[Part 1] The Formula for Over 90% Day Service Utilization: What is Your Facility's Utilization Rate?

Thank you for reading last week's kickoff article! From this point on, the main series officially begins.

Before we dive into the main topic, I'm sure some of you have found my article for the first time, so please let me introduce myself briefly!

In this series, I will deliver the "management logic for achieving over 90% utilization without overworking the staff" that I have cultivated over 18 years in the field!

The theme for this commemorative first installment is to delve into the "utilization rate," a metric that is the most important for operating a day service, yet also the most confusing for staff.

Chapter 1 | Can you calculate the "utilization rate" off the top of your head?

Let's start with the basics.
If you are an owner or manager who thinks, "Why are we going over this now?", please feel free to skip this part!

In short, the utilization rate is the percentage of "how many customers actually used the service relative to the capacity?"
*Naturally, this is calculated not only for day services but also for residential facilities.

For example, let's assume there is a day service with a capacity of 30 people.

• Exactly 30 people used it: Full house! 100%

• 26 people used it: 26 ÷ 30 = 0.866... which means 86.6%

To make it easier to visualize, if we calculate backward from target numbers, it looks like this.

• Utilization rate 90%: 30 people × 0.9 = 27 people

• Utilization rate 80%: 30 people × 0.8 = 24 people

• Utilization rate 70%: 30 people × 0.7 = 21 people

This is the calculation method for daily (single-day) utilization rates.

So, what is the "monthly utilization rate" that we managers and owners usually track? It is nothing more than the "average (accumulation) of daily utilization rates."

For example, in the case of a facility that is closed on Sundays, out of 30 days in a month, subtracting the 4 Sundays leaves "26 days" as the operating days for that month.

In other words, the MAX (100%) capacity for this month is 30 people × 26 days = "780 people".

Against this "780 capacity," how many total people actually used the service?
This is the true nature of the "monthly utilization rate."

Up to this point, you might be thinking, "Yeah, yeah, I know that." However, this is where we get to the main point.
I will talk about a point where many managers fall into a terrible trap.

Chapter 2 | What You Learn When You Ask Other Facility Managers, "How's Your Utilization This Month?"

When I was active in the field, I often asked other facility managers this question.

"How's your utilization this month?"

Then, many managers would open their management screen and confidently answer with the "monthly projected utilization rate" displayed there.

However, there is a big trap here. The number on that screen is merely a "projected value if everything goes until the end of the month without any trouble," and it is not the realistic figure as of today.

The day service field is a living thing.
Sudden hospitalizations during the month, same-day cancellations due to poor health... the reality is that the utilization rate definitely "decreases" as the days go by, isn't it?

What I really wanted to know was not the projected value for the end of the month, but
"What is the percentage as of today? (Cumulative utilization rate from the beginning of the month to today)".

Utilization rate is not a hopeful observation of the future, but nothing more than "the daily gritty accumulation (cumulative average value)".
*It is important to look at the reality up to today, rather than escaping into hopeful observations!

Chapter 3 | A Super Simple Calculation Formula to Determine the "Cumulative Utilization Rate as of Today"

"Calculating the cumulative utilization rate as of today seems like a hassle..." If you thought that, don't worry. The calculation is super simple.

For example, let's assume today is the "10th day" of business this month.

• 10-day MAX capacity: 30 people capacity × 10 days = 300 people

• Actual total number of users for 10 days: 240 people

Then, the calculation formula is this: 240 people ÷ 300 people = 0.8 (80%)

You can grasp the current situation in an instant, thinking, "Our realistic utilization rate as of the 10th day of this month is exactly 80%."

If you do not grasp this "realistic accumulation as of today," you will fall into the terrifying situation of "why is the sales revenue not reaching the target as expected at the end of the month..."

Chapter 4 | Even If You Scream "Oh No!" at the End of the Month, It Is "Too Little, Too Late"

If you have read this far, you already understand, right?

Yes, there is no point in staring at the projected utilization rate at the end of the month. Even if you rush to do sales when it gets close to the end of the month, panicking, "Oh no! It looks like it's going to be under 70% this month!!", it is completely "too little, too late".

As I have mentioned before, the utilization rate is simply the "average number of daily users."

That is precisely why the top priority for us as managers, life counselors, and leaders every day is to "eliminate the fluctuations in the daily number of users and standardize it to a consistently high average".

Let's try to visualize the daily routine at the facility.

Monday
30 people (100% - fully booked!)
➔ The staff is exhausted... "Bathing is so hard! It's impossible!"

Tuesday
21 people (70%)
➔ The staff feels, "Oh, today is a bit easier."

Even if you hit 100% on Monday, if it drops to 70% on Tuesday, the average utilization rate for those two days is diluted to 85%.

To "increase the utilization rate and stabilize management" depends on how well you can eliminate these intense daily fluctuations and keep it "flat (stable)" at a high level.

Chapter 5 | The "Two Iron Rules" and Mid-term Checks to Keep Numbers Steady

So, what should facility leaders do to eliminate daily fluctuations?

There are broadly two points.

1. How to prevent "cancellations" before they happen

2. How to encourage "additional usage" through events and planning

For example, when a user takes a day off for personal reasons (such as a hospital visit), do you just leave it as "minus one person"?

If you immediately suggest, "Shall we reschedule your day off to next week on [day]?" and arrange a make-up session for the following week, you can bring the overall facility numbers to [±0]. This accumulation of individual efforts will bounce back as a difference of several percentage points at the end of the month.

That is why managers are required to keep a close eye on daily fluctuations in numbers and make detailed "mid-term checks" and "course corrections" on a weekly basis.

Conclusion

Next time, I will talk about the topic everyone is most interested in: "Money (Income)"!

This time, I focused entirely on the essence of the utilization rate and "how to calculate the correct figures"!

……Actually, I was planning to write about the money side of things, like "how much revenue specifically increases when the utilization rate goes up?" all at once after this! Haha
However, it looked like it was going to be a very long article, so I decided to break it off here!

So, next time (next Monday), I will delve into the "reality of day service income (sales)" based on what we discussed today.

• How much money does the facility actually receive when a user visits for one day?

• How does the annual cash flow change when the utilization rate increases by 10%?

I will explain the "numerical tricks" that managers and administrators absolutely must know in an easy-to-understand way, so please look forward to it! 👋