Running expenses, also known as operating expenses or operating costs, refer to the ongoing costs that a business incurs to keep its day-to-day operations running smoothly. These expenses are necessary and include various aspects of the business such as rent, utilities, salaries, insurance, equipment maintenance, and marketing expenses, among others.
Rent or lease payments make up one of the significant running expenses for businesses that require a physical space to operate. Additionally, utility expenses such as electricity, water, and heating or cooling costs are considered running expenses. Salaries and wages paid to employees, along with associated expenses like payroll taxes and benefits, are another crucial component of running expenses.
Insurance costs, including liability insurance, property insurance, and workers' compensation coverage, are considered running expenses since they safeguard the business against potential risks and uncertainties. Equipment maintenance costs, including repairs and regular servicing to ensure optimal performance, are also categorized as running expenses.
Furthermore, expenditures on marketing and advertising activities to promote the business and attract customers are included in running expenses. Other common running expenses include office supplies, internet, telephone, and any fees related to professional services such as legal or accounting advice.
In summary, running expenses are the ongoing costs necessary for a business to operate efficiently on a day-to-day basis. They encompass a wide range of expenditures, including rent, utilities, salaries, insurance, equipment maintenance, marketing, and other necessary business expenses.
