The last slice of utilisation is the most expensive thing you sell

Pushing chargeable time from 80% to 95% looks like free capacity. The arithmetic of queues says you have just quietly rewritten your delivery promise.

By Steve 5 min read
Abstract bridge artwork for The last slice of utilisation is the most expensive thing you sell

A pattern shows up often enough in service businesses to be worth naming. Utilisation targets get tightened: chargeable hours per head rise from something like three days a week to something closer to four and a half. Revenue per head improves, modestly. And then, over the following two or three months, something else happens that nobody connects to the decision: quoted lead times stretch, delivery dates start slipping, the same three clients begin chasing weekly, and a category of work appears that didn’t exist before, the rush job, the expedite,…

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Important: General information only. Rialto Bridge articles describe patterns and considerations that may apply to a business; they are not financial, legal, tax or accounting advice, and they take no account of your particular circumstances. Consider your own situation and seek advice from a qualified professional before acting.

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