Do you know your client capacity — the maximum number of clients you can serve well given your resources?
You should always try to have an understanding of your capacity, says Julie Littlechild, founder of Advisor Impact Inc. in Toronto. Otherwise, you run the risk of going over capacity — having more clients than you can handle, which can result in unsatisfied clients and lost business.
You will know when you have gone beyond capacity, Littlechild says, “when you feel that things are slipping through the cracks. You’re just not doing the job you want to, or you feel rushed and that your to-do list is too long.”
Having too many clients can make you reactive rather than proactive, and can hinder your ability to focus on building better relationships with your top clients.
Littlechild suggests a method to calculate the number of high-level clients you can manage before the workload becomes too much to handle. The first step involves a series of questions to help you arrive at the amount of time you should spend at the office, working with clients and working on your business.
First, ask yourself the following questions:
1. How many weeks during the year am I available for proactive client contact?
Being proactive means you are in the office and available to meet with clients, Littlechild says.
Exclude any vacation time, statutory holidays and even busy periods when you tend to be reacting to client requests. For example, if you spend the month of February discussing RRSPs with clients, you should not consider that month in your calculation.
So, if you have decided to take four weeks’ vacation and exclude four weeks in February for RRSP season, you are left with 44 weeks out of 52 for the year. (These numbers will be used to help you calculate your capacity in the second part of this series.)
2. How many hours a week do I want to work, on average?
Establish a reasonable number of hours to work, keeping your goals and lifestyle in mind, Littlechild says.
For example, if you decide to dedicate 50 hours a week to your business, consider the effect this allotment of time will have on your personal responsibilities and interests. Do you have young children who require your personal time? Do you like to participate in social or recreational activities?
Once you have acknowledged the time needed for your other commitments, you might decide that 45 hours a week is more appropriate.
3. How many hours a week do I want to devote to activities other than client management?
In order to be proactive, you must learn to distinguish between “important” and “urgent” tasks. One important task that can easily be neglected is planning for your business. This activity is at least as important as client management, Littlechild says.
“You must be realistic about how much time you need to put into those activities,” Littlechild says. “Otherwise, your goals are at risk.”
So, consider how many hours per week you feel should go toward long-term planning, marketing and continuing education. For the purpose of this calculation, let’s say you decide to devote five hours a week to business planning.
Your next step will be to crunch the numbers you have arrived at through these three questions to calculate your capacity.
This is the first part in a two-part series on capacity. Next: Calculating the capacity of your practice.