Meaning & use
operating cost
Last updated
UK/ˈɒpəreɪtɪŋ kɒst/
US/ˈɑːpəreɪtɪŋ kɔːst/
Meaning
nouncountablebusinessfinance
The regular expense of running a business, machine, or system day to day.
Grammar: Often used in the plural: operating costs.
Patterns
- operating costs of something
- reduce operating costs
- high operating costs
The company cut its operating costs by moving to a smaller office.
High operating costs forced the factory to close.
Word forms
| plural | operating costs |
|---|
Common combinations
- reduce operating costs
- We need to reduce operating costs to stay profitable.
- operating costs rise
- Operating costs rise every year due to inflation.
- high operating costs
- High operating costs make it hard for small businesses to compete.
- cover operating costs
- The revenue barely covers our operating costs.
Synonyms and how they differ
- running costs
- Very similar, but 'running costs' is more common in British English and can refer to cars and homes as well as businesses.
- overheads
- Refers specifically to regular expenses not directly tied to producing goods, such as rent and utilities; operating costs is broader.
Word family
- operate verb
- To run or control a business, machine, or system.
- operational adjective
- Related to the daily running of a business or system.
Commonly confused: operating cost or startup cost?
operating cost vs startup cost
Startup costs are one-time expenses to begin something; operating costs are the ongoing expenses of keeping it running.
Practice
Which of these is an operating cost for a restaurant?
Choose one answer.
Operating costs recur regularly, like monthly electricity; the other options are one-time or startup expenses.
Make it your own
Write a sentence using “operating cost”, then check it and compare it with the examples above.
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