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The Fixed Cost Fallacy: Why Cost-Cutting is a Trap

Published January 28, 2026

1. The Disruption (Challenge the Model)

You think Profit = Revenue - Expenses.

So to increase Profit, you lower Expenses.

Mathematically true, but strategically false.

80% of your expenses (Rent, Payroll, Equipment) are a concrete block that doesn't move.

2. The Anchor (The Familiar Experience)

An Airplane costs $50,000 to fly from NY to London. That cost is Fixed — 1 passenger or 300.

Does the airline save money by serving cheaper peanuts? No.

They Fill the Empty Seats. The 200th passenger is pure profit.

3. The Reorganization (The "Oh" Moment)

Your Practice is the Airplane.

An empty chair at 2 PM isn't "saving on supplies." It is a plane flying with an empty seat. You paid to fly that hour, but got zero revenue.

Utilization is the only metric that matters.

4. The Why (The Mechanism)

This is "Operating Leverage."

Once you cover Break-Even, every dollar after is almost 90% profit.

Focusing on costs ignores the leverage. Focusing on volume exploits it.

5. The Solution (Compression)

The Utilization Rule:

Don't ask: "How can I lower my overhead?"

Ask: "How can I fill the 15% of my schedule that is currently air?"

Penny-pinching saves $500/month. Filling one empty hour/day makes $10,000/month.

How ChairFill Can Help

You have the plane. You have the crew. You're paying for the fuel. Don't fly empty. Chairfill ensures your "seats" are sold, filling those high-profit hours. Stop counting peanuts. Start selling tickets.

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