Fixed expenses are those expenses that do not change regardless of sales or production.
Every business carries with it two types of expenses: fixed expenses and variable expenses. Fixed expenses are those costs that do not rise or fall with the volume of the business' sales or production. Also known as "fixed costs" or simply "overhead," fixed expenses must be paid whether the business sells a million units or just one. Because they're so rigid, these fixed costs will be a major factor in how much income your business must earn to break even and succeed.
Instructions
1. List all of the expenses related to the business' employees, including salaries, hourly wages, employment taxes and employee benefits such as paid vacation or medical insurance. Also include Worker's Compensation payments and any expenses related to employee acquisition, such as paid moving expenses.
2. List the expenses related to the business' physical location and operation, known as "occupancy expenses." Occupancy expenses include costs such as rent, lease or mortgage payments, property insurance, maintenance or repair costs, equipment leases, utilities, property taxes, loan repayment expenses, business insurance, trash and cleaning services, and capital depreciation.
3. Add to the list any expenses related to advertising or marketing, such as print or broadcast advertising costs; the expenses of promotional events or giveaways; printing costs for brochures, flyers or other promotional materials; sales staff expenses such as travel or laptop computers; and any other expense related to the promotion and marketing of the business.
4. List your business' administrative costs, along with any regular overhead costs not included in the other sections of your list. Line items for administrative costs may include expenses such as professional dues, subscriptions, Internet access charges, copier leases, office supplies, employee training costs, computer upgrades, postage, cleaning supplies, liability insurance and miscellaneous expenses.
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