What Is Mbps Why Does It Matter to Your Business

Men and women using connected devices at work.

“Most brilliant pop star”? “My bad, pal, sorry”? Mbps doesn’t mean any of that; this initialism stands for megabits per second and refers to your internet speed and bandwidth. But why does it matter? The Mbps speed you have at home or in your office can impact your bottom line. Here’s a full guide to Mbps and why every bit matters.

What Is Mbps?

When you signed a business internet contract with your Internet Service Provider (ISP), you may have seen your internet speed listed as Kbps, Mbps, or Gbps. Think of these speeds like watts and kilowatts—gigabits being the largest sum and kilobits the smallest. Internet speeds are most commonly defined in Mbps, or Megabits per second. A Megabit is one million bits.

Stylized illustration of binary code.

Mbps vs. MBps: What’s the Difference?

These two terms look almost identical—in fact, many people think one is just a typo. There’s actually a pretty big difference, though. Mbps stands for Megabits per second, while MBps stands for Megabytes per second. Megabits is used in reference to internet speeds, while Megabytes are used for file sizes.Additionally, both Mbps and MBps refer to download speed. Mbps is typically used by Internet Service Providers to tell you how fast your internet speed is, whereas MBps is usually seen when you’re downloading a file. The confusing part is that the two terms are not interchangeable. There are actually eight Megabits in a Megabyte, so a file that is one Megabyte in size will need a connection speed of eight Megabits per second to download it in one second.

In other words, 1 MBps is equal to 8 Mbps.

What’s the Difference Between Mbps Speed and Bandwidth?

Internet connection speed and bandwidth are similar, but not necessarily the same. In simplified terms, bandwidth is the maximum speed your system is capable of using, whereas your Mbps speed is the actual download or upload speed you’re getting at the moment.

For example, let’s say your internet service package is for 75 Mbps. That number is your bandwidth. You go to download a file, and the site hosting the file limits data transfer rate to 5 Mbps. In this case, your connection’s bandwidth is 75 Mbps, but the download speed you’re getting is only 5 Mbps—it’s been limited by an external factor—and you’re not able to use your full bandwidth.

This distinction can come in handy when you’re planning your office’s network. If you know your data transfer rate will be limited by an external factor, you can choose a package that matches bandwidth to internet speed to avoid paying for more than you need.

Illustration of binary code in the shape of a sphere.

Why Are There Two Numbers for Mbps?

You may have noticed Mbps represented as something like 75/35 Mbps on your bill. What does this mean? Simply, it signifies your download speeds and upload speeds, respectively. Typically, your download speed will be faster since that’s what you use the network for the most. If your business uploads a lot of data over your network, discuss that with your internet provider and opt for a higher upload speed.

Why Does Mbps Matter for Your Small Business?

Now that you understand what Mbps means on a technical level, see why it matters when it comes to running your business.

1. A Poor Connection Might Jeopardize Client Retention

If you’re using Skype to video chat with clients all over the globe, high-quality and reliable internet keeps the call from cutting out. Consistently losing your connection could cause clients to become frustrated and take their business elsewhere.

To verify that you’re getting every last bit of internet speed you’re being billed for each month, perform a speed test. If you have any issues, you should contact your internet provider and discuss the results. If your internet connection is strong and fast, you shouldn’t have a problem with video chat freezing during an important client call.

2. A Larger Staff Requires More Bandwidth

You know how you run out of hot water faster when you’re taking a shower, running the washing machine, and washing dishes at the same time? The same goes for your network. The more people who are using the internet in your office, the larger the bandwidth you’ll need to ensure everyone can accomplish tasks simultaneously. Otherwise, people will end up wasting time—and your money—twiddling their thumbs while waiting on slow downloads and uploads.

To determine the right internet speed for your needs, tally up your employees and think about their daily work. Or, check out a chart of Mbps speeds that correlate with downloading files, streaming videos, and similar internet-based tasks. Time is money, and it might be worth it to pay more for a better internet package than deal with lag because of a slow, low-bandwidth connection.

3. You Should Only Pay for What You Need

If you don’t know anything about cars, it’s easy to get taken for a ride at the dealership. The same goes for internet speed. Instead of buying the Rolls Royce of internet packages, maybe you only need a modest mid-level sedan. By determining exactly what you need and ensuring you understand Mbps, you won’t buy too little or pay too much for internet—you’ll save money in the long run since your internet won’t be too slow or too fast, it’ll be just right.

Employees collaborating in a conference room using connected devices.

What Internet Speed Do I Need for My Business?

So how much network speed do you actually need? The answer actually depends on the data-intensive tasks you need to perform using your internet service and the number of people performing those tasks at one time.

The basic rule of thumb is to determine how much speed you need to perform your most intensive tasks, and then multiply that number by the maximum number of users that might be doing those tasks at once. Here’s how much data some of the more intensive online tasks consume:

  • Cloud backup, 2 Mbps
  • Email with large attachments, 1.15 Mbps
  • Streaming a webinar, 1.5 Mbps
  • Uploading large files, 2 Mbps
  • Videoconferencing, 4 Mbps
  • VoIP video calls, 1.28 Mbps

These activities tend to hog small businesses’ bandwidth the most. So, if you do a lot of video conferencing with clients and employees, and you might have as many as ten staff members on a call at once, you would need 40 Mbps for that call (4 Mbps x ten employees). If you have ten other employees who might be streaming a webinar at the same time, you’ll want to add another 15 Mbps (1.5 Mbps x ten additional employees), bringing you up to a total of 55 Mbps for peak activity.

It’s a good idea to allow some buffer to avoid bringing your whole business to a halt. So, in the above scenario, it might be a good idea to aim for about 60 Mbps to allow some wiggle room in the network. It’s helpful to use a speed test tool to compare this theoretical number to your current actual speed to look for any other bottlenecks. Also keep in mind that Wi-Fi connections typically requires more bandwidth than an Ethernet connection because some of the signal gets lost in the air during transmission. Ethernet can help squeeze more out of a connection if that’s a concern, though you sacrifice mobility.

Learn more about what these speeds can do for your business:

  • 5 Mbps
  • 7 Mbps
  • 15 Mbps
  • 20 Mbps
  • 25 Mbps
  • 30 Mbps
  • 50 Mbps
  • 75 Mbps

*Speeds subject to availability.  Click or call for more information.

Buying internet for your business may seem daunting. But when you familiarize yourself with Mbps, why it’s vital for your business, and how much you need to operate efficiently, you’ll already be a step ahead of the pack. With these recommendations, you’ll know what to look for from service providers and exactly how much speed you need to thrive.