If your systems went offline for an hour tomorrow, how much would it really cost your business?
Most business owners answer that question with a guess — and it is usually far too low.
Downtime costs are easy to overlook because they rarely appear in one neat report. Instead, they spread across the day in lost productivity, missed opportunities and delayed work.
This post walks you through a simple five-minute assessment with four key components, giving you a practical number you can plan around.
The back-of-the-napkin downtime calculator
You do not need a complex spreadsheet to estimate the cost. This simple formula is quick enough to work out on the back of a napkin.
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Costs of Lost revenue
First, calculate your average revenue per hour by dividing annual revenue by roughly 2,000 working hours.
For example, £2 million in annual revenue works out at about £1,000 per business hour. If downtime stops you processing orders, serving customers, or closing deals, that revenue is lost.
Your hourly figure: £___
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Staff downtime costs
Start by counting how many employees are unable to work when systems go down. Then multiply that number by their average hourly cost, including wages and benefits.
For example, ten employees at £30 per hour equals £300 in idle time for every hour of downtime.
Your staff downtime cost: £___ per hour
Now add £___ per hour in lost revenue to £___ per hour in staff downtime costs.
This gives you a subtotal of £___ per hour.
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Time to recover
This is the cost many businesses overlook.
When systems come back online, work does not instantly return to normal. There is catch-up work, re-entered data, checks to see what was lost and delayed replies to waiting clients.
That means a one-hour outage often creates more than one hour of disruption.
As a conservative rule of thumb, add 50% for recovery time. In practice, a one-hour outage can create around 1.5 hours of disruption.
Multiply your subtotal by 1.5 to estimate the total downtime event cost: £___
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Impact on customers
This is harder to put a pound value on, but it can be the costliest part of downtime.
Consider what customers experience when your business goes dark: missed calls, failed transactions and prospects who are ready to buy but reach a dead end. The longer the outage lasts, the greater the impact.
Even one lost customer can be significant. What is their lifetime value to your business — £5,000, £25,000 or more?
Ask yourself: what is one lost customer really worth?
What does your downtime cost?
Here is a quick example using approximate figures.
Imagine a 20-person accounting firm with annual revenue of £3 million.
- Lost revenue: £1,500 per hour
- Staff downtime costs: £6,750 per hour, based on 15 affected employees at £450 each
- Subtotal: £8,250 per hour
- With the recovery multiplier: £12,375 per hour of downtime
- Customer impact: difficult to quantify, but very real
Before you factor in customer relationships, a single hour of downtime already costs more than £12,000.
The bigger question is this: how many hours of downtime would it take to exceed the annual cost of preventing it?
For most businesses, it does not take many.
Why downtime costs are often underestimated
Lost revenue from downtime rarely appears as a line item. No one sends an invoice showing what your business failed to earn while systems were down.
Lost customer revenue is even harder to measure. A customer who needs help in that moment may not wait. They may be calling with a question, trying to place an order, or looking for a quick answer to keep their own work moving. If your systems are down, they get silence when they expected a response.
Instead of trying again later, they may look for someone else who can help straight away. There is no alert for that shift, and no paper trail showing when you moved from their trusted provider to just one of several options.
You know the cost. What comes next?
Most businesses never run this calculation. But once you see the number, downtime stops looking like a minor inconvenience and starts looking like a serious financial risk.
Now that you have the data, are you comfortable carrying that risk?
