Last Wednesday, I was in Liverpool’s first five-star hotel for a networking event. Very nice surroundings, lovely bar, great service. They know exactly what they are selling and who they are selling it to.
The next day I met a prospect who owns a beauty salon. They told me “we are full to capacity by person”… but at the same time they have empty space in the spa.
Then this week, I had a meeting with my coach, grilling me on my capacity to take on extra clients.
Stand back, and there is a common thread running through the week:
Most businesses say they are full. Very few actually are.
They are just full in the wrong way.
“We are at capacity” usually means “I am knackered”
When I talk to owners of six and seven-figure businesses, I often hear the same things:
- “We could not take any more work on”
- “The team are flat out”
- “We need a bigger building before we grow”
Sometimes that is true. More often, it really means:
- The owner is flat out
- The team are busy, but not always on the right things
- The building has spare capacity hidden in plain sight
My beauty prospect is a perfect example.
The therapists are booked solid at peak times, so it feels full. But if you walk around the building at different times of day, you will see empty treatment rooms, quiet hours, and corners that earn nothing.
In other words, the people are full, the space is half empty.
And I will happily (or perhaps begrudgingly!) admit that it can be true in my business with team members “at capacity” but not always busy on the right things.
Three kinds of hidden capacity
You do not need a spa or a hotel to have this problem. It shows up in almost every business I see.
Here are three places to look.
- Empty space
- Treatment rooms that only earn money three days a week
- A workshop that is rammed in the morning and dead after lunch
- A warehouse or showroom that has “dead corners”
Questions to ask:
- Could you run off-peak offers to fill quiet times?
- Could you sublet or share part of the space?
- Could you change the layout so that more of the square footage earns its keep?
Your rent, rates and energy are going out every month whether you use the space or not. Every extra pound you squeeze out of that fixed cost falls almost straight to profit.
- Busy work instead of paid work
Some teams are genuinely flat out. Others are “meeting-ed out”, drowning in email, or doing things a system should be doing for them.
If your people spend hours:
- Chasing paperwork instead of serving customers
- Re-typing the same information into three different systems
- Fixing avoidable mistakes
…then you do not have a capacity problem, you have a systems problem.
That is where the right tech and a bit of process mapping can hand you back hours a week. For us that might mean tools like Xero, Dext, and a dash of AI, but every business has its own version.
- Pricing that keeps you stuck
Back to the five-star hotel.
They are not the cheapest beds in Liverpool and they make no apology for it. They know that a slice of the market will happily pay more for location, service and experience.
Many businesses try to run a five-star operation on three-star pricing.
The result:
- You have to cram the diary to make the numbers work
- The team are rushed
- You feel “at capacity” even though profit and cash are not where they should be
Small, well thought through price moves can do more for capacity than hiring another person:
- Premium pricing for peak times
- Bundles that increase average spend without taking more time
- Memberships or retainers that smooth demand and cash flow
The numbers that tell the truth
When we run a Business Diagnostic Review, we look at seven key numbers that cut through the “I am busy” story and show what is really going on.
The big ones for capacity are:
- Revenue per employee – how much income each full-time team member generates
- Gross profit % – are you charging enough for the direct work you do
- Operating profit % – after overheads, how much of your effort is actually turning into profit
Small shifts in any of those can add tens of thousands to the bottom line without adding a single extra person or square foot.
So, are you really full?
If any of this sounds familiar, here are two simple questions to ask yourself over a coffee this week:
- If I walked round my business with fresh eyes, where is the obvious wasted space or wasted time?
- If I put a five-star hat on for a moment, what would we have to change to justify charging a bit more?
You might be closer to “fully booked” than you think. Or you might just be “half empty” in disguise.
Want a second pair of eyes?
One of the things we do as a profit partner is help clients find hidden capacity in their business.
Sometimes that is through a Business Diagnostic Review, where we model the impact of small tweaks to your prices, margins and utilisation. Sometimes it is a simple pricing and capacity meeting where we look at your current setup and play through a few “what ifs”.
If you would like us to have a look at your numbers and your set-up, reply with “capacity” and we will fix a time for a chat.
You might be surprised how much room there still is in your spa, your schedule or your bank account.
If you have any questions, please email su*****@*********************co.uk or give us a ring on 0151 380 8099.
Many thanks
Jon