Quick answer
To cut business costs fast, work in order of speed and safety: stop leaks first (unused subscriptions, duplicate services), then renegotiate the big fixed contracts (insurance, energy, rent, finance), then review supplier pricing and rostering, and only then touch anything that earns revenue. Aim for a target in dollars per month and check each cut against what it protects.
Key points
- Set a monthly dollar target before you start so you know when to stop
- Fast and safe first: leaks, duplicates and renewals; slow and risky last: people and marketing
- Finance costs are a cost line too, and fees, structure and security are often worth a second look
- Interest charged by the ATO is no longer tax-deductible, which changes the ranking of which debts to clear first
- Cutting is half the job; pair it with a price check so margin recovers from both sides
When money gets tight, the instinct is to cut something quickly, and the first thing at hand is usually the wrong thing: the marketing that brings in work, the person who keeps customers happy, the maintenance that stops a breakdown. Fast cuts made in a hurry tend to save a little and cost a lot.
The better approach is an order of attack. Start with costs that give you nothing back, move to costs you can renegotiate, and leave anything connected to revenue until last. Done in sequence, a thirty-day sweep can free real money without anyone noticing a difference.
How much do I need to cut, and why does that matter?
Start with a number. Not “as much as possible”, but a monthly dollar target connected to a purpose, such as closing a $6,000 monthly gap, rebuilding a buffer or affording a new repayment.
A target does three things. It tells you when to stop, which protects the business from over-cutting. It lets you rank ideas by dollars rather than by how much they annoy you. And it gives you something to report to a lender or accountant if you’re also thinking about fixing a cash flow problem.
To find the spend, export twelve months of bank and card transactions into a spreadsheet and sort by supplier. Most owners discover that ten or fifteen suppliers account for most of their costs, and a couple of surprises are hiding in the smaller lines.
What should I cut in the first week?
Leaks: money going out for things you don’t use. Look for:
- Software seats and subscriptions for people who left or tools nobody opens. It’s common to find two or three overlapping products doing the same job.
- Duplicate services, such as two phone plans, two cloud storage accounts or two payment platforms.
- Auto-renewals you forgot, particularly annual ones that charge once a year.
- Bank and merchant fees: account keeping, terminal rental, surcharges you could pass on, and fees for services you’ve stopped using.
- Waste in operations: stock that spoils, ordering that’s rounded up out of habit, vehicles idling.
None of this changes what customers experience. A week of focused effort commonly produces a surprising amount, and it costs nothing but time.
What should I renegotiate in weeks two and three?
Large fixed contracts are where the bigger dollars are. Each of these is worth a phone call, and a competing quote makes the call more effective:
| Cost | What to do | Typical effort |
|---|---|---|
| Insurance | Get comparison quotes through a broker; review cover limits and excess | A few hours |
| Energy | Compare plans and check demand charges; business.gov.au lists shopping around for energy deals as a cash-flow action | A few hours |
| Rent | Ask for rent-free months, a freeze or a reduced term, especially if you’re a long-standing tenant | A conversation |
| Telco and internet | Bundle, downgrade or switch | An hour |
| Suppliers | Ask for volume pricing, extended terms or early-payment discounts | See supplier terms |
| Accountant and bookkeeper | Clarify scope and fixed-fee arrangements | A short call |
Be specific. “Can you do better?” gets a polite no. “I have a quote at $X for the same cover, can you match it?” gets a manager.
Longer-standing customers have bargaining power too. A supplier would rather keep a reliable account on slightly better terms than lose it.
What about the money I owe?
Debt is a cost line, and it’s the one most owners leave out of a cost review. Three things are worth checking:
1. Fees and structure, not only the headline price. A loan with big establishment and exit fees, or several overlapping short-term facilities, can cost far more in total than it appears. Our guide to business loan costs and fees shows how to compare in dollars, and the loan cost comparison calculator does the arithmetic.
2. Consolidation. Several small facilities with daily or weekly repayments can sometimes be replaced by a single longer facility with lower monthly outgoings. The trade-off is that a longer term may cost more in total. Run the numbers for both before deciding. More on this on our debt consolidation loans page.
3. Which debt to clear first. Since 1 July 2025, interest the ATO charges on tax debts, including the general interest charge and shortfall interest charge, is no longer tax-deductible. That makes ATO debt more expensive in after-tax terms than it used to be. If you have a choice between clearing it and paying down another loan, include the lost deduction in your comparison.
If you can’t meet a repayment, talk to the lender early. The ASBFEO’s guidance for owners who owe money is to pay what you agree you owe and can afford, and offer a payment plan within your means for the rest.
Which cuts hurt more than they help?
Pause before touching any of these:
- Sales and marketing that’s working. If a channel brings in customers at a cost you can measure, cutting it shrinks revenue faster than it saves. Cut the channels you can’t trace to sales.
- Insurance that matters. Reduce excess or cover levels carefully; don’t drop cover that protects the business from a loss it couldn’t absorb.
- Maintenance on equipment you depend on. Deferring servicing is borrowing from the future at a high rate.
- The best people. Wages are the largest cost for many businesses, and rosters are worth tuning, but losing a key person costs far more than the saving.
- Paying staff or super late. This creates a much bigger problem than the one it solves.
A simple filter: for each cut, ask “what does this protect, and what happens if it’s gone?” If the answer is “nothing”, cut it. If the answer is “a customer”, leave it.
A worked example
An illustration, not a real client. A café owner in Newcastle needs to free up $5,000 a month to cover a higher rent and a loan repayment.
- Week one: cancel a loyalty app nobody uses, a second point-of-sale subscription, and an unused delivery platform plan. Saving: about $450 a month.
- Weeks two and three: switch energy plan, rebid insurance, renegotiate the coffee supplier for volume pricing, and ask the landlord for a six-month rent freeze on the annual increase. Saving: about $1,350 a month.
- Week four: trim the rostered hours on the two quietest afternoons, and reduce food waste by moving to smaller, more frequent orders. Saving: about $1,500 a month.
- Pricing: lift three menu items by 50 cents, worth about $1,200 a month with no measured drop in sales.
Total: roughly $4,500, close to the target. The last $500 comes from consolidating two small equipment loans into one with a longer term. Not a dramatic restructure, just a month of calls.
How do cost cuts and price rises fit together?
They fix the same equation from opposite ends. Costs control what leaves; prices control what arrives. If margin is thin, doing only one often isn’t enough. Read how to raise prices without losing customers alongside this, and track the combined result on your profit and loss each month. Pair the work with managing business cash flow so timing doesn’t undo the savings.
When cutting isn’t enough
Sometimes the problem is bigger than the savings available: a tax bill, a large supplier payment, a gap that arrives before the cuts can take effect. Cutting hard in that moment can damage the business you’re trying to rescue.
If you’ve done the sweep and a gap remains, it may be worth seeing what finance is realistic. Our form takes about a minute, and it doesn’t involve a credit check to enquire, so nothing marks your file. We keep your details to ourselves rather than sending them to many lenders; a real person reads your situation and calls. Put in the true amount and what you’ve already done to fix the numbers, because that accuracy helps us suggest the right option first time.
Frequently asked questions
What are the quickest ways to cut business costs?
Cancel unused subscriptions and software seats, review insurance and energy contracts, renegotiate phone and internet plans, tighten stock ordering and check bank and merchant fees. These typically take days, not months, and rarely affect customers.
Which costs should I never cut?
Be careful with anything that directly earns revenue or protects you: sales activity that is working, insurance cover that matters, safety, and the people customers deal with. Cut the waste around them rather than the thing itself.
Can refinancing reduce my business costs?
Sometimes. Consolidating several expensive facilities into one, or moving to a lender with lower fees, can reduce your total monthly outgoings. Compare the total dollar cost over the life of the new loan, including exit fees on the old ones, before you decide.
How much should a small business try to save?
Pick a target you can name in dollars per month, tied to a purpose: closing a cash-flow gap, rebuilding a buffer or funding a repayment. A vague aim to cut 'as much as possible' tends to produce small, painful cuts and no clear finish.
Is it better to cut costs or raise prices?
Usually both. Cost cuts are in your control and quick, while price rises often have a bigger effect on profit per dollar of effort. The break-even maths in our price-rise guide shows how much volume you can afford to lose.
Should I stop paying a supplier to save cash?
Not without talking to them. Contact the supplier, pay what you can and agree a plan for the rest. Quiet non-payment risks supply, credit terms and your reputation, which usually costs more than it saves.