Your Business Pipeline...It's Just Math

There is entirely too much winging it going on out there.  No wonder the general consensus is that self employment or business ownership is not stable.  It is known to be inconsistent and as I've heard ad nauseam...not a "real" job. Well, thank goodness for that, since I never want to have a job again, ever.

I was self employed for years and a business owner for years after that. As a self employed person I relied on myself, and as a business owner I relied on my team.  I dreamed for so long that there would be a day when I could rely on an income that wasn't solely generated by me. 

While I was self employed I had fluctuations in my income.  These fluctuations had nothing to do with my industry. They also didn't have anything to do with my clients.  What causes fluctuations?  The economy?  The weather?  Is it random? 

If so, then what we are implying
is that luck is needed to succeed. Well that would have had me run fast.  I would have been out.  That would be similar to saying that someone who is at the casino weekly and investing money in their business, (aka shoving money in a slot machine), should be able to write off their losses as a business expense as they run their business of luck!  I'm sure their might be a few suckers out their that might buy into that one.

Those fluctuations were only caused by me. 

My income was consistent when I was consistent.  My income was inconsistent when I was inconsistent.  

Self employment and business ownership is not unstable...People are unstable.  I have lots of evidence that when I was working and clear and focused, my business produced because I produced.  You will reap what you sow.  I know you know this, but too many people are still leaving it to chance and are not definite with their planning.  You must manage your pipeline.

A pipeline, as we will refer to it here, pertains to the relationship between activity and results.  You must be clear about how much activity it takes to produce a particular result. 

Let's start here with the result of money.  There are other reasons why businesses struggle, but money is by far the biggest culprit.  If we start with the end in mind, then money will be the end of the pipeline.  This photo also looks like a giant faucet -perfect.

Money is what is spit out of the pipeline at the end of the road/process.  We will call "money" the result. 

Your goal is to lay out all the previous steps you will take to produce your end result of money. You are looking for the beginning of your pipeline. When this is complete you will want to be clear that _____# of actions/day = a desired result.

Although CRM (customer relation management) software and apps are available out there to track your contacts through to a result, there is something that is missing for most people/businesses.  They don't tend to track the daily activity as a quantity.  Most are clear of each step, but are unclear of the importance of managing the ratios.

Here's the magic. How many daily contacts does it take to turn a result around in a specific amount of time?  Typically in any business the front end of the pipeline is marketing. Notice I also added on the time frame here.

I do not know a business that is highly successful long term that does not know the numbers of their business.  You must manage your business pipeline to have any idea what is coming in and what needs to be done to keep a consistent and growing profit.

When my husband did this for his Architectural firm, he found that for every 4 proposals he wrote, he secured 1 client at an average of a ________ commission and a ________ week turn around.  The last part of this equation is calculating the average result (how much the average result pays you).

Can you see how critical this would be to know how to manage expenses?  Your business will stay alive and then ultimately thrive when you become clear how to manage YOURSELF. It's just math.  You can either look back on previous results like my husband did, or you can begin to track the results immediately.

You can use this knowledge for many areas of your business including catching tracking upward or downward trends as well as goal setting and goal hitting.

Begin this process now and see how confident and relieved you become knowing exactly what it takes to have your business succeed.  Your worst nightmare will be over, which is the thought that you don't have complete control over how it goes.  You do.

Now you can focus your energy where it belongs.  You can spend the majority of your time on tasks that make you money.  The more time you can spend on tasks that count, the better.  That is understated, since the importance of this is imperative to your businesses survival.  I suppose there are people who wing it and it still works.  But since it is very easy to keep control of it, I would advise that route.

Can you see how managing your pipeline would solve your inconsistencies?

Knowing your pipeline numbers is the first step.  Managing your pipeline is the next and most important.  Managing your pipeline is managing yourself.  Balance your time each day with having your eye on the front end activity and the results will catapult. 

Let us know in the comments what you found!  How will 2016 be different than 2015?