Balance Your Startup: Determining Your Client Capacity

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Aarzu Khan
A full-time data scientists and a part-time industry analyst; still learning power of effective presentation and firm believer of the thought "Numbers are always magical". Love to be in the network of people who 'know' how to respect their time and keep others engaged in meaningful activities.

One of the hardest things to manage in a startup business is client load. In other words, if you have too many clients, you can’t provide consistent and reliable service – you’ve oversold yourself. If you have too few, you can’t pay the bills. Here’s how to calculate your ideal customer load and how to scale your startup safely.

How much time do you spend with your clients – not just your best clients but all clients? Consider the frequency of contact, the length of meetings you have with them, the events you plan with them, and time invested in working on a client’s account outside of those meetings.

Consider all of the interactions you have – how much time do you spend? Write that down. For example, let’s assume that you spend 20 hours a year on each client.

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The Calculation For Client Capacity

Now, calculate what you can afford to pay. Start with the number of weeks for client contact. Say you spend 40 weeks out of the year contacting clients. Multiply that number by the number of hours you want to work. Now, take that number of weeks you’ll be working and multiply that by the hours per week you’re going to work.

So, if you’re spending 40 weeks per contacting clients, and you’ll work 40 hours per week, you end up with 1,600.

Take the number of weeks you’ll be working and multiply that number by the hours you work in a week you’ll work on startup development. In other words, how much time will you spend growing the startup but not necessarily interacting with clients?

Let’s say you spend 10 hours doing that. So, 40 hours per week times 10 hours equals 400. Subtract 400 from 1600, and you’re left with 1,200. Now, divide 1,200 by the amount of time you spend with each client. In this example, that’s 20 hours per year.

The result is the number of clients you can handle in a year. In this case, that’s 60. In other words, you should be working with 60 clients per year as “top clients.” Naturally, the amount of time you devote to other customers or all of your customers will vary.

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But, if you use this calculation and the number of clients you work with differs significantly from the number you calculated, it’s time to reassess your startup business – you’re taking on too many clients.

Consider that 60 clients per year is about 1 to 2 clients per week, even if you take up to 2 months off during the year.

Most people would look at that as a light workload, but it can be incredibly busy if you’re spending a lot of time on their case work.

Getting More Clients

If you find that you’re under the target for clients for the year, then you really need to up your numbers, or you’re going to be out of business very soon. Marketing is usually the answer. If you’re going to rely on web traffic, then you’re going to need good search engine optimization. You want your link building efforts to be scalable and predictable.

You want content to appear on authority sites and backlinks to be relevant to your brand and site.

When the leads come pouring into your website, capture their email onsite and start sending them practical and useful information via email – no sales pitches, at least no more than one a month or so.

If you’re more of an old-schooler, you’ll want your content marketed through direct mail and direct response. You’ll want to make extensive use of newsletters because this keeps information in front of prospective clients. Always include contact information so prospects can order your products or services.

Client load can be scaled up if you’re using a direct approach – direct response methods. These are the only scientific and measurable means of increasing traffic, whether that’s through traditional advertising, content marketing or social media advertising or PPC.

Decreasing Client Load

Sometimes, you’ve got too many clients – weird, right? Everyone believes that having more clients is better. But, look at some of the biggest brands out there that can’t handle their client loads. You know the ones. The companies you might have done business with in the past, household names that have terrible customer service, iffy products, and that are a nightmare to deal with.

You don’t want to be like them. They might be making money, but they’re also making enemies, and even large brands aren’t immune to consumer backlash.

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