Sales capacity planning: does the team add up to the target?

Revenue targets tend to start as a growth rate, last year plus 30%, say. Capacity starts from the other end, with the sellers already on payroll and the ones who can be hired in time. Sales capacity planning puts the two side by side, and it needs one spreadsheet and last year’s numbers from the CRM.

What sales capacity planning is

Sales capacity planning is the check of a revenue target against the people who have to close it. You count what each quota-carrying seller can realistically close in a year (new hires at a fraction, while they ramp) and set quotas from that total once the board has agreed it. Done in November, it leaves time to recruit before January.

A sales capacity model is the spreadsheet that holds it: one row per person or per hiring slot, their start date, their ramp and what a fully ramped person closed last year.

A worked example (made up)

The target is $12M of new bookings. Last year the ramped business development directors averaged $1.8M each. There are four of them, so they cover $7.2M.

Two hires start in January. Each ramps at 25%, 50%, 75% and 100% across the four quarters, so each delivers 62.5% of a full year. That’s $1.125M each and $2.25M for the pair.

Capacity comes to $9.45M against a $12M target. The gap is $2.55M, which is more than one ramped director closed all of last year.

How to count ramp time

Counting a new hire as a full person from their first day overstates the year. Average the quarterly percentages instead: (25 + 50 + 75 + 100) / 4 = 62.5%. Multiply that by the ramped average and you have the hire’s year.

The start date moves the number a lot. A hire who starts in April gets three quarters, at 25%, 50% and 75%, which is 37.5% of a year, or $675K here. A July start gives $337.5K. A hire who signs in December mostly counts toward next year.

The 25-50-75-100 curve is a placeholder. Replace it with your own: pull the last few hires, their start dates and what each one closed in each quarter. With a six-month sales cycle, a new hire’s first quarter can close nothing at all, because their first deals haven’t had time to finish.

How to close the gap

Hire two more people in January. Capacity becomes $11.7M, which still leaves $0.3M. It only works if both are hired and selling by January, so recruiting has to start months earlier. A senior seller who joins in April adds $675K, not $1.125M.

Lower the target. $9.45M is what the team can carry as it stands. That means taking the capacity table to whoever set the $12M and agreeing a number the plan supports.

Add capacity somewhere else. Partner-sourced deals, a motion for existing customers or a channel that doesn’t need a director’s time can cover part of the gap. Count a partner channel at what it brought in last year. A channel launching in January has no history, so put it in the plan at zero and treat what it brings as upside.

Two hires plus a partner line could cover the last $0.3M. Or one January hire brings capacity to $10.575M, and the target comes down by the remaining $1.425M.

Why raising quotas doesn’t close it

Spread the $12M across the same six people in proportion to what they can close and every quota goes up by about 27%. The directors who closed $1.8M last year would carry about $2.29M each, with the same territories and the same week. Raising everyone’s quota to cover the gap isn’t a real option, because it doesn’t add any capacity. It just guarantees missed numbers. The directors with the best records are also the ones a competitor can hire most easily.

Some sales leaders set total quota a little above the target, so one resignation or one slipped deal doesn’t sink the year. That buffer goes on top of a target the capacity already covers. Here capacity covers 79% of the target, so the buffer question doesn’t come up yet.

What the table leaves out

A ramped director who resigns at the end of June takes about $0.9M of the year with them, and whoever replaces them starts again at 25%, so a plan with no allowance for one departure is already optimistic.

The $1.8M is also an average of four people. If one closed $3M and another $0.9M, the average describes nobody, and the plan should use the names.

And the whole table assumes each person has enough pipeline to work. A director in a thin territory won’t close $1.8M however good they are. Check the obtainable market before adding headcount to it.

If two presales people scope every deal, or three SDRs book every first meeting, then more account executives mean a longer queue in front of the same few people. Their capacity belongs in the table too, as a ceiling on how many deals the sellers can work.

Where the numbers come from

The ramped average comes from last year’s closed-won bookings by deal owner. Each rep’s start date gives you the ramp, and it usually lives in the HR system, so ask for it. Closed-won by deal source gives you the partner line.

In HubSpot, owner and close date are on every deal already. The source is the weak point. If half the deals have no source, fix that before the planning meeting, because the partner number depends on it. Once quotas are agreed, HubSpot’s goals can hold each rep’s quarterly number, ramp included, so the dashboard tracks the same figure the plan used.

Rerun the table in July with real start dates and anyone who has left.