Dr. Paul Borosky, DBA, MBA
Business Consultant · Operations Glossary
How Do You Calculate Equipment Downtime and Its Cost?
When the oven goes down on a Friday night, the repair bill is the smallest part of the cost. Dr. Paul Borosky, DBA, MBA, sees this pattern often in his business consultant work. He explains how to calculate downtime, how to separate lost revenue from lost profit, and how a simple maintenance schedule cuts idle hours.
Questions? Call or text (321) 948-9588. Dr. Paul answers personally.
Last Updated: 11/07/2026 · Written by Dr. Paul Borosky, DBA, MBA
The Short Answer
What Is Equipment Downtime?
How to calculate it and its cost: log every hour a key machine is down, divide by scheduled hours, then estimate the cost three ways and keep them separate: lost revenue, the lost profit you never recovered, and the repair bill.
What Does a Breakdown Really Cost You?
In Plain English
The Hours Your Equipment Should Be Working
Downtime is the hours your equipment should be working but is not.
A breakdown costs more than the repair bill. The real cost is the sales you could not make while it was down, and that number is usually much bigger.
A Real-World Example
The Pizza Shop With a Dead Oven on Friday
A pizza shop in New York has its oven down for 6 hours on a Friday in March. The shop normally sells about $180 an hour then, so lost revenue is about $1,080.
Roughly a quarter of those orders came back on Saturday, and ingredients and packaging run about 30 percent of sales. Estimated lost profit is about $570, plus a $400 repair. A restaurant business plan that funds maintenance up front usually costs less than one bad Friday.
From Dr. Paul’s Fabled Forest
Commander Colt and the Cracked Wheel
Doctor Owl and Mrs. Owl-Willow were sharing a picnic by the creek when a tour wagon limped past on a cracked wheel. Commander Colt galloped after it.
“Just a bit more horsepower!” Colt called over his shoulder.
That evening, Colt stopped by, worn out. The wheel had cost only a few coins to fix. But the afternoon tours were canceled.
Doctor Owl unrolled a scroll and wrote three numbers. The first was the coins the canceled tours would have brought in. The second was the coins Colt actually lost after the riders who rebooked for the next day. The third was the coins for the wheel.
Colt stared at the middle number for a long time. It was many times bigger than the third.
The next week, Forest Trails & Tours started checking every wagon wheel on the first day of each moon.
Just one of many stories from Book 3 of Dr. Paul’s Fabled Forest Business School Series.
Dr. Paul’s Insight
Dr. Paul has owners price a breakdown by lost sales, not just the repair bill, before deciding on maintenance.
Put It to Work
Downtime and Its Cost
Downtime percentage = downtime hours ÷ scheduled hours × 100. For March (illustrative): 6 ÷ 240 = 2.5 percent.
Keep three numbers separate:
| Number | How to figure it | March (illustrative) |
|---|---|---|
| Lost revenue | Hours down × normal sales per hour | 6 × $180 = $1,080 |
| Estimated lost profit | Revenue never recovered, minus costs you did not spend | $1,080 × 75 percent not recovered = $810; minus 30 percent ingredients and packaging = about $570 |
| Repair cost | The bill | $400 |
About $570 in lost profit plus a $400 repair = about $970. Overtime to catch up would add to it.
Log columns: Date | Machine | Hours down | Cause | Repair cost | Lost revenue | Orders recovered
Watch Out
Mistakes When Measuring Downtime
The repair is usually the smallest part of the cost.
Some sales come back, and some costs were never spent. Estimate the profit.
Ten minutes a day adds up to hours a month.
The time saved today is borrowed against a bigger breakdown later.
Why It Matters
Benefits of Tracking Downtime
- Better maintenance decisions
- A clear case for backup equipment
- Fewer surprise closures
- More reliable capacity
In Your Business Plan
How Equipment Downtime Shows Up in a Business Plan
Lenders want to see that the business plans for breakdowns before they happen. A downtime log and a maintenance budget show it.
Sample plan excerpt: Operations, Equipment
“Downtime is logged for each key machine. In March, oven downtime was 6 hours, or 2.5 percent of scheduled hours, with an estimated financial impact of about $970 including repair. The plan funds quarterly preventive maintenance and a service contract, budgeted at $1,600 a year.”
FAQ
Questions Owners Ask About Equipment Downtime
What is planned vs unplanned downtime?
How do you reduce equipment downtime?
What is a good downtime percentage?
More From the Series
Keep Building Your Business
Every book in Dr. Paul’s Fabled Forest Business School Series teaches one subject through short stories, real terms, and one-page worksheets.
Dr. Paul Borosky, DBA, MBA
Dr. Paul is a business consultant and author with 14+ years of experience and 1,000+ written business plans. He works with owner-run small businesses on plans, financial projections, and the systems that let a business run without the owner doing everything. This page is part of the glossary for Operations for Small Businesses, Book 3 of Dr. Paul’s Fabled Forest Business School Series.
This page is for general educational purposes only. It is not legal, safety, accounting, or other professional advice. For decisions about your own business, consult a qualified professional.