Fixed costs
Example: A Brooklyn pizzeria adds up rent, insurance, the loan payment, and its POS and reservation subscriptions and finds it owes roughly $22,000 in fixed costs every month before a single slice is sold.
costs that don't scale with sales
Costs that don't change with sales volume: rent, insurance, loan payments, base utilities, SaaS subscriptions (POS, reservations, payroll, marketing tools), salaried management, accountant retainer. Independent of whether you did 40 covers or 400 last night.
Why it matters
The floor your covers have to clear every month before profit starts. The first place to look when a business that "feels fine" keeps running negative months — fixed costs creep slowly (one new SaaS per quarter, a rent escalation clause) and nobody notices until the total moves the break-even.
Frequently asked
What is fixed costs?
Fixed costs is costs that don't change with sales volume: rent, insurance, loan payments, base utilities, SaaS subscriptions (POS, reservations, payroll, marketing tools), salaried management, accountant retainer. Independent of whether you did 40 covers or 400 last night.
Why does fixed costs matter for a restaurant?
The floor your covers have to clear every month before profit starts. The first place to look when a business that "feels fine" keeps running negative months — fixed costs creep slowly (one new SaaS per quarter, a rent escalation clause) and nobody notices until the total moves the break-even.
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