How to Calculate the Ideal Pipeline Size for Your Marketing Agency 

At the start of their business journey, every agency owner starts out trying to sign as many clients as possible. This appears to be a great move considering 84% of agency owners attribute revenue growth in 2025 to new clients and new business development wins according to SoDA’s Q1 2025 Sales Pipeline and Outlook Report. After all, a creative agency can’t function without cash, and how does a new agency owner get cash? From clients. The more, the merrier.  

However, as an agency grows, owners become aware that there might be a “magic” number of clients. An ideal pipeline size is needed to cover operational expenses and achieve growth objectives rather than “as many clients as possible.” Your employees only have so much capacity and agency resources can’t sustain an unlimited number of clients. Yet, many agency owners don’t know how to clearly define an ideal client number. 

Finding the ideal pipeline size for your agency hinges on your specific agency goals. Luckily, we have a formula that can help you define the right pipeline size for your agency’s needs and ambitions. Keep reading to learn more about calculating your ideal pipeline size.  

Calculating Your Agency’s Ideal Pipeline Size 

The first step to calculate your agency’s ideal pipeline size is to determine your average sales cycle. An average sales cycle is the duration of time it takes for a deal to enter the sales funnel to the time work begins.  

If you haven’t historically tracked your average sales cycle, now is the time. Otherwise, you may find that making plans for agency growth is very difficult, if not impossible. Start by identifying a dedicated software that determines your average sales cycle. Our agency clients have experienced great results from applications like HubSpot and Pipe Drive, however, there are nearly endless CRM systems that calculate this metric for you.  

Your next step is to calculate average contract length, or the average number of days that client contracts last. This metric is essential for telling you how quickly you turn revenue out for a specific period of time. 

Next, it’s time to determine close percentage. To calculate close percentage, you divide the number of closed qualified opportunities by the number of qualified opportunities.   

Finally, calculate your actual ideal pipeline size using each of the metrics we just collected.  

[Revenue capacity x (average sales cycle/days remaining in the period) x (average contract length/days in the period)] / number of qualified opportunities 

You’ve just calculated your ideal pipeline size, at least for your current situation. We have many agency owners that want to calculate their ideal pipeline size for future revenue goals. To do so, all you need to do is add this future revenue goal to the revenue capacity slot in the above formula. Also, adjust the days in period for the time in which you would like to make that goal revenue. 

[Future revenue goal x (average sales cycle/days you’d like to make goal revenue) x (average contract length/days in the period)] / number of qualified opportunities  

Planning Your Business Goals 

Growing a creative agency requires settings KPIs to track progress. Having your eyes on business metrics and KPIs allows you to determine when business strategies should be adjusted to stay on track with agency goals. Your ideal pipeline size is not the only metric you should be tracking. There are many other growth metrics to have on your radar. Scenario planning with a cash flow forecast and cash flow management strategies are two examples of essential tools your agency needs for agency growth plans.  

If you aren’t sure where to start when tracking agency growth metrics, reach out to one of our virtual CFOs for a free Virtual CFO services consultation.  

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