Predicting Your Business’ Future
Wouldn’t it be great to have a crystal ball so you can see what’s going to happen in your business in the next few quarters? If you did, you would know if you should hire that new employee you have been thinking about for some time. Perhaps you could finally decide on that expansion interstate or whether to invest in that expensive system that could increase your productivity by 50%.
But you don’t take these decisions because you don’t have a crystal ball, or your old one is just filled with smoke.
You don’t need a time machine to see the future, or even a crystal ball, but you do need a Sales Pipeline. A healthy Sales Pipeline means a healthy future. While I won’t go into a detailed description on how to create your own Sales Pipeline in this article (more details here), but to summarise, a Sales Pipeline is a step-by-step description of how you convert your Leads to Customers. In its simplest form, it might be:
Step 1. Initial Enquiry
Step 2. Initial Consultation
Step 3. Proposal
Step 4. Sale
For most well run businesses, there will be more steps than this simple example. The Sales Pipeline will have documentation of what happens at each stage, and most importantly for predicting the future, it will track the number of people at each stage.
The numbers will vary according to business as will the time cycle. Businesses selling high volume low cost items may be analysing their pipeline weekly (supermarkets analyse their sales hourly, which is why you hear announcements for red spot specials when things are slow). A business which has a small number of large projects may analyse their pipeline quarterly.
By looking at the numbers at each stage, and comparing the numbers with previous cycles, it is possible to see whether there are gaps or bottlenecks appearing at certain stages. When these occur, based on your cycle time you can predict a slowdown, and of course take corrective action. Alternatively, you may see a surge in the early stages of the pipeline requiring you to hire more staff or increase productivity.
Your Sales Pipeline is better than a crystal ball, which just tells you what’s going to happen, it also tells you how to fix what’s going to happen. Without a Sales Pipeline, your business’ future will be shrouded in smoke.
May Your Business Be – As You Plan It.
Dr Greg Chapman – The Profit Whisperer
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