Essential Cost-Saving Techniques For Startups

Most startups don’t run out of money because of one bad decision.. They bleed out, one silent leak at a time. I’ve seen it up close, more than once. And 90% of the time, the issue isn’t the burn rate. It’s what you’re burning on. Here are 4 places where startups waste the most money: 1. Too many tools, too little ROI Every team has their own stack. No integrations. No central view. Just 5 versions of the truth and a $90K annual bill. Fix it: → Audit your tools every 90 days. → Cut anything with <30% active usage. → Consolidate point solutions (Notion > 4 different docs + wikis). → Negotiate annual contracts, most vendors drop 20–30% just for committing. 2. Premature hiring Hiring a full-time lead when a contractor could do the job. Or building a team before validating the need. Fix it: → Use a “core vs. flex” model: core = essential ops, flex = contractors, test = advisors. → Run a 3-month ROI test before any new headcount. → Tie hiring to metrics, not gut feeling. 3. Ad-hoc growth spend Pouring $100K into performance marketing with no clarity on CAC, payback, or whether the channel still works. Fix it: → Review CAC + payback by cohort, not just blended. → Pause underperforming channels monthly. → Reallocate toward retention and expansion if it delivers better ROI. → Get finance + growth in the same room weekly. 4. Founder bottlenecks When the founder makes every financial call, everything slows down. The cost isn’t just dollars, it’s velocity. Fix it: → Set budget thresholds team leads can own. → Create weekly scorecards for decision-making. → Use OKRs to align priorities + reduce back-and-forth. This isn’t about “cost-cutting.” It’s about removing waste. Creating clarity. And making sure capital is going where it actually moves the needle. PS: Be honest, how many tools are you currently using?

You can add 4 months of runway in 30 days without cutting headcount. Most of your burn is just lazy cash flow. Here’s a real life example: Let’s make this concrete: Baseline burn: $250k/month 1️⃣ Cloud costs (AWS/Azure): Switch to reserved instances + delete idle workloads. =>Savings: 15k / month 2️⃣ SaaS Stack Audit: Kill duplicate tools (e.g., 20 unused Slack seats, unused HubSpot add-ons). => Savings: 10k / month 3️⃣ Current customers expansion: reallocate customer success efforts to focus on loyal customers so they expand => Savings: 7.5k 4️⃣ Annual Billing Incentives: Offer 10% off for annual upfront contracts. => Cash Flow Boost: 12.5k/month 5️⃣ AP Terms: Extend vendor payments from Net 30 to Net 45 (no cost, just timing). => Delayed Burn: 5k 6️⃣ Churn Reduction: Fix onboarding gaps causing 3% of MRR attrition. => Recovered Revenue: 7.5k 7️⃣ Support Efficiency: Automate 20% of tickets with AI chatbots. => Savings: 5k 8️⃣ RevOps Automation: Eliminate manual billing/reporting (e.g., Zapier + Stripe). => Savings: 5k 9️⃣ Delay all nice-to have hires for now: Delay 1 open req (e.g., junior marketer). => Savings: 10k 🔟 CAC Optimization: Shift 15% of ad spend to high-LTV customer cohorts. => Savings: 7.5k => Total Impact: $85k/month saved or delayed (34% of burn). 3 Steps to Start Today: 1️⃣ Run a “SaaS Stack Takedown” – 80% of teams have 5+ redundant tools (look at duplicates). 2️⃣ Extend one vendor payment cycle (Net 45 costs nothing but buys runway). 3️⃣ Add an annual billing option – even 5% adoption boosts cash flow. Key Takeaways: 🔍 30%+ of SaaS burn is invisible – it’s not about cuts, it’s about smarter allocation. 🚀 Quick wins matter: 5khere,10k there = months of runway. 💡 Your biggest leaks? Cloud waste, redundant tools, and monthly billing inertia. Cash optimization isn’t about slashing growth – it’s about plugging invisible leaks. And in SaaS, gross margins are too high to ignore this.

Are you struggling to make money in your business? One of the fastest ways to turn the corner is to cut costs. Here are 7 ways to cut costs: 1) Conduct a cost audit The word audit makes chills go up my back. Going through an audit stinks. But this is a different type of audit. Do a thorough review of your expenses to identify areas where you can reduce costs without too much impact on the business. 1. Pull 12 months of transactions 2. Label them: - Fixed or variable - Essential or non-essential 3. Identify subscriptions or recurring charges 4. Group them into 3 buckets: cut, review, or keep 2) Optimize operational efficiencies Easy to say right? Do these 3 things: 1. Incentivize your staff 2. Bring in an outside expert in automation and/or processes 3. Create a process flow diagram for your major processes and look for areas of improvement Work with your team on the review items to decide which to cut. 3) Adjust employee authorizations Revisit who you’ve authorized to do what and spot-check employee spending. This keeps employees accountable. Yes, give employees authorization to make decisions, but only when you have the proper structures in place. 4) Outsource Non-Core Activities You can’t be an expert in everything. Outsource activities like accounting, IT, marketing, and HR. Each requires immersion to become great, so let the pros handle it. 5) Re-negotiate contracts Build a relationship and understand the other businesses' needs. Share yours as well, then look for areas of mutual benefit. Just asking “we need to lower cost by 10%; how can we make that happen?” can open up the floodgates. 6) Leverage technology Consider what can be: 1. automated 2. move to the cloud 3. made more efficient Tech can be expensive up front, but often you’re saving in time or error reduction. Don’t pinch pennies while your team spends hours weekly on workarounds. 7) Setup a regular review Regularly reviewing costs, softwares, and processes is a great way to stay on top of your costs. This creates a culture of accountability. This often slips when people get busy, so make sure it’s a priority and stays on the schedule. Cost-cutting should be a temporary thing. A constant focus on cutting cost is going to sow doubt among your team. Cost reduction is a great first lever, but it should never be the only measure. Thank you for reading! This was originally in my newsletter, where I share business finance tips for 40k SMB owners each week. Subscribe here: https://lnkd.in/gVigaTwi

Layoffs aren’t the only way to save money. Most companies are sitting on six figures of hidden waste—and they don’t even know it. According to Gartner, companies waste an average of 20% - 30% of their expenses due to inefficiencies, redundant systems, and poorly managed processes. Before you think about cutting people, fix the systems first. Here’s a smarter way to cut costs: Think in 5Cs. 1 - 𝐂𝐚𝐧𝐜𝐞𝐥 Audit all the tools, subscriptions, and services you're barely using. If it doesn't bring clear results, it's time to pull the plug. 2 - 𝐂𝐨𝐧𝐬𝐨𝐥𝐢𝐝𝐚𝐭𝐞 Find overlaps in your tech stack, vendors, and processes. One tool, one platform, one bill—less chaos, lower costs. 3 - 𝐂𝐨𝐧𝐭𝐫𝐨𝐥 Put simple limits in place. Set thresholds for spending approvals and track anything over $500 before it snowballs. 4 - 𝐂𝐨𝐥𝐥𝐚𝐛𝐨𝐫𝐚𝐭𝐞 Bring in fractional experts instead of hiring full-time for specialized needs. Pay for outcomes, not hours. 5 - 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬 𝐈𝐦𝐩𝐫𝐨𝐯𝐞𝐦𝐞𝐧𝐭 Set a quarterly reminder to review expenses, renegotiate contracts, and audit your processes. Cost-cutting isn't a one-time thing—it’s a habit. 𝐐𝐮𝐢𝐜𝐤 𝐰𝐢𝐧𝐬 𝐭𝐨 𝐬𝐭𝐚𝐫𝐭 𝐬𝐚𝐯𝐢𝐧𝐠: → Audit subscription creep → Renegotiate vendor terms → Rethink your office space needs → Streamline your software stack → Review marketing ROI closely → Extend payment deadlines → Automate where you can → Hire a fractional instead of a full-time → Strengthen expense approval rules → Double down on high-impact projects If you optimize systems, you can save big, without losing your best people. Agree? What’s one cost-saving move you think every company should prioritize but often overlooks? ♻️ Share this with a founder who needs to hear it. ➕ Follow Donny Mashiach for more insights on scaling and financial growth.

Your best funding strategy IS NOT raising. It might need less. Founders obsess over their next round: pitch decks, investor calls, warm intros. But the real edge? It's in how wisely you use what you already have. Here’s what founders don’t talk about enough: ➟ Burn rate kills more startups than lack of demand ➟ Big teams too early often slow you down, not speed you up ➟ Spending like you’ve “made it” before you’ve nailed product-market ➟ Investor trust in fiscal discipline Instead of bloated operations, try this: ✅ Keep teams small and highly aligned ✅ Prioritize roles that drive revenue or learning ✅ Automate before you hire ✅ Negotiate every contract like your runway depends on it. ✅ Rent instead of own (especially with tools, space, or equipment) ✅ Avoid vanity marketing—focus on channels that convert ✅ Hold off on “culture perks” until there’s culture to protect ✅ Choose advisors who make intros, not just look good on a slide ✅ Test ideas fast before investing deep ✅ Delay fixed costs as long as you can ✅ Build in public to attract early users without big spend ✅ Reinvest profit, not just capital ✅ Always ask: what’s the cheapest way to learn this? Startups that survive long enough tend to win. Survival starts with knowing when to say “no” to waste—and “yes” to lean, focused growth. That’s what earns trust. From investors. From your team. And from yourself. What’s one cost-cutting decision that resonates with you? Let me know in the comments ⬇️ ----------------------------------------- 💯 Want to qualify for VC funding? Take your free Fundraising Gap Analysis Scorecard. The link is on my profile page - Leon Eisen, PhD