2 min read
Definition
Fixed costs are expenses that don't vary directly with output or sales in the short term — premises rent, core staff salaries, insurance, software subscriptions. They must be paid whether the company sells much or little.
In plain terms
They're the standing bills of running the business. High fixed costs mean a higher hurdle to clear each month before you make anything.
Why it matters for your company
The weight of your fixed costs sets your break-even point and your vulnerability in a downturn. Understanding them is central to a cash buffer. See how much cash to hold.
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Read →Funding for UK limited companies
Credicorp lends to your company, not to you personally — short-term working capital with no personal guarantee. See what your business could access.