What is an Operating Expense?

Operating expenses are the costs a company incurs as a part of everyday business operations.

The goal of most every management team is to figure out how a company can minimize operating expenses while maximizing production and profitability. Operating expenses can involve buying inventory, the cost of running machines, rent, payroll, and so on.

What it costs a company to undergo normal business operations and output. It is sometimes referred to as OPEX.