Advanced English Dialogue for Business – Fixed expenses

Listen to a Business English Dialogue about Fixed expenses

Jonathan: Hi Melody, do you know what fixed expenses are in business and finance?

Melody: Yes, I do. Fixed expenses are regular, predictable costs that remain the same regardless of business activity, such as rent, utilities, and salaries.

Jonathan: That’s correct. Fixed expenses are essential for businesses to operate but do not typically vary based on changes in sales or production levels.

Melody: Are there any other examples of fixed expenses?

Jonathan: Yes, other examples include insurance premiums, property taxes, and loan payments that remain constant over a specific period.

Melody: I see. So, fixed expenses are necessary for businesses to budget and plan their finances effectively.

Jonathan: Exactly. They provide a baseline of costs that businesses need to cover regardless of their revenue fluctuations.

Melody: Are there any strategies businesses use to manage fixed expenses?

Jonathan: Yes, businesses can negotiate lower rates with suppliers, implement cost-saving measures, or lease equipment instead of purchasing to reduce fixed costs.

Melody: That makes sense. So, businesses can take proactive steps to control their fixed expenses and improve their bottom line.

Jonathan: Yes, exactly. Managing fixed expenses efficiently is crucial for businesses to maintain profitability and financial stability.

Melody: Thanks for explaining fixed expenses, Jonathan.

Jonathan: You’re welcome, Melody. If you have any more questions, feel free to ask!