Running a business can often feel like juggling too many balls at once. But what if there was a way to streamline your operations, grow sustainably, and make your business more attractive to potential buyers? That’s where capacity planning comes in.
In the latest episode of the Exit Insights podcast, Darryl Bates-Brownsword sits down with Kevin Harrington to unpack the transformative potential of capacity planning. This strategic approach to understanding your resources and capabilities can have a profound impact on your business’s valuation and efficiency.
What is Capacity Planning?
At its core, capacity planning is about understanding how much your business can achieve with its current resources. It’s a tool that enables business owners to:
- Identify bottlenecks in key areas like sales, marketing, and delivery.
- Balance resources across functions for optimal efficiency.
- Plan for sustainable growth without risking cash flow crises.
Kevin shares that businesses operating at 70-80% resource utilisation often hit the sweet spot—maximising productivity without pushing teams to burnout.
Why Does It Matter?
- Boosts Profitability: By improving efficiency, every gain within your existing capacity translates directly into profit.
- Supports Growth: Understanding your sustainable growth rate ensures you don’t overextend your resources.
- Increases Valuation: Buyers look for businesses that are well-run and scalable. Capacity planning demonstrates that your business is prepared for growth.
Practical Steps to Start
- Review your operations: What’s your capacity in sales, marketing, production, and delivery?
- Identify imbalances: Are some functions over-resourced while others are struggling?
- Plan strategically: Use the insights to tune your operations, allocate resources efficiently, and focus on areas that drive valuation.
As Kevin explains, capacity planning is not just a strategic exercise—it’s also rewarding. By simplifying complex business functions, you can make informed choices that directly impact your bottom line and business value.
Take the Next Step
If you’re looking to get off the tools, run your business smarter, and prepare it for a successful exit, capacity planning is a critical first step. Tune in to this episode of the Exit Insights podcast and start applying these insights today.
Listen Now: [Insert link to the episode]
Show Notes:
- Introduction to capacity planning and its role in exit planning.
- How to analyse capacity across key business functions.
- The importance of sustainable growth and avoiding cash flow crises.
- Real-life examples of businesses benefiting from capacity planning.
- Why valuation-driven strategies matter more than revenue-focused decisions.
Watch the episode here:.
Welcome to the podcast that’s dedicated to helping business owners prepare for exit so that you can then maximise evaluation and exit on your terms. This is the Exit Insights podcast presented by Succession Plus. I’m Darryl Bates-Brownsword joined by Kevin Harrington. And today we’re going to talk about capacity modeling. What does it mean? How can it help you run your business and why you’d want to do it? Welcome, Kevin. Thanks for joining me today.
Hi, Darryl. Thank you. Yes, capacity planning a fun one, isn’t it? Our approach on this needs to be doing this is a really kind of simple at a strategic level. Of course, the concept can be delivered down into operational, but that’s not the point of this, is it, for what we want to talk about? Exactly. So why don’t we start with, let’s create a bit of a definition around capacity planning and what we mean to provide a framework and a context for what we think of capacity planning.
Exactly. So why don’t we start with, let’s create a bit of a definition around capacity planning and what we mean and provide a framework and a context for what we think of capacity planning. We use capacity planning as a tool to help us plan and model the business and when you do your annual retreat, whenever you sit back and do your annual planning for the business for the next year.
Now what a lot of businesses do when they think about this is they’ll have a look at their revenue and their financials for last year. And they’ll go, look, we did one, three, five million last year. And we grew, we increased that by 10, 20, 30, 50%, whatever it was. And they’ll just go, well, let’s apply that for next year. If we grew by 20 % last year, how do we grow by 20 % next year? And what they’ll do is they’ll look at all their numbers and they’ll make whatever increases they can and they’ll have a look.
And they’ll save some costs where they can and what they end up doing that they think is their business planning or what they call as their business planning is that they prepare a budget. Now just looking at your numbers and getting something mathematically correct on a spreadsheet it may all add up but it’s not necessarily anywhere near what you could achieve.
So let’s have a look at capacity planning. Capacity planning is having a look at your business and going, given my mix of resources, what could be achieved? We achieved, let’s say, five mil last year or one mil, whatever the number was, or 10. We achieved five last year. Now, with the capacity of our business and the resources that we’ve already bought, the employees, the infrastructure, the tools that we’ve got, the infrastructure.
Could my business, if everything was operating smoothly and effectively, what could it have achieved? Well, what was absolute possible? There was no errors, no mistakes, no clients, canceled meetings, canceled orders. Everything was going. The sales team was, was closing sales at a perfect sales rate. If everything was happening perfectly, what revenue could my business achieved? Now, if you did five mil, is the possible 10 mil or is it 6 mil? Because depending on what that is, it’s going to influence your business planning and your strategy planning for next year.
If you got five out of six, then you’re looking at buying, how do I increase my resources? If you got five out of 10, you’re looking at how do I do more with my current resources? And that’s the basic fundamentals of capacity planning, having a look at it strategic planning perspective, and then breaking it down by each of the functions. What’s the capacity of my marketing team? What’s the capacity of my sales team? What’s the capacity of my production and onboarding team and my whatever pre work I need to do before I make a delivery to my client and what’s the capacity of my delivery team. So there’s it in a nutshell. There’s there’s the framework, the outline that that I want to dig into with you, Kevin, and and just explore and go, how do we use this concept and apply it in our strategy? And what can we do with it? And how will it make our business better? And how will it improve the valuation of our business?
Yeah, that’s good. Typically there’s two moments in time a business might start to think about this concept of capacity planning. One is after having considered it, after talking to people like us about it, whatever, part of the strategic review for the year, planning for growth, et cetera. And the exercise happens, but quite often doesn’t get finished because life’s okay. You we’ve done a bit of that, that’s fine. And it doesn’t really get taken on board to its fullest. The other time people will look at this is, when it’s all going sadly wrong. And they go, hell, what am going to do? The government’s put taxes up, our customers aren’t over excited about buying anything at the moment. I’ve got this leased machinery and transport. I’ve got all these people in sales and marketing. How am going to pay the bills? What’s going to go first? And it ends up being a knee jerk sort of crisis reaction. And again, quite often the full gamut of looking at capacity is done as an operational exercise rather than strategic one. And as you’re alluding here, we need to look at this as a planning tool, which once people get adept at thinking through capacity planning, it can be adapted in different circumstances. It can be used to inform operational activity. That’s not the start point though. It’s got to be saying, how do we efficiently use these resources? it’s whoever the shareholder is, who put the money into this business? If it was the owner of the business, it’s their money that they should look after their own money. If they’ve had investment in there, they need to be looking after the money that’s been invested. That’s the duty of the business. And capacity planning is about tuning the operation of the business, how everything works from R&D through to aftercare and customer service.
So that it’s maximising the opportunity and it all just sings nicely and it’s not running at a hundred percent. No business can do that. Depends what department it is and so on, but it might be 80, might be 90 percent in some departments is the optimal efficiency level. That’s really what we want to start looking at and saying if we study that in a simplified business first of all, what can we learn from it? What can we take from it as a tool?
Yeah, good points. So from my experience to answer that question directly, what the optimal efficiency that I’ve seen work for businesses is to aim for 70 to 80 % of your capacity. And why do you say that? Because you’ve got to look at the energy of the business. If you’re working at 70 to 80%, you’re working quite hard day in, day out, but you’ve still got time to have a quick chat at the coffee cooler, stop for a coffee. You’re not feeling overwhelmed, but you’re feeling busy and productive. And you get home after a day’s work and you’ve gone, I’ve got a lot done today. It’s a good day.
You’re not exhausted, but you feel productive that you made a good contribution. At 90 % or 100%, you’re feeling under pressure. You’ve got to get things done. And I don’t know about you, Kevin, but if I’m under pressure, you don’t get the best out of me. It’s not my best work that I’m doing when I’m operating at 90, 95 % of my available time.
Yeah, you can’t be can’t be looking around can you if you’re if you’re going flat out You can’t see what’s happening elsewhere in the business. It’s a bit like having a car redlining all day It’s gonna go wrong,
Exactly. And that’s when mistakes are made. The car might blow up. if it’s, you haven’t got time to stop and maintain it. And you know, if, you’re redlining it yet, or if you at a human level, mistakes are made because you’re under pressure and then, and then that’s no good. Cause then you have to rework and it puts even more pressure and takes up more time. So that’s why I aim for an ideal, you know, efficient operating rate of 70 to 80 percent.
Now, while I say that, it’s worth touching on utilisation. If I go 80 % or of what? Well, if someone’s working 40 hours a week, five days a week, it’s not 80 % of 40 hours because all of their time isn’t applied to sales or delivery or what have you. You might take a day a month out of their capacity to do some training. You might say, take some time out of their diary to do some regular admin or other activities, never mind the holidays and the public holidays that they take off. So you need to take all of those other things out that are predetermined. They might have to attend marketing activities, all these other things you take out before you have your 100 % figure. Now, once you’ve got your 100 % figure, you go, well, I’m not aiming for 100%. I’m aiming for 80 % of that. And that is a sustainable 80 % that is a realistic number that can be achieved without having to work extra hours and silly hours at a regular basis. We all know there’s workloads and prices that require working extra hours every now and then, but it’s not sustainable to do it long term.
So that’s what we’re headed for. There’s the 70 to 80 % capacity. Have you implemented this into a business that you’ve worked in, Kevin?
Yes, more than once and helped other people do it as well. For some people, initially it’s a bit of a… Some people go, well, that’s really too simple or they go, intellectually they’re struggling with it because of some of the things you mentioned around the 40 hour week and it’s 80 % of that and so on.
So I think it’s good really to start painting a picture of how the thinking is for this. And if we simplify, let’s just call a business, just call it 10 million pounds worth of business a year is currently what goes on. Yeah.
Nice round number i can do the maths on that easily in my head,
And there’s probably a hundred people working in the business. That’s it for the sake of this conversation. And let’s just really, really simplify it. We’ve got production.
We’ve got sales, we’ve got delivery and we’ve got customers. Let’s just keep it to those components for the moment. Well, sales and marketing, let’s consider it as all part of same thing for now. Obviously all these things can be subdivided down as time goes on.
So I’m gonna look at marketing.
Okay. Sure. And it’s a good point. At some point, the business will have sales and marketing as one function. And at another point, as they get bigger and more established and they mature, they’ll split those out into two separate functions and two separate heads running the departments or the functions.
Yeah, so let’s imagine our capability to produce what we sell is 100 units a day. And lo and behold, we can actually sell 100 units a day, our sales team can do that. But actually our capacity to deliver is 110 or 120. And there’s plenty of market demand. What does that immediately tell you about a business?
This is what strategic capacity planning is. It’s in a simplified form. It means that the amount of money you’re spending on the delivery is more than is required. And that’s taking into account the fact that people have holidays and sick days and training days and so forth. And delivery capacity is 10 % more than it needs to. And that there’s an opportunity there to deliver more. So then we need to look at…
Could we, what’s the implications if we try to increase our output on production? What would the cost of that be? Would it mean we need a new machine on top of the three we’ve already got? If we do, that’s a big step up in cost. But if our machinery could cope with it, if there’s a capacity to do more out of that, we can look at it and then can our sales team sell it and is there a market for it? That’s the simple explanation. And the reverse happens as well. can…
We can make 10 and we can only deliver eight and the sales team is only capable of selling five. What does that immediately tell you?
So what we’re suggesting here is that you want to have a look at the key, the core functions in your business. And these are addressed in your primary workflow in all of your operations from marketing all the way through to clients. Let’s call that your primary workflow. And breaking down the separate functions within that primary workflow and going, what’s the function, what’s the functionality, what’s the capacity of your sales and marketing team? What’s the capacity of your production or your manufacturing team?
What’s the capacity of your delivery team? And that’s what you’re talking about, isn’t it, Kevin? Going and once you know, I’m not aware of too many business owners who have actually done this analysis and realised that they’re out of balance and and they’re overweight. As you suggested, the delivery is they’ve got a capacity to deliver 110 units, but they can only manufacture 100 units. So they’re over capacity on the delivery, which gives you a strategic choice.
If you’re not aware of this, you’re blissfully unaware. If you are aware of it, you can now go, do I dial back the capacity of my delivery team or do I dial up the capacity of my production and my sales and marketing teams so that I’m now tuning my operations and I’ve got everything running optimally after I’ve tuned it?
So, but if I’m not, if I haven’t done this maths, I’m not aware of where my bottlenecks or my imbalances are in my system. Is that where we’re going with this?
Often come up with people making positive requests in the business. We’ve all had the sales manager say, if I had one more person, we could do 10 % more. And you go, well, I guess that makes sense, doesn’t it? Let’s do it. And so you employ the extra sales capacity and suddenly find out that we’re not actually able to make this stuff and to sell. so there’s lots of good intent in the business.
But what tends to happen is people put forward very clever business cases for their departments, their fiefdom. With the best of intentions, there’s no malicious intent. They’re not trying to make an easy life for themselves. They’re saying, if we could make more, would that be good? Here’s how I can make more for very little extra cost, but it is extra cost. And then downstream, you can’t deliver it, you can’t market it, you can’t sell it, or even the customers aren’t ready for it. And…
It means therefore that all these things need to be looked at in in the round that the whole business needs to be focused on when when you employ more people and employing more people and buying more plants are the things that we should sit down and consider much more carefully than we normally do. The knee jerk reaction of saying let’s do this the downstream consequence of getting it wrong is inefficiency.
People that start getting confused by the business and how it’s managed and you’ve got these costs your profitability gets affected And ends up being the crisis one day if you’re not careful
Yeah, and that’s why we’re doing this at a strategic level. Let’s understand the capacity at the various levels. The temptation is because we’re dealing with numbers that we want to do it exactly. And because you put the numbers in and you do a calculation in Excel, you’ll get five decimal places or 55 decimal places. And there’s a temptation to think that you’ve got 55 decimal places, so it’s accurate.
Because we’re doing planning and modeling, it’s back of the envelope calculations. We don’t have to be exact. We want to use the average client volumes. We want to use average sale price and what have you to get our ballpark magnitude of the capacity of each of these functions because we’re not, as you touched on earlier, Kevin, we’re not using this for operational reporting down the line. If you’re going to do some operational reporting, you need to set something up down the track, but at a strategy point, all we need to do is go, what’s the capacity we’ve got?
And what are the choices we’re going to make now that we know that these imbalances are there? What are we going to do about it from a strategic point? We’ve now got some information, we’re armed with information, and once you’ve got information, you can make informed choices.
Yes and in for the informed choices won’t be revolutionary things when you get to that point.
Yeah, good point.
It will be the blindingly obvious and once people, I’ve seen people get this with capacity planning, once they get it, they go, was that it then? And you go, yes, isn’t it beautiful? You’ve got a sense for how your business can go faster or slower, become more efficient, more effective, how you can grow a business to make it more attractive to sell, to be more fun to run, all sorts of things.
It isn’t complicated. And you’re raising the good warning point in there, Darryl, that there are a lot of people that immediately go for an Excel spreadsheet on these things and start applying time and money to it. And some people are different, aren’t they? Different years of service we expect more from. And it gets so convoluted that it gets lost in the detail of data gathering rather than going in broad brushstrokes.
We’ve got an opportunity to save some money here because we’re overspending in this area. We’ve got an opportunity to invest in another area, which will enable us to capture some market from, probably from our competitors, which would be rather nice, but without too much effort. And it’s about making that business move with relative ease and probably less clunky than it is now.
So we’ve got our analysis, we know how much capacity we’ve got in each of our functions. We’re now in a position to go, hey, look, strategically, are we going to increase the capacity of this function to do our tuning or are we going to reduce the capacity of this function to do our tuning so we’ve got no bottlenecks? Now there’s a great way to make this more efficient across the board.
Now, there’s your strategy. That’s the choices you need to make. When it comes to the next layer now, when you want to get your COO or your people on the tools involved, you go, right, we need to improve the efficiency of the sales team or we need to increase the capacity of the sales team or the production team. Specifically now, what are we going to do? That’s when we got to go, OK, what are our projects? What are the rocks we want to implement this quarter to work on that? It just gives us helps us focus on where we need to be spending our time now and then having the management team running efficiently and effectively to be delivering and completing those projects. We’ve got that focus point from the capacity or tuning our capacity that makes sure we’re spending our time in the right areas because we’ve now got this mindset shift from growing the revenue in our business or managing the revenue or making revenue based decisions as opposed to making valuation based decisions. We’re thinking about selling or exiting our business one day. We want to be thinking about what are these choices? What impact are they going to have on the valuation of my business as opposed to just thinking about the profitability of my business?
So what was running through my mind there is the different responsibilities of different parts of the structure of the business and you know when we’re talking strategy we’re not talking operations and the people that are in charge of strategy are in charge of looking after the investment into business and and capture the opportunity. And I think the stage where you start getting the individual logistics teams, production teams, whatever involved in it, what springs to mind with me is that they need to take responsibility for that. And there’s this thing called Yoshida’s iceberg of ignorance that talks about how much do the people at the top really know about what’s going on in a business.
And typically it’s about four or 5 % according to Yoshida. And it means that 96 % of what really goes on isn’t known to the people that are driving the strategy. So how about saying to the people, here’s your challenge then, know, because this is our capacity planning. How can you play your part in this? You know, you know what levers you can pull to make things change.
If I challenge you with doing this, can you come back with some ideas that we can talk about to consider implementing? Because all of a sudden you’re getting other people bought into this capacity exercise, because you can’t tell people to be more efficient and effective. It isn’t this sort of no point.
As much as we try.
Yeah, yeah, yeah, why didn’t you get that right? Well, yeah. And you can hear the conversations now. And so solet’s recognise that hopefully we’ve spent some time hiring some good people over the last few years, and amongst them, they know what’s going on. And let’s give them permission to expose the good and the bad about what’s been going on in their area. Because this is not a witch hunt, this is how we collectively going to make this better. And they will come up with great ideas. And then we can see that kind of operational blue area as we call it, how that is sitting against the black strategy piece that we would talk about and one informs the other with the strategy on capacity, we’re informing operations that then take up the reins and get involved with it.
It’s a really interesting point you make that it’s absolutely essential or crucial is a word that my chat GPT likes to keep using all the time and looks like is very AI written, but it’s absolutely essential that we get others involved and engage them in the process so they own the process. But a lot of the businesses we work with that are in that, you know, one to 10 million revenue bracket,
Yeah, and we work with businesses one to 30 is where we do most of our work. But at the smaller end of one to 10, a lot of the people doing the strategy work are also the people doing the operations planning work and they’ve got to, it’s so hard for them to change hats and they dip in and out of them, they blend the strategy side of things with the operations side of things. And that’s where some of the support is really important that we show them this is the strategy, this is the level of detail you need to put into the strategy. And then you need to get tactical. And what is it the tactical level you need to be working on? And what’s the difference between the tactical level and when you’re wearing your tactical hat as opposed to when you’re wearing your strategic hat and your senior level manager leader hat as to be working on the strategy.
And but at the level of businesses where we’re working with, for some people, this is a brand new concept. And B, quite often they’re business owners that they may have worked in a bigger business before, but most often haven’t. Or if they have worked in a bigger business, they haven’t had this kind of focus before. And I think it’s really important sometimes to go, well, do know what? There’s a whole bunch of things I can’t do in this business. What do I normally do when I ask someone to facilitate help?
Whatever. And if that splitting the focus from wearing different hats, the strategic versus the tactical as you described it, if that’s a challenge, get someone to help you. I mean, that’s fundamentally one of the most useful things we ever do for our clients. They love it. When we say no, no, no strategy, just think strategic for a while, you’re wearing the wrong hat, we’ll deal with that later. In fact, just write it down because it’s important, but let’s forget it for now. And so people can work with different focuses, but if they don’t, they won’t achieve the result.
You’re right. And a lot of the feedback we get from business owners when they go, look, we know we need to be working on the business and not in the business. I know how to work in the business. I’ve been doing it for 20 years. I’m really good at it. I don’t have to think about it. I just get in there. can be effective straight away. But I need to extract myself out of all of that doing and being Superman in the business and solving all the problems.
And I need to work on the strategy. But the reality is I don’t know where to start with the strategy. So I sit down and I’m looking at a blank piece of paper and I don’t know where to start and I get stuck. And then I get another problem come in, you logged in through the office and I can go and solve it.
Capacity modeling is a simple tool that you can use to start looking at your strategy and going, OK, it’s a tool to help you identify where the bottlenecks are in your business. So you can identify and then start going, Okay, here’s the focal areas. If I’m going to tune my operations, where do I need to tune them? What’s the point of screaming out for the help most? Well, I need to be working in this area. The capacity of this function is either abnormally high or abnormally low compared to the other functions in my operations, I need to work on this, what am I gonna do? And I’m gonna bring the others up or I’m gonna drop this down. So something else, so there’s a tool to help you start working on the business if you’re at that stage of your business.
The next thing to start considering, which most business owners haven’t, is what’s my sustainable growth rate? What’s the level of growth I can put into my business before I need extra external funding to fund that additional growth? Now, most business owners, I’ve seen so many businesses grow too fast and then the resultant cash flow crisis crunch happens. I’ve seen businesses collapse, just too many of them collapse, they’re growing too fast, they’re growing too healthy and it doesn’t make sense for a lot of people how they could run out of cash because they’re growing and so profitable but you get a cash flow crisis because of the delay in payments and the cash coming in. Your sustainable growth rate, if you build your capacity plan and grow at your sustainable growth rate, again it’s a tool that you can use and go an informed choice if I want to grow higher than that sustainable growth rate then I need to start looking at getting funding in now ahead of the game before it’s too late while I’ve still got time to get the funding and implement the plan at the same time.
So, that all comes into play with your capacity planning and it’s something else that you can be doing to be working on your business and not in your business. And these are the things that you’re working on that will add valuation to your business above and beyond just revenue and profit.
Yes and I’ve personally done this for a business with over 2000 people in it. And I’ve done it for businesses down to as low as 10. And one of the really interesting things here is that a lot of people in an organisation start to display symptoms of fear when they know capacity planning is going on. It sounds like you’re about to go scything through the business. And there’s an ignorance about what’s going on and why that’s understandable, no one’s explained it. So, I think communications are very good, but I think I would share with everyone on this is that my experience from a business with well over 2000 people and the other businesses I’ve done capacity planning with, mid 90%, 95 % ishite, let’s call it for the sake of this conversation, of the people involved continue to do the same job.
But they’re supported in a better way and they’re in a workflow that makes things more predictable so people can do a better job on what’s being given to them and what they’re passing on down the pathway. So actually it works out really great for individuals. sometimes the solutions, the things that you’ve been putting off for years, you go, no, that wouldn’t work, that wouldn’t work, no, we tried that once, but actually your business has grown. And a business like which was 100-ish people, where we did capacity planning. One of the outputs from it, after we had firmed up on the strategy on capacity, was merging two teams. The individuals all carried on doing what they were doing, but there were so many commonalities of things that were going on that the supports that we were buying into the businesses, were third party support agencies and things like that, we were able to halve the number of external suppliers we had. And those suppliers ended up having a more in-depth knowledge of our business and were able to respond better. And everyone was doing the same job. And it was all triggered by capacity planning. It was saying, can we optimise this, fine tune it, so that always, always, always recognising the marketplace opportunity and what our clients want and need.
How can we structure this so the resources are effectively and efficiently being used, which sometimes is adding more, sometimes it’s tweaking it downwards, whatever, but how do we do that? It’s a fun exercise. It’s an eye-opener. And oddly, it doesn’t take too long to do. Once the mindset is there to observe these things and a big whiteboard exercise of we’ve got three of those and 10 of those and et cetera. Once that simple thinking is in place, you can immediately start to feel some benefits most of the time.
That’s why I love having you join me on the podcast, Kevin. I can always count on you to bring the concept to life through reminding us of how it works in real life with people that you’ve, we’ve done it before in the past. So, it’s always a good reminder for me.
There’s just one more thing that I want to share in this episode before we wrap things up. And that is the reminder, hopefully it’s obvious that while you’re working on things in your business that are going to increase the efficiency, so we discussed before if your business is running at 50 % of what it could be running at, then anything that you do to improve the efficiency and get it from 50 % to 60%, 70 to 80%, you’re that all within, you’re not changing any resources. So, you’re not changing your cost base. So, every cent you make, every penny you make from 50 %…while you’re working on things in your business that are going to increase the efficiency, so we discussed before if your business is running at 50 % of what it could be running at.
So, your business is getting more and more profitable as you’re increasing your running rate up to what your capacity is 70, 80 % that we discussed earlier. Now, once you’re up to that 80%, then you need to increase your resources. So, by definition, increasing your resources means you need to spend some money. There’s some capital outlay, whether it’s employing someone, buying new plant and equipment, expanding your premises, whatever it is, you’re increasing your infrastructure, there’s a cost involved.
Now, typically that’s a cost that hits you fairly quickly. And then your capacity is increased almost immediately. then you need to, once you’ve done that, you increase your capacity, you then move quickly back into a plan of going, okay, how do I utilise this new piece of equipment? How do I get this equipment, this person, these tools up and running as quickly as possible so we can start taking advantage of the investment we’ve just made. So, it’s a cycle of capacity planning now becomes a cycle of knowing where I am, increasing my profitability, building up a bit of a war chest, ready for the next investment, making the investment, increasing my capacity, then filling up and making the most of that new capacity.
So, where are we? Where do we put it together? We’ve got capacity planning. It’s a tool for business owners to make it easy for you to get off the tools and start thinking about the future of your business. And it helps you get out of the mindset of only thinking about revenue and profit and to start thinking about how do I think about increasing the valuation of my business, especially powerful if you’re thinking that you want to sell your business or exit your business to make it easier for you to get off the tools and start thinking about the future of your business. And it helps you get out of the mindset of only thinking about revenue and profit and to start thinking about how do I think about increasing the valuation of my business, especially powerful if you’re thinking that you want to sell your business or exit your business one day.
Yes, and I would just add on to that, that actually from my experience, it’s a fun exercise and it’s also a rewarding exercise. And if people have never done it before, shout, we can help. That’s one of the core things we do within our process of helping people get their businesses exit ready. Let’s have some conversations. But it’s been a good chat this one. Thanks, Darryl.
Thanks as always Kevin, thanks for sharing your exit insights with us today.
About Kevin Harrington
Kevin Harrington- Succession Plus UK Partner
Having worked in technology, telecoms, consumer electronics, payments, media and publishing, Kevin has enjoyed an interesting career history that embraces product and services businesses at all stages of their journey.
Before joining Succession Plus he was CMO with The Panoply plc, a digitally native technology services company, founded in 2016, with the aim of identifying and acquiring best-of-breed specialist information technology and innovation consulting businesses. He joined The Panoply from Tungsten Network where he was Chief Commercial Officer.
Previous roles have included working with SMEs and large international businesses. Some highlights are Managing Director at the Emerging Payments Awards and the Prepaid Awards; Managing Director of Gx; Director of Sodexo Motivation Solutions; Global Marketing Director at BBC Worldwide; Product Group Marketing Manager with Sony UK.
His career started out in a completely different direction. His first two full-time roles were as a junior in an architect’s office and a civil engineering technician. Some of his drawings and designs were constructed and are still standing.
If you would like to learn more about how to start preparing your business, then you can get more information here: https://page.succession.plus/it-all-begins-with-insights-exit-insights
Get started by knowing how sellable your business is right now. Check out our Business Sellability Scorecard to find out.
