Sales Capacity Planning
| Factor | Understaffed | Right-Sized | Overstaffed |
|---|---|---|---|
| Quota Attainment | 110-150% (burnout) | 80-100% | 50-70% |
| Rep Turnover | High (30%+) | Normal (15-20%) | High (territory conflicts) |
| Lead Coverage | Leads rot in queue | Fast follow-up | Reps fight over leads |
| Cash Efficiency | Good but unsustainable | Optimal | Poor (high CAC) |
| Growth Ceiling | Yes (can't scale) | No | No (but expensive) |
💡TL;DR
Sales capacity planning answers: how many reps do we need to hit revenue targets? The formula involves working backward from goals: Target Revenue ÷ Average Quota Attainment ÷ Quota per Rep = Required Reps. But SMBs often miss critical adjustments: ramp time (new hires produce ~25% in month 1-3), attrition (budget for 15-20% turnover), and seasonality. The best teams plan 2-3 quarters ahead, hire in cohorts (not one-offs), and track leading indicators like pipeline per rep and activity metrics to catch capacity mismatches early.
Definition
The process of forecasting required sales headcount and quota distribution based on revenue targets, rep productivity benchmarks, ramp times, and expected attrition. Effective capacity planning prevents both understaffing (missed targets) and overstaffing (burned cash).
🏢What This Means for SMB Teams
SMBs face a unique capacity challenge: they can't afford dedicated RevOps staff, so founders or sales managers do capacity planning in spreadsheets. The risk is emotional hiring—adding reps when pipeline looks good, then scrambling during downturns. A simple quarterly capacity model prevents boom-bust cycles.
Auto-log calls, score leads, revive deals—freeing reps to sell.
Automate the process, elevate the people.
📋Practical Example
A 40-person fintech company ($8M ARR) planned to grow to $15M. Initial plan: hire 6 AEs immediately. Capacity analysis revealed: (1) Current 4 AEs at 95% quota = already maxed, (2) 3-month ramp means new hires contribute Q2 at earliest, (3) Historical 25% attrition means 1 of 4 current reps likely leaves. Revised plan: hire 3 AEs in Q1, 2 in Q2, 1 buffer in Q3. Result: hit $14.2M (95% of target) with 20% lower sales cost than original plan.
🔧Implementation Steps
- 1
Calculate baseline: current rep count × average quota × historical attainment rate = baseline capacity.
- 2
Model ramp: new hires produce 25% (month 1-2), 50% (month 3-4), 75% (month 5-6), 100% (month 7+).
- 3
Factor attrition: add 15-20% to headcount targets to account for turnover; backfill takes 2-3 months.
- 4
Build quarterly model: map hiring dates to when capacity comes online; align with revenue targets by quarter.
- 5
Set triggers: if pipeline per rep drops below 3× quota or activity metrics decline, accelerate hiring.
❓Frequently Asked Questions
How do we plan capacity when growth is unpredictable?
Use scenario planning with three models: conservative (80% of target), base (100%), and aggressive (120%). Hire to conservative, but have offer letters ready to accelerate if you hit base. This prevents both under-hiring and over-committing to headcount.
Should capacity planning include SDRs or just AEs?
Include both, but model separately. SDR capacity feeds AE pipeline. Rule of thumb: 1 SDR supports 2-3 AEs in mid-market, 1:1 in enterprise. If you hire AEs without SDR capacity, pipeline starves. If you hire SDRs without AE capacity, leads rot.
⚡How Optifai Uses This
Optifai's ROI Ledger tracks revenue attribution per rep, providing accurate productivity benchmarks for capacity planning. The system surfaces capacity warnings when pipeline coverage drops below thresholds, enabling proactive hiring decisions.
ROI Ledger📚References
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Related Terms
Pipeline Coverage
The ratio of total pipeline value to sales quota, indicating whether there are enough opportunities to meet revenue targets given historical conversion rates.
Sales Velocity
A metric measuring how quickly deals move through the pipeline and generate revenue, calculated as: (Number of Opportunities × Win Rate × Average Deal Size) / Sales Cycle Length.
Quota Attainment
Percentage of reps hitting or exceeding their sales quota in a given period. Often split by role, tenure, or territory to see where enablement or pipeline is lacking.
Revenue Operations (RevOps)
The alignment of marketing, sales, and customer success operations to drive efficient, predictable revenue growth through shared data, processes, and goals.