Back to Basics: Why Develop a Standard Pipeline Format? By Tom Basile Seneca Creek Consulting A well designed pipeline can assist management in measuring progress against the company’s business plan and forecasts as well gauging individual performance. If constructed and followed properly, the pipeline should provide management with an accurate financial forecast into the future, providing enough time for management to make adjustments and corrections based on changes in the marketplace. The net result is that a standard pipeline should minimize surprises and identify where additional resources should be focused to achieve the company’s business and revenue plans. Here is a sample pipeline format to track qualified opportunities: •Responsible Sales Rep •Agency/Customer •Opportunity Description •“Company” Position (Prime or Sub) •“Company” Line of Business •Total Dollar Value: (Initial base year versus total contract period) •Probability •Weighted dollar value •Contract type and duration •Expected Close Date •Action Items/Resource Requirements needed to move to the mext step The following are example definitions for probabilities: •100%: Signed contract in hand •90%: Received verbal from customer that “company” has been selected •50%: Award to be made within 90 days. Source selection down to “company” and one or two other contractors •30%: Submitted proposal either as a prime or subcontractor •10%: Opportunity has been qualified; prospective customer has budget and need for “company” solution; and management has made a go forward bid decision •0%: Opportunity is being pursued and tracked. “Company” is examining bidding as a prime or as a subcontractor If the pipeline probability format is adhered to properly, management should be able to track progress based on total dollar value of deals being pursued and weighted dollar value of deals. With proper adjustments, the weighted dollar value will present an accurate forecast of revenue for management and its outside constituents (bank, board of directors) within 15% plus or minus of actual booked revenue. As said repeatedly by the sage Peter Drucker, “You cannot manage what you can’t measure.” Surely a pipeline is one of the significant tools for providing and managing revenue projections. For more information visit www.SenecaCreekConsulting.com