Costs that exist regardless of sales.
WHAT COUNTS
Rent Electricity and fuel Internet and phone Hosting and software Staff Transport Anything you pay whether or not you sell
WHY THEY MATTER FOR PRICING
Every sale must contribute toward them.
Pricing that covers only direct cost never covers overheads.
HOW TO ALLOCATE THEM
Total your monthly overheads Estimate your monthly sales volume Divide
That is the overhead contribution each sale must make.
WHAT THAT TELLS YOU
Your minimum viable price, below which you cannot cover the business.
FOR A BUSINESS RUN FROM HOME
Overheads are lower and not zero.
Power, data, equipment and your own time all count.
WHAT TO REVIEW
Overheads annually. They creep.
WHAT TO WATCH
Overheads growing faster than sales.
That is how a busy business becomes an unprofitable one.
