What are fixed and variable costs?
Assess your fixed costs (often called overheads), which you pay for regardless of how much you produce or sell. They include rent, rates and wages. Many businesses fail to realise that savings can sometimes be made on these. See our guide on how to avoid insolvency. Also try to make savings on your variable costs, which are linked to how much you produce or sell. Variable costs include materials, packaging, overtime and transport costs. See our guide on how to identify potential cashflow problems. Cutting costs by too much or in the wrong areas can have a negative effect, so be careful. Also, focus on value for money rather than price alone. Read our guide on how to increase your profitability. You may find that your business needs to adjust staff costs in order to survive the economic slowdown. This may mean that you could make savings by employing part-time workers for certain areas of your business and it may mean that circumstances oblige you to downsize and make certain roles redu
