Several factors contribute to high operational costs, including:
Labor Costs: Salaries, wages, and benefits for employees are typically one of the largest expenses for any business. Rent and Utilities: The cost of physical space and the utilities required to maintain it can be substantial, especially in high-demand areas. Inventory Management: Holding excessive inventory or inefficient supply chain management can result in unnecessary expenses. Marketing and Advertising: While essential for growth, marketing campaigns can be costly, particularly if they are not yielding a high return on investment. Technology and Equipment: Investments in technology and equipment are necessary for efficiency but can be a significant upfront and ongoing expense.