Know your Sales Pipeline to sleep better

overwhelmed business owner

The phone rings. I glance at the caller ID; it’s one of my favorite clients. Picking up the phone, I greet her warmly; but her voice is immediately glum.

“What’s the matter?” I ask.

“I just got two new signed contracts.”

“That’s fantastic, well done!” I’m still not seeing what’s got her down.

“I sent out three other proposals this weekend, and I’m guessing I’m going to win all of those too.”

“Really, you are on a roll! This is great!” The sigh I heard on the other end of the line told me she wasn’t as enthusiastic about it as I was.

“How am I going to get all this done? I’m already working all weekend, up late at night; it’s going to kill me.”

Ah, I’m starting to see the problem now… She hasn’t been tracking her sales pipeline and so these new client wins are hitting her all at once. Her sales success is turning into a service delivery disaster.

One of the most important indicators of business health is the strength of your new business pipeline. Most new business owners watch that like a hawk. Every new contact that might produce any new business goes into a spreadsheet and they work that list. By focusing on that list of prospects sales start to close and you are off to the races.

But more established businesses need to track their sales pipeline too. Your sales pipeline is a key indicator of when you need to hire additional help (or at least line up some freelancers). For most businesses, once you start to get too busy, it’s way too late to think about hiring. “How am I going to have time to hire and train someone new — I have too much business!” Keeping an accurate pipeline report can help you forecast well in advance, giving you time to line up additional help.

But your pipeline can tell you other things too. Are there certain jobs that close at a very high rate, and others that never seem to close? Why is that? Is your price too low on the ones that close all the time? Are you offering the wrong services to the ones that never close?

If you keep track of lead sources on your sales pipeline report you can start to find out where your most valuable referrals come from, or what sales tactics or marketing activities are producing solid results for you.

By tracking how long leads stay open, you can start to get good at forecasting your sales. If you know where your leads are coming from, and how long they stay open, and what your close rate is, then you can start to figure out really cool things like, “If I spend $500 on adwords, it’s going to give me 3 new clients in 90 days.” You can start to be *in control” of your business development process — you driving it, instead of the other way around. How cool would that be?

It doesn’t matter if your pipeline report is a simple spreadsheet, or is something you print out of your CRM tool — you’ve got to have it, keep it up to date, and review it.

That’s what I told my client the next week when I got together with her. Together we pulled out all of her proposals from the last few months and started filling out a pipeline report for her business.

“Whoa, you have been a proposal machine. What is this, 2 proposals per week?” I asked.

“Actually it’s almost 3 per week. I do feel like I’ve been doing nothing but write proposals. Now they are all turning into orders…”

Reviewing her team’s time sheets I could see some opportunities. “Let’s look at your staff and see who still has capacity.”

“Well, Maurice is coming back from vacation next week, so that helps. I think Sandra has some time available.” Her mood is brightening a bit. “I also met this new guy, Martin. I haven’t tested him out, but he’s looking for work. Maybe I could get him to freelance for a few weeks?”

Picking up the new contracts I asked, “Are all of these projects starting right away, or could some be delayed?”

“You’re right. The software company is right in the middle of a big release — they might be willing to wait a bit.”

I could see she was feeling better. I just wanted to make sure she could stay that way. “Now, about these new leads, if you are writing new proposals, let’s try increasing your prices. It might lower your closing rate, but the work you do get will be worth the pain and the extra margin will make it easier for you to hire freelancers to do the work…”

That’s how a business grows, by navigating from one crisis to another. But by keeping your eye on your sales pipeline report you’ll at least know that crisis is coming before it hits!

How do you use your sales pipeline report to help you see the future for your business?

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