Definition

Spending that stays the same no matter how much you sell, like rent or salaries. Keeping track of fixed costs is important when planning budgets.

What to consider

  • Monitor debt relative to revenue.
  • Ensure repayment schedules are realistic.
  • Avoid overleveraging to maintain financial stability.

Real world scenarios

  • A small business in Denver carries a loan used to purchase new machinery.
  • An entrepreneur uses debt financing to support expansion without diluting ownership.
  • A startup manages its debt levels carefully while scaling operations.

Related terms

Entrepreneurial Finances