#39: Sales pipeline

Over the past few articles we have been looking at the key components of your sales process, from identifying what a Salesperson actually does, the difference between the features and benefits of your product and why it is important to know these during meetings, and your USP.

Another thing you also need to manage your sales pipeline. Take a look at the two tables below:

Pipeline Source: Viridian Corporate Finance Limited
Name	Stage	Contract Size (est.)	Value
A	1	100	0
B	2	200	20
C	3	50	10
D	4	150	50
E	5	250	125
F	6	100	75
G	7	100	100
H	1	50	0
I	3	250	50
J	4	100	33
K	5	150	75
L	2	200	20
M	2	50	5
N	4	50	16
		1800	579
Assumptions
1. Prospect = 0%
2. Contact established = 10%
3. Positive meeting = 20%
4. Tender submitted = 30%
5. Negotiations/discussions = 50%
6. Verbal o.k. or email = 75%
7. Purchase order/contract = 100%

The first one is very useful in anticipating your future cash flow. The first column is the prospect. The second column is the stage the relationship has reached. The third column is the estimated absolute size of the contract. The fourth column is the discounted “value” of the contract, with the estimated size multiplied by the percentage likelihood that the business is won.

By way of example, prospect I is at stage three, so there is a 20% likelihood that you win the business. The business is estimated to be worth £250, so the discounted value is £50.

Pipeline Source: Viridian Corporate Finance Limited
Prospect	Contact Established	Positive Meeting	Tender Submitted	Negotiations/ Discussions	Verbal OK or email	Purchase order/ contract
A	A1	A2	A3	A4	A5	A6
B	B1	B2	B3	B4	B5	B6
C	C1	C2	C3	C4	C5
D	D1	D2	D3	D4	D5
E	E1	E2	E3	E4
F	F1	F2	F3	F4
G	G1	G2	G3
H	H1	H2	H3
I	I1	I2
J	J1	J2
K	K1
L	L1
M	M1
N	N1
O	O1
P
Q
R
S
T
U
V
W
X
Y
Z

Another way of looking at your pipeline is the second table. It’s the same sort of data re-sorted. It shows you how many names you have at each stage in the sales process, so it’s useful to estimate what volume of business is coming towards you from a resourcing standpoint.

If overnight everything moved from column five to column six you might think “how I am going to deal with this?” as they have all said yes at the same time.

You can also pick up on things that are stalling; if something has been in column five for ages you might ask yourself why, and investigate.

The key is how many names can you add to the first column, and how fast can you move them to the far-right column.

Try putting a table like this together and start sorting through your contacts, you might be surprised how far you have come with some of them. It will also weed out the time wasters and free up your time for people that actually want to work with you.

Remember, you can always get in touch with me for more help on this or anything else in my expert articles.

Posted in: Start-ups