What is Sales Capacity Planning?
Sales capacity planning is the process of modeling how many sales reps are needed to hit a revenue target, accounting for ramp time, attrition, quota, and attainment rates.
Capacity planning connects your revenue goal to the headcount and budget required to achieve it. It's the bridge between the board saying 'we need $50M next year' and the CRO knowing exactly how many AEs, SDRs, and managers to hire, and when to hire them.
The Capacity Planning Formula
Start with your revenue target. Divide by average quota per rep to get the number of fully productive reps needed. Then adjust for average attainment (if reps hit 60% of quota, you need more reps). Then adjust for ramp (new hires produce less). Then adjust for attrition (assume 20-30% annual turnover). Example: $20M target, $1M quota per rep, 60% attainment = need 33 productive rep-equivalents. With 6-month ramp and 25% attrition, you might need 45 AEs on payroll to deliver 33 productive equivalents.
Capacity Planning Timing
The most common capacity planning mistake is hiring too late. If ramp is 6 months, a rep hired in January won't be fully productive until July. CROs planning for Q1 revenue need to have reps hired and onboarded by Q3 of the prior year. This means capacity planning for 2027 starts in Q2 2026 at the latest.
Capacity Planning in VP Sales Interviews
Boards and CEOs expect VP Sales candidates to build capacity models during the interview process. Our job posting data shows 34% of VP Sales roles explicitly mention 'scaling sales teams' or 'building repeatable sales processes,' both of which require capacity planning expertise. Being able to present a bottoms-up headcount plan tied to revenue targets is table stakes for senior sales leadership.
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