Definition
Expenses that remain constant regardless of business activity.
Example
A bakery pays $2,000 monthly rent for its storefront and $500 for utilities, totaling $30,000 annually. These fixed costs must be covered even if the bakery has a slow month in sales, emphasizing the need to generate consistent revenue to stay operational.
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- Learn more about Fixed Costs and other costs in this Beginner's guide on How to Create an Operating Budget for Your Small Business