Tag: Scaling Up

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Shorten Your Sales Cycle: Converting Leads into Customers Faster

Shorten Your Sales Cycle

Why the sales cycle matters

Your sales cycle is the time it takes to convert a qualified lead into a paying customer. A long sales cycle keeps cash trapped in your pipeline and delays the cash-conversion cycle, which is the period between investing in your business and getting your money back. Different industries have different sales-cycle lengths, but every business can benefit from making the journey from prospect to customer shorter.

Diagnose your current cycle

Start by tracking your sales cycle. Measure how long each stage takes, from initial lead qualification through proposal, negotiation and close. If you don’t measure it, you can’t improve it. During regular review meetings, look for bottlenecks: where do deals stall? Is there a long wait for demos, quotes or approvals?

Strategies to speed up the cycle

  • Qualify leads early. Focus on prospects that fit your ideal customer profile. Unqualified leads slow down your sales team and lengthen the cycle.
  • Align sales and marketing. Ensure your marketing messages attract the right prospects and that sales teams follow up quickly.
  • Automate repetitive tasks. Use CRM tools to automate follow-ups, schedule meetings and send proposals, freeing sales reps to focus on high-value activities.
  • Streamline approvals. Simplify internal approval processes so quotes and contracts don’t sit on someone’s desk.
  • Shorten demonstrations and trials. Provide prospects with concise, tailored demos so they can quickly understand your value proposition.

Track and celebrate improvements

Shortening the sales cycle is an ongoing process. Continue measuring your sales-cycle length and celebrate incremental improvements. A shorter cycle means cash comes in sooner, which helps fund your growth. In the next step, learn how to speed up your production and inventory cycle to free up even more cash.

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Streamline Your Production & Inventory Cycle

Why production & inventory matter

If you sell a product, you need to hold inventory. The money you spend on raw materials and finished goods is cash you cannot use elsewhere until the product is sold. By speeding up production and moving inventory faster, you free up cash sooner to fund growth.

Assess your production and inventory cycle

  • Measure your production lead time: How long does it take from ordering materials to finishing a product?
  • Track days of inventory: How many days’ worth of stock do you hold?
  • Identify slow-moving items: Which products sit on shelves longest?

Knowing these metrics helps you target improvements.

Strategies to shorten the cycle

  • Adopt lean and just-in-time (JIT) methods. Companies like Toyota have reduced the time products sit in inventory by using lean manufacturing and JIT production. Produce smaller batches more frequently so cash isn’t tied up in large quantities.
  • Improve production schedules. Coordinate work orders to minimise idle time and ensure materials and labour are available when needed. Use scheduling software to spot bottlenecks.
  • Avoid false economies of scale. Buying in bulk may reduce unit costs, but if you hold excess inventory you lose the use of that cash. Evaluate whether quantity discounts outweigh the cost of tied-up cash.
  • Order smaller quantities more frequently. Ordering smaller batches reduces inventory sitting in the warehouse and may cut the cash cycle by dozens of days.
  • Use demand forecasting. Analyse past sales data to forecast demand, so you produce only what you expect to sell. This prevents over-production and helps maintain optimal stock levels.

Keep refining

Reducing production and inventory time requires continuous monitoring. Track your days inventory outstanding (DIO) – the average number of days it takes to sell inventory – and set targets to lower it. By freeing up cash tied to stock, you can invest sooner in marketing, R&D or additional capacity. Next, see how shortening your delivery cycle can speed up your cash flow even further.

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Shorten Your Delivery Cycle: Fast-Track Fulfillment

Shorten Your Delivery Cycle image

Why the delivery cycle matters

A sale isn’t complete until your customer receives the product or service and you can collect payment. Unnecessary delays between taking an order and delivering slow the cash-conversion cycle, because cash from the sale can’t be collected until delivery. Reviewing and streamlining your delivery processes accelerates cash inflows.

Analyse your current delivery process

  • Order processing time: How long do orders sit in your system before they’re scheduled for fulfilment?
  • Production or service completion time: Are there bottlenecks or hand-offs that slow down completion?
  • Shipping or service delivery time: Are there delays in shipping or scheduling services?

Gather data on these steps to identify where orders languish.

Strategies to shorten the cycle

  • Automate order processing. Replace manual order entry or approval steps with automated workflows so orders flow directly from sales to fulfilment.
  • Synchronise departments. Ensure sales, production and logistics teams share order information in real time, reducing miscommunication and delays.
  • Optimise logistics. Use route-optimisation tools and reliable carriers; for service businesses, schedule appointments efficiently to minimise travel and downtime.
  • Reduce batch sizes. Ship orders individually rather than waiting to consolidate them. Smaller, more frequent shipments may get products to customers sooner and start the payment clock earlier.
  • Set delivery expectations. Communicate clear delivery timelines to customers. Meeting or exceeding promised delivery dates reduces disputes and encourages prompt payment.

Deliver faster, get paid sooner

Shortening the delivery cycle not only improves customer satisfaction but also reduces the time between making a sale and receiving cash. Combine these improvements with the next step – optimising your billing and payment processes – to maximise your cash flow.

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Improve Your Billing & Payment Cycle: Get Paid Faster

Improve Your Billing & Payment Cycle: Get Paid Faster Image

Why billing & payment matter

There’s a big difference between sending an invoice and getting paid. Slow-paying customers extend your cash-conversion cycle and reduce liquidity. By refining your invoicing and payment processes, you can receive cash sooner and avoid cash crunches.

Identify payment bottlenecks

  • Invoice accuracy: Mistakes or missing information in invoices can lead to disputes and delayed payments.
  • Billing timing: Do your invoices reach clients when they are ready to pay? Mailing invoices at the wrong time can delay payment.
  • Payment terms: Generic “Net 30” terms may encourage customers to delay payment; clear due dates signal when you expect payment.

Strategies to speed up payment

  • Bill promptly. Issue invoices as soon as goods ship or services are delivered. Sending invoices early and stating payment is due within a specific timeframe encourages faster payment.
  • Set explicit due dates. Instead of “Net 30,” specify a due date (e.g., “Due 25 June”). This simple change can shave days off your payment cycle.
  • Offer incentives. Provide small discounts for early payment or require deposits for large orders. Incentives encourage customers to pay promptly.
  • Use electronic invoicing and payments. Automated invoicing systems reduce errors and deliver invoices instantly. Offer multiple payment options (credit card, bank transfer, online payment portals) to make paying easy.
  • Follow up on overdue accounts. Contact past-due customers to ask when they expect to pay. Frequent reminders signal that prompt payment is important.
  • Review payment terms with vendors. Negotiate payment plans or ask vendors for extended terms so you can keep cash longer.

Collect cash, boost growth

When you combine accurate, timely billing with clear terms and automated reminders, you shorten the time between delivering your product or service and receiving payment. Shortening the billing and payment cycle releases cash you can reinvest in your business. To maximise results, apply these billing improvements alongside the other steps: shortening sales, production & inventory, and delivery cycles.