[00:00:00] Have you ever looked at a business that was growing and thought, "Wow, they're really successful. They have more clients, more revenue, more employees, more projects"? And from the outside, everything looks fantastic, but inside the business, the owner is overwhelmed, the team is exhausted, things are really falling through the cracks.
Clients aren't getting the same experience they used to and are not happy about it, and the owner is making every decision. And then everyone is basically running around trying to keep up with the growth. That's what happens when you grow the demand for your business without building the capacity to actually handle that growth
Because growth without capacity creates chaos, and chaos eventually leads to overwhelm, burned out, to poor team morale, declining quality and [00:01:00] unhappy clients. And then the business can really become very difficult to run to the point where you start wondering, "Why did I build this business in the first place?
Is that really worth it to run it while compromising all the other areas of my life and sanity?" So today, I wanna talk about something that I think is absolutely fundamental to sustainable growth, and that's capacity building. Because scaling isn't simply about getting more clients. It's about a business that can actually hold more clients, serve them really well, have more revenue, but also manage more complexity and more responsibility without everything depending on you as the leader of the business and without you burning out in the process
So I wanna give you a framework you can use to think about capacity building, and there are [00:02:00] really four types of capacity that I want you to look at. One is demand capacity. Second is delivery capacity. Third, management capacity, and then owner capacity. And they build on each other, which of course I'm going to explain in this episode.
So let's start with demand
This one is probably what most business owners think about when they hear word growth and scaling of the business, right? Getting more leads, figuring out how to get more clients, increasing the revenue. And of course, that's a core part of it. But I also think about demand capacity as something bigger than just getting leads or simple marketing.
I think about it as three connected things: brand and community, then marketing, and conversion of those leads [00:03:00] into paying clients. As you scale, you do need to build a brand that creates preference, where people don't just wanna buy from you because you're the cheapest person in the corner, but they...
The right ideal clients think, "This is exactly who I wanna work with. They're my favorite. I can't wait to work with them." And that's where building a strong brand and community becomes important. And then, of course, you have marketing, which gets you in front of new people, creates awareness, and then desire to work with you.
That's how you generate leads. And from that, you need good conversion because you can generate thousands of leads, but if you don't convert them effectively, you haven't actually created useful demand. So demand capacity is really, can I create enough demand of people [00:04:00] who just love my brand and wanna work with me, and then capitalize on that demand effectively?
Because every lead requires time, money, and energy, right? So if you're putting all that effort into generating them, but your sales process is weak, you're not getting the full return from the demand you're creating. So the first capacity question is: Can my business generate and convert the amount of clients that I want?
But here is where most people stop, growth and scaling is about demand capacity. But what happens when you double or triple the clients? Can you actually deliver? And that's where we get into delivery capacity.
So let's say tomorrow your marketing works and you have twice as many clients, or three times, or maybe even five. That's amazing. But now you gotta ask [00:05:00] yourself, who is going to do the work?
And this is where I learned a very painful lesson in my corporate career. One of the reasons that I personally burnt out was because the company I worked for was focused on entering a new market vertical and was heavily focused on demand, and they won three big contracts all at once. So yeah, business was growing, but the resources required to actually deliver those contracts weren't growing at the same pace.
They didn't accommodate and account for the fact that there will need to be growth in hiring and resource allocation. They went cheap on winning the contract. So as the demand capacity increased, the delivery capacity didn't. So guess who needed to deliver the work? It went to departments like myself, who [00:06:00] were already busy delivering work to existing clients, and they were just expected to absorb more and more with minimal additional resources, and that's where chaos started.
People burnt out, people left, not some senior people and critical people to delivery of those contracts. Of course, I personally burnt out, so I know this one from the inside. You cannot sustainably grow demand faster than you grow your ability to deliver. As simple as that
And of course, delivery capacity can look very different depending on the business. For example, if you're selling an online program, you might be able to serve more people without adding one person per, let's say, 10 clients because you can build scalability into the offer itself.
But if you're running more of a hands-on service business, like you're a [00:07:00] professional organizer, you have massage therapy practice, an automotive repair, home services company, that equation, of course, will be different. At some point, you will need people who actually deliver the service because yourself, there's only so many hours a day in a week that you can work, and you still need time as the leader of your business to focus on your business, on the growth, on running and leading the business.
And this is where capacity becomes very mathematical. In my corporate world, we knew approximately how much building square footage one technician could maintain in a year. So whenever we won a contract and we knew how much square footage it was covering, we could easily calculate how many technicians we needed, and that's capacity planning.
And you can do exactly the same thing even [00:08:00] in a small service business. So let's say you're a massage therapist and you know that one therapist working, let's say, full-time for you can realistically handle X number of appointments per week. So if your demand requires you to deliver twice of that amount, you know What additional delivery capacity you need, right?
It becomes simple math. Or maybe you're a professional organizer. You know that one person can realistically handle a certain amount of projects of a certain size per week. Or if a project is a larger size, you might need X amount of people, and this is how many projects of that size they can handle a week, right?
So if you want to double the number of project of a certain size, it's also easily to figure out how many people you need. But then you also might wanna ask, okay, [00:09:00] what skill set do they need to have? How quickly can I train them on my processes? Who is gonna supervise them if I build a team that's large and I can't, let's say, be there for every project myself, right?
What happens if someone is sick or unavailable? And that last question is very important because capacity isn't simply how many people do I need when everything goes perfectly all the time, because it won't. Life is 50/50, and in the span of the year, things will happen. People get sick, they go on vacation equipment malfunctions, a client has an emergency, right?
So the question you wanna ask yourself is, "What capacity do I need to deliver reliably even when life happens?"
And of course, you wanna be realistic about it. You don't wanna catastrophize the, what can happen Because that's a [00:10:00] very expensive way to run a business. But a great capacity plan has some resilience built into it. And that brings us to the next layer, because once you build delivery capacity, you end up with another problem, which is really not a problem.
But as I always say to my clients, business is about solving problems. As service providers, we solve problems to our clients, right? And that's why they pay us. There's the exchange of value. But also we need to solve problems in our own business. And as your business grows, at every stage, you end up with new problems.
So your job is to solve them, of course, as soon as possible, but also not drag problems from previous stages of growth to the new stages of growth, because that's when, big problems and chaos happens. So of course, as your [00:11:00] delivery capacity grows and you grow your team, now you have more people and more moving parts to coordinate, which then means you need management capacity.
Because when your business is small, of course you can manage everybody yourself. Maybe you have three, four, five, ten people. Everybody reports to you. You know what's happening. You can easily text somebody or walk over and ask them a question. You can solve problems quickly. But eventually that stops working when you have twenty, thirty, forty people.
You cannot be the person coordinating everything because at some point you as the CEO become the bottleneck So that's when you need to start thinking about management capacity. Maybe that looks like a team leader, a supervisor, operations manager, or somebody supporting the field team. Like in my corporate years, it was [00:12:00] dispatchers.
So the exact structure, of course, depends on your business. When I work with my clients, we figure it out, and it always, of course, looks the same depending on the business and the stage of growth they're in. But in my corporate experience, we knew that for approximately every 20, 25 technicians, we needed a dispatcher supporting the operation.
That person helped organize the route and daily work so that the technicians could actually do their job effectively and not spend most of their days driving in their trucks from site to site. That capacity also was dependent on the technology. So when we had a technology that was more manual, of course, one dispatcher could handle less technicians.
And then when we upgraded technology that automated certain things and made dispatchers more effective, then automatically they could help more technicians. So another thing was that at around 40, [00:13:00] 50 technicians, we needed an operations manager that could lead the team, that could communicate expectations, manage performance, and handle operational issues.
And now that doesn't mean that 40 is some magical number because truly there's no universal manager-to-employee ratio
That will always depend on the complexity of the work that you're handling or your people are handling, and also the people you're managing. So for example, in our case, we always hired experienced technicians, journeymen. We weren't hiring apprentices who maybe would need a lot of technical coaching. So those experienced people could operate quite independently, and that's why a manager could handle 40 of them.
If We had 40 inexperienced people who needed daily [00:14:00] coaching, training, and a lot of supervision, my one manager would obviously not be enough, right? So that ratio would have to be different. So your management capacity depends on how many people you have, how complex their work is, how experienced and skilled they are, how independent they are, and how much coordination their work requires.
And I see it with my clients too in small businesses. I have a client right now where we're working on hiring the right supervisor for their production team because yes, technically they have somebody in that role, but having someone with the title and no... And being the wrong fit doesn't mean you have the management capacity, right?
That person in that particular role have to be able to manage the workflow, the resources, coordinate a lot of things, [00:15:00] keep the commitments on track, and also build trust with the team. And right now, that's not happening, so when they can't do that, guess who ends up doing everything? It's the owner, and they end up having actually more work because not only they have to manage the team and coordinate workflow and do the supervisory role, they also end up fixing problems and solving issues that the inept supervisor is creating within the team, right?
So you can have technically employees but still not have enough capacity if you have the wrong people in the wrong positions. And then that leads us to the fourth and probably most overlooked capacity, and that's your capacity as the owner, and we'll talk about different aspects to it. Because your business can [00:16:00] only become as big as you can effectively lead.
And as your business grows and scales, even if you keep things as simple as possible, the complexity of that business will increase because you will have more clients to deal with. You will have more projects to coordinate, right? There will be more people to deal with. So complexity grows as the business grows.
There's no qualms about it And I'm also not saying that your business can never become bigger to what you personally know how to do today. Of course it can, and there's two things about that. You learn and develop and grow as the business leader, and also you hire people who can do things you cannot do, and that's completely fine.
That's how businesses grow, right? You get support. But then [00:17:00] as your business grows, your capacity has to grow with it because the, being the owner of 100K business and being the CEO of a 20 million business or even $2 million business are not necessarily the same jobs, right? The decisions become different.
The consequences of those decisions sometimes are much bigger. The number of moving parts increases, and you might find yourself making very different decisions in one day. You might be going from making a strategic decision that affects the next three years of your business in the morning, to then getting pulled to some client escalations or helping your manager solve a people problem, to then maybe having a sales conversation and the need to create some content because you're still the face of the brand, right?
And With the growth, there's more and more for you to focus on, so [00:18:00] you can suddenly spend your entire days just in execution mode or reacting if you don't have proper planning and proper habits to even execute effectively, right? And that's why I talk so much about my clients having allocated CEO time every week in their schedule.
And CEO time is not just like productivity hack, it's about building your mental capacity. You need time where you're not answering emails, you're not going from meeting to meeting or responding to Slack messages. You need time where you can just step back and actually think, organize your ideas and your thoughts, look at the business from above and see certain patterns and think strategically, and maybe ask yourself, "What decisions am I [00:19:00] avoiding?
Where am I becoming a bottleneck? What needs to change so we can grow further?" And this is extremely difficult to process such complex information when you're constantly in execution mode, going from task to task and switching between them
And research on leadership supports that, and it shows that as the environments become more complex, then the leaders need greater cognitive capacity the goal for you isn't to become some superhuman CEO who can think about everything simultaneously. The goal is to become, yes, a high-performing leader, but high performance means you have the ability to handle complexity when needed while reducing unnecessary complexity around you. And for example, one way to do that is [00:20:00] delegation.
Because delegation is not just about getting tasks off your plate. As your business grows, you need to stop becoming the person who makes every decision. And that's where I think delegation is often misunderstood by business owners. They think that it is, "Oh, here is the task. Go and do it." But the true, real delegation eventually becomes, "Here is the responsibility.
Here is the outcome I'm holding you accountable for, and here are the decisions you're authorized to make." And that's a very different level of delegation because now you're not involved in every single small decision-making. If every employee had to come back to you for every little decision, this is when you get overwhelmed.
This is when you can't keep up. So you don't wanna create... Just you don't wanna hire more people and grow [00:21:00] demand and grow your delivery capacity just so those people s- can send you questions, right? You want to create also more capacity for yourself with the right people in the roles that you hire for.
Because as your business grows, you don't want to just delegate task. You want to delegate responsibility and ma- decision-making authority. So that's how you remove yourself as the bottleneck. And then there is emotional capacity, and that's another piece I don't wanna leave out because sometimes that's the first thing that holds you back from growth.
I have this client that we started working together not too long ago. In the first few sessions, we actually focused on building their emotional capacity because they came to me at a moment where the, they were becoming overwhelmed and burnt out to the [00:22:00] point where they couldn't really make any strategic decisions for their business and grow it, right?
So sometimes your overwhelm and lack of emotional capacity prevents you from actually growing the business, right? You can have skills, you can have the team, you can have the system, but then growth can become very uncomfortable or actually scary
if you can't energetically and emotionally handle it. And, as the business gets bigger, yes, there is more uncertainty. There are bigger decisions to make. There is more money at stake, more people depending on you, and that could have a toll if you don't know how to handle it. So you do need the emotional capacity to sit with that uncertainty, to make the bigger decisions, to be okay with everything without immediately going into panic, avoidance, or overwork
And that's what I call the [00:23:00] emotional intelligence, and I work with my clients on this too, building the self-awareness, learning how you respond under pressure, how to actually lower the pressure day to day, week to week, how to eliminate small things that don't matter that might be bugging you now and creating unnecessary stress to make room for that complexity, right?
Learning how to make decisions without reacting, how to make decisions when you don't have perfect information, how to pause and respond, not react. 'Cause growth isn't just a business challenge, it's also requires your growth as the CEO, and that growth actually takes time. This is something you cannot do overnight
So here is the question I want you to ask yourself. Imagine that your business doubled or tripled over the next 12 months. Not theoretically, but you're waking up 12 months [00:24:00] from now and your business is two times, three times as big
Think about what would break first. Would it be demand or delivery? Or maybe you would need actually management capacity at that point or actually sooner Could you fulfill twice as many clients or three times as many clients without sacrificing the quality?
Maybe suddenly you would have too many people reporting to you, or maybe it would be you. Maybe you would have to answer way too many questions, approve way too many decisions, handle too many things, right? The answers to those questions become your capacity gap, and that's where you wanna focus on and build.
Now, you can't fix everything at once. You wanna ask yourself, "What is the next constraint, the most important one I need to fix next?"
If the [00:25:00] constraint is the delivery, build delivery capacity. If it's the management, then start looking for help. Figure out what would be the leadership structure and decide on the first role you need to hire And the important part is that I want to stress a lot is you need to build that capacity before you absolutely need it.
Don't wait until you're drowning to hire a supervisor because then, as I say, desperate hiring never works out. So don't wait until you're booked solid to realize that let's say your offer isn't scalable or that you need help and you need to hire somebody and then train them, right? Don't wait until you're burnt out to start protecting your CEO time and building your own capacity, emotional capacity.
So capacity, [00:26:00] it's not something you add after the growth. It's something that allows you to sustain the growth. And that's ultimately what sustainable scaling means to me. It's not about how fast can I grow, but it's about how much growth my business can sustainably hold and I build towards that Because the last thing I want for my clients is to build a business that looks successful from the outside, but they're exhausted on the inside and they're regretting they've grown it.
I want my clients to build the business that can handle more clients, more revenue, more people, more opportunity and complexity without them requiring to sacrifice themselves and other parts of their life to keep it running. Because for me, that's the difference between simply growing the business and actually building that capacity is the difference between [00:27:00] hustling and actually building a business worth owning.
So before you go out there and start growing like crazy, ask yourself, "Do I have the capacity to hold it?" And if the answer is no, that's not a reason to stop. It's just your next business-building project. Build the capacity and grow as you do it. Have a great week.
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