What is a sales cycle? How long should yours be?

A sales cycle is the sequence of steps from first contact with a prospect to a signed deal. In B2B SaaS, average sales cycles range from 14 days for sub-$5K ACV products to 3–6 months for enterprise deals above $100K ACV. The length of your sales cycle has a direct impact on pipeline velocity, cash flow, and how you structure your sales team.

What are the stages of a typical B2B sales cycle?

Prospecting: identifying and reaching target accounts. First contact: initial outreach and first reply. Discovery: understanding the prospect's problem, budget, authority, and timeline. Demo or presentation: showing the product in the context of their specific situation. Proposal: scoping and pricing. Negotiation: final terms. Close: signed contract. Not every deal goes through every stage in sequence — SMB deals often compress discovery and demo into one conversation, while enterprise deals may cycle through multiple rounds of each.

What determines how long your sales cycle is?

ACV is the primary driver. Higher-value deals require more stakeholders, more approval steps, and more risk mitigation — all of which add time. Number of decision-makers: a founder making a $500/month decision alone closes faster than a VP Sales getting sign-off from the CFO and procurement. Product complexity: a product that requires significant implementation or change management has a longer evaluation phase than a plug-and-play tool. Category maturity: selling into a well-understood category (CRM, email marketing) is faster than selling a new category where the prospect needs to understand the problem before evaluating the solution.

How do you measure your actual sales cycle?

Pull the last 20 closed-won deals from your CRM. For each one, calculate the time from first positive engagement (first reply, first meeting booked) to signed contract. Average them. Segment by deal size — your cycle for sub-$10K ACV deals is probably materially different from your cycle for $50K+ deals. Track this quarterly; it will change as your ICP definition tightens and your sales process matures.

When does a long sales cycle signal a problem?

When it's longer than the ACV justifies. A 90-day cycle for a $5K ACV deal means you're either in the wrong ICP (deals that could close fast are stalling on unresolved objections) or your discovery process isn't surfacing urgency. When cycle length is increasing quarter over quarter without a corresponding increase in ACV, that's a process signal — something in the qualification or demo-to-proposal handoff is creating delays that compound.