Operating Expenses (OpEx)
The ongoing costs a business incurs through its normal operations — payroll, rent, tools, marketing, and other day-to-day expenses.
The expense composition view shows exactly where your operating expenses go.
What is Operating Expenses (OpEx)?
Operating expenses (OpEx) are the costs of running your business on a day-to-day basis. They include everything from salaries and benefits to office rent, software subscriptions, marketing spend, and professional services.
OpEx is different from capital expenditures (CapEx), which are investments in long-term assets like equipment or property. For most software startups, nearly all spending is OpEx since the main costs are people and tools.
Understanding your OpEx breakdown is essential for managing burn rate. Payroll typically represents 60-80% of a startup's operating expenses, with tools and other commitments making up the rest.
Why it matters
Operating expenses are the primary driver of your burn rate. If you want to reduce burn, you need to understand where your OpEx goes — and most of the time, the answer is people.
Tracking OpEx by category helps you identify spending creep. Tool costs, for example, tend to increase gradually as teams add subscriptions without retiring old ones. Without category-level tracking, these increases go unnoticed.
Formula
Operating Expenses = Payroll + Tools & Software + Rent + Marketing + Professional Services + Other Recurring Costs
Example
A 10-person startup has: payroll $120,000, SaaS tools $8,000, office space $6,000, marketing $5,000, legal/accounting $3,000. Total OpEx = $142,000/month.
How RunwayCal helps
RunwayCal categorizes all operating expenses into payroll, tools, and commitments. The expense composition view shows the breakdown, and the budget module lets you set targets for each category and track variance.
Common mistakes
- 1Not tracking OpEx by category, making it impossible to identify where costs are growing
- 2Forgetting that employee benefits (health insurance, 401k) are part of payroll OpEx
- 3Treating variable costs as fixed when building a budget
See every dollar of operating expense — categorized
RunwayCal breaks down your OpEx into payroll, tools, and commitments with budget tracking and variance analysis.
Track your expenses → Start free