Cutting costs is often necessary, but done blindly it can remove the very capacity you need to recover. The skill is separating fat from muscle.
Start with non-productive spend
Subscriptions you do not use, duplicated tools, discretionary travel and marketing with no measurable return are usually the safest first cuts. They reduce outgoings without touching your ability to deliver.
Renegotiate before you remove
Before cancelling anything essential, ask for better terms — suppliers, landlords and service providers will often flex to keep you. A renegotiated cost keeps capacity while easing cash flow.
Protect revenue-generating capacity
Be very careful cutting the people, kit or stock that directly produce income. Saving a little now by hollowing out capacity can cost far more when the recovery you are fighting for finally arrives.
A leaner cost base also makes any loan arrangement easier to sustain.
We lend only to UK limited companies and LLPs, and the loan is to the company with no director personal guarantee. As business finance outside the consumer-credit regime, it is not covered by the Financial Ombudsman Service or FSCS.
See also: Restructuring costs to protect your business, Building a recovery plan after a difficult period, Talking to suppliers about payment terms.