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On a recent client call, we were discussing how to use a new capacity report to make decisions for a firm. Capacity measures an asset's maximum ability. For example,
The question is: Why is this useful? Because it’s a metric that holds still. What does that mean? It means it’s a known quantity that doesn’t fluctuate often, so you can use it as a steady baseline to calculate other values inside the business. Which can help you
Examples:
-> Employees required = Revenue / hourly rate / project weeks / 50 hours
-> Hours needed = Whirligigs ordered / # machines / 3 whirligigs per hour
-> Revenue = 50 billable hours * # employees * hourly rate * 4.33333 Every business is full of moving parts. Markets shift, demand surges and dips, costs rise and fall. But certain inputs (like capacity) hold pretty steady, And that stability is powerful. Because when you find the numbers that don’t move, You can anchor to them. You can build reliable models around them. And you can turn chaos into clarity. Your Daily CFO, Lauren |
CEO-turned-CFO & finance instructor, Lauren Pearl, drops a daily tip that helps startup founders grow their businesses and control their destinies. Learn why this growing list with a 60% open rate led to LP being named top 25 Finance Thought Leader and host of the #3 CFO podcast for 2025
Recently, I read a comment from a startup advisor peer about the lack of women in VC-funded startup leadership. Essentially: "Maybe this is just a product of preference. Maybe women are just more risk-averse. And maybe men are simply dumb enough to try." While framed as flattery, it disguises something ugly- It’s a tidy explanation for the funding gap That promotes a dangerous narrative Which is also - blatantly - wrong. Women do start venture-backed companies - many of them. About 1 in 5...
AI is supposedly making us faster. In conversations with founders and engineers, I’m hearing the same story: Prototypes that once took weeks now take days. Code that required whole teams now gets drafted in an afternoon. Experiments are cheaper, iteration is faster, and the barrier to entry for creating new products has never been lower. But speed in one part of the system often exposes constraints elsewhere. Recently, I’ve been reading Abundance, Ezra Klein and Derek Thompson’s new book on...
The junior employee who says: “Managers are a complete waste of money - they just sit around doing nothing while others work.” The first-time founder who says: “Big-firm lawyers are a total rip-off. I’m paying $700/hour for a contract that should just be a free template.” The nursing student who says: “Ugh, doctors don’t know ANYTHING.” The independent consultant who says: “Those jerks at McKinsey are a scam. People pay them millions and all they do is create a PowerPoint and walk away.”...