Building Your Capacity to Grow

W5 Building Capacity to Scale

John Nieuwenburg

John Nieuwenburg has been a professional business coach since 2004. Prior to becoming a coach, he held executive positions with Tip Top Tailors and BC Liquor Stores. In 2019, MacKay CEO Forums awarded him with Canada’s CEO Trusted Advisor Award in the Small Business category. Since becoming a coach, John has worked with over 350 clients, taking them through a systematic process that helps them feel organized, confident and in control of their businesses.

The Balancing Act of Growing Your Business

When we talk about growing a business or “scaling” most people immediately think of growing in terms of revenue.

More customers. More sales. More money.

But increasing sales is only one part of growing your business.

The other side of scaling is growing capacity.

I often describe this as a highwire act where you’re balancing a pole: on one side is sales, the other is capacity.

Building capacity requires growing your team and becoming a master of delegation so that you don’t end up in the hub and spoke trap.

Capacity building happens incrementally

This is an org chart I use for reference with my clients:

(Click the image to download a PDF copy.)

The goal of increasing capacity is to focus more and more of YOUR time and effort on the roles at the top: the CEO and manager.

This is where you are most valuable to your business.

See the red arrow?

That’s where I advise my clients to start building capacity.

Delegate tasks from the administration column first – a good VA can do a lot of this work for you.

Next you can delegate delivery tasks from the middle column. You may want to be strategic about this and build in some operational redundancy.

Then marketing and lead generation from the left hand column.

Sales conversion is one of the last things that most entrepreneurs need to hire for.

When you follow this general order, you can build capacity incrementally as you need it.

skill fun boxUse the skill/fun box to identify what to delegate next

A number of years ago, I worked with an owner who was growing her business rapidly.

Over the course of about 18 months, we updated her job description several times as she worked her way from doing almost everything to focusing just on the management and sales aspects of her business.

Before each change, we began with the skill/fun box exercise.

This requires auditing your time for a full week – writing down everything you do in 15-minute increments.

Then categorize each task according to the level of skill it takes compared to the level of interest, enjoyment, or fun it produces (for business tasks think of fun in terms of revenue generated.)

Tasks that are low in skill and low in fun are the first ones to delegate!

There’s never an equal balance between sales and capacity

In an ideal world, sales and your capacity to deliver would be equally balanced.

You’d have enough work to keep everyone busy, but not so much that your people and systems are overloaded.

In reality, it’s more of a balancing act.

Sometimes you have more sales than capacity. At other times, you have unused capacity.

Many owners are hesitant to go after more sales when they don’t feel they have the capacity to deliver.

I find this perspective to be crazy-making!

Your business will be healthier and more profitable if you aim for having slightly more sales than you have capacity.

The alternative is a business that is paying overhead for unused capacity.

Would you like some help scaling your business and finding the right balance between revenue growth and capacity?

Book a quick 15-minute call to talk about coaching here: time with John

The Ultimate Guide to Scaling Your Business

w5 what does it mean to scale your business

How to grow your business without sacrificing time freedom

This post is part of my Ultimate Guide to Scaling Your Business. Visit the guide homepage to get my best advice and coaching exercises to help you:

  • Develop systems and processes to free up your time
  • Hire and manage a great team to run your business (mostly) without you
  • Make the mindset changes that enable you to grow your business bigger - faster than you dreamed possible