Help customers buy - Capex and Opex.
Should salespeople understand the difference between Capex and Opex?
It may seem that it isn't necessary to know the intricacies of financial management.
Having a basic understanding will help you discuss funding with customers.
The purpose of capital expenditure is to provide the means of revenue generation or value creation. It includes replacement, modernisation, cost reduction, and capacity expansion.
Operational expenditure is the term used to describe the costs incurred in operating the business. Repairs and maintenance, staff costs, utilities, rentals, leasing, licence fees, and subscriptions are all normally classified as operational expenditures.
Capex and Opex budgets are usually kept separate.
Knowing the reasoning behind the classifications enables you to position what you sell as Capex spending or Opex spending.
How might a customer buy what you sell through either a Capex or an Opex budget?
Test your understanding by answering this question.
Post explanations in the comments for feedback.
If you are stuck, try Google, call a friendly CFO, or speak with your accountant.
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If you have the discipline of an autodidact, use our free B2B sales training course, indexed here. This page presents 1.6 of section one - about the allocation of spending to Capex and Opex budgets. If you need more, have any of our B2B sales training courses or any element or any combination of elements delivered for groups or individuals through online sales training sessions or one-to-one coaching. Call +44 (0)1392 851500 or email jimm@salessense.co.uk for details.
