What we hold still

On a recent client call, we were discussing how to use a new capacity report to make decisions for a firm.

Capacity measures an asset's maximum ability.

For example,

The capacity of a consultant might be that they can perform up to 50 billable hours each week

Or the capacity of a 3D printer might be that it can print up to 3 whirligigs per hour

The question is: Why is this useful?

Because it’s a metric that holds still.

​

What does that mean?

It means it’s a known quantity that doesn’t fluctuate often, so you can use it as a steady baseline to calculate other values inside the business.

Which can help you

Predict the future, and

Make better decisions.

​

Examples:

How many employees do you need to fulfill the pipeline of deals this quarter?

-> Employees required = Revenue / hourly rate / project weeks / 50 hours

How long will it take you to print out this next order?

-> Hours needed = Whirligigs ordered / # machines / 3 whirligigs per hour

How much money will you make next month if you continue to work at max capacity?

-> Revenue = 50 billable hours * # employees * hourly rate * 4.33333

​

Every business is full of moving parts.

Markets shift, demand surges and dips, costs rise and fall.

But certain inputs (like capacity) hold pretty steady,

And that stability is powerful.

​

Because when you find the numbers that don’t move,

You can anchor to them.

You can build reliable models around them.

And you can turn chaos into clarity.

​

Enjoyed reading this article? Subscribe to receive more via email here. 

Know a Founder or Entrepreneur who'd love this content? Please share it!

Previous
Previous

"Networking"

Next
Next

Employee -> Founder