Capital expenses and operating expenses are two very different beasts when it comes to running a business. Simply put, capital expenses are larger investments that a business makes in order to grow or improve itself, whereas operating expenses refer to the ongoing costs of day-to-day business operations. Capital expenses can include items like purchasing new equipment, investing in property, or expanding into new markets. On the other hand, operating expenses are things like rent, payroll, utilities, and marketing costs. The best way to think of capital and operating expenses is to imagine them as two distinct animals: one that helps you build for the long term and one that keeps the lights on in the short run.