Template · Forecasting & Analytics
Annual Planning &
Capacity Model
Companies that build bottom-up capacity models achieve 91% of plan in year one, compared to 68% for those using top-down targets alone — a 23-point gap driven entirely by planning rigor.SBI Growth / McKinsey
The full annual planning workbook: headcount-to-quota math, ramp-adjusted capacity, coverage ratios, segment allocation, and a hiring timeline — all connected to your quota target and budget constraints.
Planning Framework
Four phases. One connected model.
Annual planning fails when Finance builds the target and Sales builds the plan in isolation. This framework connects them from day one.
01
Target Setting
Set the Number
Work backward from the board target to a segment-level ARR plan. Factor in net retention, expansion, and new logo mix.
- ARR target by segment & source
- New logo vs. expansion split
- Net retention assumptions
- Quarterly phasing model
02
Capacity Build
Model the Capacity
Translate the target into required headcount using ramp-adjusted quota capacity. Account for attrition, ramp time, and productivity curves.
- Ramp-adjusted rep capacity
- Required headcount by role
- Hiring timeline with start dates
- Fully-loaded cost per head
03
Coverage Analysis
Stress-Test the Math
Validate coverage ratios, pipeline generation requirements, and marketing demand targets. Identify the gap before it becomes a miss.
- Pipeline coverage by quarter
- Required pipeline generation
- Marketing-sourced vs. sales-sourced
- Sensitivity scenarios (±10%, ±20%)
04
Operationalize
Lock & Deploy
Finalize territories, set individual quotas, align comp plans, and build the Q1 operating rhythm. No plan survives contact — build the review cadence that catches drift early.
- Individual quota assignments
- Territory assignments
- Comp plan alignment
- Monthly plan-vs-actual review cadence
Capacity Model
Ramp-adjusted capacity — the real math.
Most capacity models overcount new hires. A rep hired in Q1 isn’t at full capacity until Q3. This model accounts for ramp curves, attrition, and quota relief.
| Line Item |
Q1 |
Q2 |
Q3 |
Q4 |
FY Total |
| AE Headcount |
| Starting AEs |
24 |
26 |
30 |
32 |
— |
| New Hires (start of Q) |
4 |
6 |
4 |
2 |
16 |
| Attrition (projected) |
2 |
2 |
2 |
3 |
9 |
| Ending AEs |
26 |
30 |
32 |
31 |
31 |
| Ramp-Adjusted Capacity |
| Fully-ramped AEs |
22 |
22 |
24 |
28 |
— |
| Ramping AEs (50% capacity) |
4 |
8 |
8 |
4 |
— |
| Effective Full-Capacity Equiv. |
24.0 |
26.0 |
28.0 |
30.0 |
— |
| Quota & Capacity ($K) |
| Quota per AE (full quarter) |
$250K |
$250K |
$250K |
$250K |
$1.0M |
| Gross Capacity |
$6.0M |
$6.5M |
$7.0M |
$7.5M |
$27.0M |
| Attainment Adjustment (85%) |
$5.1M |
$5.5M |
$6.0M |
$6.4M |
$23.0M |
| Plan Capacity (Ramp-Adj) |
$5.1M |
$5.5M |
$6.0M |
$6.4M |
$23.0M |
Planning Calendar
The Q4 planning sprint, week by week.
Annual planning is a 10–12 week effort that starts in early October. Here’s the cadence that keeps it on track.
Oct Week 1–2
Board target finalized
Retention assumptions locked
Historical data pull
Oct Week 3–4
Segment targets set
Capacity model v1
Headcount request drafted
Nov Week 1–2
Coverage stress-test
Pipeline gen requirements
Finance alignment
Nov Week 3–4
Scenario modeling (±10/20%)
Territory design
Comp plan drafts
Dec Week 1–2
Quota assignments finalized
Hiring plan locked
CRO sign-off
Dec Week 3–4
SKO prep & rollout materials
Q1 pipeline targets distributed
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