Capacity Planning Guide for Software Development


The modern approach to start-ups and small businesses revolves around small teams. Maximizing efficiency while minimizing costs. It’s the same thinking that made coworking spaces a massive phenomenon.

Small teams are great. They reduce waste, increase communication, and reduce workflow hiccups. The downside is that it’s easier to become overwhelmed. 

Day-to-day operations run smoothly, but capacity is easily exceeded. That makes it hard to capitalize on opportunities, can impede growth, and even grind operations to a standstill. This is why capacity planning is so important.

Why Capacity Planning is a Must-Do

Capacity planning ensures that your team cannot only handle their daily tasks, but manage any additional demands that can come up. Essentially, it makes sure you have a sufficient capacity buffer to handle the increases in workload that can happen at any time.

An inability to meet this buffer can stunt growth and limit agility. In the fast-moving world of software development, agility and growth are paramount to creating high-quality functional products.

Questions a Capacity Plan Must Answer

What is Our Current Capacity?

Start by breaking down the maximum capacity of your current team. Review your time/task tracking software to discover how much of this capacity is used in a typical week. The difference between your maximum capacity and your used capacity is the “free capacity.” This free capacity is your buffer to manage spikes in workload, plan ahead, or resolve issues.

Too often, we see businesses who regularly meet or exceed their maximum capacity. It’s great working with teams that are devoted enough to put in the extra time and effort, but it also means they don’t have the time or resources available to manage anything extra that comes along. This means that, as good and dedicated as the team is, they are limited in what they can achieve.

Without a buffer, you can meet significant issues even in regular operations. If someone gets sick or quits, you may be unable to hit important deadlines.

Next, determine how much of a capacity buffer is needed. What workload increases can you anticipate, or extra features and iterations you may incorporate into your software development. Compare your ideal capacity buffer with your current free capacity. If they don’t match up, you may need to hire more staff, review workflows, and/or implement new technologies.

What is Your Expected Growth? 

Successful products don’t just look at where they are, they look to where they’re going. Software developers must consider how much their capacity load will grow. 

A software development roadmap is a good way to approach this. This gives you a sense of what features, and functions you’ll want to add, as well as anticipating user growth over time. Using this timeline helps you determine how much extra capacity you need to maintain buffer growth, as well as at what milestones you need to increase it.

Methods for Calculating Capacity

Load Generation

One of the most common ways to test capacity if load generation. This method starts from your normal workload and then adds in extra demands on the workload until capacity hits a failure point. The difference in the amount of extra demands before failure is the current buffer capacity.

In this process, the additional demands are synthetic rather than putting real stress on your capacity. This allows for testing without interfering with regular workflow. 


The opposite of load generation, this approach removes services from the software, continuing until they reduce to a point where the primary service can no longer function. The more services you can starve before failure, the greater your capacity buffer. 

This approach shows how far you can reassign capacity in times of need. Using this capacity buffer you temporarily limit your own services, but don’t need to tack on extra resources to manage capacity.

Capacity Planning Template

  1. Determine the free capacity of each service provided: What is your current buffer?

  2. Establish minimum capacity requirements: How much of a capacity buffer do you need?

  3. Account for project/product growth: Set a timeline to re-review capacity and your expected capacity growth over that timeframe. 

  4. Calculate:


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