Capacity-vs-sales constraint
What is Capacity-vs-sales constraint?
Whether an agency's growth ceiling is the work it can deliver (capacity-constrained) or the work it can sell (sales-constrained).
Diagnosing this correctly changes where you invest next. A capacity-constrained agency that hires more salespeople just makes the bottleneck worse; a sales-constrained one that hires delivery staff burns cash on idle headcount.
Related terms
- Account-management overheadNon-billable time spent running the client relationship: status updates, reporting, internal coordination and admin.
- Deliverable marginThe margin made on a single deliverable (a campaign, a website, a brand system), independent of overall project margin.
- Gross retentionThe percentage of recurring revenue retained over a period, before any expansion from upsells or growth.
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