Three Ways Downtime Kills Small Businesses

Downtime is bad news for any business whether big or small.

A two-hour New York Times website downtime occurrence sent Twitter ablaze and their stock price plummeting. The Wall Street Journal even capitalized on the event by dropping their paywall to try and capture the NYT's displaced readership.

Google going down for only five minutes in 2013 resulted in lost revenue estimated at $500,000 and a decrease in overall web traffic by 40%. We know what you're thinking: 'Google makes $100,000 a minute?!' Yeah...insane, right?

While the cost of downtime for a small-to-medium sized business won't be nearly as large as that astronomical Google figure, downtime is often more detrimental to smaller companies. Smaller enterprises are more susceptible to downtime and are neither large nor profitable enough to sustain its short- and long-term effects.


Downtime leads to unhappy/unproductive employees

Even the happiest of employees become dissatisfied when they can't perform basic day-to-day job functions or properly service customers or clients.

While some employees may use downtime as an excuse to lean back, put their feet up, and comfortably collect their hourly pay, we're talking about those employees who come to work to actually work (the ones you especially want to keep happy).

And don't forget your IT guy or tech crew. They can't necessarily sit back and twiddle their thumbs when downtime occurs because they're typically taking the brunt of the storm. They will ultimately grow tired of the daily routine of putting out fires and having neither the additional manpower nor resources to change things for the better.

These things lead to high employee turnover and the expenses that come with training and re-training a revolving door of employees.

 

Downtime leads to customer dissatisfaction

Customers and clients grow weary whenever critical components of your operations – or the services they either expect or pay for - cannot be accessed.

Nearly 50% of customers will move on to a competitor if they encounter downtime of five minutes or more. These customers represent significant lost revenue.

While some suggest this is a bigger problem in the retail sector, other types of businesses are impacted as well. Have you ever clicked a link from search engine results only to quickly bolt when the page didn't load, you couldn't complete an online transaction, or you were greeted with a "Technical Difficulties – Be Back Up Soon!" message?

Did you give up on finding what you were looking for or did you wait it out? You did neither. You went back to Google and found someone else offering a similar service or product that satisfied your needs.

 

Downtime ruins your reputation

One of the most commonly overlooked consequences of downtime is the hit your company's reputation takes online. One person's bad experience is quickly shared and broadcast to dozens or even hundreds of followers through social media. Bad news spreads faster than ever and has lasting repercussions.

Many businesses today rely on their websites as informational tools or even their sole storefront. If yours is constantly down, customers will remember that instead of your company's services and eventually stop trying to visit. Your reputation can easily become 'the company that never has a working website'!

The online age we're in comes with many benefits, but can quickly turn into a problem for your business if you aren't proactive.

Downtime blog - Warren Buffett reputation quote

 

Protect your bottom line

The simplest way to calculate potential downtime loss is by using this equation:

LOST REVENUE = (GR/TH) x I x H
GR = gross yearly revenue
TH = total yearly business hours
I = percentage impact
H = number of hours of outage

The challenge for small businesses has always been how to minimize single-point-of-failure downtime using their limited IT resources. This is why downtime kills so many small businesses. They can't prevent it and they can't react quickly enough.

Thankfully, there are end-to-end business continuity solutions available today that integrate Remote Monitoring and Management (RMM) software, 24/7 access to a Network Operations Center (NOC), and advanced backup and disaster recovery solutions to alleviate this issue.

Not only do these methods minimize downtime and get businesses back up and running quickly, but they can reduce the cost of technology infrastructure maintenance by as much as 80%.


 

With more protective solutions than ever before, it's time that small businesses stop being victims to downtime.

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