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The impact of a power cut on the running of your business

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The impact of a power cut on the running of your business

Power cuts can be everything from a nuisance to an extremely costly event. In July, Thorpe Park was hit by a series of power outages that left some visitors stranded on rides due to the sweltering temperatures of the region’s heatwave, while more than 15 power cuts were reported in 24 hours in Cambridgeshire at the end of the month.

Unfortunately for business owners, power outages can rack up huge costs, as well as cause hours of lost productivity. Therefore, it’s vital for business owners to be prepared and ensure their operations keep functioning as effectively as possible during power cuts. Read this guide to find out how…

Power cuts and their effects

The UK has long suffered power and energy outages over the decades. In 1972, the miners’ strike caused major power issues and even a state of emergency to be declared, while Storm Frank in 2015 caused the loss of power to around 40,000 properties. Considering the UK has more than 17,000km of electricity cables, there’s a great deal of maintenance to keep on top of, which means a sudden storm or unexpected heatwave can cause significant issues.

Here are the various types of power outages:

  • Transient fault: temporary fault, but power is automatically restored.
  • Brownout: can last for a few days (e.g. lowered light levels) and cause machinery malfunction.
  • Blackout: causes complete power loss and is usually the most expensive and tricky for businesses to recover from.

Between 2003 and 2012, weather caused eight out of ten power cuts — if research by Climate Central is trusted. Considering the randomness of power outages, you should prepare your company for future power cuts now.

Lack of power and its effect on your business

Not having power is, of course, going to have a detrimental impact on any company — but power outages still affect business in different ways.

You don’t want to lose online data as a business — this can make you look unprofessional, miss deadlines, waste time and cost money. Blackouts and brownouts that last one or more days can mean your production lines simply cease to exist in practice. Of course, your staff are there and willing to work, which means they need paying regardless. However, your business won’t be able to create the products it needs to make a profit that day or even break-even. Similarly, if your business relies on a sales department, think of how much revenue you could lose if your team can’t contact people via phone or email to clinch new customer accounts.

£800 is the price tag placed on a power cut of only one hour for a small company. When Google lost its power in 2013, it experienced losses of £100,000 per minute! The reasons behind the losses vary. Not having access to electricity can mean that employees cannot communicate with customers and are therefore losing out on potential sales. For an ecommerce company, 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.

Almost a quarter of IT professionals asked said that a power cut could cost between £10,000 and £1 million every hour in their industry! In fact, IT downtime in the UK costs around £3.6 million and 545 productivity hours a year. To work out the average cost of downtime an hour, use the below formula:

Employee cost per hour x fraction of employees affected by the power cut x average revenue for each hour x fraction of the revenue that was affected by the outage

If you don’t want to risk having to fork out this amount of cash, you need to plan how to cope with a power cut.

Alleviating the effects of a power cut

Off-grid companies may fare slightly better when it comes to a power cut, as these establishments will use energy sources like gas bottles and cylinders to power operations. However, if your brand relies on the mains grid to run computers and data, install a UPS (uninterrupted power supply) for all your computers. This will let the device run via its battery and will give the staff enough time, if a blackout happens, to save crucial documents and properly shut down the computer to ensure data is not damaged and can be recovered to keep projects on track. Saving on a cloud is also a great way to keep critical files safe.

Losing connection to the internet is bad enough when we just want to check our social media at home, but at work, it becomes much more important. By setting up a MiFi — a device that can operate as a Wi-Fi hotspot — your employees’ devices can connect to an ‘ad-hoc’ network to help you stay online and working in the event of a power cut.

A sudden rush of power after an outage can harm data and machines, so make sure to use surge protectors. Industrial generators are good, too — they’re robust and designed to comply with legal obligations for optimum efficiency in times of need. If your brand relies on the continuous operating of equipment and machinery, it’s vital that you invest in a generator to protect from major productivity and revenue loss as a result of power outages.

A continuity plan that details how to behave and react to a power cut is critical — and all your staff should know about it. Do this by creating a team or committee that will determine the specific risks to your business — a small IT company will have different points to consider compared to a large factory — and then draw up a detailed process for mitigating these risks.

Once you know you’re experiencing a power cut, unplug all your devices and machines. Also, make sure you only use electrical equipment that adheres to regulations detailed by the British Standards Institution.

Power cuts are unpredictable and potentially devastating to a business. Follow these steps and prepare your company for a blackout situation.

I am the founder of Startup Today. I am the main writer and have put in many hours of work into creating this blog. If you want to find out more about me then lets get in contact.

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