What is Overhead?
A definition of Overhead
“Overhead refers to the ongoing business expenses not directly attributed to creating a product or service. These are the costs that support the company’s operations, like rent, utilities, and salaries.”

Business Glossary > What is Overhead?
Examples of Overhead in a Sentence:
The company reduced its overhead by moving to a smaller office.
Increasing overhead costs can hurt a business’s profitability.
Startup companies often struggle with managing overhead efficiently.
Why is Overhead Important in Business?
Understanding overhead is crucial for managing a company’s financial health. Reducing unnecessary overhead expenses can enhance profitability and allow more resources to be directed towards growth and innovation.
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Associated Terms
Here are some associated business terms and synonyms for “Overhead”:
- Indirect Costs
- Operating Expenses
- Fixed Costs
Amazon Overhead
Amazon has optimized its overhead costs by automatizing its warehouses and leveraging economies of scale. By effectively managing overhead, Amazon can offer competitive prices and maintain profitability.
Final Notes on Overhead
Companies should regularly review their overhead to identify cost-saving opportunities. Effective overhead management can lead to significant improvements in a business’s bottom line.
This has been a definition of Overhead meaning.
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