The expenses we should try to avoid the most are fixed expenses, wherever possible we should rather take on expenses as variable expenses rather than fixed expenses.
A fixed salary for a new employee or contracted rent for premises are examples of fixed expenses. These can e converted to variable expenses by entering into an arrangement with an employee only for the amount of time that they will be needed or renting extra space only for the amount of time required.
The way to determine if expenses are essential to the business or not is to calculate if the extra expense will affect profitability in any meaningful way. If it is expected to make profits go up significantly or prevent profits from dropping appreciably then it is worth investigating further to determine any other impacts the added expense may have.
Once the cost benefit analysis is completed then we need to see if there are ways to make the cost a variable one whenever possible. Variable costs should scale as profitability scales
