Business · TERM

Overhead

also called fixed costs

Meaning

Ongoing costs not tied to a specific project or sale.

Base Meaning™

What it costs to keep the doors open.

What It Is

Overhead sits on the Business side of the work, in the Finance area. Stated plainly: ongoing costs not tied to a specific project or sale.

It is a label with a settled working definition, so the value is in using it the same way every time. That is the version worth keeping, because it survives contact with a real project.

How It's Used

In practice, Overhead shows up in commercial decisions, pricing conversations and how the business runs. It is usually discussed together with Profit, Margin and Cash Flow. The practical test is whether everyone in the room means the same thing by it.

Why It Matters

Overhead is one of those items that only becomes visible when it is missing. When it is unclear, margin leaks in places nobody is looking. It is worth pinning down before anyone builds on top of it.

Explain It Like I'm Five

Think of it as a name on a box. Open the box and this is what is inside: What it costs to keep the doors open.

Termshift™

How the meaning shifts depending on who is using it, and where.

INDUSTRY

Practitioners use Overhead as shorthand and expect no explanation — ongoing costs not tied to a specific project or sale.

PLAIN

Outside the industry, most people would just say: what it costs to keep the doors open.

The Bottom Line

Treat Overhead as a decision, not a description. What it costs to keep the doors open.