Finance, operations, and marketing, is there any business function that the internet doesn’t support? In one word: nope! The internet makes each of these functions centralized, efficient, and effective, making it an essential requirement for small to medium-sized businesses.
However, as a business owner, you might be wondering, “Hey, what happens if my internet connection suddenly goes down?” The answer? Multiple hidden operational, financial, and reputational costs that can potentially knock your business out of the equation. To prevent that, let’s explore each of them by diving into:
Internet Downtime – What It Is & How It Occurs
Let’s first identify the root of the problem so you’re equipped to control the situation if it hits you. Internet downtime is when your internet connection, or in other words, the digital backbone of your business, either faces a downright outage or frequent disruptions. This results in all your digital functions coming to a complete halt, leading to the costs that will be discussed ahead.
Internet downtime results from a range of reasons, which most notably include:
- Provider End Issues: Many business internet providers don’t have the network capacity to handle simultaneous data-intensive activities. When they face a high number of users on their network, poor performance or outages can often occur. Sometimes their infrastructure may be weak or damaged, leading to the same outcome.
- External Factors: Factors such as bad weather or power outages may also result in internet downtime. Bad weather may damage your provider’s network infrastructure or interfere with signals. In case you don’t have a power backup, you may also face internet downtime during a power outage.
- Human Error: We’re only human after all (love that song) and can make mistakes such as accidentally unplugging network devices or cables. The result is an immediate internet outage.
Now that you know why it occurs, let’s explore what costs it can lead to.
Exploring Major Costs of Internet Downtime
The major costs of internet downtime fall into one of the three categories below:
- Financial
- Operational
- Reputational
Let’s break each one down in more detail.
Financial Costs
The direct impact of internet downtime is significant revenue loss, especially for e-commerce businesses. For small businesses, this direct revenue loss ranges between $137 to $427 each minute their internet is down.
Additionally, when all your online functions are paused, so are employees, leading to a huge drop in productivity. This drop in productivity leads to a reduced return on investment on various digital tools you may be using and paying for monthly. You also have to pay salaries to your employees.
To reduce the effects of internet downtime on your business, your IT team may have to work overtime to get your business back online, which can lead to increased payroll costs.
In case you’re a client-based service business, there’s a high chance you’ve finalized deadlines for certain deliverables with clients. Internet downtime can lead to a failure in meeting such deadlines, which can, in some cases, result in considerable financial compensation.
Operational Costs
Your business may rely on internet access to ensure smooth workflow across business processes such as real-time inventory tracking, project management, or internal communication.
You may also need the internet to access cloud-based data, such as reports or documents, to proceed to the next phase of a process or discuss with clients.
Without the internet, such operations and more suffer since data needed for decisions can’t be timely accessed or shared, and processes can’t be performed, leading to significant missed opportunities.
For example, let’s suppose you need to review crucial data about your target audience to plan your next digital marketing campaign. Getting the timing right is a huge success factor in a digital marketing strategy, since you’re unable to review data, plan, and execute your campaign; the process slows down, possibly turning new potential customers into lost cases.
Reputational Costs
This is one of the most irreversible effects of internet downtime, because it develops a long-lasting image of your business in the minds of customers or clients you’re engaging with.
Let me explain this cost with two scenarios, one as a product-based business and the other as a service-based business. Let’s say you’re an e-commerce business owner, and a potential customer is engaging with a chatbot on your website to inquire about certain products. If your conversation frequently drops or you provide delayed responses due to a weak internet connection, that potential customer is going to switch to your competitors instantly, and possibly even leave negative reviews for your business.
Speaking of service-side businesses, client reporting is a weekly, if not daily, part of your business. Let’s say you’ve added your client to an internal communication platform. If they don’t receive progress updates in a timely manner, they’re highly likely to lose trust in your services and take their business elsewhere.
Now that we’ve covered the reasons and effects of internet downtime for your business, let’s explore some remedial steps you can take to prevent such a situation from unfolding.
Three Remedial Measures Against Internet Downtime
The good news is that there are some rather simple foundational steps you can take to prevent your business from going through the costs of internet downtime. Most notably, these include:
1. Set an Internet & Power Backup
Cellular networks often have more extended network coverage compared to internet providers, especially wired ones. Many providers also offer 5G internet services, some of which you can explore on internet comparison platforms like LocalCableDeals. You also need to ensure constant power using solutions such as an uninterruptible power supply (UPS) for your business, since more often than not, a power outage means internet downtime. Setting up such backups can ensure your connectivity isn’t impacted, and all business functions continue smoothly.
2. Conduct Business-Wide Software & Hardware Audits
Continuous improvement is the key to success, and the key to continuous improvement is constant monitoring of your systems and equipment. This will help you identify potential weaknesses and take the necessary measures. For example, if your audit indicates that your internet router and modem are outdated, you can explore newer options before they cause downtime.
3. Launch Employee Training Initiatives
Your employees are your most valuable asset, and you need to provide them with the knowledge of both preventing and, in a worst-case scenario, navigating internet downtime situations. This includes factors such as creating policies around handling cables and contacting emergency response teams during an outage.
Time to Turn Internet Downtime into Uninterrupted Connectivity
Internet downtime is a major consideration for small to medium-sized businesses trying to scale their operations, since it’s the difference between a bright future and wasted time and investment.
With simple preventive measures such as setting backup power and connectivity solutions, continuously running business-wide audits, and training your most valuable assets, you can mitigate the effects of internet downtime on your business.
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