Utilization Rate

Utilization rate measures the percentage of available capacity that actively generates revenue during a given period. For equipment hire businesses, it tracks the proportion of hire days - or units - in service versus sitting idle. For service teams - electrical contractors, AV technicians, installation crews - it measures billable hours against total hours available. The underlying principle is the same in both cases: idle capacity cannot recover its cost. Utilization rate is the number that connects fleet size, team size, and pricing to actual profitability.

Equipment Utilization Rate

The standard formula for time utilization is: (Days on Rent / Total Days Available) × 100. For stock-based hire: (Units Currently on Rent / Total Available Units) × 100.

Industry targets for general equipment rental put the optimal range at 65% to 75%, with approximately 70% considered the target for most equipment types (Quipli, 2026). The thresholds either side are practical guides:

• Below 60%: excess fleet not earning. Items consistently below this mark are candidates for disposal, cross-hire, or fleet reduction.
• 65-75%: the target zone. Fleet is earning well while remaining available for unscheduled bookings.
• Above 80%: demand is outpacing supply. At this level, bookings are being turned away - typically a signal to expand rather than simply optimize.

Financial utilization adds a second dimension: Revenue Generated / Acquisition Cost. An item can show strong time utilization but poor financial utilization if hire rates have not kept pace with depreciation and replacement costs. Both measures together provide the complete picture.

Staff and Technician Utilization

For service businesses, the formula shifts to hours: (Billable Hours / Total Available Hours) × 100. A technician with 40 available hours who bills 28 runs at 70% utilization. Most small and medium-sized service businesses target 65% to 75% billable utilization. The remaining 25% to 35% covers travel, admin, training, and unbillable remedial visits. Consistently below 60% points to overstaffing relative to demand, or a failure to capture billable time at the job record level.

Zigaflow's inventory and job management tools link equipment to job records and delivery notes, providing the data needed to calculate utilization per asset or category and identify items that consistently underperform against fleet averages.