Business owners are used to tracking sales, costs, and margins.

But, there’s another metric that is hidden in plain sight, that can make or break your business: asset utilization.

Think of it as the percentage of time (or capacity) that an asset is actually being used, compared to the total time it could be. The opposite of this is the idle rate.

Restaurant example

Let’s say you rent a restaurant space. You pay for it 24/7, but you only operate 5 days a week, 8 hours a day.

• Hours in a month: ~730

• Hours you operate: ~170 hours

• Utilization rate = 23%

• Idle rate = 77%

That means, you are paying rent for the space to sit empty A LOT.

This is one (of the many reasons) why restaurants are tough, low-margin businesses. The fixed cost is there, whether you are serving customers or not.

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Restaurant solution

What if three chefs each ran their own restaurant concept in the same space:

• Breakfast/brunch

• Lunch

• Dinner/late night

Suddenly:

• The space is used nearly 24/7

• Each chef’s rent cost per hour drops

• Everyone has a higher chance of making a profit

Bonus: Cooking classes on the weekend. After all, it comes with no extra rent-related costs!

Now, you might wonder, well, I don’t have a restaurant, so this doesn’t apply to me. Idle assets are everywhere.

• Gyms are packed between 6 am and 9 am, as well as 5 pm and 8 pm. However, there’s not much going on in the middle of the day, as most of its customers are working.
  Solution: Rent the space to yoga instructors, host corporate wellness sessions, or run kids’ fitness programs during off-peak hours.

• Trucks & delivery vans sit in the parking lot outside delivery times.
  Solution: lease them to other businesses looking for their deliveries when you’re not using them.

• Event venues are booked on weekends but empty during the week.
  Solution: Offer discounted weekday rates for corporate workshops or community events.

• High-end equipment (photography studios, 3D printers) is often used for only a few hours a week.
  Solution: Rent to freelancers or other businesses.

• Office spaces come very close to the first restaurant example in terms of utilization/idle rate.
  Solution: List them on coworking or event rental platforms

The list goes on.

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The Mindset Shift

It is common for business owners to think of certain costs, like rent or equipment, as fixed. But if you increase its utilization rate, suddenly the cost per hour decreases. So start asking:

• What percentage of the time is this asset making me money?

• Could someone else use it during the “dead” hours?

• Could I repurpose it for another type of customer?

You’re already paying for these assets 24/7.

Instead of cutting costs, sometimes the smarter move is to make what you already have work harder for you.

There is often a great opportunity in squeezing more value out of what you already own.

The impact

Most industry data points put average restaurant rent at ~7% of gross sales.

When staring out, it’ll likely be higher, as it takes time to build relationships with customers. But if it stays at 10% or above, likely there’s no profit.

And here’s the bonus. Sharing a space doesn’t just cut costs - it might allow you to afford a better location, with higher foot traffic, at at same, or lower cost.

Higher utilization, lower risk, bigger upside.

The other side of the equation

You can use this same approach if you’re on the other side. If you're passionate about cooking, starting a restaurant is a significant leap. It requires a significant upfront investment, which might not work well.

But what if you could rent the kitchen of an already existing restaurant for a few hours a day, outside of its business hours? You have the opportunity to give it a try, without making the big jump, while the restaurant gets some compensation for the idle equipment!

If you are stuck, overwhelmed, or need help with brainstorming, reach out to kosta@ristovskiconsulting.com to explore what’s possible..

All by himself.

He leased a warehouse, sourced raw materials, purchased the necessary equipment, created his website and an Etsy shop, and started selling.

The average selling price was $4,000. He was selling ~100 products per year.

All of this sounds good. However, he wasn’t a business person. After the pandemic, the sales were down ~40%, and he was feeling exhausted.

He has been doing the same thing, alone, since 2017. The dream had started to feel like a trap. The drudgery of fulfilling orders was replacing the passion that started the business.

So, he hired me.

I spent ~3 days with him, trying to understand everything he does, while also getting to know him as a person. During those three days, five key actions were identified that ultimately led to $85,000 in additional annual profit.

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#1 The elephant in the room - Shipping

Shipping large physical products is costly, especially if the majority of the customers are in a different country (in this case, from Canada to the United States).

These costs were steep, sometimes over $1,000 per product. At first glance, there’s not much to be done. After all, a small business owner has no leverage.

However, there were occasional returns, and these were particularly damaging.

• Item shipped: $1,000

• Item returned to Canada: $1,000

• Item sold again: $1,000

Total: $3,000 in shipping costs.

But it gets a bit worse. When the first customer ordered the bed frame, it was "custom-made” for him, and the $4,000 selling price was justified.

Once it was returned, it was no longer custom-made for the next buyer. It was a bed frame waiting for a buyer. Therefore, it had to be heavily discounted.

So every return resulted in an unprofitable sale.

Solution: We partnered with a fulfillment warehouse located in the U.S. Returned items were shipped directly there, repackaged, and then shipped out to new customers. This simple logistical shift drastically cut shipping costs and freed up his time.

#2 We improved the paid advertising campaigns

A significant part of the three days was focused on how the products were presented online and what could be improved.

The SEO was already looking good, and the impressions were there.

His products were of premium quality, but his online presence didn’t fully reflect that. The traffic was there, but the ads, imagery, and copy weren’t compelling enough to convert visitors into buyers.

Solution: Start from scratch. We replaced basic product shots with high-quality images that told the story of his craftsmanship, showcasing the entire process from raw wood to finished product. This visually justified the premium price. We paired this with more descriptive headlines and copywriting that captured the artistry behind the work. The result? A higher conversion rate and more sales, without increasing his ad spend.

#3 We monetized unused warehouse space (and parking lots)

During busy periods, less than half of the warehouse was in use. When the business was started, there was no smaller warehouse available around that area, and this one had an acceptable price.

Solution: Sublease part of the warehouse, as well as the two unused parking lots.

The biggest problem was his isolation and burnout. He was a creator who had become an assembler, and the lack of social interactions was draining his energy.

So, that’s what we aimed to fix next.

#4 Workshops

Woodworking is a profession for many, but it can also be a hobby. So, we brainstormed around the idea of organizing workshops.

His manufacturing process was highly organized, and he was working on five bedframes at once.

So, we identified a few activities in the process, where a complete amateur could follow his instructions, and do “an okay” job. Not a great job, but also not one where the product is ruined.

The workshop was a win-win:

• The payment for a 4-hour workshop was low, which attracted many people who wanted to learn the basics of woodworking from a professional.

• Although he is more experienced and can do the job faster than the rest, it would take him longer than five amateurs under his supervision; and

• He got to socialize, teach, and share his passion, which fought off the loneliness and reignited his creative spark.

#5 The big reward

With the above decisions:

• The conversion rate was higher, leading to more sales;

• The shipping costs were reduced;

• No time was spent on repackaging returned products;

• Unused warehouse space and parking lots were monetized;

• A workshop income stream was introduced;

• Manufacturing time was slightly reduced.

What started as an exhausting one-man operation became a revitalized business, with an extra $85,000 in profits.

But the real reward wasn’t just the money. It was the freedom. With a more efficient and profitable business, he finally had the ability to hire others to manage the day-to-day orders. This allowed him to get back to what he loved: designing new products and being the architect of his business, not just a lonely worker in it.

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If you found this business case helpful, please feel free to share it with a fellow business owner.

If you are stuck, overwhelmed, or just know there’s more potential waiting to be unlocked, let’s talk. I work with solo founders and small business owners to fix what’s not working and grow what is.

This is a no-cure, no-pay service. If I don’t create value for you, you don’t owe me a cent.

Reach out at kosta@ristovskiconsulting.com to explore what’s possible.