Non-necessities are expenses such as travel, entertainment or office perks like a flavored water cooler. DeAngelis gave sales team commissions as an example: If your business were to sell 10,000 products, you would pay your sales team more in commissions than if you sold 100 products. Variable expenses can include some bills or software, as business owners tend to have more control over these expenses, and they fluctuate based on sales. Unless your business pays percentage rent based on sales, the rent is generally contractual, with fixed increases throughout the life of the lease.” “Generally, fixed costs are contractual,” DeAngelis said. Tip: Categorize your budget by fixed expenses and variable expenses, as well as non-necessities. Fixed expenses stay constant, regardless of the number of sales, according to Axel DeAngelis, founder of NameBounce. It’s best to categorize your budget by fixed expenses, variable expenses and non-necessities. Whether you’re a new business or you’ve been doing this a while, projecting what will happen to your business in the future is educated guesswork.
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