The principle
Cost cutting in a panic damages growth. Cost optimisation is a repeatable discipline applied annually.
The 5-bucket review
1. Software subscriptions
- List every recurring SaaS payment
- For each: who uses it, what would break without it, when does it renew
- Typical savings: 15–30% by deduplication, downgrading tiers and renegotiating at renewal
2. Professional services
- Bundle separate suppliers (one accountant + lawyer + payroll = better terms than three)
- Move retainer work to fixed-fee where scope is predictable
- Audit time-and-materials suppliers for scope creep
3. Premises and utilities
- Renegotiate the energy contract every 12 months — switching is usually 10–20%
- Sublet or downsize unused space
- Review business rates — many SMEs overpay
4. Payment processing
- Aim for under 2% on card processing for B2C, under 1% for B2B via direct debit (GoCardless)
- Audit Stripe/SumUp/Adyen statements — international and "premium card" fees often hide 0.5–1.5% extras
5. Headcount and contractors
- Track contractor spend by month — many SMEs find recurring contractor cost has quietly exceeded full-time hires
- Convert long-running contractors to employees where IR35 demands it
- Avoid panic redundancies — they're rarely a sustained saving
What not to cut
- Marketing during a slow period (it's exactly when CAC is lowest)
- Customer support (churn costs more than the savings)
- Training and tools your top performers depend on
- Pension contributions (recovering them later is painful)
Annual cadence
Run a 5-bucket review every September/October ahead of the new financial year. Document the decisions and review the savings in the following month's KPI pack.
Premium clients get a cost-base review built into their annual planning cycle.