Full Definition
Operating expenses (OpEx) are the ongoing costs required to run a business day-to-day. They include everything from employee salaries and office rent to marketing spend and software subscriptions. Understanding and managing OpEx is crucial for controlling burn rate and extending runway.
Common Startup Operating Expenses
- People: Salaries, benefits, contractors (typically 60-80% of OpEx)
- Infrastructure: Cloud hosting, tools, software subscriptions
- Marketing: Paid ads, content, events, PR
- Office: Rent, utilities, equipment
- Legal/Accounting: Professional services
- Travel: Business development, conferences
Real-World Example
A 20-person startup has $350K monthly OpEx: $250K salaries, $30K cloud infrastructure, $40K marketing, $20K office, and $10K professional services.
Related Terms
The rate at which a startup spends its cash reserves, typically measured monthly.
The amount of time a startup can operate before running out of cash, given its current burn rate.
The total income generated by a company from its business activities before any expenses are deducted.
The net movement of cash in and out of a business over a specific period.
The direct revenues and costs associated with a single unit of a business model (typically per customer).
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