What downtime actually costs a small shop

Honest math you can do on the back of a work order. No inflated industry multipliers, no counting the same dollar twice.

Every vendor selling maintenance software has a downtime calculator, and most of them are built to scare you. They multiply your downtime hours by your full revenue rate, add your wages on top of revenue that already includes those wages, and hand you a number designed to make their subscription look cheap. Shop owners can smell that math a mile off, and they should.

Here is the honest version. Three rules keep it that way.

Rule 1: never count the same dollar twice

The most common trick in downtime math is adding lost revenue and idle wages together. But wages are already inside your revenue. Say a machine hour bills $150, and you count the full $150 as lost. Then you add the $28 an hour you pay the person running it. You just counted that pay twice.

The clean way: split the two. Count idled wages once, because you paid those people whether the machine ran or not. Then count lost profit per machine hour after wages and material are already out. If a machine bills about $150 an hour and material plus the people running it eat about $50 of that, the honest profit number is $100.

Rule 2: only count hours that are gone for good

If your shop has slack and you make the work up Thursday night, that downtime cost you overtime and aggravation, not full profit. If you run booked solid with no slack, every lost hour really is gone. Most shops are somewhere in the middle, so put a percentage on it. Half is a fair starting guess. Sold out with no room to catch up means 100 percent.

One asymmetry worth keeping: idled wages count on every down hour regardless. The catch-up shift on Saturday does not refund the wages you paid people to stand around on Tuesday.

Rule 3: only count machines that matter

The backup mill that sits cold half the week should not inflate your number. Count the machines that stop work when they stop. In most small shops that is a shorter list than the asset list, and it is the list your maintenance attention should follow anyway.

The math, worked

Take a 12-machine shop where each critical machine loses about 4 hours a month across roughly a dozen breakdowns, half the lost work is gone for good, two people idle during a typical breakdown at $28 an hour all-in, profit runs $100 a machine hour after wages and material, and a typical breakdown adds $250 in rush shipping and repair bills.

Want your own number? Use the downtime cost calculator. Put in your shop's numbers, and the math runs as you type.

Notice what that number is not. It is not padded with the double-counted wages, it is not pretending every lost hour killed a sale, and it still lands at nearly a hundred grand a year for a modest shop. Honest math is scary enough on its own.

What to do with your number

• Start counting. If you do not track downtime yet, your inputs are guesses, and that gap is the first thing worth fixing. A clipboard works, and so does our free printable board. Machine, what happened, how long. When the clipboard fills up, the Downtime & OEE Tracker is the same habit with the math done for you.
• Put regular upkeep on your three worst machines first. It is almost always a few machines causing most of the pain, and a basic preventive schedule on just those changes the number fast.
• Run the math again in 90 days with real counts. However different the second number is from the first, that difference is what not tracking was costing you.

And if the number gets your attention, the fix is not complicated software. It is a schedule that flags what is overdue and a habit of writing breakdowns down. Two of our files do just that. One is the Preventive Maintenance Scheduler. One is the Downtime & OEE Tracker.

Questions? Is your shop not covered here? Write to support@breakdownboard.com. A person reads each one and writes back.