Fiducia TogetherCapacity utilisation
How much of your total capacity is being used. The number behind most operational decisions.
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.
What it means
Capacity utilisation is actual output divided by maximum possible output, as a percentage.
Why it matters
Fixed costs are spread over output, so utilisation drives unit cost directly. A hotel at 40% occupancy and one at 80% have very different economics on identical costs.
What it looks like in practice
Low utilisation means each unit carries more overhead. That is the argument for marginal pricing to fill spare capacity — see contribution.
What to watch out for
Adding capacity in response to a peak. Peak demand is not average demand, and capacity added is a fixed cost that stays after the peak.
Where to get proper advice
Your own output against capacity, tracked over a year to see the seasonality.
Where to read more
Last reviewed 2026-08-28 by Fiducia Together · Next review due 2027-08-28
Please note: This page explains what a term means. It is general information, not legal, financial, tax or investment advice, and it does not know anything about your business. Before you sign, file or commit to anything, check it with an accountant, a solicitor, or the official guidance we link to.