Power Outages & Brownouts Secretly Hurting the Bottom Line

Consumer's Energy Outage Map of
Kalamazoo for July 23rd, 2013

Consumer's Energy Outage Map of
Downtown Kalamazoo for May 29th, 2013

A power outage today, July 23rd, has left 4500+ without power!(Another on the east side of downtown Kalamazoo, on May 30th resulted in almost 1000 Consumers Energy customers out of power for the majority of the afternoon.) The outage left many Kalamazoo businesses unable to process transactions.

Of course, we're writing about this outage because it affected out direct surroundings, but that's what power outages do. And they do not ask if it is convenient to occur, nor are they predictable, yet they cost businesses millions every year.

Here are the hard facts. The US Department of Labor estimates that power outages cost $80 billion per year and that 73%, or $57 billion, of those losses come from the business sector and 25%, or $20 billion, come from the industrial sector. A typical convenience store/gas station, for example, can lose about $445 per hour in revenue.

But lost revenue alone does not tell the whole story.

Power Outage Effects

Power outages not only affect sales, they can also affect the technology systems, data and hardware businesses use in their day-to-day operations. They cause electrical surges damaging or even destroying hardware, both servers and workstations. The costs of acquiring new hardware and hiring qualified personnel to install and configure that hardware can easily run into the thousands of dollars for small businesses and tens-of-thousands for medium- to large-businesses.

New hardware, servers, computers and other devices, can be purchased, but recovering data from the damaged devices can take several weeks and in worse case scenarios may not even be possible. Any data not properly backed up can be lost for good costing much more than a few thousand dollars in hardware.

Hidden cost of Power Outages

I took some time to talk with fellow Newminder Matt Vollmar, whose had years of experience delivering managed IT services and he said, “Business data is the real lifeblood, including, customer/client information, financial records, HR & employee information, etc. Losing business data can put a business in a position where it cannot continue to operate.  What’s more, a data loss can significantly damage the reputation of a business.”

Exactly how costly is a power outage? I had to do some digging, so get ready for more facts.

Learn More About Data Backup

Schedule a 1:1 consultation with Newmind Group and learn how we can help with:

• Reduced Downtime & Data Loss During a Disaster
• Data protection for multiple platforms and devices
• Application Aware backups

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According to the United Kingdom’s Department of Trade & Industry (DTI) and Price Waterhouse Coopers (PWC), 70% of businesses that experience a major data loss will go out of business. A Pepperdine University study found that each data loss instance can cost about $4,000 for small- to medium-sized businesses(SMB). Larger businesses may be able to weather these costs, but as power outages are common occurrences, if you're a small- to -medium-sized business you may find yourself in deep water.

How to combat Power Outages

We recommend implementing the following disaster recovery & business continuity solutions to help combat data loss from power outages, hardware failure, and natural disasters:

• Regular data backups
  
  Its important to backup your data frequently. A lot can happen in a month and if you’re only backing up monthly you may lose so much data you will not be able to stay in business.
• Redundant Backup
  
  Hardware is not infallible and will fail eventually. Maintaining multiple backups will ensure that you will have a source to restore servers and business-critical data.
• Storing Backups off-site
  
  Storing a backup 20 miles or farther from your day-to-day operations can help to protect it from being damaged by the power outage.

Power outages are common occurrences and can have a damaging effect on a business. Implementing a disaster recovery and business continuity plan now can save your business thousands of dollars and mean the difference between staying in business or closing your doors for good.

Daniel Proczko has been working with organizations and individuals to build & grow the entrepreneur community of Kalamazoo, MI. From organizing TEDx events, hack-a-thons, and documentary screenings to engaging with business leaders, Dan strives to inspire individuals with new ideas and better thinking.

Having always been interested in tech and understanding the value of innovation through IT, communicating the importance of strategic IT thinking is one of Dan's primary goals within Newmind Group.