Fast Tip Friday! You know who I am: Charlie Hauck, founder, president, and lead trainer at Growth Dynamics.
Hey, I've got another business topic for this Friday because we tend to think in immediacy, and we like immediate return. We can't wait to see the fruits of our labor. But I've got to tell you, you've got to understand business cycles, and you live in a business cycle.
If you're in business development, it's not just, "They bought something, they gave me a PO today, I ship them product next Tuesday, and then I'm going to get paid for that sale next Friday." That's typically not the way the business cycle works in business-to-business selling.
You've got to understand that your business cycle really starts from your first contact with an opportunity. Can we have a business conversation? Can we figure out if this can be a mutually beneficial opportunity for us both? I sell you a product or service, and you're willing to pay me my price at a fair margin.
That's what we have to do in business development. But we've got to understand that from day one of the sales cycle to the day that you actually see the compensation in your paycheck, it could take 90 days for some of the people that I work with.
If you're a manufacturer's rep and you sell something on May 22, it might not get delivered until June 5, and it might not get invoiced from the manufacturer until June 30. It might not get paid to your rep agency until July 15, which means it might not get to your paycheck until the first of August.
That's about a 10-week sales cycle right there.
And so, when we look at statistics, and we look at closing cycles, and we look at revenue generated, and we look at purchase orders signed, and we look at commissions paid or owed, we've got to understand: What's the timeline? What is the velocity of the revenue that you're generating, and how quickly can you turn that "I don't know if this works for you, but can we have a business conversation?" into "Honey, let's go out to a really nice dinner. I got a great commission check."
You have to be completely aware of all the cycles of the business world that you're working in.
If you're selling large capital expense equipment, it could take you a year. That's a scary number. But once you get into that business cycle consistently, and you're closing a capital expenditure item every month or every six weeks, you're getting paid every month or every six weeks at a high level.
The business cycle is what the business cycle is, but you have to know it to understand how it affects your financial life and your personal enjoyment of that life.
Know your business cycle.
Today's effort might not have an impact on your paycheck for a long time, so every day you've got to put the effort out there to start a new opportunity so that you don't have a lull in your revenue stream.
It's predictable. It is somewhat controllable if you do enough prospecting. If you can find a creative way to express your value and your competitive difference, you can live with that business cycle.
But don't be upset, and don't be surprised, if you don't pay attention to that and you feel like, "Holy cow, my money machine ain't working."
The best business development people I've met, and the best business development people I've had the opportunity and the honor to train, are the ones that understand business as much as they understand the product or service that they're selling.
Those are the real killers in the world that I want to work with.
Get on that bandwagon of business cycle awareness and understand that once you can get that cycle operating, you can have a regular income at almost any level you'd like. But it's up to you to understand how to make it happen and to do the work consistently to keep it happening.
Know your business. Know your cycle. Make your money.
Have a great weekend. Get out there on Monday and turn the cycle machine on again so you know when your next big check is coming.
Take care.