Reducing burn rate is mostly about the order you do things in. Cut the wrong thing first and you slow down the growth that was going to save you. Cut in the right order and most companies find 15–30% of their spend can go without anyone noticing.
First, be clear about which burn you're lowering. Gross burn is everything you spend. Net burn is spending minus revenue. Net burn is what decides your runway, which means raising revenue counts exactly as much as cutting costs.
Step 1: Get the real list of what you spend
You can't cut what you can't see. Export the last three months from your bank and card statements and put every recurring cost in one list: what it is, monthly cost, who uses it, and when it renews.
This takes an afternoon, and it's usually where the first surprise is. Most small companies have a few subscriptions nobody remembers signing up for, tools paid for twice, and annual renewals that went through on autopilot. The free subscription tracker does this list for you and flags renewal and cancellation dates.
Step 2: Cut the things nobody will miss
Start with costs that have no effect on customers or the team's ability to ship:
- Unused software seats. Remove people who left or never logged in.
- Duplicate tools. Two project trackers, two note apps, three ways to store files.
- Tools on the wrong plan. Plenty of "Business" plans could be "Starter".
- Annual renewals coming up. Downgrade or cancel before the renewal date, not after.
Step 3: Renegotiate the big ones
Your largest costs after payroll are usually hosting, a few core tools, and maybe office space. All of them are negotiable, especially at renewal:
- Ask vendors for startup programs or credits. Most cloud providers and many SaaS companies have them.
- Offer to switch to annual billing in exchange for a discount, if your runway allows it.
- Get a competing quote. "We're considering moving" changes the conversation.
Step 4: Fix revenue leaks before you cut people
Before touching payroll, look at the money you've earned but aren't collecting:
- Unpaid invoices. Every overdue invoice is runway you already earned. See how to chase unpaid invoices.
- Failed card payments. Turn on automatic retries and dunning emails in your billing system.
- Customers on old, low prices. A price rise for new customers lowers net burn without cutting anything. See how to raise prices without losing customers.
Step 5: Look at hiring and payroll last, but honestly
Payroll is usually 60–80% of spend in a startup, so if the earlier steps aren't enough, this is where it has to come from. The order to look in:
- Pause open roles. Hires you haven't made yet are the easiest cost to remove.
- Contractors and agencies. Often the most flexible spend.
- Founder salaries. A temporary cut sends a clear signal and buys time.
- Team reductions. If you have to do it, do it once, do it deep enough, and do it early. Repeated small cuts damage morale more than one decisive one.
What not to cut
Don't cut the things that directly produce revenue or keep customers: the channel that brings most of your signups, support for paying customers, or the work that's about to ship a feature customers are waiting for. A useful test for every cost: if this disappeared tomorrow, would revenue drop within three months? If yes, keep it and look elsewhere.
Check the result
After cuts, recalculate runway and check whether you're now default alive. The goal of reducing burn isn't a smaller number for its own sake. It's buying enough time for revenue to catch up with costs.