Emergency Power Backup

How Much Do You Stand To Lose In A Power Outage?

By June 1, 2017 November 6th, 2019 No Comments

You know power outages happen. You know emergencies and natural disasters happen. You know a power outage means your business will grind to a halt until power can be restored. Yet, you’re still gambling with the chance that the outage won’t happen to your business. After all, backup power systems cost money, sometimes a lot of money, and you just can’t justify the expense. Or can you?

Have you ever actually calculated how much money you stand to lose in a power outage? Chances are very good that the money you spend on a backup generator or power system will be recouped with just one extended power outage. But, see for yourself. Use this calculator to determine you actual costs during a power outage, then compare that number with the cost of installing a backup power system. 

Calculating Power Outage Costs

At its most basic, a power outage will cost you in terms of revenue, but that is not the full picture. Outages will also cost you in the areas of labor and service.

  • Labor Costs = E x P x R x H
    • E = number of employees affected
    • P = average percentage of workforce that is affected
    • R = average employee cost/rate per hour
    • H = number of hours of outage (If you have experienced outages in the past, use those durations to start calculating your losses)
  • Revenue Loss = (GR/TH) x P x H
    • GR = gross yearly revenue
    • TH = total yearly business hours
    • P = percentage impact
    • H = number of hours of outage
  • Service costs
    • Service costs are more intangible. They may be things like late delivery surcharges, overtime costs to make up for lost productivity, or missing critical due dates and having to pay fines and penalties associated with them. In severe cases, you might even include the loss of an important customer account due to being unavailable during the outage.
    • Your accounting or financial team should be able to help you identify service costs associated with an outage. Divide these costs by the number of hours the business was closed or systems were down to determine the cost per hour.

Once you have these three areas of loss, total them up. This will give you an idea of the total amount of loss you can expect to have during a power outage of a certain duration.

The numbers are kind of shocking, aren’t they?

Plenty Of System Options For Multiple Needs

There is no one-size-fits-all solution when it comes to backup power systems – and that’s a good thing! That means you can customize your backup power solution to your needs. Features like kW hours, amps, fuel sources, age of machine, new vs. used machines, where the unit will be located, how often you plan to run it, and more can all affect the final price.

To find the right backup power system for your needs, contact Critical Power Products & Services. We will work with you to determine your power demands, discuss when and how you expect to use your backup solution, and provide recommendations that fit your needs and your budget.

Call CPP&S at 877-315-4176 or contact us online to learn more.