Agency Operation Struggles: Capacity Equation

If you’re a growing agency and find yourself struggling with capacity, you’re not alone. At some point, every owner deals with the stress and headaches around growing agency operations. But it doesn’t have to be so hard. By following our capacity equation, you’ll be primed for scale in no time. 

The Capacity Equation

It is impossible to scale your agency operations if you don’t fully understand your current capacity. The capacity equation helps you learn how much work your team currently has and how much they can handle so you know exactly when it’s time to bring in new talent. Without a system like this in place, there are holes in your strategy that new business will leak right through.

Identify Current Capacity

The first step in the equation is to calculate how much starting capacity your team has. Assuming a team member works full time, that capacity is 40 hours a week. 

Identify Client Commitment

Next, identify how many hours per week each client takes up. From there, you can further categorize your clients as small, medium, and large. Let’s say for this example you have seven medium-size clients, each taking five hours of time commitment each week. This equates to 35 hours of client work each week for the employee. 

Ideal Capacity

In the example above, the employee has only five hours each week to spend on work not directly related to the clients, so they are operating at over 87% capacity. If any of these client accounts were to grow, your employee is already at capacity and can’t take on more work. 

The ideal capacity number can be used to set a bench march for talent acquisition planning. A good ideal capacity is around 75-80%. Once you hit that number, you know that it is time to start looking at adding to your team. In our example, 75% capacity kicks in at about 30 hours. 

Capacity Equation for Better Planning

To scale with success, you need to keep your capacity in the front of your mind. The numbers can act as a forecast when you are planning to grow your agency operations. Back to our example – if your pipeline shows you’ll be bringing on ten new clients in the next two months and your team is at 50% capacity, you need to kick the talent acquisition process into high gear.

 Even in a normal job market, recruiting, hiring, and training new staff can take up to 90 days. In today’s hiring climate, you have no time to waste if you want to keep your agency operations running smoothly. Failing to adequately plan for hiring is where most agencies go wrong. Missing this step can derail any plan you have for scaling and keep you from reaching your full potential. 

TL; DR

Always know your team’s capacity and their current commitments for client work. Set an ideal capacity number and use it as an indicator for when your team is overloaded to plan for more support. 

Want to Talk More About Capacity?

If you’re ready to take your agency operations to the next level and transform your business into 8 figures, the experienced and motivated team at 8 Figure Agency is here to guide and support you. Schedule a free consultation today.