fixed cost

Everything Comes At A Price

Everything Comes At A Price

Turns out, lots of things cost lots of money. 

Millennial griping aside, it's not revenue that matters. It's costs. We face them in our daily lives:

  • Fixed costs you would incur no matter what for your business. Imagine a Starbucks without their coffee machines! They have to have them or there isn't a business.
  • Variable costs change based on the amount you're producing. You only need so much organic cacao and whipped cream for cappuccinos based on your output.
  • Opportunity costs hide behind all of your decisions like buyer's remorse. It's the cost of what you could have done with that asset--like instead of paying rent, renting it out to someone else. If you don't have your coffee, your opportunity cost is being a complete zombie, even though your absolute monetary cost might be lower. You're giving up functioning like a human being, so most people say it's worth it to make the purchase.