There are all kinds of factors that can impact how quickly and profitably you’re able to grow your business.
Your specific business model.
Your strategy for differentiating your business versus the competition.
Your ability to build the right team around you.
But for most businesses – and particularly for service businesses of any type – the single most important factor in growing your business quickly and profitably is how well you do at maintaining a full pipeline of sales opportunities.
Why is that?
There are a number of reasons:
The Odds Improve
A full pipeline of sales opportunities dramatically increases your odds of getting enough new business to grow quickly and consistently.
In service businesses, in particular, you can only take on so many new clients and maintain a high level of service.
Let’s assume that a number of five new clients each month. If you only have ten sales opportunities in your pipeline each month, then closing five is actually relatively tough – a 50% closing ratio is very, very good.
But if you have thirty sales opportunities in your pipeline each month, then closing five is actually pretty darn easy – a 16% closing ratio is achievable even by junior salespeople.
So the math simply works in your favor.
You Get More Confident
Confidence is critical in sales.
I first heard Jim Rohn define sales as ‘a transfer of trust’. People buy from you when they trust you.
Confidence is one of the most important tools a salesperson can deploy to increase the degree of trust they create with their prospect.
You Say ‘No’ More…Which is Good!
The other really important product of increased confidence is that you start saying no to more opportunities – the ones that are less-qualified and you know are going to be a pain in the a$$.
Anyone running a service business knows that the difference between a good client and a bad client is night and day!
Good clients pay well, pay on time, value your services, and don’t bug you.
Bad clients fight every bill, pay late, question your expertise, and annoy the heck out of you, and sap the morale of your team.
And which ones do you end up spending more time and energy on?! The bad clients!!!
Just say no more, and business will get much more enjoyable and profitable!
Your Margins Improve
When you have a full pipeline of sales opportunities, your margins improve.
Because as you start saying no to more bad clients, you don’t waste nearly as much time and effort servicing your clients – good clients simply use fewer resources.
And, you’ll raise your prices.
Your increased confidence will result in you realizing that there are enough good clients out there that will pay a more premium price for your service. Since you can only take on so many new clients each month, you’ll happily lose a few opportunities that would have been lower margin.
The combined impact of saying no to bad clients and raising prices for good clients have an exponential impact on your margins – this is the kind of change that grows your bottom line from 5% to 40%.
You Get Critical Mass
Size matters in business.
Bigger businesses have more case studies of success, more people talking about them in the market, more sales and marketing power, and more resources to devote to their clients and employees.
All of which has a ‘gravitational effect’.
This is why bigger businesses are able to stay big even while it seems that they are putting in much less effort at winning new business than the little guys.
They have critical mass, and that attracts business to them.
You Get a ‘Flywheel of Domination’ Effect
In every fast-growing business I’ve ever been a part of, you wake up one day to the realization that the stuff that was really hard for you just a few years ago now is happening almost automatically.
Getting new clients used to mean hours, weeks, or months of struggle…now it seems the phone is ringing with new opportunities all the time.
That’s when you realize that you’ve got the momentum, and the market is now chasing you.
You have a flywheel effect that is increasing the rate at which you are kicking the pants of off your competition. Every day it seems growth gets faster and easier, and every day you seem to find new ways that you are distancing yourself from the competition.
This is no time to let off the gas pedal, of course, as success in business is fleeting and must be constantly nurtured.
But if you stay focused, you have now entered the really fun stage of growth where you are winning, not just surviving.
The Impact of a Full Sales Pipeline Can’t Be Overstated
I hate to say that sales is a ‘numbers game’ because there is so much more to it than that.
The reality is that having numbers on your side is one of the most reliable and proven ways to get fast, consistent growth at your business.
The more opportunities you have in your pipeline, the better your business will perform (from a growth perspective, anyway).
A pipeline full of sales opportunities breeds confidence, which has so many downstream benefits that combine to produce results far beyond what you may expect.
Make It a Priority!
Make it a priority to develop the strategies, systems, and processes necessary to ensure you are able to fill your sales pipeline well beyond your current expectations.
The great news is that it’s never been more affordable and realistic to do so.
Given the combined power of content, social media networks, paid advertising, and sales & marketing automation growing your sales and marketing impact doesn’t have to mean that your effort or budget have to grow at the same pace.
Smart entrepreneurs will leverage these factors to create fat, healthy sales pipelines and dominate their competition.
You should be one of them!
All the best,