One hour of downtime can cost businesses $256,000 in revenue and other associated costs such as intangibles, recovery expenses and intangible assets. Exact figures will vary based on industry, size and business model.

Having a Business Continuity Plan is a crucial approach to ensure your company can function during and after a catastrophe. Through evaluating your business vulnerability, you can safeguard your company and minimize any downtime that might arise due to unforeseen business interruptions. Natural calamities such as fire, seismic activity, inundation, and blizzards have the potential to impede or even cease operations. Moreover, other risks like cyber assaults and data breaches can lead to unanticipated disruptions to your business.

1. Lost Revenue

Lost Revenue

The cost of downtime depends on several variables, including your business’s hourly revenue per hour, industry and the duration of an outage. A private clinic that generates its profits through patient visits will incur vastly different recovery costs than one that relies on data transactions for revenue generation. Also, companies experiencing outages during high traffic periods could experience greater financial losses compared to ones operating during quieter times.

There are numerous steps you can take to reduce downtime costs, however. A disaster recovery solution will allow you to minimize money lost from outages by setting up your systems so they’ll be back online quickly following an outage; while backup solutions allow your business to recover lost data quickly and get back to work without incurring revenue losses due to downtime.

Downtime can cost your company in more ways than simply lost revenue. Reputation damage, lost productivity and security risks all pose risks that are hard to measure but have an enormous effect on business operations.

Downtime can have another hidden cost: loss of customer trust. From server outages and data breaches, to customer accounts being inaccessible or purchases not going through as intended, customers may become disenchanted with your service if it interferes with them and can sometimes opt to take their business elsewhere.

While downtime’s costs may be substantial, its effect on your reputation and trust are just as crucial. By taking steps to prevent downtime and protect it in advance, you can protect your brand while making customers happier – the key being creating and implementing a comprehensive downtime strategy including testing, backups, and contingency plans to mitigate risk while safeguard sensitive information.

2. Lost Productivity

Lost Productivity

If your business relies on technology systems for goods or services delivery, each hour of downtime costs you in both profit and productivity. While you might recover quickly after an outage occurs, productivity loss can have long-term repercussions and significantly impact the bottom line over time.

System downtime not only causes financial losses, but it can also rob your employees of productivity. Depending on its cause, employees could either waste their time trying to fix it themselves, or be completely unable to work; for instance, an outage could deny employees access to the company network and data – leaving employees without access for vital projects and tasks that impact customer experiences and thus profits.

Productivity loss may also result from employees who are unable to fulfill their jobs due to health problems, whether absenteeism or presenteeism (being at work but being unable to perform due to illness). While difficult to measure and quantify, such losses should still be factored into calculations of downtime costs.

Small businesses may find their productivity losses even more costly than larger enterprises, since large organizations can easily cover lost productivity through regular employees and overtime pay, while it is harder for small businesses to do the same – in fact, an hour of downtime could cost a small business up to $8,600!

Though some productivity losses may be unavoidable, there are steps you can take to limit employee distraction and ensure they remain productive on-the-job. Inefficient processes and lengthy email chains can eat away at employee productivity; taking steps to streamline and simplify them will result in happier, more productive employees while cutting down time spent searching for information – saving both you and your company money in the process.

3. Recovery Costs

Recovery Costs

Downtime costs vary significantly depending on several variables, including business revenue, industry and time of day the outage occurs. Businesses reliant on high-level data transactions like banks or retail sales websites could experience greater recovery costs per hour of downtime than private clinics for example; furthermore, peak traffic hours present greater impact during an outage event.

Not only can companies lose revenue during downtime, but their bottom lines may also suffer due to increased staffing expenses, overtime work costs, replacement fees and recovery fees. It is easy to forget this part of a disaster’s cost calculation but they can have lasting repercussions for profits.

IT downtime has the power to damage both a company’s reputation and their clients’ trust in them. Customers could turn away from your brand if they can no longer access their data; and many may stop trusting it altogether if their needs were never communicated clearly enough during any downtime incident.

IT disasters can strike any size business; by developing an effective IT strategy with redundancy and resilience in mind, however, you can reduce the risks and minimize any negative repercussions when they do arise.

When creating an IT disaster recovery plan, it is critical to establish the following two objectives: Recovery Time Objective (RTO) and Recovery Point Objective (RPO). RTO defines how long operations must resume after being disrupted while RPO specifies your maximum data loss threshold. Tier level in your data center will also have an effect on both its level of reliability as well as costs associated with backup and disaster recovery technologies. Acknowledging and understanding the four tiers of data center reliability can be key in making informed decisions about disaster recovery solutions to safeguard your organization, including how much downtime is acceptable before recovering costs become unmanageable. Partnering with someone familiar with these aspects will allow for informed decision-making around disaster recovery solutions needed by your business and how much downtime can be afforded before becoming too costly for recovery.

4. Intangible Costs

Intangible Costs

Downtime can impose costs beyond lost revenues and productivity; there are intangible ones as well, including customer trust loss and brand damage that cannot easily be quantified but nonetheless have significant ramifications on your bottom line.

Tangible costs can easily be identified and quantified, such as money spent on employee salaries or materials used in product production. They can be tracked in financial reports so you can make accurate decisions regarding where and how much to spend or charge.

Intangible costs may be harder to track, but they’re just as essential in business as your monetary expenditures. For instance, if one of your employees decides to leave and you must hire someone in their place, some intangible costs associated with that might include paying them for any unused vacation days they forfeited, plus HR’s expenses in interviewing candidates and processing paperwork, plus time lost while your new hire adapts to company processes and technology.

Though downtime may be unavoidable, you can reduce it significantly by regularly testing systems, having contingency plans in place and following best practices for responding to incidents when they arise. Doing this could save thousands in costs while simultaneously increasing employee morale and brand image.


When making key business decisions, it is critical that you fully comprehend both tangible and intangible costs so you can make the best choice possible for your organization. By taking the time to assess both types of costs you’ll better evaluate each option available to you and select one with greater potential success. Likewise, understanding true costs of downtime allows for the correct decisions without incurring costly mistakes later on. To find out how much downtime can you afford? Calculate both monetary losses and intangible costs before taking steps necessary to lower those costs so your business thrives and thrives. One way to avoid being a victim of downtime cost is using managed IT services for your business. They have the capacity to sustain your operational time while ensuring that, should any period of inactivity arise, you encounter only a nominal expense by implementing backup solutions.