Free Tool
What does an hour of downtime actually cost you?
Work out what an hour of your operation costs to run, then what you lose every time it stops. Two minutes, no signup, and the number is yours to keep.
Most calculators ask you for a number nobody has
They want your lost revenue per hour. Almost nobody can state that, so the field gets left at zero and the answer comes out meaninglessly low.
This one builds it up instead. First it works out what an hour of your operation costs to have available at all, which is a number worth knowing on its own. Then it works out what you lose when that hour produces nothing.
The part that surprises people is that the overhead does not stop when the machines do. Rent, machine finance, subscriptions and salaries all keep running through an outage. You just have no production to recover them against.
Step 1
What an hour of your operation costs
Most people can't answer this off the top of their head, which is why the cost of losing an hour never gets worked out. Build it up here first.
What counts as overhead, and the bits people leave out
Everything that doesn't change job by job. Rent and rates. Utilities. Insurance. Machine finance, leases and depreciation. Software subscriptions. Admin, management and your own salary. Vehicles and fuel. Accountancy and professional fees. Maintenance contracts.
It does not include the garment, the thread, the film, the ink or the transfer. Those are direct costs and they belong to the job, not the hour.
The three most commonly missed: your own salary, machine depreciation, and the software you forgot you were paying monthly for.
Machines or stations that can run work
52 less holidays and shutdown
The share of available hours actually spent producing, after setup, changeover, maintenance, reruns and hours with nothing booked in. This is the number that gets assumed at 100%, and it is the single biggest reason businesses underprice.
Out of 7,360 theoretical hours. The gap is the part nobody prices.
Step 2
What happens when it stops
Wage plus NI and pension
In this sector the deadline doesn't move. Kit needed Friday for a Saturday match is worth nothing on Monday, so a missed deadline is a scrapped job rather than a late one.
Your numbers
Overhead recovery rate
£38 / productive hour
What every productive hour has to earn before materials and before any profit.
One hour down costs
£146
One full day down costs
£1,165
| At 24 hours lost a year | Cost |
|---|---|
| Overhead you still paid but never recovered | £903 |
| Wages for people who couldn't work | £2,592 |
| Work scrapped or missed | Not included |
TOTAL ANNUAL COST OF DOWNTIME
£3,495
That is 1.9% of your annual overhead, spent on hours that produced nothing.
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What to do with the recovery rate
The recovery rate is the more useful of the two numbers, and most businesses have never calculated it. It tells you what each productive hour has to earn towards your overhead before you have paid for a single garment or a gram of thread.
Take it into your quoting. If a job needs thirty minutes of machine time, it has to clear half your hourly rate in contribution above its materials just to break even. Quote below that often enough and you will be busy and unprofitable at the same time.
That is the answer to a question I get asked a lot: we are flat out, every job makes money, so why is there nothing in the bank? Margin is earned per job. Overhead is incurred per hour. If you are recovering less per hour than the hour costs, more volume makes it worse rather than better.
Watch the utilisation slider too. Pricing off theoretical hours rather than real ones is the most common way to arrive at a rate that looks fine and does not cover the business.
Why downtime costs more in decoration than most places
The deadline does not move. A distributor can ship a day late and apologise. You cannot. The match is Saturday, the event is Friday, and a box of shirts nobody wore is scrap rather than stock.
It is also worth being honest about what counts as an outage. It is not only the server being down. If the internet drops and your phones run over it, you cannot take an order. If the artwork system is unreachable, production stops even though every machine is working perfectly. If nobody can see what is in stock, picking stops.
A useful test, and it costs nothing: pick a quiet hour, pull the internet, and write down what still works. Most owners find the machines keep running and everything around them stops.
If the number was higher than you expected
That is the finding, and it is usually a process and systems problem rather than an IT spending problem. A Clarity Audit is a full day on site working through where the hours and the money are actually going, with everything it costs you in writing within five working days.