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Operating budget and Running costs

Operating budget

The operating budget includes all recurring expenses, such as rent,salaries, insurance and supplies. In the case of a pilot project of creating a recycling site, conducted by the CFER , the budget was distributed as presented below.

The distribution of costs varies from site to site, but this chart gives a rough estimate. It is important for the entrepreneur to assess these costs before starting a business, in order to determine the break-even point of the company.

Running costs

Running costs comprise fixed expenses (administration costs) and variable expenses (operating costs). Generally, administration costs account for 13% to 15% of the global expenses. They include renting costs, standing charges, telecommunication costs, and a part of the salaries devoted to the management of the company. Operating expenses include maintenance costs, heating and electricity charges, the amortization of equipment, etc. To estimate these costs, the entrepreneur can try to find out what another business or organization of a similar size pays. It is best to over-estimate these costs at first.