Capacity Planning Essentials for Small Business
Last week I had an incredible strategy session with one of my clients. Before going into the session one of the questions I asked was: “What obstacles might prevent you from achieving what you want in 2023?” They said a couple of things that really stood out to me.
“I run the risk of over programming myself and overdoing it. I feel like I’m on a hamster wheel, always going”
“I’m not appropriately blocking time for my regular work. That’s a lot of hours already accounted for in a week”
“I’d like to stop trying out ALL the things, and to stop scattering my focus”
This feedback demonstrates how important it is to incorporate capacity planning as part of your overall strategy.
But what is capacity planning?
Capacity planning is the process of estimating the amount of resources (like people, time, energy) needed to complete a task or project.
Putting the effort into capacity planning allows you to properly plan and allocate resources to ensure the amount of work you planned can actually be completed within your allocated timeframe. It also enables you to have more agility and make adjustments in your business as a result of the insight gained. Once you have mapped out the things you need to do, approximately how long they will take, and when they will happen, you can clearly see what will be impacted should something unexpected come up. And we all know that unexpected things come up all the time!
Steps for Capacity Planning
When it comes to capacity planning for small businesses, there are a few key pieces to keep in mind:
Start by mapping out all the existing work, new projects, and anticipated work. If you aren't sure what to put in for anticipated work, try looking back at the work you did last year. Are there any trends that you can see? Any recurring work that you can anticipate? Remember - it's just a guesstimate and it is better than not allocating any time for it, and then having to compensate at a later date.
Estimate the amount of resources (people, time, energy) needed to complete each task or project. When I don't really know how long something takes, I make my best guess and then I double it - because many people naturally have a cognitive bias that causes them to underestimate time (look up planning fallacy).
Plan for the unexpected. Okay, I know this is hard, how can you plan for something that you don't know? This means including margins in your planning or contingency blocks of time. This is the thing that we most often don't do. But if you think about it, the unexpected always comes up, life happens. Think back on your last 30 days, can you honestly say that nothing unexpected happened?
Once all the information is collected, review your plan to determine if the amount of work planned can be completed within the allocated timeframe.
Adjust accordingly if needed.
Finally, review your capacity plan on a regular basis. I incorporate some form of capacity planning on a daily, weekly, monthly, and yearly basis.
When my client and I started mapping out their work over the next few months, it became obvious why they were feeling like their focus was scattered, or that they were running the risk of overdoing it. Once we plugged in all their known work, new projects, plus all their anticipated work, we found they were currently estimating they would need 37 hours of work weekly, but their available working time was only 33 hours. And that doesn't even account for time they spend chatting with customers, scrolling the internet (we all do it), taking a break to use the washroom, or pouring a cup of tea. No wonder they were feeling like they were on a hamster wheel. They were.
At this point, I could see their frustration. How could they get all the things done if they didn't have the time? One answer is certainly to outsource, to bring on help. But that isn't always an option when you are a small business. With compassion, I had to remind them of the old adage that every time you say YES to something, you are saying NO to something else. If you try to do all the things, all at once, you are inevitably doing it at the expense of other things like family, self-care, etc.
Some decisions need to be made on what things to say yes to. In practice that looks like:
Prioritizing the work that's the most important, and re-scheduling or pushing out work that is less of a priority
Finding ways to consolidate or batch work so that you reduce the time spent on the individual activities
Making the hard decision to say no. You can always move these things to a list that you can come back to later.
Capacity planning can seem complicated, time-consuming, and frustrating but it’s essential to taking back control of your time. To move from a reactive “fly by the seat of your pants strategy” to a proactive plan that takes you where you want to go. It is a crucial part of the work I do with my clients.
If you are not even sure how you spend your time, maybe this blog will help you get started:
Small Business Efficiency: The power of knowing how to spend your time
