Sales pipeline calculator

Calculate your sales pipeline

The sales pipeline formula

The sales pipeline formula works backwards from the money. There are three steps:

• Deals to win = revenue target ÷ average deal value. Round up. You can’t win half a client.
• Open opportunities = deals to win ÷ close rate. If you win one in four quotes, every deal needs four quotes behind it.
• Pipeline value = revenue target ÷ close rate. The same idea, counted in money instead of deals.

Then spread the opportunities over the weeks in the period. A month has about 4.33 weeks, a quarter 13 and a year 52. That gives you the number that matters day to day: how many new opportunities you must start each week.

Use the close rate from the same stage you count from. If you count quotes as opportunities, use your quote win rate. If you count first calls, use your overall close rate, which will be lower.

What pipeline coverage means

Pipeline coverage is the value of your open opportunities divided by your target. If your target is 30,000 and you have 90,000 of quotes in play, your coverage is 3.

You will often hear that you need 3x coverage. That is a common rule of thumb, and it only holds if you close about one in three. Your own number is 1 ÷ your close rate. Close one in four and you need 4x. Close one in two and 2x is enough. Copying someone else’s multiple without their close rate tells you nothing.

Count opportunities, not just value

Sales teams track pipeline value because they have many deals and many people. A one-person business has neither. One large quote can make your pipeline value look healthy while you have only two real conversations open. If one of them goes quiet, half your pipeline is gone.

Counting opportunities keeps you honest. It also tells you how much work the target takes. Value doesn’t book calls or write proposals; you do. If the target needs more new opportunities a week than you can handle alongside paid work, the plan fails no matter what the value column says.

The sales cycle matters too. If deals take 30 days from first conversation to signature, anything that isn’t in your pipeline 30 days before the period ends won’t close in time. The last month of a quarter is mostly decided before it starts.

A worked example

A consultant wants to bill 30,000 this quarter. Her average project is 5,000 and she wins one in four of her proposals. Deals take about 30 days to close.

She needs 30,000 ÷ 5,000 = 6 deals. At a 25% win rate, that means 6 ÷ 0.25 = 24 proposals, or 120,000 of pipeline. Spread over 13 weeks, that is about 1.8 new opportunities a week. With a 30-day cycle, she needs her last opportunities in play about 4 weeks before the quarter ends.

Two a week is achievable for one person. If she raised her win rate to one in three, she would need 18 proposals instead of 24. Small gains in close rate or deal size cut the volume more than most people expect.

Questions people actually ask

How do you calculate sales pipeline?

Divide your revenue target by your average deal value to get the deals you must win. Divide that by your close rate to get the open opportunities you need. Divide the revenue target by your close rate to get the pipeline value you need. Use the close rate from the same stage you count opportunities from.

How much pipeline do I need?

Enough that your normal close rate turns it into your target. At a 25 percent quote win rate you need four times your target in open quotes. At 50 percent you need two times. The answer comes from your own close rate, not from a fixed multiple.

What is pipeline coverage?

Pipeline coverage is the value of your open opportunities divided by your revenue target. Coverage of 3 means you have three times your target in play. A common rule of thumb is 3x, but that only works if you close about one in three. Your own coverage target is 1 divided by your close rate.

How do I build a sales pipeline as a freelancer?

Start new conversations every week, not only when work runs out. Write down every person who could buy, the stage they are at and the next step. Work out how many new opportunities a week your target needs, then pick one or two channels you can keep up at that pace.

More free tools

• Close rate calculator — your closing ratio and the stage where deals leak.
• Lead generation calculator — how many leads you need to hit a revenue goal.
• Consulting rate calculator — your floor hourly and day rate from real numbers.

Find your real bottleneck

A pipeline number tells you how much you need. It doesn’t tell you whether the path from first contact to purchase actually works, which is the Journey stage. The free Bottleneck Finder scores all nine stages of the path from stranger to customer in 18 questions and names the one that’s blocking you.

Find my bottleneck — free, 5 minutes

No email, no login. The full framework is the book From Stranger to Sold; the first chapter is free.