The True Cost Of IT Downtime: What Your Business Stands To Lose

Written by Jim Parise | March 20, 2025

For small and medium-sized businesses, maximizing uptime is the name of the game. The reality is, however, that sometimes your technology can fail, leaving you scrambling to continue running your business.

So, how do you calculate the financial impact of IT downtime to your business? How can you evaluate which services are essential to your organization’s ability to function during an emergency?

In today’s technology-fueled landscape, everything revolves around the health and stability of your physical and digital IT infrastructure. How long can you really afford to be without access to your critical data or systems?

Extended downtime for your business can mean not being able to meet your contractual obligations, fill customer orders, hit crucial deadlines, process payroll, order necessary equipment, pay your suppliers and vendors, or even keep your doors open.

In this article, we’ll examine the true cost of IT outages for small and medium-sized businesses (SMBs). We'll also provide effective IT downtime prevention measures and outline steps to take to increase your business resiliency following a major outage.

How Do You Determine The Impact Of IT Downtime On Your Business?

According to several published reports, the average cost of downtime is between $5,600 and $9,000 a minute. Those estimates jump significantly for large enterprises.

As these numbers show, the financial impact of IT downtime can be staggering.

While it's possible to estimate your disaster recovery time objective (RTO) and recovery point objective (RPO), determining the true cost of an IT outage to your business isn’t just about calculating dollars per minute.

Such disruptions can lead to lost revenue, customer churn, reputational damage, increased cybersecurity risks, diminished employee productivity, and possible data breaches.

All of these potential hazards stemming from extended IT downturn can have a lasting—even catastrophic—impact on your business.

Just how much damage it results in depends on several factors, including: the cause of the adverse event, your business and industry, the length of time your normal business operations are impacted, and your business continuity preparation.

No time is the right time for a disruption, especially for organizations with time-sensitive and mission-critical data.

7 Common Causes Of Business Technology Downtime

IT downtime is the dreaded workflow interruption that comes when your network, apps, devices, or other parts of your infrastructure suddenly go dark.

In the course of doing business, some downtime is expected with routine software updates and security patches, or other ongoing system maintenance. These occurrences can often be scheduled during non-peak times that are the least disruptive to your business.

Unplanned downtime, however, can make completing certain critical tasks and job functions tedious, if not downright impossible, leaving you in a lurch.

For instance, the June 2024 CDK Global cyberattack left some 15,000 North American auto dealerships unable to access their critical management systems, files, and applications. As a result, many dealers were forced to go old school, relying on pen and paper to try to complete sales and keep the doors open.

As seen in the CDK Global ransomware attack and aftermath, unexpected IT outages can throw your entire business operations out of whack and have major consequences.

There are many causes for IT downtime.

Some common reasons include:

1. Human Error:

Human error is the leading cause of IT downtime. It can stem from different factors.
An employee may have fallen victim to a phishing scheme, allowing cyber predators an opening into your network to launch a malware attack to steal or compromise your data.

Other times, the employee’s mistake can be a technical snafu, such as misconfigured software or devices. In these incidents, employees can inadvertently cause data loss, equipment failures, or system outages.
Of course, accidents can also happen, such as a dropped laptop, spilled liquids, or other unintentional mishaps.

How to prevent:

Provide monthly employee cybersecurity awareness training with learning modules and phishing simulations to educate them about new and emerging cybersecurity schemes and how to avoid them.
Ensure that your employee handbook is updated and details your organization's policies, user expectations, and protocols involving the use of your technology.
Provide adequate training for your team on best practices for using, storing, and maintaining company IT equipment.

2. Cyber Incidents:

With increased resources, including artificial intelligence (AI), hackers are getting more stealth in their methods of attack. Bad actors are constantly looking for security flaws within your infrastructure to exploit to access your systems and sensitive information.
Cyber incidents such as phishing attempts, malware, ransomware, or data breaches, can stem from internal or external threats.

How to prevent:

Fortify your cybersecurity defenses with robust security policies, practices, and tools, including network monitoring, intrusion detection, antivirus and anti-malware software, automated patching, multi-factor authentication, next-generation firewalls, and microsegmentation, among others.
If you’re in a high-risk industry that is prone to cyberattacks, you should also consider adopting a Zero Trust architecture (ZTA).
Zero Trust follows the idea that a breach has happened or will happen, and therefore, nothing and no one can be trusted. So, it requires user validation to gain access, then continual reverification to maintain access.

3. Hardware Failures:

IT equipment can fail for many different reasons. Some are human-related, such as accidental drops or spills and even intentional damage by a disgruntled employee.
Sometimes systems can fail because of improper environmental conditions such as extreme heat, excessive dust and debris, insufficient RAM, damaged cables, hard drive failure, power surges or outages, wear and tear due to age, and manufacturing issues with the device.

How to prevent:

Ensure that you’re using equipment that hasn’t outlived its lifespan. Using end-of-life (EOL) equipment means it’s likely no longer under warranty and, therefore, not getting manufacturer updates or technical support.

Perform regular maintenance on your equipment following best practices. This should include checking that you have clear protocols, climate controlled data centers, surge protectors, and a device replacement plan, among other controls.

4. Natural Disasters:

Sometimes unpredictable Mother Nature is the culprit behind your IT outage. Perhaps a large tree limb knocked your systems offline, or your building sustained damage from a fire, hurricane, or flood. Such calamities can cause substantial, and sometimes permanent damage.

How to prevent:

Maintain proper insurance to cover your business and assets in the event of a natural disaster. Ensure you have proper data backups and a comprehensive disaster recovery plan.

5. Software Issues:

Software issues can be caused by bugs or glitches within the software coding, compatibility issues with your devices, or even viruses.
As with legacy hardware, using end-of-support (EOS) software means you’re no longer receiving updates and critical patches from the software vendor, leaving the door open for cyber criminals.

How to prevent:

Ensure you’re using up-to-date software and set up an automated patching schedule to remediate any new vulnerabilities.

6. Staff Shortages:

Sometimes problems can arise simply because the IT personnel responsible for maintaining your systems aren’t there.
What happens if those support staff take a vacation, an extended medical absence, or even leave the company? Such critical gaps in your ongoing network maintenance and monitoring could leave your business vulnerable.

How to prevent:

You’ll need to decide if it’s worth it to your business to significantly expand your budget to hire more in-house IT professionals, or whether partnering with a managed IT service provider is a more cost-effective solution.

7. Unauthorized Access

The physical security of your IT environment can also be an area of vulnerability.
Leaving your data center unsecured, for instance, is inviting trouble.

How to prevent:

Implementing physical security controls to limit access to critical parts of your building to only authorized employees is a vital part of your security posture.

Protecting your physical assets and restricting access to critical parts of your infrastructure is often a requirement in cybersecurity regulations. It also follows the Zero Trust motto to “never trust, always verify.”
Some physical security controls include: installing biometric scanners, using security tokens or key fobs, setting up security cameras, blocking access with gates or barriers, and hiring security guards, among other measures.

Preparing For The Worst: How To Arm Your Business With The Best Defenses

Whether or not a major IT disruption results in a temporary hit or debilitating blow to your business depends on your disaster preparedness.

A core part of disaster readiness is developing a business continuity and disaster recovery plan. A BCDR plan is a comprehensive guidebook for your company’s response to and recovery from extended business disruptions.

Your BCDR strategy should establish the key stakeholders to be notified during an emergency, spell out the steps you’ll take during the outage to stay up and running, and detail exactly how you plan to recover from the crisis and preserve your business.

To create a BCDR plan, you’ll need to perform the following:

Risk assessment: Perform a risk assessment to identify potential threats and vulnerabilities to learn what your business risks are in the event of a major system outage.
IT audit: Inventory your entire IT environment so you can identify your assets, categorize your critical processes and applications, and designate your business continuity team.
Recovery: Establish and implement detailed recovery measures following an outage to ensure that your business can survive both during and after the event.
Testing: Perform regular business continuity tests as a way to review the business continuity measures you’ve put in place and gain confidence that they’ll work during an emergency.
Post-event assessment: Evaluate the effectiveness of your response and continuity strategies following an event to look for any flaws or weaknesses and make any necessary adjustments.

The Bottom Line With Unexpected Business IT Downtime

Disasters can strike at any time.

Small and medium-sized businesses like yours depend on their IT infrastructure reliability. That’s why developing a robust BCDR plan is critical to ensuring that you can keep the doors open and continue operating if your systems go down.

After reading this article, you now understand that tabulating the financial toll of extended downtime caused by an unforeseen event goes far beyond dollars and cents.

At Kelser, we’re committed to providing straight-forward, informative articles such as this one to help business leaders like you keep your organization and data safe.

As a managed IT services provider (MSP), we offer a comprehensive suite of advanced IT and cybersecurity solutions, along with strategic business continuity and disaster recovery planning.

Perhaps you already have a sizeable internal team with the capacity to implement the security controls and BCDR measures your business needs for proactive IT risk management.

If not, then managed IT support is a cost-effective option, allowing you to gain an entire team of IT experts along with powerful cybersecurity solutions to safeguard your critical physical and digital business assets.

We know you have many choices of managed service providers. So, we encourage you to thoroughly research several MSPs before partnering with one to make sure they’re a good fit to work with for your business.

If, however, you want to learn more about gaining insight into your disaster readiness and establishing a business continuity and disaster recovery plan, or you have other IT-related concerns, reach out to us now by clicking the button.

Discover how much disaster recovery will cost your business. Use our IT recovery cost calculator and get your no-cost estimate.

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