Doing the math will put a figure behind the importance of a dependable contingency plan.
As a small business, you’ll essentially need to calculate the revenue lost per hour your internet isn’t working as it should. This can be done via a simple equation that will determine the highest possible loss for your business — the worst-case scenario.
Of course, it needs to be said that you won’t always lose 100 per cent of your revenue during a period of internet outage. Some customers may return to purchase later, and you may even find a few still carry cash and can complete their purchase without your EFTPOS terminal. It will, however, give you a ballpark figure that will act as a somewhat harrowing indication of cost.
To find that figure, you’ll need the following data:
Calculating the true cost of a period of internet outage can be represented by the following equation.
It’s important to note that this equation doesn’t take into account the amplified impact felt by retailers on weekends and during holidays. Nor does it factor into account busy dining times for small businesses in the hospitality industry.
So, for example, if you’re a food truck business operating three days a week, eight hours a day, and making $250,000 a year, your equation would look like this.
This means that for every hour you’re unable to connect to the internet, your food truck is losing approximately $200 of potential revenue.
Aside from the obvious loss of revenue, there are also a number of other intangible costs that can impact your business further down the line.
Internet outages can affix a sense of unreliability to your business, particularly if it’s a recurring issue. If customers can’t rely on you to provide them with a good or service (because you can’t accept payment in return), they may instead go to a competitor who can. Coupled with the persuasive power of word-of-mouth, your business may begin to feel the repercussions of a compromised reputation, something that can be near impossible to repair.
For this reason, you should always have a reliable mitigation strategy that will ensure your customers feel confident they will be able to pay for your goods or services in a convenient way.
Being the bearers of bad news can be a difficult burden to carry for your employees, particularly if they’re constantly having to assuage disgruntled customers. Over time, this can wear down morale and even lead to resignations. Loss of labour then comes with the added cost of securing new hires, something that takes away costly labour resources from management who have to interview and train prospective hires.
Securing a reliable backup to internet outages is an investment into the performance and longevity of your team. It will help ensure you are only ever investing extra hours into employee upskilling and improvements in efficiency that could in turn boost your business’s revenue potential.
Depending on the type of business you run, when your EFTPOS terminal is unable to connect to the payment network you may be able to invoice a customer instead of taking payment on the spot. However, you’re then tasked with the job of following up payment for that invoice. That’s valuable time that could otherwise be spent securing new customers, expanding your business, or introducing new products. Plus, there’s the cost of late payments to consider — another expensive consequence that can have severe repercussions on the health of your business’s cash flow.
Suffice to say, being able to reliably accept payments during all hours of operation is critical to ensuring you’re meeting your revenue potential. A reliable contingency plan will ensure you are able to accept EFTPOS payments 24/7, no matter where you are or what the state of your internet connection is.
Zeller SIM Card is the easiest way to protect your business from internet outages. For the low cost of $15 per month, you’ll get the flexibility to accept payments at your business location or on-the-go, as well as peace of mind knowing you won’t be left in the lurch when — not if — there’s an internet outage.
Now that you know the true cost of internet downtime and what you can do to mitigate the risk, you’re ready to invest that saved revenue into scaling up your business. Sign up to our Business Blog to cash in on valuable insights sent straight to your inbox.