Start with the easy wins
Software audit is always the first target. Most growing companies have 20-40% waste in their software spend - unused seats, duplicate tools, forgotten subscriptions, over-provisioned plans. Pull the full list, audit usage for each tool, cancel or downsize the waste. Typical savings: $30K-$150K annually for a mid-sized company.
Vendor renegotiation is the second easy win. Most vendor contracts auto-renew at whatever the vendor set the rate at. Before renewals, challenge the pricing. For annual contracts, this often produces 10-20% reductions. Some vendors hold firm; many negotiate. Ask every time.
Payment processing fees are often overlooked. Review merchant processing rates, ACH costs, and wire fees. For high-volume companies, negotiating these can save $10K-$50K annually with no operational impact.
The productivity dimension
Cost cuts that reduce team productivity are usually false savings. Cutting a tool the engineering team actually uses slows down engineering. Cutting training budgets slows up-skilling. Cutting team events hurts retention. Each has a financial consequence that exceeds the direct cost saved.
Before cutting any tool or program, ask what happens if it is cut. Will someone do the work manually? Will productivity drop? Will morale suffer? If the answer to any is yes, the true cost of the cut is higher than it appears.
The opposite is also true. Some spending categories genuinely add no productivity. Premium seats for features nobody uses. Catered meals that nobody eats. Training programs with low attendance. These can be cut without any productivity loss.
The structural cuts
Consolidation of duplicate functions produces real savings with limited productivity impact if done carefully. Two tools doing similar things usually have overlap that can be eliminated. The transition requires planning but the steady-state savings are real.
Outsourcing vs in-house decisions can flip over time. A function that was right to keep in-house at $2M revenue might be more efficient outsourced at $10M, or vice versa. Review these decisions annually rather than treating them as permanent.
Office space is often overbuilt. A 15K sqft office that was signed when the team was 30 people and expected to reach 60 may still be in place when the team is actually 40 people working hybrid. Subleasing, downsizing, or going fully remote can save $200K-$500K annually for mid-size companies.
What not to cut
Customer-facing functions where the cut would affect customer experience. Customer support that gets slower produces churn. Sales enablement tools that get removed slow revenue. Marketing programs that drive leads affect pipeline. These are easy to cut numerically but expensive in downstream impact.
Compliance and controls. Cutting audit preparation, financial controls, or legal review to save money rarely ends well. The savings are small; the risk exposure is large. Do not optimize by cutting the protections.
Growth investments that are working. If sales and marketing spending is producing good unit economics, cutting it reduces future growth. The short-term savings show up in current P&L; the long-term revenue impact shows up in future periods. Cut inefficient growth spend, not productive growth spend.