I found this post by Karen Andrews and just had to share it. While buildingyour pipeline in any business, sales, real estate leads, etc. you need to understand your business and your forecast. Always Grind today, to have the future of tomorrow!

“A sales pipeline is simply a forecast that you or your salespeople prepare monthly which lists the customers that are likely to buy in a given time frame, the value of the sale and when it is likely to close. It is an essential tool for business owners and sales managers to identify where you are and where you need to be in order to meet budget.

Even if the forecast is well below where you need it to be, at least you are aware of it and can take steps to improve it and stay on track. Don’t wait until the 2nd or 3rd week of the month when you realise that sales are slow to come in and you need more because it’s usually too late.

Typically, I usually ask for a forecast at the beginning of the month and then again on the 15th of the month to see how we are tracking.

The important thing to remember is to use a ‘weighting’. You may $500,000 in your pipeline but it’s very unlikely that you will be successful in winning 100% of them so the forecast will be inaccurate. A weighting is simply a % that you apply terms of the likelihood of winning the sale. Here is an example of how to calculate:

Using this example, the salesperson needs to add more sales into their pipeline to ensure they reach their sales target of $100,000.

As a guide to the Probability you could use

Initial Communication – 10%
First Meeting/Presentation – 20%
Proposal Given – 60%
Negotiation/Verbal Commitment – 80%
Closed – 100%

Most CRM/Database packages (I use ACT or Salesforce.com) include Sales Pipeline management but it can be as simply as listing them on an Excel spreadsheet. Here is an example from Excel to get you started

Product Sales:

http://office.microsoft.com/en-us/templates/TC011457181033.aspx

Karen Andrews is Director of Shine Sales Solutions, and a Sydney based Sales Coach and Sales expert who  works with businesses to increase their sales through strategy development, sales coaching and mentoring.”