You’ve figured out the money coming in on the project (the revenue) and now you need to figure out what money needs to be paid out. Expenses are money a business has to pay out. A business needs something to sell and a place to operate. They have to pay employees. Think about a simple example. If you run a hot dog stand at a local ballpark, then you have to buy hot dogs, buns, napkins and condiments. You have to pay rent on your hot dog cart. You may even have to pay someone to help you during really busy games.

Hospitals have similar expenses. They have to buy equipment, pay employees, pay rent and utilities to maintain their facilities, etc.

There are different kinds of expenses, specifically variable, fixed and overhead. To determine the total expenses associated with a project, you need to total each kind of expense and them add them all together.

Clink on the links to the left to look at each kind of expense in more detail.