A pipeline is the set of deals you have in progress and where each one stands. Its purpose is to let you see what is likely to close before it closes or falls apart, rather than finding out at the end of the month.
Stages
Most pipelines run roughly: a lead arrives, you make contact, you quote, the customer decides, the work is won or lost.
The exact names matter less than the discipline. A stage should mean something specific enough that two people would put the same deal in the same place — "quoted" is a fact, "interested" is a feeling.
What it tells you
Volume at the top tells you whether you have enough coming in.
Movement between stages tells you where deals stall. A pipeline where everything sits at "quoted" is not a lead problem — it is a follow-up problem, and more marketing will not fix it.
Age tells you what is dead. A quote that has not moved in six weeks is usually a no that nobody has said out loud.
The most common mistake
Treating the pipeline as a record of what happened rather than a tool for deciding what to do next. A pipeline you update after the fact is a report. One you look at on a Monday morning to decide who to call is a pipeline.