“Can we start this project next month?” sounds like a simple question—until it quietly turns into late nights, missed deadlines, or rushed hiring.
Capacity math removes the guesswork. With a few assumptions and basic formulas, you can convert headcount into available hours, compare that to your pipeline, and know exactly when to start work—or when to say not yet.
Capacity is a target-per-person game. Set a realistic weekly target for each role (billable hours or equivalent effort units), track actuals against that target, and make start/hire decisions from the variance. If most people are above target, you’re constrained; if most are below, you have capacity.
Step 1 — Set the target by role (not one number for everyone)
Targets should reflect the reality of each role. Examples:
- Designer/Consultant: 30–32 billable hours/week (of a 40-hr week)
- Project Manager: 25–30 billable or project-coded hours/week
- Principal/Owner: 12–20 selective billable hours/week (plus BD & leadership)
Write targets down and review quarterly. Targets are the basis for staffing and start-date decisions.
Step 2 — Track actuals vs. target weekly
Use time entries or effort units mapped to projects. For each person, compute a simple variance:
- Variance (hrs) = Actual billable hrs – Target hrs
- Variance (%) = Actual / Target – 1
Interpretation (team-wide):
- Above target: If a majority of the delivery team runs consistently above target (e.g., > +10% for 2–3 weeks), you’re constrained—push start dates or add capacity.
- At target: Starts are possible, but new work should be phased (milestones, staggered kickoffs).
- Below target: You have capacity. Fill from the pipeline or bring work forward.
Step 3 — Look forward: project load vs. targets
Convert pipeline into weekly hours and compare to team targets by week (next 8–12 weeks minimum):
- Sum expected project hours by week.
- Sum team targets by week (current staff, vacations, holidays).
- Flag weeks where projected load > team targets. That’s where start dates slip—unless you increase capacity.
Decision rules that keep you honest
- Start-date rule: Don’t start a new project in weeks where most deliverers are running above target.
- Escalation rule: If ≥50% of the team is above target for 2+ consecutive weeks, adjust start dates or add capacity.
- Stability rule: Confirm three consecutive weeks at/under target before pulling a project forward.
Hire & onboarding lead time (be realistic)
From the moment you decide to hire until that person is producing at their target takes time:
- Hiring: 8–12 weeks (sourcing, interviewing, offer, notice period)
- Onboarding to productivity: 8–12 weeks (process, tools, shadowing, first projects)
Total lead time: 16–24 weeks. If your forward view shows sustained demand above team targets 4–6 months out, start hiring now or re-sequence projects.
Examples (quick reads)
- Constrained: Designers average +12% over target for 3 weeks, pipeline adds 160 hrs in Week 5 → Push the new project two weeks or add a contractor now.
- Capacity available: PMs average –15% under target next month → Pull a project forward, or package smaller milestones earlier.
FAQs
What’s a good utilization target?
Many small service firms set 70–80% for core delivery roles, lower for PMs, and much lower for principals. Calibrate based on reality (meetings, admin, reviews).
How do I factor non-billable work?
Targets already assume non-billable time. Don’t chase 100% billable; set role-appropriate targets and hold to them.
How far ahead should we model?
At least 8–12 weeks. If your sales cycle is longer, extend to match it so hiring and start-date calls aren’t last-minute.
What’s a realistic hire-to-productivity timeline?
Plan for 16–24 weeks total: 8–12 weeks to hire, plus 8–12 weeks from onboarding to reaching target productivity.
Disclaimer: This article is for general education and may not reflect your specific facts. Consult your HR and finance advisors for decisions.