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Methodology

Agency Team Capacity & Revenue Planner methodology

This planner totals user-entered team billable hours and revenue capacity, then compares them with committed pipeline.
Duc Nguyen X.By Duc Nguyen X.· Founder, Margin101Last reviewed: View update historyMethodology

Educational only: Business decision support, not accounting, tax or legal advice.

Privacy: Calculations run locally; Margin101 does not receive your commercial inputs.

Update policy: Reviewed when formulas or official dependencies change.

Scope: Market-neutral small-business planning using your own assumptions.

1. Formulas and units

Row billable hours
Bᵢ = nᵢ × Wᵢ × Hᵢ × uᵢ

Where

nᵢ
headcount in team row (people)Source: Business record
Wᵢ, Hᵢ
working weeks and hours per week (weeks/year and hours/week)Source: User assumption
uᵢ
billable utilisation (decimal)Source: User assumption
Bᵢ, Rᵢ
row billable hours and revenue capacity (hours/year and currency units/year)Source: Calculated output
Row revenue capacity
Rᵢ = Bᵢ × rᵢ

Where

rᵢ
hourly rate excluding indirect tax (currency units/hour)Source: Business record
Bᵢ, Rᵢ
row billable hours and revenue capacity (hours/year and currency units/year)Source: Calculated output
Capacity gaps
Δ = C − Cₚ

Where

C, Cₚ
total capacity and committed pipeline in the matching measure (hours/year or currency units/year)Source: Calculated output
Δ
capacity gap (hours/year or currency units/year)Source: Calculated output
Pipeline coverage
p = Cₚ ÷ C

Where

C, Cₚ
total capacity and committed pipeline in the matching measure (hours/year or currency units/year)Source: Calculated output
p
pipeline coverage (decimal)Source: Calculated output

Money inputs and outputs use the currency selected in the scenario without changing the canonical methodology. Rates, margins, utilisation and buffers are entered as percentages and converted to decimal values for calculation.

2. Worked example

Input assumptions

One senior at 70% and two consultants at 65%, each working 48 × 38 hours, produce 3,648.00 billable hours.

Calculation and outputs

Example

One senior at 70% and two consultants at 65%, each working 48 × 38 hours, produce 3,648.00 billable hours.

Senior hours
1276.80 hours
Senior revenue
229,824.00 currency units
Consultant hours
2371.20 hours
Consultant revenue
331,968.00 currency units
Total capacity
3648.00 hours; 561,792.00 currency units
Pipeline gaps
448.00 hours; 81,792.00 currency units

At entered rates, revenue capacity is 561,792.00 currency units; against 3,200.00 hours and 480,000.00 currency units of pipeline, the gaps are 448.00 hours and 81,792.00 currency units.

Interpretation

Use the capacity result to reconcile sellable delivery time with committed work before accepting more pipeline.

3. Validation and boundary checks

  • Row totals reconcile exactly to agency totals.
  • Combining identical rows gives the same capacity as split rows.
  • Zero capacity and zero matching pipeline returns an explicit unavailable coverage ratio.
  • Positive pipeline against zero matching capacity returns an unreachable-target result.

4. Assumptions and source classification

  • Headcount, weeks, hours, utilisation, rates and pipeline are user supplied.
  • Positive gaps mean unused capacity; negative gaps mean over-commitment.
  • No salary, utilisation, rate or sales benchmark is used.

This planner has no current policy-data dependency. Its commercial assumptions are user supplied. Registered family-level regression suites exercise the shared business-logic engine and worked-result reconciliation.

5. Limitations

  • The model excludes loaded labour cost, payroll, awards, leave, demand probability, conversion and cash collection.
  • Additional people or roles are included only when the user explicitly adds a member row.

This is educational decision support, not tax, accounting, legal or financial advice. Check the treatment of your actual transactions under the rules that apply to your business and seek qualified advice where appropriate.

6. Update and evidence policy

Registered family-level suites test formula invariants and example reconciliation; the release ledger records that coverage without claiming a separate oracle for every line of public copy. There is no official threshold or benchmark to refresh for this planner. Commercial inputs remain user-supplied because they vary by business and contract.

Change history

  1. : Initial public release of the planner and methodology after pre-launch calculation, content, source and interaction review.

Related reading

Guides to interpret the decision and its assumptions.

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