Overhead Expenses

Overhead expenses are the ongoing costs a business incurs to operate that are not directly tied to producing goods or services. These include rent for office space, utilities, salaries for administrative staff, and office supplies. Unlike direct costs, which vary with production levels, overhead remains relatively stable regardless of business activity. Managing overhead is crucial for businesses, as high overhead can reduce profitability even if sales are strong. Understanding and controlling these expenses helps ensure the financial health of a business while allowing it to invest in growth and development.