Fixed costs grow quietly and don't come down when sales do.
Few companies close because of a single bad decision. Many close because their cost structure grew too big for what they were earning and, by the time they tried to react, there was no room left. Operating expenses (salaries, rent, tools, services) are the cost of opening the door every morning, whether you sell or not.
The most common expense is hiring ahead of revenue: you recruit for the volume you expect to have, not the one you have. If the forecast is wrong, the payroll is still there. Hiring when the work is already overflowing hurts more day to day, but it is much safer.
Software subscriptions, offices bigger than needed, services someone signed up for and nobody uses. None of them is serious on its own. Added together, they can amount to several months of runway. Going through the bank statement line by line every quarter almost always brings surprises.
A supplier who charges per project, a salesperson with variable pay or a flexible workspace sometimes cost a little more per unit, but they adjust when sales fall. That flexibility is worth money.
How much you need to invoice each month to cover all your fixed costs. If you don't know that figure, you don't know how far you are from trouble. And every new fixed cost raises it.
Further reading: Only 14% of cost transformation efforts work: Enterprise Cost Transformation Survey 2026 (Deloitte); Cost resilience: the "find the money" phase (Deloitte).
