Fixed vs. Variable

Fixed costs: business costs that are constant whatever the quantity of goods or services produced.

Examples of Fixed Costs:

  • Rent/Utilities/Payroll/Insurance/Benefits

Variable Costs: a cost that varies with the level of output

Examples of Variable Costs

  • Materials/Cost of Goods/Shipping/Credit Card Fees/Commission

As you grow each of these will grow, it is inevitable, but only one will shift with your revenue. Control your fixed costs as you grow so you don’t rob yourself of what comes with growing variable costs. Profit.

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