 Now, what is a fixed cost? Fixed cost is a cost that doesn't change regardless of your output. I'll give you an example. If you're selling 10 burgers, your rent doesn't change. If you're selling a thousand burgers, your rent doesn't change either. And that's the reason why rent is a fixed cost. It doesn't matter how many burgers you produce at home, you're still going to be paying the same rent and that's why we call it a fixed cost. Now, why is understanding fixed costs so important? First and foremost, because it allows you to calculate your break-even cost. It allows you to understand how long would it take for you to make back the investment that you put into the business and so then that way you know how many units you need to sell per month for you to make back your money. And also, a business with a high fixed cost will need a much longer time to break even, which is a reason why a lot of people who are in the restaurant business wouldn't be able to make back their money in the first three years. And you hear this all the time. It's that, you know what, people are spending $200,000, $300,000 in creating a restaurant and for them to make back that money, it usually takes around two to three years before they start profiting and which is the reason why you made a super, super good decision to invest in yourself in this business because the investment that you put in is very, very limited in comparison to a traditional restaurant. Now, how do you identify startup costs? Here's a very common list of fixed costs for any type of business and I'm going to give you context of your Instagram home food business. First up rent, usually $5 to $20 per square foot and Vancouver, it's around $15 per square foot. We're talking about either a home kitchen, a commercial kitchen, or a ghost kitchen. These are things that you can go out and rent, but nonetheless, you can actually create the stuff from your home and if you're living at home with your family, then a lot of times rent is neglected and this is a really, really big fixed cost that you can save. Next up equipment, it really depends on the equipment. I highly, highly do not recommend you to purchase any commercial equipment to begin with. First up because it is super expensive when it comes to commercial equipment and on top of that, you might not need commercial equipment because usually what makes a domestic equipment and a commercial equipment difference and the only difference most of the time is the amount of unit that a commercial kitchen can produce. Initially, when you just start off your business, you really don't need that much and that high of a quality of equipment for your operations. Next up, business insurance. Business insurance is very, very much needed because what if you get sued? You don't want to get sued and not have insurance to back you up. So for us, it ranges from $1,000 to $3,000 a year and on that note, definitely go and talk to an insurance broker and ask them, hey, you know what? I want to set up my home food business. What are the insurances that I would need? I highly recommend you to do so and once again, I'm not here to provide you with any legal advice. I'm not telling you that you must purchase any of these items. I am just showing you what are the items that we purchase and what are the items that we recommend you to purchase when starting up your business. You definitely need to consult with your city officials for this. This is a huge disclaimer. Okay. Next up, legalities. Documents such as your business license, business name registry, Vancouver. Our legal document ranges from $100 to $500 per document. So it really depends on what you're signing up for. So usually this is a really affordable expense. Next up, your website, domain and your hosting, that ranges from $20 to $50 per month, depending on the e-commerce platform, which we'll dive into in the Nix module, module five. And we're going to be talking about Shopify and how to set up your Instagram shop. And that is around $30 per month at this time. So the prices would fluctuate depending on the time that you set up your account. So nonetheless, there are little expenses that would accumulate over time. And you need to be able to have these numbers all into one place, one Excel. So then that way you have clarity on how many units you need to sell per month in order for you to break even. So then that way you can decide whether this is the right business model for you. So next up, example of Bulbasaur. Like I said, this is a case study that we created specifically for you. And as you can see here, we logged the different expenses that we were incurred into our business. So what you can do is find this fixed cost analysis in our financial analysis document, which is in the document and template that we are providing for you in the link below. So now it is your turn. Go and list out all the necessary fixed expenses that applies for your business. Use the template and use it as an as an inspiration for you to calculate your cost.