The Monthly Recurring Revenue Capacity Equation

The podcast discusses the importance of understanding the Monthly Recurring Revenue (MRR) capacity equation and how it can significantly impact business growth. The formula takes into account the average price of services, the number of deals closed per month, and the churn percent. By knowing these three data points, businesses can determine their current revenue potential and identify areas for improvement. For example, the podcast provides a case study of a client who caps at $200,000 per month based on their current MRR capacity. The discussion also highlights the need to focus on the key factors that disproportionately contribute to business growth, such as closing more deals or reducing churn, and the importance of building the right processes and systems to overcome constraints.