How to know which of your team can take on new clients.

Video Overview

Capacity is your inventory

When you sold an hour, worked an hour and invoiced an hour, growth was simple: hire more people. On a fixed fee the hours stopped being the product. They became what it costs you to deliver, and what you have left to sell is your team’s available time. That makes capacity the ceiling on the revenue your firm can make, and the thing you are actually trading when you take on a new client.

The annual plan holds only if nothing moves

Most of us have built the spreadsheet. Hours per person, less leave, times a target capacity, times a rate, and a revenue number at the bottom. It is a worthwhile exercise. It also holds only if nobody resigns, everyone takes their exact leave entitlement, everyone hits their productivity target every month, no job runs over, no job finishes early, no new work arrives, no client leaves, and only one person works on each job. Our own data says the last one is never true: in firms with more than twenty people, three to five people work on the average job and five to seven on the average client.

More than half of today’s work arrived from earlier months

A restaurant gets a reset. Service was slow, the food was cold, everyone goes home and tomorrow starts empty. Accounting firms do not get that. The diners are still sitting there in the morning. Of all the work open across our customers in October, 46% of it started in October. The other 54% came from September or earlier, which is why a plan built for November is already carrying work that was budgeted months ago.

Your plan is competing with things nobody planned for

About an hour a day per billable team member goes to unexpected client work. Taps on the shoulder, phone calls, a quick question that turns into forty minutes. That is five hours a week that was never in anyone’s estimate. On top of that, 10% of a team’s time goes to write-offs, and a write-off costs you twice: the margin on the job, and the availability that overrun took from a different job. And 13% of the year is leave. None of these are failures. They are the normal shape of a year, and a plan that makes no allowance for them will be wrong by February.

Automations, boards and AI do not produce the number

Automations move work between people faster, but none of them check whether the next person has room before it arrives, so you move the queue rather than clear it. Boards and views give you more places to look, when capacity is a single number that changes every time anyone allocates, completes or timesheets anything. And capacity is not a calculation problem. The arithmetic is one subtraction. It is an accountability problem, because the number forces somebody to decide what will not get done, and that decision has a client on the end of it.

Capacity needs three things

Who, when and how long. Every item of work needs all three before it can reduce anyone’s availability. Something with an owner and a due date but no estimate tells you nothing. It is also why tasks rather than jobs are the layer that matters: a job carries one due date and one owner, so it cannot tell you who has room in March.

Your firm has capacity. Almost everyone in it is over-allocated.

Both are true at once, and that is the paradox. Can you take on more work? Almost certainly yes, because the capacity exists. Is nearly everyone over-allocated right now? Also yes, because it is lumped in the present and sitting with the same few people. Work gravitates to whoever finishes under budget, so your best people carry the most and are the last to mention it, until they resign. When someone is over-allocated a manager has exactly two moves: give the work to somebody else, or move it to a different period. Normalising taking work off people is where this starts.

Commit to a month rather than a date you are hoping for, and start hiring three months before you need to, which is about how long it takes to find someone and get them up to speed.