sheet of paper or in a computer file, make a list of the fixed or regular monthly expenses of your business. Your objective is to develop a dollar amount of expense that you are committed to pay every month. This is your "nut," or the dollar figure you must be able to pay to keep the business viable. Include rent, utilities, salaries of employees, payroll taxes, insurance payments, postage, telephone, utilities, bookkeeping and so forth. Some costs will be paid each month and others will be paid once or twice a year. If a cost is less than about 10% of your total fixed costs, you can divide the cost by 12 and show an amount each month. If the cost is larger than 10% of the total, record the cost in the month you expect to pay it. You can choose whether to include a draw for yourself as part of the fixed costs. If you plan to take your compensation only if the business shows a profit, do not include your draw.     Your fixed cost list should also include some "discretionary costs"-expenses that change from time to time due to your conscious decision. For example, your promotion expenses may change occasionally as you increase or decrease advertising to take advantage of slow or busy times. Include them in the fixed cost category even though the amount may fluctuate from time to time.     WarningCertain expenses are not "fixed costs." Do not include as fixed costs:     the costs to actually open your business (covered in     loan repayments (covered in     the costs you pay for any goods youll resell or use in the manufacturing or development process (covered in           Fixed Costs Forecast for Antoinettes Dress Shop         By completing this simple exercise, Antoinette has gained important information. She now knows that she must sell enough every month so that she has at least $16,050 left after accounting for the merchandise she sells. On an annual basis, thats $192,600 ($16,050 multiplied by 12). Antoinette must also bear in mind that she has not shown any salary or draw for herself. To prosper, she obviously must not only cover fixed costs, but also must take in enough to make a decent living.     3. Forecast Gross Profit for Each Sales Dollar     How much of each sales dollar will be left after subtracting the costs of the goods sold? That number will pay fixed costs and determine your profit for your business. At this stage, you are trying for a broad brush, quick and dirty forecast, so its okay to make a rough estimate of your average gross profit.     Lets look at how Antoinette calculates her gross profit for her first year of business. Antoinette plans to sell about half her products at double the cost she pays. A dress she buys for $125 she sells for $250. That means that her gross profit per dress sale is 50%. She plans to derive her selling price for sale dresses, mark-downs and accessories by adding one-half of her cost to her