It’s no surprise to any salesperson that one of the most important keys to success is to develop a repeatable process for building and closing your pipeline. A big part of accurate pipeline forecasting is having your hands around what each prospect is trying to achieve, when that deal might close, and what could make the deal go sour. The path is never linear, which is what makes each victory so satisfying.
The same can be said for investments. Much like you need to know what is coming down the funnel in sales, you need to have a clear view of your investments in order to make reasonable assumptions on how they will contribute to the overall portfolio (and when). Moreover, it’s important to structure both your pipeline and your portfolio so that if any one deal opportunity falls through it doesn’t ruin your numbers for the entire year.
Know What’s In Your Pipeline
Much like with your pipeline, an important early step to effectively managing your portfolio is making sure you’re clear on what you own and why you own it. This is a foundational element of both successful investing and sales. The real insight here comes from having a clear view on how each constituent in the pipeline arrived, and how it has gotten to where it is today. This will provide greater insight on how each may behave under any number of possible circumstances.
Talented salespeople are closely attuned to the behavior of their prospects, and how there can be considerable differences in how any particular prospect might respond to specific levers (or risk factors). Some sales opportunities tend to be short-lived and opportunistic (i.e. a worthy win to be seized during a short window of time), while most will follow a longer sales cycle that needs to be closely monitored and well-tuned. There are also huge accounts with a long and unpredictable sales cycle which may require many factors (beyond your control) to be aligned in your favor. Pursuing only one opportunity type (or worse yet, not correctly identifying them) can result in a huge waste of time and resources.
Planning For Both Good and Bad Outcomes
We’re all subject to dealing with unforeseen circumstances, and a key factor in the outcome is how quickly we identify them and how well we manage them. In sales that may be an internal champion leaving their role and affecting your ability to close a large deal (or M&A activity), and with investments that might be news from the US government about interest rate changes or new tariffs that affect global markets. Either way, you need to anticipate that external factors can affect your own results (the question is where, when, and how much).
For example, we’ve recently discussed how the signs of a potential recession tend to present themselves as flashing yellow lights indicating that it may be time to exercise caution, but knowing exactly when the next recession will occur cannot be reliably predicted. That’s why it’s so important to always be prepared for what’s ahead, and to make sure that your investments are positioned to do well in both up markets and down markets.
Don’t Slack On That Opportunity Review – Or A Portfolio Review
Just as it’s wise to take your manager up on the periodic opportunity review to gauge the health of important deals within your pipeline, it’s worth engaging with a trained investment advisor for a portfolio review to make sure your portfolio is well positioned.
Paceline offers a complimentary portfolio review to determine if your investments are properly aligned with your financial goals, to provide insight into areas of risk within your portfolio, and to identify potential opportunities. Contact us today to get started.
This blog was written by Jeremy Bohne, Principal & Founder of Paceline Wealth Management. Paceline is a fee-only investment advisor serving clients in the Boston area, and on a remote basis throughout the country. Paceline specializes in helping tech and biotech executives, physicians, and those seeking financial planning services.