How to Slash Your Startup’s Costs

Building a successful startup requires a lot of intangible skills, such as dedication, discipline and an openness to feedback. But any entrepreneur knows that while these skills are important, there are other, more tangible things that are just important.

Specifically, to be successful, you need to optimize how your business runs. Part of what will make you successful is being able to do more quickly and more cheaply what other, larger companies do. And this means taking a look at your operation and figuring out where you can cut your costs.

However, this doesn’t mean you should make cuts everywhere. After all, it takes money to make money, and if you cut back on your investments, then you could end up slowing growth.

Income Producing Vs. Non-Income Producing Activities

The first thing you should do when looking to cut costs at your startup is to take some time to distinguish between activities that actively produce income and those that don’t. For example, marketing and content creation can be considered an incoming producing activity (hopefully), whereas human resources and accounting, although necessary, are non-income producing.

It’s important to do this because it will help you decide which cuts to pursue. Specifically, if you’re going to make cuts to income-producing activities, you need to make sure you’re not sacrificing that activity’s ability to generate revenue. For example, reducing staff can save you a fortune, but productivity will likely suffer. Often times the best way to save money with your income-producing activities is to optimize them so that they either produce the same for less, or so that they can bring in more money than they are already doing.

For non-income producing activities, the goal needs to be streamlining, trimming and optimizing. This means finding systems that allow people to do their jobs more easily, or that allow you to do more with less people. It also means developing processes that are as efficient as possible.

Cutting Costs

Knowing the importance of distinguishing between income producing and non-income producing activities, now it’s time to discuss some ways to actually slash your startup’s cost.

Go Remote

Most of us associate having a dedicated office space with success. But in today’s day and age, this simply isn’t true. In fact, unless you are running a massive company, or if you frequently meet clients in an office, then there is very little reason for you to have one fixed place of work.

Going remote will allow you to save thousands in rent and other utilities. Thanks to the wide range of technological solutions available, such as Trello, Slack, Zoom, Google Drive, etc., it’s easier than ever to communicate and collaborate with your team without all being in the same place.

Change Providers

No matter what your business does, there are going to be some expenses you simply cannot avoid. For example, you will always need a fast, reliable internet connection. But just because you need it doesn’t mean you need to spend a fortune on it, especially now that there’s more competition in this market, which has helped bring prices down and quality up.

Do a search of broadband internet providers in your area to determine if you could be getting a better value for this much needed service. And while you’re at it, consider looking into things such as voice over internet protocol (VOIP), a service that allows you to make calls all over the world for much less than what you’re likely paying now.


The term automate typically conjures up images of robots, but this isn’t an accurate depiction of how automation is being used by businesses today. In general, automation can be used in almost every aspect of your business, and they can be an effective way for you to cut the cost of both income- and non-income-producing activities.

For example, marketing automation can help you learn more about your target audience and also reach them more effectively, helping you reduce your marketing budget while also improving your results.

You can also automate non-income-producing activities, such as payroll, and this will help you reduce errors and do the same things you’re doing now for much less. But perhaps the biggest savings these solutions provide is in time. By automating these activities, you can turn your attention to other aspects of the business that are more likely to bring in revenue.


When you can’t or won’t automate something, then consider outsourcing it as a way of saving money. This is a great option when there are a lot of infrastructure costs involved. For example, it often ends up being much cheaper for you to outsource your IT and customer service operations, as being competitive in these areas will require you to fork over a fortune in initial setup costs.

Specialized firms have a greater incentive to make this infrastructure investment because they can spread the cost out among many different clients. As a result, using them can deliver incredible savings to your startup, and sometimes this can even result in better performance. For example, outsourcing customer service might allow you to have a 24/7 call center, something customers want, but that you might not be able to afford on your own.

Evaluate Constantly

These are some of cost-reducing moves that will have the most immediate effect in terms of overhead and profit margins. However, there are always more places to save. And the key to staying afloat is to constantly evaluate what you do. This will allow you to identify areas where you could make changes or cuts so as to optimize the business and put it in a position for rapid growth.


About the Author: Kevin is the founder and CEO of Vast Bridges, a lead generation and customer acquisition service based out of Jacksonville, Fla. His passion, and the mission of the company, is in helping business owners and leaders develop and implement a strategic vision. And as an entrepreneur himself, Kevin is especially interested in helping startups find success as fast as possible.

By John-Shea

Internet Marketing Entrepreneur

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