The Link Between Cash Flow and Your Sales Cycle
With a longer sales cycle, it can be tough to reach profitability and manage business necessities between sales. Key strategies for managing cash flow can help the business run more smoothly.
You initially contact your sales prospect
You meet your first delay in the sales cycle - the prospect does not respond right away
To stay on track, you apply for a business loan
With the loan, you place orders with your vendors to ensure you have products available for the sales that come through
Your prospect finally responds! But it’s to ask questions about the product. They aren’t ready to buy yet.
With your invoices from suppliers are already in and payroll due in a few days, there is some pressure on your cash flow.
You have some cushion from the loan you’ve taken out, so you’re able to pay your suppliers and meet payroll.
Your prospect is interested but they’ve asked for a product you don’t immediately have access to. You use some of your loan funds to meet the special request.
To help your prospect, you lay out the timeline for the sales and onboarding process.
With the timeline in hand, the prospect starts moving more quickly
An earlier prospect you’ve been working with has decided to become your customer, easing some cash concerns.
Your current prospect is still deciding - they want the service but are haggling around price.
You offer flexible billing to your current prospect to sweeten the deal: they are able to pay quarterly.
Using your optimized payment system you’re able to close the deal with your new prospect and receive funds quickly.
With your new revenue, you can pay back your business loan and focus on reinvesting in technology that will help your business run even faster.
