The Sales Funnel
The Sales Funnel is a simple concept that captures several important points:

• It takes a lot of prospects to produce one good paying project.
• Selling progress is trackable (measurable).
• The sales cycle has several stages.
• You don't have time to mess with non-qualified prospects.

The sales funnel represents the natural shrinkage of prospects as you convert leads into sales.

Prospects enter the big opening at the top of the funnel and projects pour out of the narrow end. As you weed out prospects, and as they weed you out, your opportunities shrink as you get closer to closing the deal.

The sales funnel transforms sales management into a numbers game that can be monitored and managed. It gives you a manage-by-the numbers system for controlling the use of business development time.

We will get into the numbers game in a minute, but first let's build your sales funnel. To start, we need to identify the stages.

Identify Your Sales Funnel Stages
Stage 1: Prospect has a project under consideration.
Stage 2: Project is funded, green-lighted, and a good fit.
Stage 3: You are price competitive.
Stage 4: Prospect values your services for this project.
Stage 5: You are negotiating the price.

Let's expand on each stage.

Stage 1
This stage highlights the need to get in on the ground floor of projects before your competition learns about them. Keep your ear to the ground and monitor the volume of work that's out on the horizon. The larger the pile of work, the greater the margins. The smaller the pile, the tighter the margins (hello 2009).