Explicit vs. Implicit Costs: Key Differences & Business Impact
Explicit costs are the out-of-pocket cash payments a firm makes—wages, rent, materials. Implicit costs are the invisible opportunities you forgo when resources are already yours—owner salary forgone, building you own instead of renting it out. People mix them up because receipts feel “real” while lost opportunities feel like daydreams. A bootstrapping founder often ignores the…