How to cut costs without hurting revenue

Step 1 — categorise every cost

Split your spending into three: costs that directly generate revenue (sales, delivery, the core team), costs that keep the lights on (rent, insurance, software), and discretionary costs (nice-to-haves, projects, perks). This map is the whole game — it tells you what to protect, what to trim, and what to cut. Cutting blind is how businesses damage their own burn rate improvements by killing income.

Step 2 — cut the discretionary first

Start with the discretionary bucket — the fastest, safest cuts. Pause non-essential projects, cancel unused subscriptions, defer nice-to-have spend. These reduce cash outflow quickly with little downside, buying immediate breathing room. Most businesses find more here than they expect once they actually look. Every pound removed extends your runway.

Step 3 — renegotiate the keeping-the-lights-on costs

Overheads are often negotiable. Renegotiate supplier contracts, shop around for insurance and software at renewal, ask landlords about terms, and consolidate where you can. These take a little more effort but rarely touch revenue. Aim to lower the fixed cost base rather than cut the activity — the goal is a leaner machine, not a smaller business.

Step 4 — protect and even increase revenue spend

Guard the spending that brings money in, and consider that cutting it is often exactly the wrong move under pressure. If sales activity generates a positive return, cutting it shrinks income faster than costs. Sometimes the right response to a cash squeeze is to protect or even sharpen revenue-driving spend while cutting everywhere else. See how to extend your cash runway.

Step 5 — bridge while the cuts take effect

Cost cuts take time to flow through to cash. Where you need to protect revenue spend now but the savings arrive later, a short facility bridges the interval.

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