CapEx, OpEx

Here’s a thought:

Over time, the OpEx of an exhibition will eventually outstrip the CapEx.

Now, you probably had one of two reactions to that statement.

Reaction #1 is something like: “Hm. Yes, eventually that would likely be true.”

Reaction #2 — far more likely than #1 — is: “What?”

So let’s unpack this concept.

“CapEx” is finance jargon for “capital expenses.”

“OpEx” means (yep, you guessed it) “operating expenses.”

Capital expenses go to create “capital”: anything with a value lasting beyond a year, like a permanent museum exhibition.

Operating expenses, on the other hand, pay to operate that same exhibition each year after that — like salaries, heating, and maintenance.

In other words, “OpEx eventually outstrips CapEx” because over enough years, the accumulated annual costs of operating anything you build will eventually be more than the original cost of building it.

So?

If we know this, we can try to slow that down by making good planning and design decisions. How we design something directly impacts how much it will cost to operate it later.

Here’s the thing:
Over time, the OpEx of an exhibition will eventually outstrip the CapEx.

But if we design it well to begin with, we can make that take a long time.

Warmly,
Jonathan

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MtM Word of the Day:
Circulation. The movement of visitors through an exhibition or other space. Effective architectural circulation creates a smooth flow, prevents congestion, and allows access to everything. (BTW, stairs and elevators are called "vertical circulation.")