When money begins it's flow from the consumer's point of purchase back through the market, the consumer's dollars pay the costs of the retailer, the wholesaler, the transportation costs, the labor costs, the raw material costs, the insurance, the electricity and other related costs of production, the building of the production plant, AND the cost of providing a return-on-investment (ROI) to the investor, or interest to the individual who lent the money to put the whole sequence of events into action.

The costs of doing business are only justified when the consumer acknowledges his individual valuation of the finished product, by purchasing it.

Let us take a few moments now to examine in greater detail those "costs of doing business".

To see just what is entailed in any business activity, these costs can be broken down as follows:

• The cost of goods and services provided by others
• The cost of purchasing or replacing tools
• Involuntary, non-productive costs
• The cost of human energy (labor)
• The cost of using tools (profit)

Cost of goods and services.  Included here are such costs as raw materials, utilities, insurance, transportaion, etc.

Cost of replacing tools.  Here are such costs as maintenance, replacement of tools, research and development, etc

Involuntary, non-productive costs.  These costs include the expenses imposed by government, such as taxes, license fees, regulatory compliance, and the like.  Also included are the costs of employee theft, vandalism, etc.

Cost of human energy.  These costs include wages, salaries, commissions, bonuses, etc.

Cost of using tools.  This is what many economists refer to as the "basic" cost of doing business.  When an individual invests in a business, he is providing for the tools of production, without which none of the other costs would even be incurred.  The investor puts his or her money into an enterprise only in anticipation (speculation) that THIS cost will be met.