Blog · Territory, capacity and quota planning
Allocate a declared productive-hours budget between existing-account expansion and new customers. Use separate productivity, margin and timing assumptions and test feasible combinations.
Sales-plan capacity allocation between new business and expansion asks how to use the productive selling time left after existing obligations. A team can have enough total headcount and still allocate too much of its effort to a motion whose opportunities cannot land inside the plan period. Distinguish the motions before combining their revenue contributions.
The capacity guide owns the total productive-capacity calculation. This guide takes an available capacity budget and allocates it between existing-account growth and new customers.
Separate required account service, renewal activity and administration from discretionary growth time. Expansion calls may be combined with a renewal conversation, but do not count the same hour in both capacity pools unless the allocation rule explicitly splits it.
Use productive hours available in the planning period after leave, ramp and other obligations. A headcount total is not the same as that capacity. If a specialist supports both motions, treat their hours as a separate shared constraint rather than assuming every seller can substitute for them.
For each motion, define the opportunity population, selling activities, expected period of revenue recognition or invoicing, incremental margin and historical reference. Keep one revenue basis across the plan.
If using revenue per productive hour, derive it from comparable historical activity and matched outcomes where available. Document lag: prospecting this quarter may produce next year's revenue. An average from established relationships cannot automatically represent newly hired prospectors.
Treat the inputs as assumptions with ranges. A linear model is a useful first review, but additional hours can have diminishing returns or encounter an opportunity limit. Do not infer that doubling hours will always double revenue.
Choose constraints that represent actual commitments: an eligible expansion opportunity pool, minimum new-customer work, owner-specific capacity, specialist availability and delivery onboarding limits. Record the business reason and owner for each limit.
The account-priority guide handles selecting individual growth accounts. At this stage, ensure the aggregate expansion workload does not exceed the candidate work those accounts can support.
Microsoft's Solver documentation describes objective calculations subject to constraints. For a modest planning exercise, a few explicitly tested allocations can be easier to review than a complex optimizer.
The example below assumes 1,000 productive growth hours after routine obligations. Amounts are invented, not a benchmark or product result. Expansion is limited to 600 hours by the reviewed opportunity pool, and at least 400 hours are reserved for new-customer work.
| Motion | Assumed revenue per hour | Incremental margin | Contribution per hour |
|---|---|---|---|
| Existing-account expansion | $500 | 30% | $150 |
| New business | $300 | 40% | $120 |
Despite new business having the higher margin percentage, expansion has the higher contribution per assumed productive hour.
| Allocation | Expansion revenue | New-business revenue | Total revenue | Total contribution |
|---|---|---|---|---|
| 600 expansion / 400 new | $300,000 | $120,000 | $420,000 | $138,000 |
| 500 expansion / 500 new | $250,000 | $150,000 | $400,000 | $135,000 |
Moving 100 hours from expansion to new business reduces revenue by $20,000 and contribution by $3,000 under these assumptions. Neither result is a forecast; each is conditional on the stated productivity and cost basis.
Reduce both revenue-per-hour assumptions by 25%. The 600/400 allocation then produces $225,000 expansion and $90,000 new-business revenue, totaling $315,000. At unchanged margins, contribution is $103,500.
Test different motions separately too. If new-business productivity rises or expansion eligibility narrows, the preferred feasible split may change. Keep the original allocation and its input version so the decision is not reconstructed from a later result.
Microsoft's SUMPRODUCT reference supports the hours-times-productivity arithmetic. Check that allocated hours do not exceed capacity and that the two revenue components sum to the chosen growth contribution in the broader plan.
An account manager and a new-business seller may not be interchangeable. Test role-specific productivity and any handoff cost before transferring time. Align the allocation with territory ownership and crediting rules so two teams do not count the same expansion opportunity.
Keep the quota buffer distinct from productive capacity. Raising assigned quota is not a substitute for changing the motion mix or making resources available.
Publish available hours, selected split, constraint owners, productivity evidence, downside scenarios and the next review trigger. Use sales-plan change control when approvals alter the allocation. Discuss the available activity and revenue records with Covirage before assuming a report can prescribe role changes or deliver the conditional revenue shown in a scenario.
Only if the roles, opportunity mix, time commitment and revenue basis are genuinely comparable. Expansion and new business often require different activities and timing, so declare their assumptions separately before combining the plan.
No. Revenue produced per hour, opportunity limits, relationship commitments, required new-customer coverage and execution constraints also matter. Compare contribution per constrained hour and feasible combinations rather than margin alone.