Cost of Downtime – Calculate it Yourself

By Chris SeveyBlog

How much do you lose from unexpected downtime of your servers & business applications? The simplest way to calculate potential revenue losses during an outage is with the equation:


GR = Gross Yearly Revenue

TH = Total Yearly Business Hours

I = Percentage Impact

H = Number of Hours of Outage

Small Business Example: According to the Small Business Administration (, the average annual revenue of a small retail or services business is $7 million, and according to Gartner Research Group (, the average business suffers 87 hours of downtime per year. Let’s use these in our example…

GR = $7,000,000.00

TH = 2,340

I = .293%

H = 87.3

LOST REVENUE = (7,000,000/2340) x .0293 x 87.3 = $7,651.81/Year

If your business grosses higher revenues, operates less business hours, or has a greater average downtime percentage than this example, your costs will be significantly higher. Calculate it yourself and find out what downtime is costing your business!