How to Build a Sales Pipeline, Step by Step

Eight steps to a sales pipeline you can trust: who you sell to, stages and exit criteria, what to record on each deal, how much pipeline you need, and the habit that keeps it current.

May 28, 2024 · By Joseph Lamoureux

How to Build a Sales Pipeline, Step by Step

Building a sales pipeline isn’t about software. It’s a handful of decisions (who you sell to, how they buy, what you track) and one habit that keeps the result honest. Make the decisions well and almost any tool will do. Skip them and no tool will save you.

Here’s how to build one from scratch, in the order that works.

Step 1: Decide who you’re selling to

Write a short description of your best-fit customer: industry, size, the problem they have, and who inside the company feels it. Be specific enough to rule companies out. “B2B software companies with 20 to 200 employees that sell through partners” is useful. “Businesses that want to grow” is not.

This decides what goes into the pipeline at all. Deals outside the profile can still close, but they shouldn’t be counted on.

Step 2: Map how your customers buy

Before you name stages, list what a customer actually does on the way to buying from you: realizes they have a problem, looks at options, involves colleagues, runs a trial or review, gets approval, signs. Talk to a few recent customers if you’re unsure. Your pipeline stages should follow the buyer’s journey, not your internal to-do list.

Step 3: Define stages and exit criteria

Turn that journey into five to seven stages, such as Prospect, Qualified, Discovery, Proposal and Commit, plus Closed Won and Closed Lost. For each stage, write down what must be true for a deal to move on, in terms of what the customer has done. “Customer confirmed budget and timeline” moves a deal. “We sent an email” doesn’t.

Sales pipeline stages covers each stage and example exit criteria in detail.

Step 4: Decide what each deal records

Keep the required fields short enough that people actually fill them in:

account and key contacts
what you’re selling and its value
stage and confidence
expected close date, and when revenue starts
where the deal came from (your team, a referral, a partner)
the next step, its owner and its due date

Source is the field teams most often skip and most often regret. If partners bring you deals, recording who sourced each one, at the time, avoids arguments later. For the full anatomy of a deal record, see what’s in a sales opportunity.

Step 5: Fill the pipeline

List the places deals come from and estimate how many qualified opportunities each produces per month:

Outbound: your own prospecting.
Inbound: people who find you through content, search or word of mouth.
Customers: expansions, renewals and referrals.
Partners: consultancies, resellers, technology partners and cloud marketplaces that bring you into deals or work them with you.

Enter every live deal you already have, then commit to a weekly target of new qualified opportunities from each source.

Step 6: Work out how much pipeline you need

Pipeline size should come from math, not mood. You need three numbers: your revenue target, your win rate on qualified deals, and your average deal size.

Say your quarterly target is $300,000, you win one in four qualified deals (25%), and your average deal is $30,000:

Qualified pipeline needed: $300,000 ÷ 25% = $1.2 million
Qualified deals needed: $1.2 million ÷ $30,000 = 40 deals

If your typical deal takes three months to close, those 40 deals need to be qualified about a quarter ahead. If you don’t know your win rate yet, start with a conservative guess and replace it with real data after a quarter. Sales pipeline metrics covers coverage, win rate and velocity in more depth.

Step 7: Run a weekly pipeline review

This is the habit that makes everything else work. Once a week, for 30 minutes:

Update every deal that changed: stage, close date, value, next step.
Fix every close date in the past.
Check that every open deal has a next step with an owner and a date.
Close out deals that are dead.
Look at the totals against target, and decide what to do about the gap.

How to improve sales pipeline management has a full agenda for the review.

Step 8: Measure, then adjust

After a month or two, look at where deals stall and where they’re lost. If deals pile up in one stage, the exit criteria may be unclear or something in your process is slow there. If you lose most deals at the proposal stage, look at pricing or qualification. Change one thing at a time and watch the numbers.

Choosing where the pipeline lives

A spreadsheet is fine for the first few weeks with one person. It breaks when two people need to update it, when you want totals by period, or when a partner needs to see shared deals. At that point you want a tool that calculates totals and forecasts from the deals themselves, so the numbers can’t drift from the data.

Recordbook does that, and it’s built for teams that sell with partners: your CRM and your partner’s connect to one shared workspace, so co-sell deals are one record both teams update. It’s free to start, with every feature on every plan. See how the pipeline is calculated.

A one-page checklist

A written description of your best-fit customer.
Five to seven stages that follow how customers buy.
Exit criteria for each stage, based on customer actions.
A short list of required fields on every deal, including source.
Every live deal entered.
A pipeline target calculated from win rate and deal size.
A weekly 30-minute review on the calendar.

Common questions

How long does it take to build a sales pipeline?

Setting up the stages, fields and review takes a day or two. Filling the pipeline takes a full sales cycle, because the deals that close next quarter need to be qualified now.

Can I build a sales pipeline in a spreadsheet?

Yes, to start. A spreadsheet works for one person and a handful of deals. Move to a tool that calculates totals from the deals once a second person, or a partner, needs to update it.

How do partner-sourced deals fit into the pipeline?

They use the same stages as every other deal. Tag each one with the partner and record who sourced it when the deal is created, so you can see each partner’s pipeline and settle credit without debate.

Try it on your own pipeline

Recordbook is free to start. Every feature is on every plan, and adding your team or your partners costs nothing extra. Create your free workspace.