What is sales capacity?
How much can your sales org produce - what is its revenue potential? We could think of this as the size of your company’s engine.
You may have a 12 gallon tank at the beginning of the year. This can take you up to 200 miles.
If you keep hiring you can add capacity.
As a new hire ramps up, their mileage improves. This happens as they start to build pipeline through a better understanding of the industry and the product they are selling.
As you build your sales capacity model. You want to understand how many opportunities you can expect a BDR to bring in and plug that into your Sales Formula (Number of Sales Meetings) X (Conversion Rate) X (Average Contract Value).
Based on your Sales Formula, each BDR should have an annualized target they are expected to hit when they are fully ramped
As you add BDRs to your team you can start to plan out the impact this can have on your number of Sales Meetings and the downstream impact on revenue.
Caveat - BDRs have a ramp time. You might have 3 reps on board, but only 1.5 ‘full-capacity’ reps at a given point in time.
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