Business costs refer to the expenses that a company incurs in order to operate and generate revenue. These costs can be categorized into fixed costs, which remain constant regardless of production levels, such as rent and salaries, and variable costs, which fluctuate based on the volume of goods or services produced, like raw materials and utilities. Understanding business costs is essential for effective financial management. By analyzing these expenses, companies can identify areas for cost reduction, improve profitability, and make informed decisions about pricing and investment. Proper management of business costs helps ensure long-term sustainability and growth.