An enterprise will need to plan the costing and pricing of its products carefully. Costings cover all of the costs associated with the provision of the product. This will include:
Examples of fixed costs
•Water rates
•phone and internet charges; (if on a all inclusive plan)
•Insurance;
•Rent;
•Non Domestic Business Rates (Business version of council tax)
Examples of variable costs
•Electricity
•Gas
•Water meter;
•marketing your new business;
•Postage;
•wages for you and your staff
The total costs of running a business are found by adding the fixed costs and the variable costs using this formula:
Total costs = Fixed costs + Variable costs