Additionally, some expenses may be considered capital expenditures rather than operating expenses, depending on how they are classified for accounting purposes. It's important to note that not all businesses will have every type of operating expense listed here, and there may be additional expenses specific to their industry or operations. By carefully tracking and managing each cost, businesses can ensure they remain financially stable and sustainable over the long term. Operating expenses vary from one business to the next. Insurance: the cost of insuring your business against liability, property damage, theft, and other risks.Utilities: the cost of water, electricity, gas, and other utilities used in the course of doing business.Maintenance and repairs: the cost of routine upkeep and unexpected repairs for your office, store, or other business property.Payroll: the cost of salaries and wages paid to employees, as well as payroll taxes and benefits.Rent: the cost of leasing space for your office or store (commercial rent).For an eatery, this can also include the restaurant food cost. Inventory: the cost of goods sold purchased for resale or used in the production of services (raw materials, finished goods, etc.).Property tax: a tax levied on real estate by local governments.Just be sure you know your customer profile to avoid any ineffective marketing strategies. Advertising and marketing: the cost of promoting your business through B2B marketing, DTC advertising, PR, and other marketing activities. ![]() For businesses, this includes office equipment, restaurant equipment, vehicles, and other property depreciation. Depreciation: the gradual reduction in the value of an asset over time.It may also include restaurant supplies and cleaning supplies in the restaurant industry. Office supplies: the cost of paper, ink, toner, and other office supplies used in the course of doing business.Vehicle expenses: the cost of maintaining and operating a vehicle used for business purposes, including gas, insurance, repairs, and depreciation.Attorney fees: These refer to the cost of legal services associated with your business, including filing incorporation papers or defending against a lawsuit.Accounting fees: Fees paid to an accountant or bookkeeper for services such as tax preparation, financial statement preparation, and bookkeeping.Research: costs associated with market research, product development, and similar activities.(e.g., a wholesale license, an eCommerce business license, and even a license for selling alcohol online) License fees: state and local licenses and permits required to operate your business.Travel expenses: airfare, lodging, car rental, and other travel-related costs incurred while conducting business.Here is a closer look at 16 of the most common types of operating expenses: Operating expenses include all the costs associated with running a business daily. A positive cash flow indicates that a company generates more cash than spending, while a negative cash flow means the opposite. The cash flow from operating activities can be either positive or negative. ![]() The cash flow from operating activities measures a company’s ability to generate cash from its day-to-day operations, which is included in the statement of cash flows. Operating activities include selling goods, manufacturing, rendering services, etc. Operating activities are the core activities that generate revenues and incur expenses for a company. Examples of fixed costs include rent, salaries, and insurance. Examples of variable costs include raw materials, commissions, and shipping fees associated with dropshipping, overnight shipping, and expedited shipping. Fixed costs remain constant regardless of production levels or sales volume. Variable costs are those that fluctuate based on production levels or sales volume. Operating expenses can be divided into two categories: variable costs and fixed costs. Operating expenses can significantly impact a company’s bottom line, so businesses must carefully track and manage them. Many businesses outsource certain operating expenses, such as accounting or customer service, to save on costs. These include rent, utilities, labor, insurance, and other daily expenses. Operating expenses (OPEX) are the costs associated with running a business.
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