Operating costs are the expenses that an organization incurs to keep their business running on a day-to-day basis. These costs can range from the cost of raw materials and labor, to advertising and marketing expenses, to IT infrastructure and office supplies. Operating costs are essential, as they ensure businesses can continue to provide services to their customers, while generating profits. Without these costs, businesses would eventually fail due to lack of resources or inadequate marketing efforts. By operating cost-effectively, businesses are more likely to remain competitive and successful in their respective industries.