Why is it crucial that small businesses hold back their exposure to fixed costs?
Answers:
Small businesses especially if different must be flexible and chop and alteration until they own a successful business model. All businesses big and small must strive to consideration their exposure to fixed costs.
It provides contingency against period of underperformance surrounded by sale.
no concept
To survive the fruitless times and respond to souk change.
An example is a travel agency surrounded by the 80s when most be going to computer systems that cost 25K or more. One I did the accounting for didn't buy the computer system and when the travel industry be down she could lay past its sell-by date a party and still receive a profit. Others be going out of business because they couldn't take-home pay the payments on the computers.
The same entity happen to lots small farmers, they buy expensive equipment and own a drought or freeze and can't manufacture the payments so lose the plant.