Start with a reasonable baseline, monitor CPU, RAM and database behavior, then scale from evidence rather than guessing far ahead.
CPU pressure
PHP execution, image processing, imports and heavy uncached requests can make CPU the first limit.
Memory pressure
PHP workers, database buffers, Redis and the operating stack all consume RAM. Swapping is a warning sign, not a capacity plan.
Storage and I/O
Large media libraries, backups and database growth affect disk size and I/O. Do not size only around today's WordPress directory.
Concurrency
A store with many simultaneous checkouts can be harder than a blog serving far more cached pageviews.
Where Cloudways enters the decision
Cloudways Flexible lets you choose and vertically scale server resources. Use monitoring and load characteristics to decide when to resize rather than treating the smallest plan as a universal recommendation.