Knowing your company’s capacity is a key part of dealing with the business environment and making smart decisions. It is surprising how your capacity leads to revenue.
This episode is part two of the Solid Business Foundations series and shares the four major types of capacity found in companies that impact profits. Included is why capacity is not a limitation, that business capacity is the same as revenue capacity, and examples of how to estimate and use capacity calculations in planning.
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What is Capacity?
For this episode’s purposes, business capacity is the same as revenue capacity, the maximum revenue your business can consistently generate over time. This goes beyond operational capacity, which is the maximum output that can be sustained in a perfect world. Your capacity leads to revenue.
Slack is a difference between capacity and your current operating level.
Four Types of Capacity
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