Understanding Start-Up Costs in Business

What are start-up costs in a business?

• Costs incurred after the business has been running for a year

• Initial expenses required to start a business

• Costs related to employee salaries

• Costs for expanding the business

Which of the following is an example of an operating cost?

• Office rent

• Ange out

• Rent deposit

• Fish fryer

What is meant by operating costs in a business?

• Costs associated with the initial setup of a business

• Ongoing expenses required to run the business

• Costs for purchasing new equipment

• Costs related to employee training

Which of the following is considered a variable operating cost?

• Monthly rent

• Salaries of permanent staff

• Cost of raw materials

• Insurance premiums

Running costs in a business are also known as:

• Capital costs

• Fixed costs

• Operating costs

• Start-up costs

What is the primary difference between start-up costs and running costs?

• Start-up costs are ongoing, while running costs are one-time expenses

• Start-up costs are one-time expenses, while running costs are ongoing

• Start-up costs are variable, while running costs are fixed

• Start-up costs are fixed, while running costs are variable

Which of the following would be classified as a running cost?

• Purchase of a delivery van

• Monthly utility bills

• Initial inventory purchase

• Business registration fees

How can a business reduce its operating costs?

• Increase employee salaries

• Use energy-efficient equipment

• Expand office space

• Hire more staff

Which of the following is a direct operating cost?

• Office supplies

• Advertising

• Hourly Wages

• Insurance

What is the impact of high running costs on a business?

• Increased profit margins

• Reduced cash flow

• Improved employee morale

• Enhanced customer satisfaction