When I am asked to work with a business for an extended time I always take a diagnostic approach.
So often, advice is given on assumptions or a cookie-cutter-style approach.
I gather facts on many aspects of a business, but one, in particular, continues to give me an in-depth look at the structural strengths or weaknesses of the business.
That factor is the pipeline.
Your pipeline is the stock you believe will come to market in the next 12 months.
There is a solid correlation between the size and effectiveness of a pipeline and that of performance.
When diving deep into a monthly structure pipeline, it enables you to look at several issues inside a business.
Firstly, when you are nominating stock that may come to the market in a future month, and that number is less than five properties, you have a volume problem.
Between five and seven properties is par, while consistently listing seven and above means volume is starting to be your friend.
Amazingly, nearly all of our top writers list between 12 and 20 properties per month.
The next thing the pipeline can reveal is depth of relationship.
If you nominate a property to come to the market in the month ahead and it doesn’t, then you have a depth of relationship issue with the owner.
It shows you were not close enough to fully understand their true position.
Remember, there is a thing called life that plays a role, but enough volume and great relationships allow you to navigate around life.
For example, Mr and Mrs Smith decided to renovate instead of selling, while Mr and Mrs Brown chose to put their sale on hold after their daughter arrived back from overseas.
In the meantime, Bill and Mary decided not to sell until they found their dream home.
All of these factors play a role, but volume and depth help you navigate them.
The last factor is what percentage of your pipeline has come to the market and what percentage of that you listed.
Here, you need to examine whether you were called to the listing table.
If you weren’t, you have a depth problem.
If you do get called to the table, but you consistently lose, you have a skill problem. So often in business, people address the wrong problem.
They address a skill problem when they have volume issues.
When I start working with a business, I often begin with structure as it quickly allows you to identify areas that need support, and, more often than not, are a window into the soul of the business.
I have long said that the pipeline is where the money lives, and nothing, including the pandemic, has swayed my opinion.