Capacity utilization

Capacity utilization measures how much of available service capacity is actually being used. The calculation: scheduled hours / available capacity hours. A 3-tech operation with 40 available hours per tech per week has 120 hours of weekly capacity; if 96 of those hours are scheduled with customer work, capacity utilization is 80%.

Capacity utilization is distinct from billable utilization. A schedule full at 100% capacity might still have only 70% billable utilization due to drive time, admin, etc. Capacity is about demand-supply matching; billable utilization is about labor productivity.

For service operators, capacity utilization signals whether demand is appropriately matched to supply. Sustained capacity utilization above 90% suggests undersized capacity (turning away work, customers waiting too long, missed revenue). Below 60% suggests oversized capacity (idle techs, marketing investment underperforming). The healthy range is 75-90% during stable seasons.

Seasonal businesses (HVAC heavy summer demand, lawn care heavy spring through fall) plan capacity around peak rather than average. Maintaining ~85% capacity utilization at peak ensures both that customers don't wait too long and that techs aren't sitting idle. The off-season may run lower capacity utilization, accepting some idle time to maintain peak readiness.