Pipeline
Definition
Pipeline is the total value and count of open opportunities a contractor is actively pursuing but has not yet won or lost.
What Pipeline Means for Your Business
What it means
Pipeline is the funnel of future revenue. Every inquiry, estimate, and bid in progress lives in the pipeline until it either closes into backlog or falls out.
Why it matters
Pipeline is the early warning system for next quarter's revenue. A shrinking pipeline means thin backlog in 60 days. A growing pipeline means hiring decisions and equipment orders.
How contractors use it
Sales teams log every opportunity in a CRM, assign a stage and probability, and review the pipeline weekly. The pipeline times weighted probability equals the forecast.
Real-World Example
A commercial HVAC contractor maintained a $2.8 million pipeline at 32% weighted win rate, yielding an $896,000 forecast. When the pipeline dropped to $1.6 million, they ramped bidding effort to rebuild it before backlog ran out.
Related Terms
Backlog
Backlog is the total dollar value or labor hours of work that has been sold but not yet scheduled or completed.
Close Rate
Close rate is the percentage of presented estimates that result in a booked job or signed contract.
Win Rate
Win rate is the percentage of competitive bids a contractor successfully wins against other bidders on commercial or public projects.
Estimate
An estimate is a written offer of price and scope that a contractor provides to a customer before beginning any work.
Customer Lifetime Value
Customer lifetime value, or CLV, is the total amount of revenue a customer is expected to generate for a business over the entire duration of the relationship.
Put This Into Practice with Free Software
Kaldr Tech handles pipeline and everything else you need to run your shop. $0/month, 3.5% + 30¢ per transaction.