Different Levels of Value in Service Capacity from Blumer CPAs on Vimeo.
Transcript:
You may have heard of the term capacity. This is something that service-based companies manage. They manage capacity to scale their companies, and you got to figure out capacity management. It's something we're thinking a lot about lately and we're putting and building into some of our growth models. So I just wanted to talk about the value of capacity on teams right now. So if you look at a chart of a team, that is the owners at the top, and maybe some leaders, and then the other people producing the revenue, what you're going to find is at different levels of your chart of the structure of your company, people's capacities are of different value. So what that means is if you have a leader, a manager, or a director, somebody like that, or the owner, their capacity can be of extreme value.
So what they should be doing is using that capacity on the production of high value revenue. That should be matched up in a service-based company, and if it's not, you're going to struggle to scale. So let's say you have 40 clients and they're all very, very high value. If you pump all of those through the owners, let's say one owner or two owners, that owner can't do it all, so their capacity is going to be limited. That means you can't have 40 clients. You can have about 20, let's say, in this example. But if you sell different types of revenue that has different levels of value, you can take some of the most highest valued revenue from a client, and you can give that to the owners or some of the leaders or directors. And then hopefully a larger percentage, let's say 65, 70% of your revenue, is really more recurring revenue. It's not the high value stuff. You can let a larger team produce that on a regular basis.
And so what you're going to find is there are different values to the capacity on your team. And it depends on the level that they are on in a structure, like an accountability team structure. And so I hope that helps. I want you to know that you can't just give any amount of client revenue to any person on your team. You have to be very methodical about whose capacity you choose to use. That's a real important key to scaling your services company over time. And that's complex, and if you need help, let us know. We help agencies do that at [email protected] We'll see you. Take care.
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