Hupspot Guide to Operating Expenses
In this Hubspot-inspired guide, you will learn exactly what operating expenses are, how they differ from other costs, and how to manage them so your business keeps more profit without hurting growth.
What Are Operating Expenses in the Hubspot Framework?
Operating expenses are the everyday costs a business pays to run normal operations. They are often called OPEX and appear on your income statement below revenue but above operating income.
These expenses exclude what it costs to produce your product itself (that is cost of goods sold), and they also exclude items like interest and taxes. Understanding this split helps you read financial reports accurately and make smarter decisions.
Core Definition of Operating Expenses
In simple terms, operating expenses are non-production costs that keep the business open and functioning. Typical examples include:
- Office rent and utilities
- Employee salaries and benefits (not tied to manufacturing)
- Sales and marketing costs
- General and administrative expenses
- Insurance and legal fees
- Software subscriptions and tools
Using a clear definition, like the one you would find in a Hubspot style financial explainer, makes it easier for teams to align on what counts as operating expenses and what does not.
Types of Operating Expenses Explained the Hubspot Way
Most operating expenses fall into two broad groups. Organizing them this way improves reporting and makes cost control more strategic.
Selling, General & Administrative Expenses (SG&A)
SG&A includes the overhead costs that support sales and day-to-day operations. Common SG&A items are:
- Sales team wages and commissions
- Marketing campaigns and advertising
- Customer support salaries
- Office supplies and equipment rentals
- Human resources and finance department salaries
- Professional services such as accounting and legal advice
When you read a financial breakdown in a Hubspot article, this category is where much of the operational spending shows up.
Research and Development (R&D)
R&D covers investment in new products, services, or features. It can include:
- Engineer and product team salaries
- Prototyping and testing costs
- Specialized R&D tools and labs
Some companies separate R&D from SG&A because they want to highlight innovation spending. A clear R&D line item helps leadership track how much is being invested in future growth.
Operating Expenses vs. Non-Operating Expenses
Not every expense belongs in operating expenses. To analyze performance correctly, you must split operating items from non-operating ones.
Common Non-Operating Expenses
Non-operating expenses are costs that do not come from core business operations. Examples include:
- Interest on loans or credit lines
- Losses on asset sales
- One-time restructuring charges
- Damages from lawsuits
- Currency exchange losses
These sit below operating income on the income statement. A Hubspot-style financial overview would treat them separately so they do not distort the view of everyday performance.
Operating Expenses vs. Cost of Goods Sold (COGS)
Another important line is the split between operating expenses and cost of goods sold. COGS includes the direct costs of producing or delivering your product, such as:
- Raw materials
- Direct manufacturing labor
- Shipping fees tied to each unit sold
- Packaging that goes with each product
Operating expenses, by contrast, are the supporting costs of running the organization. For example, your sales team salary is an operating expense, while the wages of factory workers building the product are part of COGS.
How to Calculate Operating Expenses
You can calculate total operating expenses in two main ways, depending on what information you already have. Both methods align with the clear, step-by-step style often seen in a Hubspot financial tutorial.
Method 1: Sum Up Individual Operating Expenses
Use this method when you have detailed line items:
- List all recurring expenses related to normal operations.
- Exclude production costs that belong in COGS.
- Exclude interest, taxes, and unusual one-off costs.
- Add up the remaining items to get total operating expenses.
Formula:
Total Operating Expenses = Rent + Salaries + Utilities + Marketing + Insurance + Other Operating Items
Method 2: Derive from the Income Statement
Use this method when you know revenue, operating income, and COGS:
- Take total revenue.
- Subtract COGS to get gross profit.
- Subtract operating income from gross profit.
- The difference is total operating expenses.
Formula:
Operating Expenses = Gross Profit − Operating Income
This approach matches how a typical Hubspot-style finance guide would walk you through an income statement.
How Operating Expenses Affect Profitability
Managing operating expenses is not about cutting everything. It is about spending in ways that support growth while protecting margins.
Impact on Operating Income
Operating income (or operating profit) is:
Operating Income = Revenue − COGS − Operating Expenses
If operating expenses rise faster than revenue, operating income shrinks, even if sales are strong. That is why leaders pay close attention to these costs.
Healthy vs. Risky Operating Expense Levels
Healthy operating expenses:
- Support revenue growth and customer satisfaction
- Scale roughly in line with revenue over time
- Include deliberate investments in marketing and R&D
Risky operating expenses:
- Grow faster than sales without clear return
- Include large contracts that are rarely reviewed
- Hide in vague categories such as “miscellaneous”
A balanced view, like you would expect from an in-depth Hubspot resource, focuses on optimization, not blanket cuts.
Practical Steps to Manage Operating Expenses
Use this straightforward process to get operating expenses under control without damaging growth.
1. Categorize Every Expense
Start by assigning each cost to one of these groups:
- COGS
- Operating expenses (SG&A and R&D)
- Non-operating expenses
Clear labels reduce confusion between departments and align reporting with the approach often illustrated in Hubspot finance content.
2. Identify Essential vs. Discretionary Items
Mark each operating expense as:
- Essential: Must have to keep the business running.
- Strategic: Not required daily, but clearly supports growth.
- Discretionary: Nice to have, but not critical.
Focus reviews first on discretionary and poorly performing strategic items.
3. Review Contracts and Subscriptions
Look closely at recurring costs such as software, services, and leases. For each one, ask:
- Is it still used actively?
- Is there a cheaper or better alternative?
- Can terms be renegotiated?
This is where many organizations discover quick savings.
4. Track Operating Expense Ratios
Monitor trends over time with simple ratios, such as:
- Operating Expense Ratio = Operating Expenses ÷ Revenue
- SG&A Ratio = SG&A ÷ Revenue
If ratios rise for several periods while revenue growth slows, you may need to adjust spending plans.
Further Learning and Resources
To explore the original discussion of operating expenses in more depth, you can read the source article on the Hubspot blog at this operating expenses guide.
For broader help with financial strategy, analytics, and performance optimization, you may also find value in consulting specialized partners like Consultevo, which focuses on business growth and measurement.
By applying the concepts outlined in this Hubspot-style overview, you can read financial statements more confidently, control operating expenses with intent, and make decisions that strengthen long-term profitability.
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