If there’s one thing founders know, it’s that cash flow is king. Whether you’re bootstrapped or backed by investors, keeping costs under control is critical – especially in a market where funding isn’t as easy to come by.

But cutting costs isn’t just about slashing expenses across the board. Cut too much in the wrong places, and you slow growth. Spend too much, and you burn through runway before you gain traction.

So, where should you trim the fat, and where should you double down? Let’s break it down.

The Areas Where You Can (and Probably Should) Cut Costs

1. Fancy Offices & Unnecessary Perks

If you’re still paying for a sleek office space when most of your team is remote, it’s time to reconsider. Many startups have shifted to hybrid or remote setups, cutting office costs significantly. A co-working space or occasional team meetups may be more cost-effective than a long-term lease.

The same goes for non-essential perks. Free lunches and team outings are great, but if your burn rate is creeping up, these should be nice-to-haves, not must-haves.

2. Overpriced Software & Tools

It’s easy for SaaS subscriptions to pile up – especially when different teams are using different tools. Review your tech stack and ask:

• Are we actually using this tool? If it’s barely touched, cancel it.
• Is there a cheaper alternative? Many startups start on premium plans they don’t fully need.
• Can we consolidate tools? Some platforms offer multiple functions, reducing the need for separate subscriptions.

3. Marketing That’s Not ROI-Driven

Marketing is essential, but wasteful marketing isn’t. If you’re spending big on ads that don’t convert or expensive sponsorships that aren’t delivering leads, it’s time to shift focus.

Instead of broad, expensive campaigns, prioritise organic growth, partnerships, and targeted ads with clear ROI tracking. Content marketing, SEO, and customer referrals can often drive better long-term results at a lower cost.

4. Hiring Too Fast, Too Soon

Hiring ahead of growth can quickly drain cash. Before bringing on full-time employees, consider whether a contractor, freelancer, or fractional hire could fill the gap.

This is especially true for roles like finance, HR, or legal, where early-stage startups don’t always need a full-time team member. Hire for what you need now, not for what you think you’ll need a year from now.

5. Travel & Conferences

In-person meetings are valuable, but not every trip or conference is worth the cost. Before booking flights and hotels, consider:

• Will this directly impact revenue or fundraising?
• Can this meeting be done virtually?
• Is there a way to attend or speak at an event without a hefty price tag?

The Areas You Should Invest In (Even When Cutting Costs)

1. Product Development & Customer Experience

Cutting corners on product development or customer support is a short-term move that can backfire. If your product is clunky, buggy, or lacking essential features, customer churn will increase, and revenue will suffer.

The same goes for customer support – if customers struggle to get help, they’ll go elsewhere. A solid product and a great customer experience drive retention, referrals, and long-term revenue growth.

2. Revenue-Generating Talent

While hiring too quickly can be risky, some roles are worth investing in early – especially those directly tied to revenue. Strong sales hires, business development professionals, or growth marketers who can generate leads and close deals pay for themselves over time.

If you’re cutting costs across the board, don’t starve the areas that actually bring in money.

3. Financial Planning & CFO Support

Many startups neglect financial strategy until it’s too late. A good financial model, clear forecasting, and solid investor reporting can help you make better decisions and avoid fundraising pitfalls.

If you don’t have the budget for a full-time CFO, a fractional CFO or outsourced finance team can be a cost-effective way to gain financial clarity without adding overhead.

4. Retaining Great People

Replacing employees is expensive – not just in salary, but in hiring, onboarding, and lost productivity. If you have top-performing team members, it’s worth ensuring they’re fairly compensated and engaged.

This doesn’t always mean big salary increases – sometimes, equity, flexible working arrangements, or professional development can be just as valuable.

5. Smart Marketing & Growth Strategies

While wasteful marketing should be cut, high-ROI marketing is worth every penny. Investing in scalable growth strategies like:

• SEO & content marketing (long-term lead generation)
• Customer referral programs (low-cost, high-trust acquisition)
• Performance marketing with clear tracking (so you’re spending where it works)

These areas drive revenue without burning cash unnecessarily.

The Bottom Line: Cut Costs with Purpose, Not Panic

Budgeting in a startup isn’t about cutting for the sake of cutting – it’s about making sure every pound spent is moving the business forward. Before slashing costs, ask: Is this expense helping us grow, retain customers, or generate revenue?

If the answer is no, it might be time to trim. If the answer is yes, it’s probably worth keeping.