Definition
Fixed costs are expenses that do not scale with usage, such as baseline infrastructure, tooling, and salaries.
Why it matters
If fixed costs are ignored, pricing can look profitable at low usage but fail to recover overhead.
Pricing implications
Use a base fee or platform fee to recover fixed costs. Spread fixed costs across expected volume.
Measurement tips
Separate fixed costs from variable costs in your model.
Checklist
- List fixed costs by category.
- Allocate fixed costs per plan or segment.
- Use base fees to recover fixed costs.
- Recalculate fixed costs quarterly.
- Avoid hiding fixed costs in variable pricing.
- Validate fixed costs with finance data.
- Update costs after staffing changes.
- Document fixed cost assumptions.