What is the difference between fixed and variable costs in facility management?

Fixed costs play a crucial role in facility management as they represent expenses that do not change with the level of activity or usage of the facility. These costs remain constant over time, regardless of how often the facility is used or the number of visitors. Common examples of fixed costs include rent or mortgage payments, salaries for full-time staff, and insurance premiums. Understanding that fixed costs are stable allows facility managers to budget and plan effectively, giving them a clear framework for long-term financial management.

In contrast, variable costs fluctuate based on usage or activity levels. These can include costs related to utilities, maintenance, and staffing, which may increase or decrease depending on factors such as the number of events hosted or attendance levels. The ability to discern between fixed and variable costs is essential for effective budgeting and financial analysis in facility management, as it helps managers predict and control expenses based on expected usage patterns.