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Businesses Suffer Serious Effects From Power Outages

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There has been plenty of news lately about power outages as Pacific Gas & Electric (PG&E) has instituted blackouts for millions of customers in California to reduce the risk of fire danger. Many stories about these planned outages have focused on how the shutoffs impact residents but businesses across multiple industries are heavily impacted as well.   

According to E Source, power outages cost U.S. businesses $27 billion per year within eight key market segments. Further, a four-hour power disruption costs an average of $10K to $20K while a three-day outage can cost upwards of $50K. Marketplace notes that, in some parts of the world where access to electricity is unreliable, business owners work the cost of backup power into their standard operating budgets.  

Power outages can occur for a number of reasons including natural disasters and equipment failures. Following are some of the potential major impacts of power outages on businesses, regardless of the cause, as well as what companies can do to prepare for these events.

Major Impacts

Businesses rely on electrical power for every aspect of their operations, so it’s no surprise that loss of power means loss of customers, income, and data.

Decreased Revenue

If a company is unable to deliver the product or service it normally provides, customers are going to find it somewhere else, with the possible consequence of finding a new favorite provider for that item. The inability to deliver could impact a company’s reputation as well. As a result of these factors, significant time and money may be needed to rebuild a solid customer base.

Damaged Inventory, Supplies, and Equipment

For restaurants or grocery stores without power, food can go bad. For medical facilities, medication can be negatively affected, as can any item needing to be maintained at a certain temperature. Likewise, electrical equipment can be damaged when the power comes back on if a company hasn’t taken steps to prevent electrical surges.

Decreased Productivity

For companies that rely on computers or other machines, in the event of a power outage employees may not be able to complete their tasks. Results may include backed up workflows and the need to pay workers overtime to finish tasks later. That includes IT professionals who may need to be called in to retrieve lost data and restore equipment operation.

Inferior Customer Care

Without access to the appropriate software applications, customer care becomes almost impossible. No matter how many apologies a company offers, it may not be enough to appease outraged customers, who may take their business elsewhere and never return.

How to Prepare Now

Even companies that don’t think power outages are an issue in their area should prepare, as these events can happen unexpectedly. Businesses should create a disaster recovery plan that includes power outages and how they can be dealt with, including the possibility of a backup generator and enough fuel to operate it.

It may also include an alternative location or way to deliver customer service, such as temporarily forwarding calls to employees’ personal phones. Managers should train all workers on these plans and conduct drills a couple of times per year.

Companies can also think of creative ways to deliver services without power for a brief period. For example, during the PG&E outages, “Workers at both small businesses and big chains…tabulated sales on a piece of paper. They brought flashlights to work, and guided customers to dark areas of the store to help them find…emergency supplies,” according to KOMO News.

Power outages can be damaging to both homes and businesses. Companies have much to lose and the impacts can be far-reaching and long-lasting. Fortunately, there are ways to prepare for such an event and all businesses should be proactive in planning for this possibility.

Have your business customers experienced power outages? If so, how were they impacted and what were their coping strategies? Please share in the comments.

Karen Marcus's picture

Thank Karen for the Post!

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Discussions

Matt Chester's picture
Matt Chester on Nov 8, 2019 10:40 pm GMT

This is a timely and important topic, thanks for sharing Karen. One industry I've heard a lot about in the wake of the PG&E PSPS is the Ag industry, where unplanned outages cannot have the necessary work simply shifted in time and where delays risk ruining and entire year's harvest in a way that can be impossible to come back from. These issues must be taken with seriousness and urgency from the relevant utilities!

Karen Marcus's picture
Karen Marcus on Nov 11, 2019 8:31 pm GMT

Agreed, Matt. As you point out, sometimes lack of access to power can have long-lasting and far-reaching effects, not just for businesses but for the people they serve. 

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