Definition

Counting on income that arrives on a regular basis, like subscriptions or service fees. It helps make budgeting and future planning more reliable.

What to consider

  • Track costs as production levels change.
  • Identify opportunities for cost savings.
  • Plan for market price fluctuations.

Real world scenarios

  • A manufacturer’s raw material costs change based on production volume.
  • A retailer sees fluctuations in packaging expenses with varying sales.
  • A service provider experiences variable utility bills depending on usage.

Related terms

Entrepreneurial Finances