How to Calculate Your Agency's Capacity in Three Steps

What does agency capacity mean?

Here, capacity means the total workload your team can handle, measured as the number of clients you can take on with the resources available. The goal is to end with a clear maximum number of clients, and a roadmap for raising it without creating bottlenecks.

This works best for established agencies with clear deliverables, a clear process for delivering them and several team members. If you are a complete beginner, it is probably too early.

You can calculate a general capacity or a role specific capacity. We use the role specific version, because it shows exactly what is constraining growth. There is a free capacity calculator sheet for this guide that does the sums for you, but you can do it by hand.

Step one: how do you calculate bandwidth?

Bandwidth is the time your people actually have available for new client work. Work it out weekly, for each role. It is made up of three variables:

• Capacity (weekly hours). The total hours a person works in a week. A full time employee is about 40 hours and a part time employee about 20, depending on the contract.
• Admin. Time spent on tasks that are not client work but still have to be done, such as checking and sending Slack messages or submitting expenses. If you are unsure, start with an estimate of at least 2 hours per week per person and refine it later.
• Meetings. The time spent in meetings each week. The easiest way to measure it is to open the calendars for a period of one to three weeks and average it out.

What does a bandwidth calculation look like?

For each role, subtract admin and meetings from weekly hours, then multiply by the number of people in the role.

Example one: three full time media buyers, each with 5 hours of admin and 5 hours of meetings a week. (40 minus 5 minus 5) multiplied by 3 gives 90 hours. The media buying role has 90 hours a week for client work.

Example two: four part time designers, each with 4 hours of admin and 1 hour of meetings. (20 minus 4 minus 1) multiplied by 4 gives 60 hours.

If a role mixes full time and part time people, calculate each person or group separately and add the results together. Repeat this for every role in your agency.

Step two: how do you work out client needs?

Client needs are the hours each role spends on each client per week. Many owners do not know these numbers, so there are two ways to find them.

• Use time tracking. Have team members track client related time, such as client meetings and emails. Divide the total time by the number of clients over the period. For example, 80 hours across 10 clients is 8 hours per client per month, which is 2 hours per client per week once divided by four.
• Run a task audit. List the tasks each role does for a client, and estimate how long each takes and how often. For a media buyer: campaign setup of 3 hours once a month is 0.75 hours a week, ad optimisation is 2 hours a week and reporting is 1 hour a week. Add them up for 3.75 hours per client per week.
• Interview your team. Nobody knows how long tasks take better than the people doing them, so ask them rather than guessing.

Step three: how do you calculate capacity?

Divide each role's bandwidth by that role's client needs. This takes the hours available each week and divides them by the hours one client needs.

With media buyers at 90 hours of bandwidth and 5 hours per client, capacity is 18 clients. With designers at 60 hours of bandwidth and 8 hours per client, the result is 7.5. If you get a decimal, always round down, because you cannot have half a client. Designers can handle 7 clients.

Your agency's capacity is the lowest number across the roles. In this example it is 7, because even though media buyers could handle 18 clients, designers could not keep up. The designers are the constraint.

How do you increase your agency's capacity?

The formula has four variables: weekly hours, admin time, meeting time and client needs. Hiring raises weekly hours, but it also raises costs and lowers profit, so treat it as a last resort. Start with the other variables.

• Admin time. Make it easier to communicate, find resources and complete recurring tasks, or automate the recurring tasks.
• Meetings. Many meetings are unnecessary or longer than they need to be. Audit them.
• Client needs. Reduce the time each role spends per client without lowering quality. Give your team tools, SOPs, clear systems and automations so they can produce high quality work in less time.

Why shouldn't your client count match your capacity?

Once you know the constraining role, look at its numbers and ask what the real problem is. Is it too few people, too much admin, too many meetings, or too much time per client? In the designer example, the part time admin figure was high, so cutting admin and introducing better SOPs and automations would be the places to start.

Capacity should not equal your number of clients. Someone with 36 hours of bandwidth will not be productive for all 36, and filling every hour risks overworking and stressing the team, which can lead to people leaving. Efficiency and utilisation rates matter too.

Recalculate regularly. The first run is a rough estimate. As you learn your real admin and meeting time, and as automations and process changes take effect, you can see the number improve. It is a lagging indicator, but it shows whether you are heading the right way. If your client numbers are approaching the capacity figure, that is the sign to invest in operations.