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Economics
Fixed Cost
Costs that stay the same no matter how much you sell — rent, salaries, software subscriptions.
Businesses with high fixed costs have high operating leverage — once they cover the fixed costs, extra sales drop straight to the bottom line. This is why software and digital businesses can become extremely profitable very fast.
It's the bill you have to pay even if the shop is completely empty.
Real world: A Shopify store pays £49/month for the platform, £200/month for rent on a small office, and £3,000/month in salaries. These are fixed costs — they don’t change if sales double or drop to zero.
💡 Keep fixed costs as low as possible when you're starting — they are the silent killers of small businesses.