Building a Sales Pipeline You Can Trust: From Forecasting to Business Value
Originally published on September 2, 2026
“You’re paying on the past, but you’re buying for the future.” — Mike Sibley
A reliable sales pipeline does more than fill a sales dashboard. In this Moore on Manufacturing episode, Mike Sibley and Kevin Golden break down how manufacturers can tell whether their pipeline reflects real, winnable business, and what happens across inventory, labor and cash when it doesn’t.
The conversation covers what separates a healthy pipeline from one that just looks good on paper, the warning signs that a forecast is unreliable, and how a well-documented pipeline can support a stronger valuation when it’s time to sell.
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Full Transcript
[00:03] Mike Sibley: I’m Mike Sibley, partner and leader of the manufacturing team at James Moore. I’m joined by Kevin Golden, also one of my partners and a member of our manufacturing team. Today we’re talking about something every manufacturer depends on to plan for the future, the sales pipeline.
[00:26] Mike Sibley: A healthy pipeline can give leadership confidence to hire employees, purchase equipment, build inventory, expand capacity, and make other investments. But what happens when the pipeline looks great on paper but doesn’t translate into actual orders? On today’s episode, we’ll discuss how manufacturers can determine whether a pipeline is truly reliable, how sales data should connect to forecasting and production planning, and what happens when leadership makes decisions based on opportunities that never materialize.
[00:47] Kevin Golden: The other thing we’re going to talk about is how having a pipeline that’s predictable, something based on history and data, can actually make your business more valuable to a potential buyer. So we’re going to throw some of that in there and why it’s so important.
[01:08] Mike Sibley: There are a lot of aspects to a healthy pipeline that are very important, but value is one of them, and Kevin and I have always talked about value as being important to the discussions we have here. We have other episodes of Moore on Manufacturing where we’ve talked about sales processes and had guests on setting up sales systems. I’m a big believer in sales systems.
[01:32] Mike Sibley: I’d encourage you to check out some of those episodes on building a sales system, which will help you build the pipeline and the team to build those pipelines and bring in more sales. This one, we’re talking more generally about how to make the pipeline more valuable, how to understand it, and how to use it on the predictive side of things.
[01:51] Mike Sibley: Kevin, glad to be having the conversation again, but let’s start with the very basic question. Let’s talk about what the sales pipeline is and how you know whether you actually have a healthy one.
[01:51] Kevin Golden: Okay, so we’re talking about our pipeline, our opportunities. Future opportunities that, preferably, you’ve got some way in or that you’re actively working. Maybe you know somebody, maybe you know somebody who knows somebody. Some way along the line, you’ve identified this as maybe an opportunity, some company or customer you’d like to be in front of. Maybe it’s your ideal profile. But let’s talk about what it’s not. First, it’s not just an ideal of what it could be.
[02:43] Kevin Golden: For example, maybe you’ve got a very large pipeline and it looks great. You look at the numbers and think, look at these opportunities, we have millions of dollars of opportunities. But if those opportunities are just an idea, meaning there’s no strategy behind it, no realistic opportunity there, it’s just a hope and a prayer, so to speak. It can be misleading. I’m not saying you shouldn’t have targets of people or a customer base you want to be in front of, but there’s got to be more than just, hey, I’ve got it on paper and now I’ve got this big pipeline full of ideas. There’s got to be strategy, and looking at history, what’s worked well for us.
[03:29] Kevin Golden: So, not just looking at size alone. Then again, going to the other extreme, not having anything in there isn’t what we want either. So you want to look at the quality of what’s in there. Have you vetted these prospects? Do they fit your ideal profile of who you’re trying to target? Maybe you’re trying to grow a different division or sell a different product. Do they match what you’re looking for? Have you even defined what that is? Sometimes people think they know what they’re going after, but they haven’t realistically set an expectation of what would be the best fit for that type of customer or product.
[04:22] Kevin Golden: So the quality of what’s in that pipeline matters. You mentioned historical conversion rates earlier, and that points to how realistic it is that these opportunities will actually turn into wins. We all want 100%, but that’s not realistic. So looking at, historically, have I converted 50% of those opportunities, 20%, something else, is important to understand how much of these opportunities are realistically going to turn into actual sales.
[04:54] Kevin Golden: Another thing when you look at a healthy pipeline is timing. You may have a lot of great, healthy opportunities that meet the ideal client profile, but if they all hit at once, how are you going to service that? Have you thought about how much you could take on at one time, or whether this needs to be spaced out more strategically? A quick way to shrink your pipeline is to take on a lot of opportunities at once, do none of them well, and then find the demand isn’t there anymore.
[05:45] Kevin Golden: So the basic question is, what is the pipeline? It’s those opportunities that exist. But not just looking at size. That can create a false idea of, hey, we’ve got a million dollars of opportunity. Great, but what does that really translate into six months from now, three months from now?
[06:07] Kevin Golden: It’s important to build the pipeline up and come up with opportunities in it, but also make sure you’re looking at it the right way so you’re not creating a false idea that these are realistic opportunities. If you think about it from a sales cycle standpoint, I do business development and selling all the time. I love it, it’s amazing, I get excited about it. So it’s easy for a sales team to get very excited looking at all these opportunities. But that alone isn’t enough to realistically come up with a strategic plan for how you’re going to grow, and what this means logistically, operationally, and financially two to six months from now.
[06:47] Kevin Golden: You need a good size pipeline, but you also need good quality compared to what you’ve done historically, to understand what this really means for you and your company today and in the near future.
[07:08] Mike Sibley: I think a couple things to make clear. You mentioned targets. There’s a big difference between having a target list and a target list that’s part of your pipeline. Targets can convert into a pipeline, and then you’ve got to have a process for monitoring the pipeline and qualifying opportunities. If you spend a lot of time on an unqualified opportunity, your win rate is going to be much lower than it needs to be.
[07:47] Mike Sibley: So working on that qualification process, a pipeline probably has stages. You can have more or less, but you have an unqualified lead, then a qualified lead, then maybe the proposal stage, the approval stage, and the win or loss stage. Hopefully more wins than not.
[08:11] Mike Sibley: And having KPIs around that pipeline, whether it’s pipeline size, win rates, and ultimately using the pipeline to learn. If we lost something, why did we lose it? Understanding those things makes the pipeline a very useful tool. You also mentioned staying in your lane. If you’re an aerospace manufacturer and you’ve got some healthcare or med device work on there, is that really good to go after? Is it going to be good, profitable work?
[08:47] Mike Sibley: So that starts creating a pipeline that we’re managing. But let’s look at a couple other things. What are some of the warning signs or problems that show your pipeline isn’t healthy? When we see opportunities that are just hanging out there for a really long time, did we properly qualify that to begin with? Do they really have a need or a pain, or did we just throw something on there to increase the size of the pipeline?
[09:13] Mike Sibley: Expected close dates get continually pushed. Salespeople assign overly optimistic probabilities. If you’ve got a salesperson who’s saying 90%, 90%, 90%, but their win rate is really 30%, something’s going wrong in that process. And if you’re building up productive capacity based on those numbers, that’s a problem.
[10:02] Mike Sibley: The pipeline is the starting point for understanding what our future is going to look like. If we’ve got these warning signs, we may be trying to build forecasts or production capacity that isn’t translating into the revenue we want or need. So it’s worth spending time challenging the sales team, looking at those KPIs, and making sure the pipeline is flowing properly.
[10:46] Mike Sibley: Kevin, let’s talk about how a solid sales pipeline builds into our forecast.
[10:46] Kevin Golden: Yeah, real quick before we move on, one thing I was thinking about is, hey, we’ve got these KPIs, and maybe the sales team says we had a 90% rate but it’s really more like 30%. You’ve got to have transparency around those metrics. Your foundation is your data, and making sure it’s good. Same thing goes with your pipeline, whether it’s a CRM or another way of constantly updating the good, the bad, and the ugly about your actual prospects. Why did we win? What meetings did we have? How frequently did we meet with them, what did we talk about? If those things are being updated properly, those KPIs will reflect the good or the bad, and that’s something to learn from, whether it’s missed opportunities or wins.
[12:02] Mike Sibley: As I’m sitting here thinking about the different teams, and you’re going to talk about forecasting in a minute, the sales pipeline is a document that speaks to all the leaders in the organization. I’ve had a client recently where I’m helping build out the management team, and the sales pipeline is really critical to all the various steps along the way, inventory, capacity planning, all the way to finance forecasting and labor development. It’s one of the most important pieces for the entire organization to understand what’s coming down the pipe. Going back to the healthy and unhealthy parts, having those pieces understood is a communication to the entire team.
[12:57] Kevin Golden: You mentioned looking forward to the forecast. Think of the ripple effect of this. That pipeline says we have a lot of work coming. So now you say, great, what do I need? I’m going to need inventory for that, so you start working through your supply chain to make sure things are lined up appropriately to deliver on those promises. Two, you start adding labor, ramping up on people, hours, or shifts. Then you look at, great, when we sell this product we’ll have cash available for operations or future investments. Especially if we grow, we might start increasing capacity a year out.
[14:23] Kevin Golden: And then all of a sudden that comes crumbling down because the win rate we thought was 90% is really 30 or 40%, and half of that work isn’t even coming. Now you’ve got too much inventory sitting on hand, which is cash sitting there doing nothing, losing value with carrying costs. You’ve overhired, and labor isn’t cheap or easy to find. Now you’ve put pressure back on the entire team. What are we going to do with those people? Now you’ve got the ripple effect, and the cash isn’t going to be there, or worse, the cash outlay is there but the income isn’t, so you’re burning through capital with nothing to replenish working capital.
[15:29] Kevin Golden: You can see quickly why it’s so important, because of the ripple effect. Being off 10% on a million dollars is $100,000 worth of cash, inventory, or labor equivalent that’s gone to waste or underutilized.
[15:50] Mike Sibley: Inventory is the constant problem I see. The ironic thing is manufacturers often have too much inventory on hand but always run out of the one or two parts they actually need to move something along. So your lead time expands by a week or two because you didn’t have proper planning. Along with a forecast and a pipeline, a product list, and a bill of materials, if you have a good bill of materials and know what’s coming down the pipe, you can forecast better.
[16:35] Mike Sibley: You can forecast your inventory needs better, your production needs better, and your lead times better, giving production people a great tool to capacity plan. And all of that starts with a pipeline that has some reasonableness to it. The pipeline builds into committed orders, and then it becomes backlog, and we can manage inventory a lot better.
[17:19] Mike Sibley: So the pipeline is our potential business, and as it moves along the categories, unqualified, qualified, proposal stage, whatever stages you have, at each point we get a better idea of our confidence level in winning, and our win rate once it hits that stage. For example, if our total bucket of unqualified leads is maybe 50% likely, qualified maybe 60%, proposal stage maybe 90%, we can use that to predict a forecast or budget.
[18:08] Mike Sibley: One of the things I always put around forecasts is a baseline, a reasonable expectation of what we’re going to do, but let’s have an upside and a downside. The upside might be, if we win all this business, we need to be strategically thinking about how we’re going to accomplish that. On the other hand, if we’re 90% certain but only win 75%, what does that mean for production? If you build those concepts in, you’ll be better prepared to manage the upside and downside because you’ve already thought about it.
[18:54] Mike Sibley: Once you get into committed orders, that becomes part of your backlog. We want a healthy backlog, but we don’t want the lead times on that backlog to be really long, because we don’t want customers waiting and getting frustrated and finding other manufacturers.
[19:31] Kevin Golden: I like that you mentioned boundary testing, what if this on the upside, what if this on the downside, because no one’s going to hit it perfectly. Most people live in that gray area in between. Maybe you’re experiencing some of these problems because you didn’t test that upfront, and you could tighten up your pipeline and expectations. Once you’re doing that correctly, dive even deeper. Are these your best qualified leads? How can you continue to tweak that in line with your vision, which may change a few years from now as your business grows.
[21:00] Mike Sibley: So as we think about what statistics we want to know, conversion rates, our historical win rate, our win rate by stage of opportunity, the average sales cycle, how long it takes to close business. Even in our own business, some segments take longer than others, so pipelines look very different depending on your sales cycle. If you’ve got short sales cycles, you win those fast, but it’s hard to keep the pipeline up, so you need a system that keeps driving targets into actual pipeline opportunities.
[21:37] Mike Sibley: The other thing is, do we have customer concentration, or concentration in a certain type of product versus a whole product list? Putting on expected close dates matters too. If your customers are telling you it’s August and they’re not expecting to close until November, that’s important information. Your average deal size, new versus existing customers, are we bringing in new logos or existing customers?
[22:25] Mike Sibley: One of the most important things you can do is look at your current customer list and ask, have we built the relationship as well as we should have? Can we expand our share of what that customer’s buying from us rather than from others, since you already have a relationship? And then new logos coming in let you continue to expand. It’s almost two different strategies, some people working on new logos, some on existing customers, with some crossover.
[23:12] Mike Sibley: And how the opportunities came about. If we lose an opportunity, why did we lose it? Was it a price issue? Did we not understand their actual pain? Did we not have the product they needed? Is there a product we could be making that’s within our wheelhouse? There’s a lot to think about as we consider more data within the sales pipeline.
[23:12] Kevin Golden: A lot of what you mentioned there is around understanding that data, which helps you be more strategic. The new versus existing customer point, I love that one, because you’ve already got a relationship. It’s a lot easier to grow a current client than create a whole new relationship and have to prove yourself all over again. Being able to grow them into an even better customer is usually easier than bringing on a brand new company.
[24:13] Kevin Golden: Also, where is my sales team just nailing it? Maybe those areas line up with products that have better margin, that we can turn around quickly, that are in our wheelhouse. Where are those opportunities coming from? We should hang out there more and talk to those people more to make sure we’re filling the pipeline with them, because those may be our bread and butter.
[24:29] Kevin Golden: It helps you strategize better and put a better understanding between sales, production, and leadership, coming to conclusions on what we should be making, who we should be selling it to, how we should be selling it, getting to the stage where we’re more likely to convert and make that pipeline more predictable, because you’ve done that over and over again.
[25:27] Mike Sibley: This document, this information, can be important across the organization. Where can finance be important to it? Finance can help with forecasting, costing, and pricing. We have some manufacturers with thousands of customers and others with dozens, depending on what they’re doing, and sometimes it’s hard to really data mine all that and make sure we’ve got a good set of profitable customers.
[26:12] Mike Sibley: Some manufacturers allow their sales team to use discounting in pricing. As we go, we may want to look at that and make sure we understand our margins, and get back to the pipeline to say these pricing objectives are where we need to be. If we have a really large opportunity, this is where talking to the management team, the CEO, and finance matters. This is a huge opportunity, we’re willing to take some pricing concessions to win this because the volume is so great, versus allowing the same discount to a customer with very low volume who isn’t repeatable.
[27:26] Mike Sibley: The other thing is, if you’ve got an array of products, which ones do we want to sell the most of? Which are higher margin, which are high volume? I’ve seen companies with high volume items they make no money on, offset by a low volume product with a ton of margin. Do you understand those margins and what’s going on? You can use the pipeline to say, this is all the price we can get and we’re not making good margins, so either we shouldn’t be selling this, or we need continuous improvement on how to make these margins better.
[28:32] Mike Sibley: So when we think about what’s good revenue, what’s bad revenue, what’s problematic, we can look at all these factors, and pipeline data combined with historical sales data and costing data is something we can use to help make decisions.
[28:51] Kevin Golden: Some things I was thinking about, Mike, is one, the relationship between sales, operations, and finance. A healthy relationship there is going to create better decision-making all around, make you a better salesperson, finance person, and operational person. If a salesperson says, hey, we’ve got a great opportunity and the financing makes sense, they say we could discount this amount and still have great margins, operations says we can take that capacity, especially if we take it now when we have more capacity than in three months.
[29:44] Kevin Golden: You as a salesperson look like a rock star when you can meet a deadline and give a discount because you’ve gotten all those teams in sync. Overall, it’s making healthier relationships internally, being in sync, and that in each department builds value, which builds value of the company as a whole.
[30:21] Kevin Golden: You could have a great pipeline full of realistic opportunities, legitimate conversations, converting at the right rate, but maybe financially it just doesn’t make sense because it carries lower margins. So no one aspect, sales, pipeline, operations, or finance, tells the whole story. It’s all together. We talk about that a lot on this show, connecting all aspects of your company, financial and non-financial, to help make better decisions, so when your pipeline looks like X, you understand what that actually means operationally and financially, and what should hit the bottom line, and how that helps you accomplish your goals, grow, take care of your people, and make future investments.
[31:39] Mike Sibley: At the beginning I led with the idea that the sales pipeline can help make your business more valuable. As we come to a close, it’s a good time to bring that together. It can make your business more valuable because you’re better forecasting, better planning, better managing your margins, production volume, labor needs, and inventory needs. All that should relate to margins. Better margins relate to better EBITDA, and better EBITDA usually leads to a higher value on the business.
[32:37] Mike Sibley: When a buyer comes in, they’re absolutely looking at your historicals, how you’ve done, how you’ve grown, and your margins. They’re also thinking about the future. In every single due diligence we go through, they want to know what your budget or forecast looks like for the next three years. Well, what happens if I give them a forecast, is it believable?
[33:27] Mike Sibley: If I can say, here’s my pipeline, look how healthy it is, look at my historical pipeline, I can tell you with certainty that we’ve been able to win at these rates at these different points in time, and we convert those into backlog, into sales, and so on. If I’m selling my company and I show them a 20 million dollar pipeline, I can support my forecast knowing at each stage what our conversion looks like.
[33:56] Mike Sibley: I can say our average pipeline is usually around 20 million, and based on that, we’re going to have sales of this and this. When a buyer comes in, now they have confidence in your future, they’re buying into your business, and you’re hopefully commanding a heavier multiple. You can even show them the makeup of the pipeline, and if it’s related to higher margin work, that supports your ability to produce those margins. A good, solid, well managed pipeline leads to a stronger confidence level in what you can produce in the future.
[34:34] Mike Sibley: So they’re paying on the past, but they’re buying for the future, and giving them that pipeline and that confidence helps the deal get done, because you’re going to gain leverage in that process.
[34:34] Kevin Golden: Think about it this way, what does that mean for me today? If someone can’t explain their historical conversion rate, something as simple as that, now you know where you need to go back and start having conversations. Maybe it’s data you need to start tracking, or regular conversations between sales, operations, and finance about what the pipeline looks like, the quality of it, and the ripple effect of variances. If we thought this was a definite win and it wasn’t, even though we’re at a 70% win rate at this stage, why not?
[35:44] Kevin Golden: If you couldn’t explain that to a third party who knows how a manufacturing company should run, that’s probably an area we could shore up. So when the day comes to explain it to a bank, a potential buyer, or the next level of leadership, those areas provide a lot of clarity and comfort that you can predict and carry that off in the future, and demand a higher value.
[36:09] Mike Sibley: Hopefully this makes sense to everybody. There are some intuitive pieces and some not so intuitive pieces, and some companies even struggle to put a pipeline together. Listening to this and our other videos on building the sales system is a way that can help grow and make your business more valuable. As always, appreciate your time listening to this. Reach out with comments or questions to Kevin or me, and certainly if there are ideas for future episodes, we’d love to hear them. Thanks again.
[36:42] Mike Sibley: To learn more about James Moore and Company’s manufacturing services, go to jmco.com. Don’t forget to subscribe to our Moore on Manufacturing series to receive updates when new videos and podcasts are released. If you’d like to be a guest, or if there’s a topic you’d like to see covered on a future episode, contact us on our website. You can also follow us on social media for more news as manufacturing continues to change quickly.
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For the complete discussion on building a reliable sales pipeline, from qualifying opportunities to using pipeline data to support business valuation, watch the full episode above. To learn more about James Moore’s manufacturing services, subscribe to Moore on Manufacturing.
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