Metric

Fixed Expenses

These are costs that your business pays no matter how much you sell, like rent for your office, payroll, health insurance, and legal fees. Note that "fixed" doesn't mean these numbers don't change, just that these expenses aren't sales related - they don't increase if your revenue increases, or decrease as revenue decreases.

Why it matters

This is one of the key pillars of profitability. No matter the economic situation, time period, or fancy new technological advancement going on, companies with low fixed expenses (relative to revenue) are healthier companies - these are the ones that survive the downturn. Keeping these expenses under control (a.k.a. as low as humanly possible) helps your store stay profitable even during slower periods.