Variable expenses are those expenses that track directly with sales. If sales stop they stop. These are expenses like supplies used to support in the making of your product or doing your service. Such things as shipping cost for raw materials for your product or service. If you have no sales then you're not going to be purchasing materials so your shipping cost for those materials will stop as well. As an example, if you have a lawn mowing business and there are no lawns to mow, then you wouldn't be buying gasoline to travel to your lawn mowing site. These kinds of things are variable expenses. If you're producing a product, it would include supplies used to produce that product like sand paper, glue, finishing materials, cutting tools, etc.
We often see entrepreneurs who are working so much on the day_to_day tasks of building the business that they do not take the time to properly plan. Usually the business owner did not take the time to properly plan for the future. This is one of the biggest mistakes a business owner can make. In this article I will outline 5 reasons an entrepreneur needs a business plan to keep their business on the right track.