Small business owners shouldn’t be diving into the budget’s nitty-gritty details all the time.

You’re the owner! There are so many things you are doing, and allocating your time effectively is the name of the game.

Here are two cost categories small business owners should bucket expenses into so you’re not spending hours picking apart your expenses.

🧾 Fixed Costs

These stay the same month to month (no matter how busy you are).
Examples:
• Rent
• Salaries
• Insurance
• Software subscriptions

👉 They’re predictable — which means you can plan for them in advance.

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🔄 Variable Costs

These change depending on your sales or activity level.
Examples:
• Materials or supplies
• Shipping costs
• Contractor hours
• Payment processing fees

👉 They rise (and sometimes fall) as your revenue does.

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⚖️ Create a Budget For These Buckets:

1️⃣ Cover your fixed costs first — they’re non-negotiable.
2️⃣ Plan variable costs as a % of revenue (so they scale with your sales).
3️⃣ Add a buffer — because variable costs almost always surprise you.
4️⃣ Track and review both regularly.

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📊 When you understand your fixed vs. variable costs, you can:

✅ Price your products/services with confidence
✅ Avoid cash flow crunches
✅ Predict profit more accurately