Methodology
How the numbers are calculated
Every constant in this calculator is documented below. The model is deliberately conservative: where a judgment call existed, we chose the number that makes your downtime cost look smaller, not larger.
The formula
loadedHourlyWage = avgSalary ÷ 2,080 × 1.30 productivityLoss/h = affectedEmployees × loadedHourlyWage × productivityImpact revenueLoss/h = (annualRevenue ÷ 2,080) × industryMultiplier hourlyCost = productivityLoss/h + revenueLoss/h annualRisk = hourlyCost × expectedDowntimeHours
- 2,080 hours — a standard working year (260 days × 8 hours). Businesses with longer operating hours spread revenue thinner per hour, which keeps the estimate conservative.
- 1.30 wage loading — accounts for benefits, payroll taxes, and overhead on top of salary. Commonly cited loadings run 1.25–1.4; we use a conservative middle value.
- 50% productivity impact (default) — assumes partial operation during an outage: some staff can keep working offline. Fully system-dependent teams should raise this in Advanced assumptions.
- 8 hours downtime/year (default) — a conservative assumption for a small business without tested backup and continuity (BCDR) arrangements. If you track real incident history, use your own figure.
- Revenue skipped → $0 revenue loss — if you don't enter revenue, the estimate counts productivity loss only.
Industry multipliers
The multiplier scales the revenue-at-risk term by how directly a sector's revenue depends on systems being up. These are relative weights, not measured precision — they align qualitatively with published rankings of hourly downtime loss by vertical (financial services, healthcare, manufacturing, retail at the top). The absolute number is driven by your own inputs, not the multiplier.
| Industry | Multiplier | Rationale |
|---|---|---|
| Professional services (legal, accounting, consulting) | 0.8× | Billable-hours model — employee productivity loss dominates; revenue is often deferred rather than destroyed. |
| Manufacturing & logistics | 1.2× | Line and shipping stoppages hit revenue directly, plus SLA penalty exposure. |
| Retail & e-commerce | 1.4× | Real-time revenue dependence — POS or online-store downtime is immediate, unrecoverable loss. |
| Healthcare | 1.3× | Scheduling, billing, and EHR interruption plus regulatory burden (noted separately, not priced in). |
| Financial services | 1.5× | Time-critical transactions, regulatory and trust sensitivity — highest hourly exposure. |
| General office | 1.0× | Baseline for a typical office business. |
Data anchors
We benchmark against SMB-scale, MSP-sourced data. We deliberately do not use frequently-cited enterprise statistics (e.g. $5,600/minute figures) — they are dated, enterprise-biased, and unrealistic for small businesses.
| Metric | Value | Source | Caveat |
|---|---|---|---|
| Average SMB downtime cost | ~$8,000 / hour | Datto, State of the Channel Ransomware Report | MSP-sourced, SMB-focused — the anchor this calculator is benchmarked against. |
| SMBs reporting $10,000+ per downtime hour | 78% | Datto | Shows how common five-figure hourly losses are among small businesses. |
| Ransomware downtime cost per SMB incident | ~$126K–$141K | Datto | Incident-level, not hourly — context for worst-case exposure. Not used in this calculator's math. |
Display rules
- Hourly figures are rounded to the nearest $10; annual figures to the nearest $100.
- Hourly estimates are display-capped at $100,000/hour with a caution note — beyond the typical SMB range this tool is designed for.
- There is no lower clamp. If your estimate is small, we show it as-is and let the benchmark provide context — honest numbers over impressive ones.
Limitations
This is a screening estimate built from your inputs and published benchmarks. It is not suitable for insurance, contractual, or compliance purposes, and it excludes categories that are real but unquantifiable without a site-specific assessment: data loss, breach response, regulatory penalties, reputation damage, and customer attrition. Where those apply, your true exposure is higher than the number shown. For decisions with money attached, commission a formal business impact analysis.