Operating Expenses

Also called OpEx

Operating expenses: the ongoing costs of running the business that are not tied directly to a unit of product, salaries, rent, marketing, software. The day-to-day cost of keeping the lights on.

Why it matters

OpEx is where most of a startup's burn lives, so it is the main lever for extending runway. Watching the ratio of OpEx to revenue shows whether the business is getting more efficient as it grows.

For example

A startup's operating expenses, salaries, rent, and marketing, run 80 lakh a month, the bulk of its burn.

Related terms

Capital Expenditure Cost of Goods Sold Burn Rate

Go deeper

See how founders actually handle this on Money, pricing and metrics, part of the Starting Up hub.

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