What downtime really costs
Downtime usually stacks up in four buckets:
- Lost sales: missed orders, stalled quotes, delayed invoicing
- Wasted staff time: waiting, repeating work, manual workarounds
- Recovery cost: IT time, emergency fixes, expedited parts, specialist support
- Reputation & risk: churn, SLA penalties, compliance exposure, cyber fallout
A simple downtime cost calculator (use this today)
Estimate your cost per hour:
- Lost gross profit/hour = (Revenue/hour) × (Gross margin %)
- Idle payroll/hour = (Impacted staff) × (Loaded hourly cost)
- Operational penalties/hour = SLAs + late delivery + overtime + contractors
- Knock-on impact (optional) = add 10-30% for rework/delays (be conservative)
Worked example (illustrative Glasgow services firm)
Assume:
- £120k revenue/month, ~160 trading hours → £750/hour
- 45% margin → £338/hour gross profit
- 15 staff blocked × £25/hour → £375/hour
- Recovery/admin overhead → £200/hour
Cost/hour: ~£913
If the business impact lasts 5 hours (3-hour outage + 2 hours rework):
~£4,565 per incident. Once per quarter ≈ ~£18k/year (before churn and knock-on delays).
Downtime is increasingly tied to cyber risk
Many outages are triggered or prolonged by security issues (ransomware, account takeover, patching gaps). The UK Government’s Cyber Security Breaches Survey includes staff time when people can’t do their jobs as a core cost category, with an average £1,600 for the most disruptive breach (and £3,550 excluding £0-cost reports).
For major incidents, IBM reports the average UK data breach cost at £3.58m (2024).
Why downtime hits SMEs harder
- Single points of failure (one firewall, one circuit, one server)
- Key-person dependency (“only one person knows the fix”)
- Backups exist, but restores aren’t tested
- Support is reactive, not preventative
What to do next
Gather:
- Revenue/hour and gross margin %
- Typical staff impacted
- Top 5 systems that would stop work (M365, LoB apps, internet, firewalls, storage)
- Backup method + date of last successful restore test
Then decide what prevention and recovery is worth versus your current support model.
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