What is a Sales Cycle?

You built a product. Now you need someone to pay for it. The sales cycle is the defined set of steps a salesperson or company takes to turn a lead into a customer. It encompasses everything from the first moment of prospecting to the final signature on the contract.

For a founder, this is more than just a process chart. It is a measurement of time.

When you hear people talk about a short or long sales cycle, they are referring to how much time passes between meeting a prospect and getting paid. Understanding this duration is vital for predicting revenue and managing your burn rate.

While every business is unique, most sales cycles follow a similar trajectory. You can think of these as the hurdles you must clear to win business.

• Prospecting: Identifying potential clients who fit your target market.
• Outreach: Making the first contact via email, phone, or social media.
• Qualification: Determining if the prospect actually needs your product and has the budget to pay for it.
• Presentation: Pitching your solution and demonstrating value.
• Objection Handling: Addressing concerns regarding price, features, or timing.
• Closing: Agreeing on terms and signing the contract.
• Referrals: Asking the new happy customer for leads to restart the loop.

If you skip steps, you usually pay for it later. For example, failing to qualify a lead early often results in a deal falling apart at the closing stage because the prospect never had the budget in the first place.

It is common to confuse the sales cycle with the sales funnel. They are related but distinct concepts.

The sales funnel refers to the volume of prospects you have at each stage of the process. It is a numbers game. It tells you how many leads you need at the top to get one deal at the bottom.

The sales cycle refers to the process itself and the time it takes to complete it. It focuses on the velocity of the deal.

Why does this distinction matter?

You can have a full funnel but a broken cycle. If you have a thousand leads but it takes two years to close them, your startup might run out of cash before the revenue arrives.

In a corporate environment, sales cycles are predictable. In a startup, you are often building the road while driving on it.

Your first few sales cycles will be messy. You might not know your ideal customer profile yet. You might not have a standard pitch deck.

This creates a specific risk for early-stage companies. If you are selling to enterprise clients, your sales cycle could be six to eighteen months. You need to ask yourself if your current funding runway can survive a cycle that long.

Do you have the capital to wait that long for a check?

If the answer is no, you may need to pivot to a customer segment with a faster cycle, such as small businesses or direct-to-consumer models, to keep the lights on while you hunt the whales.

Track your time. Measure how long each stage takes. Only then can you find the bottlenecks and fix them.