Q&A: How can I get more out of my deal pipeline?
Significant amounts of time and effort go into building your deal pipeline, so you want to make sure you’re making the most of it.
Here, we’ll examine how you can extract every last bit of insight from your current deal pipeline and empower yourself to make quick investment decisions with the utmost levels of confidence.
MANAGING YOUR DATA IS JUST AS IMPORTANT AS MANAGING YOUR ASSETS
I know – it’s not always easy to separate truths from fiction when discussing innovation in an already established industry. So I can appreciate the scepticism from some when I say that managing your data is just as important as managing your assets.
But the reality is: managing your data really is just as important as managing your assets. The two should be inextricably linked by now if you want to get ahead of your peers and competitors.
The problem is that just having more data isn’t enough; it needs to be correct, current and easily accessible – something the industry standard, Microsoft Excel, is unable to guarantee.
In fact, the European Spreadsheet Risk Interest Group has estimated that 90% of all spreadsheets contain errors. More importantly, half of the spreadsheet models used operationally in large businesses have ‘material defects.’ The group has warned in its research that “because spreadsheet users do not go looking for errors, they don’t find many.”
You don’t want to spend unnecessary amounts of time checking over data, using up resources that could otherwise go into securing more business.
You want to speed up processes, to place and ultimately win more bids.
TAKE TIME TO SELECT THE RIGHT TOOLS
Ultimately, this means using more than just Excel. No work computer would be seen as complete without a version of Excel installed, but it wasn’t specifically designed to buy and manage assets. Use tools that are built for purpose.
Investment teams using Coyote have a central dashboard to monitor and edit all the assets they’ve been introduced to: from those that weren’t quite right for their business plan, to the ones they followed through to completion. Anyone on the team can access this data at any time.
Suppose an introduction to an industrial site in Manchester has potential and reaches the underwriting stage. The team can input the data into Coyote’s underwriting template or integrate it with an existing model and update their records instantly.
All those with access to that record will see its updated key stats – price, yield, voids, leases, and so on – and know precisely where in the acquisition process that deal is at any given point.
In my experience, investment teams who manage their entire process on one central platform can act quicker and place more bids.
WANT TO SEE COYOTE IN ACTION?
MAKE THE MOST OF THE INFORMATION YOU ALREADY HOLD
We asked a number of our clients how they managed their deal pipeline before using Coyote – and the answer is often similar.
They would run a weekly pipeline meeting from a schedule created and maintained using Excel. Each session, they would review the deals on the board and decide if they want to continue pursuing them or not.
If yes, they would continue to research and gather more intelligence to justify the investment.
If no, the asset would be removed from the schedule for the next week to focus on the deals in hand. The information relating to that deal would be filed away in a ‘Previous Versions’ folder of their network drive, unlikely to be referenced again.
Just because the deal wasn’t quite right for you then, it doesn’t mean the information your team collected becomes redundant.
Teams using Coyote to monitor their deal pipeline can run meetings interactively using Coyote on-screen to analyse and categorise potential deals. If an asset under consideration is no longer of interest, they simply select and remove it from their pipeline.
The record still exists, and they retain all of the market intelligence associated in the form of a functional and searchable database to help guide future investments.
For example, an acquisition manager may search for comps relating to all deals considered in the last six months, featuring industrial assets located within a radius of 10 miles of Nottingham, where the net initial yield is between 5-7%.
You get instant results with Coyote – something that’s hard to replicate with Excel and old deal information stored in network folders and email inboxes.
ALL IS NOT LOST WHEN THE BID FALLS THROUGH
When you miss out on a deal, it makes sense that you’d want to brush it off and forget about it, but when you’ve been working on a deal that closely – often for an extended period – you hold an abundance of expert knowledge.
You’ll likely already know the vendor’s involved, the purchasers, their agents, market rent, quoting price – this is all information that could be very helpful when you’re looking to validate future investment opportunities.
Maybe you received an investment brochure containing a tenancy schedule that could help your asset management team target new tenants for their vacant units.
If deals drop out of your pipeline (or never made it to your pipeline in the first place), the data on the assets is still retained in Coyote and creates a rich, validated database of comps that can be referenced by anyone in the team from then on.
Combined with third-party market data – such as EG Radius Data Exchange – which is also integrated into Coyote, you get a deeper, more detailed picture of the potential investment and an enhanced understanding of the market.
Not only does this ensure your data remains accurate, but it also becomes more functional and increasingly intuitive as you manage your deal pipeline.
While your competitors are still busy gathering information to support their findings, you could already have your proposal wrapped up neatly on your investor’s desk, ready to take action.
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