Having owned and run multiple small businesses, I know, firsthand, that managing capacity is one of the most difficult challenges facing owners and executives. It’s taken me years of trial and error to learn an important lesson to consistently growing a business – you must sell through capacity.
I’ve learned that capacity is often an illusion at best and an excuse at worst. When small and mid-size companies start thinking about capacity, they take their foot off the proverbial gas pedal.
Two negative things occur when that happens:
- You eliminate your margin for error by doing this. In my experience, executives and (especially) owners tend to see capacity problems before they’re actually there. Then, if by some chance you fail to capitalize on the opportunities before you, you’re suddenly dealing with excess capacity (and possibly higher expenses) and a dead pipeline.
- Even if you are right and you capture your opportunities and get to capacity – you kill your momentum. Once you’re ready to grow again, you have to start all over again with lower margins for error.
Is there danger when you sell through capacity? Absolutely! Frankly, every time I deal with it, it scares the, well, you know what out of me. However, it’s a problem you must deal with if you want to break through your growth barriers.