Ask most business owners how much downtime costs and they'll give you a vague answer. "It's bad." "We'd lose money." "We really should have better IT." What they usually haven't done is the actual math — and the actual math has a way of changing the conversation.
We're going to do the math with you, using a realistic 30-person professional services firm in Utah as the example. Adjust the numbers for your business and see where you land.
Step 1: Calculate Your Hourly Labor Cost
For a 30-person company, let's assume an average fully loaded employee cost (salary plus benefits, overhead, etc.) of about $65,000 per year. That works out to roughly $31 per hour per employee.
If all 30 employees are unable to work productively due to an IT outage:
30 employees × $31/hour = $930 in labor cost per hour of downtime
And that's just direct labor. Nobody's being productive. Everyone's waiting. Some are getting increasingly creative with their downtime (not in a useful way).
Step 2: Add Revenue Impact
For a professional services firm billing $150 per hour across 20 billable employees, an outage means:
20 employees × $150/hour = $3,000 in lost billable revenue per hour
Some of this may be recoverable — you can bill for that time later — but not all of it. Client meetings get canceled. Deadlines get missed. Some clients are understanding; others are not.
Step 3: Estimate the Indirect Costs
This is where the number gets uncomfortable, and where most downtime estimates fall short. Indirect costs include:
- Emergency IT response: If you don't have a managed IT provider, you're paying someone emergency rates — often $200–$400 per hour — to diagnose and fix the problem
- Data recovery: If the outage involves data loss, add professional data recovery costs, which can run from a few hundred to tens of thousands of dollars depending on severity
- Customer trust: Harder to quantify, but a client who experiences service disruption because of your IT problems is a client who starts evaluating their options
- Regulatory exposure: For healthcare, legal, or financial services firms, an outage that touches protected data has compliance implications that generate legal and administrative costs
- Employee morale: This one sounds soft until you have to recruit to replace someone who decided that a company that can't keep the lights on professionally isn't where they want to build a career
Putting It Together
For a realistic 4-hour outage for our 30-person firm:
| Cost Category | 4-Hour Estimate |
|---|---|
| Direct labor (30 employees) | $3,720 |
| Lost billable revenue (partial recovery assumed) | $6,000 |
| Emergency IT response | $1,200 |
| Indirect costs (conservative estimate) | $3,000 |
| Total | $13,920 |
Fourteen thousand dollars. For four hours. On what might be a completely ordinary outage — a failed server, a botched update, an ISP issue that cascades into something worse because there was no failover.
A ransomware incident that takes systems offline for several days? Multiply accordingly, and add the ransom demand (if you're tempted to pay) or the recovery cost (if you're not).
The Managed IT Math
Comprehensive managed IT for a 30-person company in Utah — covering monitoring, help desk, endpoint security, backup, and proactive maintenance — typically runs somewhere between $3,000 and $6,000 per month, depending on what's included and the complexity of your environment.
One avoided 4-hour outage per year pays for a month of managed IT. Most companies we work with avoid multiple outages they didn't even know they were about to have, because we're watching the environment and catching problems before they become emergencies.
The Question Worth Asking
We're not saying every company needs managed IT. Small enough organizations with simple enough environments can often get by with less. But if you have 20 or more employees and your business depends meaningfully on technology to operate, the math deserves a serious look.
We're happy to do a no-cost assessment of your current IT environment — look at where the risk is, where the redundancy is, and give you an honest picture of what a bad day would actually look like. No pressure. Just numbers.