If sales are not coming in, the usual instinct is to blame the close. You work on your closing lines, then start doubting the product or the price. More often the real problem is that you, or your salespeople, are trying to close too early, before the prospect has gone through the stages that lead to a yes.
A sales funnel for small business fixes that. It sets out the stages of your sales process, shows where each prospect really is, and lets you forecast against target with confidence. It also shows where each salesperson is strong or weak, so you can coach them properly. Here are the ten steps to design, run and review one.
1. Understand where your sales performance stands today
Look back critically at every part of your sales performance, from managing opportunities through to admin and after-sales. The raw numbers, ratios and timescales show which parts work and which fall short. Ask:
- How many contacts does the team make each week?
- How many interactions does it take to win a customer?
- How many unqualified prospects do you need for one sale?
- What is the average transaction value, and how many products does a new customer take?
- How many customers cancel during the cooling-off period?
Expect a “bell curve” in your team. The guide’s author typically found about 10% well ahead of target and highly self-motivated, 25% just over, 30% roughly on target, 25% just below, and 10% so far below the minimum that they were probably in the wrong job. Your job is to narrow that spread, and you need a system with clear milestones to do it.
2. Set clear sales objectives with your team
Begin with the end in mind. Objectives should be SMART: Specific, Measurable, Achievable, Relevant and Time based. Then nobody can say they did not understand what was expected.
If your culture allows it, involve the team in setting targets. That is not a blank sheet: know where you need to get to and steer the session towards it. Ask each person for their personal best and how they achieved it, then discuss what “great looks like” over a year. In the author’s experience, teams nearly always said they could do more than he expected, and often beat his original targets. Done well, this gives you a Compelling Vision, or “well-formed outcome”, which is the foundation for motivation.
3. Explain why the funnel matters
A new process pushed onto a sales team rarely gets a warm welcome, so explain the “whys” first. The main benefit is a true value of your sales pipeline at any moment, because a prospect only counts at a stage when there is real evidence it has reached it. Forecasts become more accurate and you can see where the bottlenecks are.
Be clear that you will challenge performance, but the funnel will never be a stick to beat people with. It is a tool for spotting strengths and weaknesses so you can coach. Motivation is a personal choice, and the stronger each person’s emotional link to their vision, the more likely they are to hit their goals.
4. Design the stages of your sales funnel for small business
Bring the team in early to get buy-in and ownership. Start with a brainstorm around one question: “What are the key stages in our sales process?” Let ideas flow without judging them, encourage everyone to take part, aim for quantity at first, look at it from the customer’s point of view, and record ideas in the group’s own words.
Then refine. Funnels run from five to ten stages; what matters is that each one is measurable and backed by evidence. A widely used example:
- Unqualified prospect: a potential customer with no direct contact yet.
- Initial communication: they have phoned, emailed, visited your website or filled in an opt-in form.
- Customer acknowledges a need: they have clearly said they have a problem.
- Financial impact identified: if the problem costs them £5,000 a year, they are unlikely to spend £25,000 solving it.
- Commitment to a budget: you know what they will spend and whether you can deliver at that price.
- Decision criteria defined: few businesses buy on price alone; most buy the least risky option.
- Customer evaluates alternatives: you present a choice of solutions that meet the need.
- Solution selected: it solves their problems with minimal risk, within budget.
- Close the sale: paperwork done, delivery awaited.
- After-sales and administration: deliver, follow up and bank the cash quickly.
5. Agree the rules for using it
You have probably left a meeting feeling crystal clear, only to find everyone heard something different. Agree how often the funnel will be inspected and who attends, what reporting system and reports you will use, what evidence supports the numbers, and what happens after each review.
Without these rules, each person will measure different things, in different ways, at different times, mainly to look as though they are doing what you want. Keep the rules simple, but robust.
6. Get the team using it
Getting people to use the process is usually harder than designing it, so give it the most attention. If the team designed it, resistance should be low, as long as it is easy to use, adds value to their roles and has the full support of everyone, management included.
Where someone is still reluctant, talk to them one to one using the PRO model: Present the Problem, Reaction to Reality, Ownership.
7. Train people in the process
Where training is needed, work through the four-part training cycle in order:
- Explanation: observe specific parts of the job and get the trainee to analyse their own performance and identify what to improve.
- Demonstration: show good habits without showing off. Keep sharp by watching how your top performers get their results.
- Imitation: let them try it. The commercial risk is low, so let them fail; people often learn most that way.
- Consolidation: debrief straight away and let them lead. “So Jane, tell me how you think that went” often brings honest self-criticism and a chance to reassure and praise. Then set fresh objectives and go round again.
8. Coach and support in the field
Many managers reach this point, put their feet up and wait. When results do not come, they fire off emails and memos. That does not motivate anyone.
Get out of the office and watch your people at work. Debrief after every accompanied visit while examples are fresh. Ask open questions such as “How well did you feel the new process worked for you?”, be specific and sincere, and end positively. Keep these sessions about development and sharing knowledge, not a formal analysis of the numbers.
9. Hold regular one-to-one pipeline reviews
The one-to-one is where you review performance critically. It supports a culture of reward and recognition, and gives anyone struggling every chance to reach the minimum standard in good time. If you already hold performance reviews, link the funnel review to them.
Audit the numbers, check the evidence, and compare each person against target and their peers. Your main job is to clear bottlenecks in the sales pipeline: find out why a prospect is not meeting the criteria for the next stage, then challenge the salesperson to move it on or take it out of the funnel. Over time, best practice emerges that you can share.
10. Monitor and review the whole process
By now you should know your goals and the pipeline levels you expect in each funnel. Carry out variance analysis and look for ways to drive performance up. Review the process itself, not just the people in it, fix any blockages in the system, and keep encouraging the team to share what works.
Where to start
This week, pull together the step one numbers for the last few months: contacts made, interactions per sale, unqualified prospects per sale, average transaction value and cancellations. Lay them out by salesperson and see where your own bell curve falls.
Then book an hour with your team and ask: “What are the key stages in our sales process?” Their answers become the first draft of your funnel.