1/31/2024 0 Comments Total operating expenses formulaOperating expenses are important because they directly impact a company’s bottom line. 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.
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