Gregory Shepard breaks down time to revenue into three parts: contact-to-contract, contract-to-active, and active-to-revenue. Most companies ignore this, assuming cash arrives when a deal closes. In reality, it can take six months or more before money hits the bank, which breaks budgeting and forecasting.
Chapters
So time to revenue. This is surprisingly not very common that people understand the idea of time to revenue. But when you're looking at your time to revenue, what you're trying to figure out are these different cycle times. So cycle time from contact to contract, from contract to active, from active to revenue. This is really, really important. A lot of people miss this when they're doing their go-to-market and they're doing their budgets and their forecasts and stuff that You know, if it takes you 3 months from the point that you start demand generation and there's a contact point to get a contract, that's 3 months right now. From that point to the point that they're implemented and onboarded, maybe that's another 30 days. And then from the point that you get paid, if you're net 30, that's another 30 days. So, you know, it's real easy to think that, okay, I'm going to start driving revenue and not back into these different cycle times and then get your budget really, really wrong because you didn't account for the fact that it's 6 months, you know, let's say before you actually have money in the bank. So it's really important to understand your, your contact to contract cycle times, your contract to active cycle times, and your active to revenue in the bank cycle time. I hope that's helpful.
