What's your strategy for deciding which business expenses are worth cutting when times are tough? What factors do you consider most important?

Question

Managing business expenses can be challenging, especially when working with freelancers or contractors. This article explores effective strategies for optimizing costs without compromising quality or productivity. Drawing on insights from industry experts, it offers practical tips to help businesses maintain financial health while leveraging external talent.

Niclas Schlopsna · Answer

When times are tough, the key is to look at expenses through the lens of impact versus necessity. I remember working with a startup at Spectup that was dangerously close to running out of cash, and the first thing we did was categorize every expense into "growth critical," "operational essential," and "nice-to-have." It's amazing how many expenses end up in that third category when you're forced to prioritize. For example, while subscription software might seem untouchable, we discovered overlaps where two tools were doing the same job. Cutting one saved thousands without disrupting operations.
Another factor we always emphasize at Spectup is understanding the ROI of every expenditure. Marketing budgets, for instance, shouldn't just be slashed indiscriminately. Instead, we examine which campaigns are directly driving customer acquisition or revenue and preserve those while pausing the experimental ones. One time, we recommended reducing spending on expensive trade shows for a client and funneling those funds into digital campaigns with proven results instead, which not only saved costs but boosted conversions. Emotional attachment to certain costs can make decision-making hard, but numbers rarely lie. The goal is to act decisively without undermining future growth. And yes, I've had to talk startups out of keeping their office latte machine--sometimes tough love is part of the job!

Kristin Marquet · Answer

When times are tough, I approach cutting business expenses with one guiding strategy: I only keep what directly supports revenue generation, brand visibility, or strategic innovation. If an expense doesn't fit into one of those three pillars, it's either scaled back, paused, or eliminated. This filter helps me stay objective and protect the core growth drivers across my ecosystem—whether that's FemFounder, The Money Daily, or the future vision for Marquet Media's Tier 3 services.
The first factor I consider is ROI—not just in financial terms but also in momentum and opportunity creation. If an expense isn't driving leads, sales, authority building, or operational efficiency, it becomes non-essential. I also look closely at scalability: Will this expense grow with the business long-term, or is it just a short-term convenience? Tools, platforms, or consulting relationships that help build infrastructure (like my Payhip stores, Pinterest traffic systems, or PR frameworks) typically stay, even during lean periods, because they support short-term wins and future growth.
Lastly, I think about opportunity cost. Every dollar spent is a decision—am I investing in stability and growth, or am I draining resources that could be better used elsewhere? Being willing to cut "nice to have" subscriptions, advertising experiments that aren't converting, or even reducing the scope of lower-priority projects has helped me survive hard seasons and reposition for faster rebounds. For me, it's not just about lowering expenses—it's about preserving the foundation that allows the next chapter of expansion to happen.

Riken Shah · Answer

When times are tough, I don't start by looking for what to cut—I look for what to protect. In healthcare IT, that usually means anything tied directly to clinical impact, compliance, and core customer value. I've learned that the wrong cut can do more damage than no cut at all, especially in a space where trust, continuity, and regulation are non-negotiable.
I use a simple framework: Mission-critical, Impact on revenue/retention, Regulatory risk, and Adaptability. For example, during a cost review on a remote patient monitoring project, we kept investing in infrastructure and clinical alert systems but paused a non-urgent UX redesign and deferred new marketing hires. It wasn't about shrinking effort—it was about focusing it.
I also consider reversibility. Canceling contracts or laying off experienced talent is hard to undo. But delaying product roadmap items or consolidating software tools offers breathing room without long-term damage.
I've seen companies like Teladoc consolidate backend systems post-acquisition to reduce costs while keeping clinical tools intact. Olive AI's pivot back to provider-side automation after cutting non-core projects was another good example—focus is a form of cost-saving.
Above all, I prioritize clarity over panic. When every dollar matters, it's not about trimming fat—it's about strengthening the muscle that keeps the business moving forward.

Enoch Olalusi · Answer

When times are tough and expenses need trimming, my strategy centers on making data-driven decisions aligned with the business's core strategic goals, rather than acting on gut instinct alone. Early in my career, I learned the hard way that relying solely on intuition for financial decisions wasn't sufficient. Reviewing detailed financial statements like the P&L and cash flow statement is a vital first step.
The factors I consider most important include financial impact and strategic relevance. I analyze where the significant outflows are by examining the numbers. Applying the 80/20 principle, I focus on the 20% of expenses that likely account for 80% of the cost. Simultaneously, I assess how each expense supports our core business model, unique competitive position, and key profit drivers. Cutting expenses that are essential drivers for revenue or operational efficiency can be detrimental in the long run. I also prioritize cutting wasteful spending first, looking for inefficiencies that don't add value.
To make these decisions actionable, I start by developing or updating a financial forecast. Navigating uncertainty always felt like driving in the dark until I embraced forecasting; it's like having headlights, showing just enough of the road ahead to move safely. This helps me visualize different scenarios and their impact on cash flow.
I then analyze each expense line item in the context of these forecasts, considering its tie to key drivers and its efficiency. I look at both the short-term effect on immediate cash position and the potential long-term impact on growth. For example, while marketing might seem like an easy cut, it could harm future sales.
Once decisions are made, continuous monitoring is essential. I track the effect of cuts on key financial indicators and adjust as needed. Having a structured approach to managing finances, perhaps by organizing funds into separate accounts for operating expenses, growth, and savings, provides clarity on where money is going and helps build a crucial emergency buffer. This strategic, data-informed approach allows the business to weather setbacks and continue working towards its goals.

Derek Pankaew · Answer

When it comes to deciding which expenses to cut during rough patches, here's a philosophy that's served me better than spreadsheets ever could: I treat every dollar like a signal, not just a cost.
It's easy to just go line by line and slash the obvious stuff — subscriptions you forgot you had, underperforming ad campaigns, that extra SaaS tool nobody really champions. But the more interesting question is: What story is this expense telling me about how the company operates?
If a cost shows that we're being lazy — paying for convenience instead of solving the real problem — that's an easy cut. If a cost shows that we're investing in something that builds team morale, deepens customer relationships, or keeps the product sharp, I'll fight to keep that, even if it stings in the short term.
One weird thing I do: when money's tight, I don't just look for the biggest dollar amounts to cut. I look for the places where we're spending without thinking. Because unconscious spending is a canary in the coal mine — it usually means there's a process somewhere that's bloated, outdated, or disconnected from reality.
Also: I never cut anything that feeds momentum. Momentum is oxygen when you're in survival mode. I'd rather cut 10% from a bunch of safer, back-office areas than pull the plug on a product experiment that's even slightly catching fire. You can't shrink your way to winning.

Nancy Capistran · Answer

How I Decide What Business Expenses to Cut When Times Are Tough
When the economy tightens, every dollar counts. My approach is simple: protect what drives value, cut what doesn't.
Start With the DataFirst, I dig into the numbers. I analyze spending patterns and pull up the budget to compare projected costs with actuals. The goal: spot the big-ticket items and recurring costs that don't directly fuel growth or customer satisfaction.
Prioritize Essentials, Trim the RestI rank expenses by impact. Core operations, customer-facing activities, and anything tied to revenue stay at the top. Non-essential perks, outdated subscriptions, and "nice-to-haves" go straight to the chopping block. If it doesn't move the needle, it's expendable.
Renegotiate and ModernizeBefore cutting, I look for ways to renegotiate contracts or find more cost-effective vendors. Sometimes, a quick phone call can save thousands. I also embrace digital tools and automation to streamline processes and eliminate manual busywork--efficiency is the ultimate cost-cutter.
Team Input MattersOne of my executive coaching clients put this into action brilliantly: when faced with tough cuts, she invited her team to a "cost hackathon." Each person brought one idea for saving money without sacrificing customer value. The team uncovered hidden inefficiencies--like overlapping software licenses and underused subscriptions--that leadership had missed. Not only did this approach surface practical savings, it boosted morale and gave everyone a stake in the outcome.
Core Factors to Consider:
1. Direct impact on customers and revenue2. Long-term vs. short-term savings3. Employee morale and productivity4. Flexibility to scale back up when things improve
Bottom Line:Cutting costs is about being strategic, not just slashing at random. Protect your core, stay nimble, and always keep an eye on what truly drives your business forward.

Peter X · Answer

Reviewing my business expenses regularly has become a habit, especially during lean periods. I like to print out my bank statements and highlight every outgoing payment, which makes it easy to spot things that aren't pulling their weight. 
One year, I realized I was paying for a marketing service that hadn't brought in a single new client, so I canceled it without hesitation.
Essential expenses always get top priority. I learned this the hard way after trying to save money by switching to a lower-quality massage table. 
The discomfort it caused both me and my clients was immediate, and I quickly went back to investing in quality equipment. It reinforced the idea that some costs are simply non-negotiable if I want to maintain the standards my clients expect.
I also pay attention to anything that saves me time or reduces stress. If a tool or service frees up my energy for client care or business growth, I consider it worth keeping. By focusing on value rather than just price, I make smarter decisions about what to cut and what to keep.

Tony Mirzakhanyan · Answer

In our roofing company's two decades of riding economic waves, we've learned to distinguish between expenses that generate customer value and those that don't. We analyze each expenditure by asking: "Does this directly impact the quality, safety, or timeliness of our work?" Premium materials and skilled craftspeople are never compromised, as they're the foundation of our reputation. Instead, we first look to optimize operational efficiencies - consolidated material deliveries, improved scheduling, and digital documentation. The toughest times have actually sparked our most innovative solutions, like developing a proprietary project tracking system during the 2008 recession that ultimately improved customer satisfaction while reducing administrative costs by 22%.

Max Shak · Answer

As the Founder and CEO of Zapiy.com, making decisions about cutting business expenses during tough times requires a careful, strategic approach. The first factor I consider is the impact on customer experience. Expenses that directly affect how we serve our customers, such as tools for product support or customer success, are usually off-limits for cuts. Without a positive customer experience, our business loses its foundation, so we prioritize anything that enhances that journey.
Next, I look at core business functions like revenue generation and product development. We assess the ROI of marketing campaigns or any non-essential subscriptions, focusing on what drives growth. If something isn't delivering measurable results, we reevaluate it. It's about trimming the fat from areas that don't actively support business growth, without damaging critical functions.
Another key factor is the flexibility of the expense. Some costs are fixed, like salaries or long-term contracts, which can't easily be reduced. In these cases, we focus on optimizing usage or improving efficiency. On the other hand, more flexible expenses--like temporary contractors or certain marketing spends--can be scaled back with less long-term impact.
I also always keep our long-term goals in mind. If a cut will impact growth in the short term but is aligned with the company's strategic direction, we may make the sacrifice. It's about balancing immediate savings with future gains.
Lastly, I involve the team in the decision-making process. They often have valuable insights into where resources can be better allocated, or where cuts would have the least negative effect. This ensures a more holistic approach to decision-making and helps us make well-informed choices.
In the end, we aim to maintain a lean operation that still supports our core objectives. Making thoughtful, strategic cuts helps us stay agile and weather tough times while keeping Zapiy.com on track for the future.

Eric Chebil · Answer

When money gets tight, I try not to panic—I just take a hard look at everything we're spending and ask, "Do we really need this right now?" I don't cut just to cut. I cut the things that aren't helping us bring in money or keep our clients happy.
Usually, I'll go through our expenses and sort them into three groups: things we absolutely need to keep the business running, things that help us grow but aren't urgent, and things that just aren't worth it anymore. Subscriptions, tools we don't use often, marketing that isn't bringing results—those go first.
I try to hang onto anything that helps with sales, client service, or communication. That's where the real value is, and it's what keeps the business alive. Sometimes I'll even double down on those while trimming elsewhere.
Cutting people is the last resort. If we can shift someone into a new role or reduce hours temporarily, I'd rather do that than lose a good team member.
The truth is, tough times force you to get real about what matters. You start to see what's just noise and what actually moves the needle. It's not always fun, but it does make the business stronger in the long run.
And the bounce-back? It's always easier when you've kept your core team and systems intact. When things pick up again, you can move faster because you stayed lean but ready.

Jamie Frew · Answer

When things get tight, the first step is always to zoom out and ask what's truly essential to the core of the business. For us, it comes down to one question: does this expense directly support the value we're delivering to customers? If the answer is no, it's on the table.
One of our top priorities is keeping the team intact. People are the core of what we do, and cutting headcount is always the absolute last resort. We'd much rather trim tools, delay non-essential projects, or pause spending in other areas than risk losing the talent and momentum we've built. Protecting the team means protecting the quality of our work and the experience we deliver.
We don't go straight to across-the-board cuts. Instead, we prioritize based on impact. Tools or services that help us improve product quality, support our users, or keep the team running efficiently are protected. Anything that's nice to have, bloated, or disconnected from outcomes is where we start trimming.
Another big factor is team morale. Sometimes the most expensive line item isn't the one doing the most damage. We've seen low-value meetings, poorly scoped projects, or unused subscriptions quietly drain time and energy. So we also look at expenses through that lens: what's quietly costing us in ways that aren't obvious on a spreadsheet?
The strategy is really about staying calm, focused, and honest with yourself about what's actually moving the needle. It's not just about cutting costs. It's about sharpening focus. When you approach it that way, tough times become an opportunity to get leaner and more aligned with your core mission.

Yancy Forsythe · Answer

When times are tough, my strategy for cutting business expenses starts with one question: "Does this expense directly support revenue, efficiency, or client experience?" If the answer is no, it's on the chopping block.
I start by reviewing recurring costs—software, subscriptions, marketing spend—and rank them by ROI. If a tool or service isn't actively helping us close deals, save time, or retain clients, it's either cut or replaced with a more affordable alternative.
The most important factor I consider is impact versus cost. Some expenses are small but high-impact—those stay. Others may be expensive and underused, and those are the first to go. It's not always about cutting the biggest number—it's about protecting what keeps the business moving forward.

Andrew Osborne · Answer

When times are tough, my first step is to look at which expenses are directly tied to the quality of service we provide. If cutting a cost would impact the end result for our clients, it's usually off the table. I always prioritize the tools, equipment, and training that help us deliver top-tier results because the reputation we've built at Ozzie Mowing & Gardening depends on it. Instead, I look at nonessential costs like marketing channels that aren't converting or subscription services that aren't giving real value. I also consider timing; can something be paused instead of cancelled? Flexibility is key when you're trying to ride out a rough patch without damaging the business long-term.
A few years ago, during a slow winter season, I reassessed all our recurring expenses and realized we were still running digital ads that weren't performing well in off-peak months. Because I've spent over 15 years in the industry and understand the seasonal flow of this work, I knew where we could safely scale back. I cut those ads and put more focus on personal referrals and word of mouth, which had always been strong thanks to our customer service award and reputation. At the same time, I invested in maintaining our equipment and upskilling staff because I knew that would pay off when things picked up again. That decision helped us keep our service quality high, saved money in the short term, and positioned us for a strong bounce back when the busy season returned.

Billy Rhyne · Answer

When times get tough, my strategy is to cut what's not directly contributing to revenue, retention, or reputation—and protect anything that touches the guest experience.
At Horseshoe Ridge RV Resort, we've faced off-season slowdowns and unexpected costs. In those moments, we don't start with line-item cuts—we start by asking: What do our guests value most? If an expense doesn't support that (like underperforming ad spend, bloated software subscriptions, or rarely used third-party services), it's a candidate for reduction or elimination.
The most important factor is ROI—not just financial, but brand equity and guest satisfaction. I'd rather cut a backend automation tool than compromise something like our pancake breakfast that guests consistently rave about.

Patric Edwards · Answer

When times get tough, my strategy for cutting expenses boils down to one core principle: protect the engine, not the accessories. Every dollar we spend needs to either move the business forward, deepen customer loyalty, or strengthen the core team. If it doesn't clearly do one of those things, it's on the chopping block.
The first thing I look at is direct impact. I ask: If we cut this, will it slow revenue, hurt product quality, or erode customer trust? If the answer is no—or even just "not really"—then it's a candidate to go. Vanity expenses, bloated tools we barely use, events that are more about appearances than outcomes—those get slashed fast.
Next, I weigh team morale heavily. Some cuts might make sense on paper but gut the spirit of your people. A minor perk might not seem "essential," but if it keeps your team feeling seen and valued, it's a strategic investment in resilience. You can't cost-cut your way to greatness if your best people burn out or check out.
Finally, I consider momentum. Certain expenses—like marketing experiments or product R&D—might feel risky to maintain during lean periods, but cutting them can starve future growth. I'm willing to endure short-term discomfort to protect the few initiatives that are building our next chapter.
In tough seasons, you're forced to get brutally honest about what truly drives value. And often, those decisions reveal the business you really are—not just the one you imagined when times were easy.

Georgi Petrov · Answer

When times get tough, my strategy for deciding which business expenses to cut involves focusing on what directly impacts revenue generation and long-term growth. I take a step back to evaluate each expense based on its ROI, necessity, and alignment with my core business objectives.
First, I assess the impact of each expense on customer acquisition, retention, and overall business performance. For example, marketing spend is one area I closely scrutinize. If certain channels aren't driving a significant return, I may reduce investment there and shift to more efficient platforms or organic strategies.
Next, I consider whether the expense is a fixed cost or a discretionary one. For instance, ongoing software subscriptions or tools that aren't essential to my day-to-day operations are often the first to go. Conversely, expenses tied to customer-facing services or products tend to be prioritized, as they directly affect revenue.
Finally, I think about team impact. Layoffs or cuts to staff can be detrimental, so I look for ways to optimize workflows, streamline processes, or automate certain tasks before considering personnel cuts. It's about finding the balance between saving costs and maintaining business resilience.

Heinz Klemann · Answer

When times are tough, our strategy for cutting costs starts with focusing on flexibility over fixed commitments. The biggest leverage point for us has been reducing the number of full-time employees. We now operate with a small core team and scale up with freelancers or flexible contractors as needed. This gives us room to adjust without sacrificing delivery or quality.
Most other cost cuts—tools, software, overhead—are tied to the size of your team. Fewer fixed employees mean fewer licenses, less time on people management, and so on.
We also cut out our office about a year ago when we moved fully remote. That was a big step in lowering fixed expenses without impacting how we operate.
That said, the one area we don't cut significantly is sales and marketing, as long as it's clearly bringing in new clients or supporting retention. Revenue is king. If clients are staying and acquisition is working, most challenges are manageable.

Dhari Alabdulhadi · Answer

When faced with tough economic conditions, my strategy for cutting business expenses revolves around a thorough analysis of both short-term needs and long-term goals. First, I assess the impact of each expense on core operations and revenue generation. Essential functions that drive growth or customer satisfaction are prioritized.
Next, I evaluate the return on investment (ROI) for discretionary spending. This includes scrutinizing marketing campaigns, subscriptions, and overhead costs. I also consider employee feedback, as team insights can reveal inefficiencies or areas for improvement.
Finally, I look for opportunities to renegotiate contracts or consolidate services, which can yield savings without sacrificing quality. By balancing immediate financial relief with strategic foresight, I ensure that cuts are made thoughtfully, preserving the organization's ability to thrive in the long run.

Hershel Glueck · Answer

Cutting business expenses is always challenging. The key to doing it effectively is to first look at potential alternatives so that you can replace items rather than removing them completely.
For example, my business recently reduced some of its software costs by switching from costly tools with monthly per-user pricing to less expensive paid alternatives and even some open-source software. When something can be replaced with a substitute good, it's usually the first thing you should consider when you need to cut expenses.
Often, you don't even need to switch to the new alternative -- simply reaching out to let the provider know you're considering switching can often be enough to negotiate a discount and keep the existing provider at a lower cost. This approach can work well when you need to make small cuts to expenses and don't want to make major business changes simultaneously.

Daniel Lynch · Answer

My strategy is simple: protect revenue-generating and customer-retention functions at all costs. When times are tough, I immediately audit every expense through two lenses: does it directly generate revenue, or does it protect and nurture existing customer relationships? At Empathy First Media, this approach has led us to cut non-core subscriptions, experimental ad campaigns, and office perks before even considering reductions to our client services or tech infrastructure. It's about preserving the systems that keep the business alive and resilient, not just trimming expenses randomly.

Jeff Michael · Answer

Our strategy for cutting business expenses starts with a deep dive into our profit margins. We focus on eliminating products or brands that are popular with our customers but offer low margins. Even if they drive volume, they can drain revenue without contributing to the bottom line. Instead, we prioritize items that provide high margins and long-term value to our business and customers. The key factors we consider are profitability per unit, reorder rates, and whether the product strengthens our brand or just eats up inventory space in our warehouse. While we try to be lean, we don't want to limit our growth.

Robbert Bink · Answer

When cutting business expenses during tough times, we start by carefully analyzing the cost and value of each expense. We focus on retaining elements that directly support our main goals, such as tools and talent that drive revenue or maintain client satisfaction.
We utilize data to prioritize expenses based on their return on investment (ROI). For example, we evaluate whether a marketing campaign attracts new clients or if a software subscription saves time and money by automating tasks.
We also consider long-term growth. Cutting elements like training or critical infrastructure can harm the business later, so we avoid those. Instead, we reduce costs with minimal impact, such as scaling back low-performing projects, renegotiating contracts, or transitioning to flexible solutions like cloud services.
Our approach is strategic—balancing immediate needs with future growth. It's not about cutting blindly but restructuring costs to keep the business strong and sustainable.

Kritika Kanodia · Answer

At Kalam Kagaz, my strategy for deciding which business expenses to cut is rooted in practicality and long-term vision. I focus on three main factors:
1. Core Value Contribution: If an expense doesn't directly enhance our writing services or client experience, it's evaluated for reduction.
2. Operational Necessity: We prioritize what's crucial for delivering quality, like our expert team and tech infrastructure. Non-essential overheads are trimmed first.
3. Sustainable Growth: I'm careful not to cut corners on talent development, client relationships, or marketing; these are vital for sustaining growth and reputation.
I've learned that smart, strategic adjustments help us remain resilient while maintaining the highest standards for our clients.

How to Manage Business Expenses When Working With Freelancers Or Contractors

How to Manage Business Expenses When Working With Freelancers Or Contractors

Prioritize Impact and Necessity

Protect Revenue Drivers and Brand Visibility

Focus on Clinical Impact and Compliance

Make Data-Driven Decisions Aligned with Goals

Treat Every Dollar as a Signal

Analyze Spending Patterns and Rank Expenses

Balance Quality and Cost-Effectiveness

Maintain Customer Value and Operational Efficiency

Align Cuts with Long-Term Strategic Goals

Trim Noise and Protect Core Functions

Evaluate ROI and Protect Team Morale

Assess Direct Impact on Business Outcomes

Preserve Service Quality and Reputation

Protect Guest Experience and Brand Equity

Safeguard Revenue Generators and Team Spirit

Focus on Revenue Impact and Growth

Optimize Team Structure for Flexibility

Balance Short-Term Needs with Long-Term Goals

Replace Costly Tools with Affordable Alternatives

Protect Revenue-Generating and Customer-Retention Functions

Eliminate Low-Margin Products to Boost Profitability

Analyze ROI and Prioritize Essential Elements

Maintain Quality While Trimming Non-Essentials