

There is a critical difference between products or services aiming for individuals and companies.
– The sales cycle for individuals is not established. It depends on the other factors as for example, the needs covered by the product.
– The sales cycle for companies varies depending on the others factors: budget, direct needs covered by the product, size, sector and brand recognition.

Company size.

There is also a critical difference between selling for Small Medium Business, and Enterprise and Corporate companies.
Here is one of the most common mistakes by technology startups: Lack of patience or understanding about the sales process for an enterprise or corporate customer.

While for small and medium enterprises the cycle may be smaller due to the organization of budgets. The enterprise and corporate sales cycles are usually set up one year in advance.

My tips

You need to clarify who is your target customer and the reasons you are selling to small and medium business or selling to enterprise corporate.

Does a small company need your solution? Is a small company willing to spend on your solution? If your target is only enterprise or corporate, then be aware of how long it takes to close a deal. It may take years in some cases and you need to survive meanwhile. So you need to choose a proper Go To Market strategy and be patient with your partners and customers.

Sector: Private or public

There is a big difference between a private and public client. The private budget can be decided by themselves.
However in a public company, the process my last years: lack of budget approval, change of government priorities, change of the government party, etc

Brand recognition

When the brand is not well recognized, the customer experience insecurity and risky cause they are the first customers.

Due to this startup challenge, the sales cycle period will be longer. However, you can have in consideration my tips from the post: Scale-up common mistakes and tips: Branding.

Are you agree on this list?

If you liked the post, don’t hesitate to share this or write your opinion in the comments below.

Javier Nieto León



Javier Nieto León

When I started as a Business Development Manager at a Tech Startup Vendor in 2014, I faced the issues and the pains about how hard it is becoming a global Tech Startups. The Startups Tips mission is to help your Tech Startups to go from Local to Global.

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