Build your pipeline

A pipeline is only useful if the stage a deal sits in means something specific. The most common failure is stages that describe your internal activity rather than the buyer's commitment.

Stages should describe the buyer, not you

"Proposal sent" is about you. "Proposal accepted in principle" is about them. The second one predicts revenue; the first one predicts that somebody was busy. Aim for stages that only move when the customer does something.

Four to six stages is usually right

• Lead — in the list, not yet spoken to.
• Qualified — they have a real need, budget and a timeline.
• Proposal — a number is on the table.
• Negotiation — they are arguing about terms, which means they intend to buy.
• Won / Lost — closed either way, with a reason recorded.

Weighted forecast

Each stage carries a probability. The weighted forecast multiplies each open deal's value by its stage probability and sums the result. It is a blunt instrument, and it is still better than a gut number — as long as the probabilities are set from what actually closed historically rather than from optimism.