OpEx (Operating Expenses)
The ongoing costs required to run a business day-to-day, excluding the direct costs of producing goods or services.
Definition
Operating Expenses (OpEx) are the day-to-day expenses incurred in running a business. These costs are necessary to maintain operations but don't directly contribute to producing the company's products or services. OpEx is crucial for budgeting and understanding the baseline cost structure of a business.
Common OpEx Categories
Administrative
- • Office rent
- • Utilities
- • Insurance
- • Legal and accounting
Operational
- • Salaries (non-production)
- • Software subscriptions
- • Marketing expenses
- • Travel and entertainment
Real-World Example
Tech Startup Monthly OpEx:
- • Office rent: $5,000
- • Administrative salaries: $25,000
- • Software tools: $2,000
- • Marketing: $8,000
- • Legal and accounting: $1,500
- • Insurance: $800
Total Monthly OpEx = $42,300