A conversation Randy and I had a few months ago while I was down came to mind recently while a nasty flu bug hit the office. We were down 3 people and the office was chugging along, slowly but surely. Everything that needed to get done – the shipping & customer service, purchasing & receiving was happening.
It’s something I was talking to a prospective entrepreneur up here about too in his business plan. When you develop your plan, your pricing model and plans; you have to build capacity in the system.
When Things Go Wrong
Extra capacity is required when things go wrong – if there’s no slack in your system, you could find yourself struggling to catch up. Let’s say you work 12 hours a day yourself – now, if you have to take a day off, to catch up you need to do another 12 hours. If you can only add 2 hours a day to your regular day, it’d take another 6 days to catch up.
Obviously, that’s not always true – not everything needs to happen immediately. Projects can be pushed off, nice-to-have things are set aside, pre-orders left till later. Yet, theoretically all that work you did in the 12 hours has to be done sometime – so what now?
Sickness isn’t the only thing that can throw you off. Unexpected problems like a server migration going bad, a shipment being delayed or damaged or just a bad traffic jam could all push you behind schedule. Building a little slack in the system is a good idea in many cases.
When Opportunity Knocks
It’s not just things going bad though that you need extra capacity but for opportunity. If you can handle 12 orders a day, 16 at a push once in a while; what happens when you are suddenly doing 16 orders everyday? It’s great but suddenly all that slack is gone and that 16 was a push anyway. What if all that great publicity pushes it to 20 orders a day? How do you handle that?
Or you have the chance to hit a convention on the weekend at a really good rate – but you just don’t have the people to handle it.
Extra capacity means you have the time and space to jump on opportunities when they come calling. It’s not just about planning for the worst, but for making sure you can take the opportunities that come calling. Planning for capacity is really planning for success in that sense.
So, what do I mean by capacity? It means having a little bit of slack during your workday, not working a 100% all the time you are there. It means having a backup plan for when things go wrong – people or processes that fill in when needed. Here’s a few things we do:
- Cross-training employees so that there’s no single point of failure
- Part-time employees – having a few part-time employees who can increase their hours as necessary to deal with short-term bumps in work
- Flexible processes – knowing which areas of a process (e.g. shipping) where we can cut corners if necessary
- and lastly; an understanding significant other!
I’m not joking about the last one. If you have an SO of any form, you need them to be understanding if/when you suddenly have to work 16 hour days. Of all the employees available, you are the one who can throw in the most additional work at the shortest notice, often at the highest level of efficiency. Which means your free time can often be the slack in the system. So making sure you nurture that relationship so that when you need to kick it up a notch, you can.