How much can a power cut cost your business?

Business Insights

In 2017, an estimated of 63,000 properties in North Lancashire were hit by a power cut and Edinburgh Airport had to delay flights due to power-related issues. With more than 170,000 km of electricity cables to maintain, power outages will sometimes happen. But how much do they affect businesses?

Working with retailers of commercial gas, Flogas, we investigate the cost to businesses if power outages occur and look at what can be done to protect your company from unplanned disruptions.

The causes of power cuts

The reasons for power outages can vary. Harsh weather conditions are one of the main causes – in January 2015, one million people across North Eastern Scotland were left without power as a storm struck the power lines. Similarly, in Florida following Hurricane Irma’s path of destruction, 4.4 million homeowners were left without electricity.

The growing electricity supply gap in the UK is another reason. Jenifer Baxter, head of energy and environment at the Institution of Mechanical Engineers said,

“Under current [government] policy, it is almost impossible for UK electricity demand to be met by 2025.”
Alongside proposals to phase out coal-fired power and a lack of investment in national grid infrastructures, power failures and blackouts are expected to become more common.

There are also uncommon reasons for why a blackout could occur - reports of a squirrel biting through power cables in Somerset led to 1,000 homes being left without electricity.

Your location can also play a factor to how many times that you’re left without power – In 2015, the South of England was reported to have suffered the most blackouts in the UK, with 124 incidents.

Power cuts usually last a few hours, but some can take days or weeks to restore. No matter the cause, they are inconvenient and can have detrimental effects on businesses.

The cost to your business

In the UK, the average power cut lasts 50 minutes. This may not sound a lot but with a single hour of downtime estimated to cost a small business £800 – it could be very damaging.

Larger companies understandably would see higher loss if power cuts occur, but they’re also expected to recover quicker. When Google lost their power in 2013, they experienced losses of £100,000 per minute!

Not having access to electricity can mean that employees cannot communicate with customers and are losing out on potential sales. For an ecommerce company, a loss of power means that they do not have access to their website to monitor sales and client requests. There is also the risk of losing unsaved material which can be costly to small businesses.

The measures you can take to reduce the damage caused by a power cut

Mostly, power cuts are caused by reasons beyond our control. However, there are certain steps that small businesses can take to reduce the damage caused from a power cut.

The first recommendation would be to purchase a UPS (uninterruptible power supply). This allows a computer to keep running for a short while when the mains electricity has gone off. Often, a warning sign will come up to alert the user that a power cut has occurred – giving them time to save any unfinished work.

Another option would be set up a standalone generator, which can be used for emergencies for when the power cuts out as it does not rely on electricity supplied from the grid. If you are considering going off-grid with your power supplies, it is worth considering gas cylinders too.

Aside from these two actions, you can ensure that you are saving your work regularly and have a contingency plan. This could be a way to inform customers that your power supply is down and you won’t be able to answer queries – perhaps on a mobile device.