Your team feels wrong. Work piles up. Deadlines slip. But you can’t tell if you need more people, fewer people, or just different people.
This confusion costs money. It burns out good employees. It slows growth.
Right-sizing your team requires three inputs: workload, revenue, and runway. This guide shows you how to combine them into a clear decision.
Key Takeaways
- Measure workload—quantify actual work demand
- Assess revenue—evaluate financial capacity
- Calculate runway—determine time available
- Apply framework—make clear decision
- Execute choice—hire, wait, or restructure
Table of Contents
The Decision Framework
Three questions determine team size:
- Can current people handle the workload?
- Can revenue support new hires?
- Do you have runway to wait?
Answer all three. Then decide.
When to Hire
Hire when:
- Workload exceeds capacity
- Revenue covers new hire costs
- Runway supports onboarding time
When to Wait
Wait when:
- Workload is manageable
- Revenue is uncertain
- Runway is short
When to Restructure
Restructure when:
- Workload is misaligned
- Revenue can’t support growth
- Current structure creates waste
Pro tip: Use our TAM SAM SOM Calculator to evaluate market opportunity and inform team size decisions. Calculate market size to understand growth potential.
Workload Assessment
Measure actual work demand. Don’t guess.
Current Capacity
Calculate current capacity:
- Hours available per person
- Productive hours per week
- Total team capacity
Why this matters: Capacity shows what you can handle. If you don’t measure capacity, you can’t compare it to demand.
Work Demand
Measure work demand:
- Hours required for tasks
- Projected workload growth
- Peak demand periods
Why this matters: Demand shows what you need. If you don’t measure demand, you can’t see the gap.
Capacity Gap
Calculate the gap:
- Compare capacity to demand
- Identify shortfalls
- Measure gap size
Why this matters: The gap shows the problem. If you calculate the gap, you see the problem size.
Revenue Analysis
Revenue determines what you can afford.
Revenue Stability
Assess revenue stability:
- Study revenue trends
- Evaluate revenue consistency
- Compare revenue patterns
Why this matters: Stability shows sustainability. If you assess stability, you see sustainability.
Hiring Costs
Calculate hiring costs:
- Salary and benefits
- Onboarding expenses
- Training costs
Why this matters: Hiring costs show affordability. If you calculate costs, you see affordability.
Revenue Capacity
Evaluate revenue capacity:
- Compare revenue to costs
- Assess hiring affordability
- Study financial capacity
Why this matters: Revenue capacity shows feasibility. If you evaluate capacity, you see feasibility.
Runway Calculation
Runway shows how long you can wait.
Cash Runway
Calculate cash runway:
- Current cash balance
- Monthly burn rate
- Time until cash runs out
Why this matters: Cash runway shows urgency. If you calculate runway, you see urgency.
Growth Runway
Assess growth runway:
- Revenue growth rate
- Time to profitability
- Growth sustainability
Why this matters: Growth runway shows opportunity. If you assess runway, you see opportunity.
Decision Timeline
Set decision timeline:
- Define decision deadline
- Create timeline structure
- Build timeline framework
Why this matters: Timeline creates urgency. If you set timeline, urgency increases.
Making the Decision
Combine all three inputs. Make the call.
Decision Matrix
Use decision matrix:
- Map workload to decision
- Map revenue to decision
- Map runway to decision
Why this matters: Matrix creates clarity. If you use matrix, clarity improves.
Decision Execution
Execute decision:
- Hire if all signals point to hire
- Wait if signals are mixed
- Restructure if structure is wrong
Why this matters: Execution creates change. If you execute, change occurs.
Pro tip: Use our TAM SAM SOM Calculator to evaluate market opportunity and inform team size decisions. Calculate market size to understand growth potential.
Your Next Steps
Right-sizing requires clear assessment. Measure workload, analyze revenue, calculate runway, then make the decision.
This Week:
- Begin measuring workload and capacity using our TAM SAM SOM Calculator
- Start analyzing revenue stability
- Begin calculating runway
- Start applying decision framework
This Month:
- Complete workload assessment
- Finish revenue analysis
- Calculate runway accurately
- Make hiring, waiting, or restructuring decision
Going Forward:
- Continuously monitor workload, revenue, and runway
- Reassess team size regularly
- Adjust decisions as conditions change
- Optimize team structure continuously
Need help? Check out our TAM SAM SOM Calculator for market evaluation, our role design guide for job planning, our capacity planning guide for workload balance, and our staged hiring guide for phased growth.
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Sources & Additional Information
This guide provides general information about team sizing decisions. Your specific situation may require different considerations.
For market size analysis, see our TAM SAM SOM Calculator.
Consult with professionals for advice specific to your situation.
