Should you create channels or separate Teams?

Create a separate Team when a different set of people needs access. Create a channel when the same people need another conversation. Permissions decide it, because a Team is a security boundary with its own SharePoint site, and a channel is an organising device inside that boundary.

This is the question that determines whether a Teams deployment is usable in two years, and it is usually answered by instinct rather than by rule. The instinct is to create a Team for everything, because creating one is easy and it feels like organisation. What it actually creates is another SharePoint site, another set of permissions and another thing to own, so the cost is invisible at the moment of creation and obvious eighteen months later.

Work from the access list instead. A client engagement where the client will be a guest needs its own Team, because you cannot let them see everything else. Finance needs its own Team, because not everyone should see it. A project involving the same operations people who already share a Team does not: it needs a channel. The test is simple enough to apply in the moment: if the answer to who should see this is the same as an existing Team, you want a channel there.

Private channels sit between the two and are worth using sparingly. They restrict a conversation to a subset of a Team and quietly create their own SharePoint site, so they carry more weight than they appear to. Genuine sub-groups, such as leadership within a department, are a fair use. Wanting a quiet corner is not. If you find yourself creating several private channels in one Team, the honest reading is that the Team's membership is wrong. If you want the structure designed against who actually needs what, call 1800 456 567.