Fixed costs are business expenses that stay the same regardless of sales or activity levels. You pay them whether you sell one bag of food or a thousand.
Examples:
- Rent or lease payments
- Salaries (for full-time staff)
- Insurance
- Internet and software subscriptions
- Loan repayments
Why It Matters
Fixed costs are predictable and help you understand your break-even point—how much you need to sell before making a profit. Keeping them under control is key to staying profitable during slow months.
Tip: Unlike variable costs (which go up and down with sales), fixed costs don’t change unless you make a big decision—like moving to a bigger space or hiring more staff.