overhead

Vocabulary Word

Definition

'Overhead' refers to ongoing business expenses that aren't directly tied to creating a product or service. This includes rent, utilities, and salaries for employees not involved in production.

Examples in Different Contexts

In business, reducing overhead costs can lead to higher profits. A CFO might say, 'We need to cut down on overhead expenses to improve our financial performance.'

Practice Scenarios

Business

Scenario:

Our profit margins are narrowing with our company's expansion. We should consider ways to keep our costs low.

Response:

I agree. Maybe we could minimize overhead by finding a less expensive office space or digitizing more of our operations.

Sustainability

Scenario:

We need to strategize our funds for maximum impact. High administrative costs could dilute our efforts towards environmental projects.

Response:

Absolutely. Lowering overhead could allow us to allocate more resources to our sustainability initiatives.