Why Overhead MATTERS To ENTREPRENEURS

Analyzing the definition of key terms often provides more insight into concepts.  Overhead can be defined as activities supporting the production process that are not direct costs, or direct labor.  As an entrepreneur, it is essential to know why overhead costs impact your small business.  I first start by defining overhead then go into examples.   What costs are included in overhead?  A definition of fixed costs, variable costs, and semi-variable (mixed) costs are also included.  It is important to note that the more fixed costs you have, the less profit you will have.  Also discussed is how to compute your overhead rate.