Boost Your Bottom Line: 5 Strategies For Business Cost Cutting

Yahoo

10-07-2025

One of the draws of going into business for yourself is becoming the ultimate decision-maker. Not only do you have control over your career, but you also choose how things are run—from the everyday decisions to big-picture strategy.
However, some things will inevitably be outside your control, such as larger economic conditions. And considering the impact they can have on a business's success, it's a topic on many entrepreneurs' minds. According to 2025 data from the U.S. Chamber of Commerce, 58% of business owners cite inflation as a top concern, which is likely also a contributing factor to the 35% concerned about revenue.
While economic conditions are out of your control, plenty of other things are still within it. Finding ways to reduce your operating costs can create flexibility in your budget, helping you weather whatever the future brings.
'Having more margin is a gigantic ecommerce cheat code,' Andrew Faris tells Shopify. Faris is the founder of AJF Growth, a consultancy that helps scale direct-to-consumer brands.
Knowing your numbers is step one: how much money is coming into the business, and how much is going out. Next, consider the following strategies to help reduce business expenses and improve margins.
Customer acquisition costs (CAC) can add up quickly, but offering free products could significantly reduce your expenses. Leah Marcus and Yasaman Bakhtiar, the duo who founded the pickle brand Good Girl Snacks, employed this strategy to accelerate their business growth.
Instead of paying influencers to talk up the brand on social media, they researched established content creators who were likely to genuinely enjoy their product, and sent them complimentary samples. The move paid off.
'It's created a lot of buzz and allowed for a lot of sales, while still maintaining a zero-dollar CAC, because we just gift, we don't pay anybody,' Marcus says on Shopify Masters.
Similarly, when the clean skin care brand Tower 28 launched in 2019, founder Amy Liu sought out prominent beauty YouTubers, found their contact information, and sent each a free product sample, with a personal touch.
'From the very beginning, I've always really believed in a handwritten note,' Liu says. 'And we would just send these packages out to people. Our open rates were certainly not 100%, but there were a few.'
When the COVID-19 pandemic hit, she began gifting the brand's popular SOS Daily Rescue facial spray to healthcare workers to help alleviate maskne and other skin irritations. In turn, recipients posted before-and-after photos showing how well the product worked, which Liu was then able to repost (with permission) on the brand's account. This social proof is one of the reasons Tower 28 is now a multimillion-dollar brand.
AI can save business owners significant time across their operations, especially in areas that don't require a human touch or a great deal of strategy. This can include everything from data entry to content creation to customer feedback analysis. Julianne Fraser, founder of the digital brand marketing consultancy Dialogue New York, developed proprietary systems to help her company meet the increasing demands of its clients.
'We knew that we didn't want to change that human-to-human approach in the way that we pitch, negotiate, and form the campaign narratives, but everything thereafter in terms of executing a campaign—from the contract process, the content approval, the invoicing, etc.—could be automated,' she tells Shopify. 'So we worked with a developer to help us streamline and automate that, and it really improved and increased our capacity substantially.'
In fact, the team was able to quadruple the volume of campaigns they were managing without having to scale their human capital. Fraser says this has also led to more fulfilling work for her team, freeing up more time for the creative aspect of their work—the ultimate win-win.
Supplier prices aren't written in stone. Taking the time to compare prices among vendors, negotiate for better rates, and review contracts to update terms can help reduce your operating costs. This is especially true if your business relies heavily on outside vendors, which is often the case for product-based companies.
Will Nitze, founder of the protein bar brand IQBAR, leveraged the company's increasing production volume to negotiate more favorable terms with his suppliers. 'You go back to your manufacturer and you say, 'Hey, now that I'm producing 10 times more product, I need you to reduce my labor cost per bar from X to Y,'' he explains.
Ultimately, Nitze pivoted IQBAR's supply chain from an outsourced 'turnkey' model to an in-house operation during the pandemic. Not only did this give him greater control over production, but it also improved the business's margins.
'Typically, they're marking up or taking a percentage of the total cost, as what's called a materials management fee,' says Nitze.
One downside of taking ownership of this process, however, is an increased administrative burden. If this sounds too extreme for your business, you don't have to go all in. You might choose to assume a small role in co-manufacturing and then leave the rest to trusted suppliers.
Business growth doesn't always require a huge employee roster. Staying lean can free up more money to put toward product development, marketing, and scaling your operations. For Danny Buck, cofounder of the men's jewelry line CRAFTD London, maintaining a small, mostly remote team has also allowed him to source talent from all over the world.
'From a personal perspective, I didn't want a big team. So CRAFTD only has 15 people,' he says. 'We consider ourselves small and mighty. We're growing and will grow. We don't need a hundred people to do it.'
In some cases, restructuring is a matter of life or death. When Brad Charron took the reins as CEO of the protein brand Aloha in 2017, he was immediately faced with some tough decisions. The company was in serious financial trouble, which prompted him to let go of the bulk of his 70 employees and transition to remote operations. Today, Aloha is a multimillion-dollar business, and the team remains small, with about 20 employees.
Building and maintaining your online presence can be a huge expense. And while digital ads can be effective, they can also be costly.
Leon Hughes, partner at the London-based private equity firm Piper, cautions against paying for ads during a company's early days. Instead, he suggests first ensuring there's a market for your product.
'Go to events, get out there, sell hard, learn about the product, make sure that it is fit for purpose and people are coming back,' he says. This can help you decide if the upfront investment in paid media is worthwhile.
When you are ready to invest in paid ads, a more manual approach may be key, says Faris, who utilizes manual bids to achieve the best return on ad spend (ROAS) from his Meta ads.
'The basic concept here is that instead of just telling Meta, 'Here's how much budget I have; spend through all of it every day,' … instead, you say, 'Here's the target ROAS or cost per acquisition that I'm trying to get, you tell me how to spend as much money as you can while maintaining this target.''
This strategy ensures that Faris invests the majority of his budget in his best-performing ads. 'That ends up being the most efficient distribution of your dollars on ads,' he says.
This story was produced by Shopify and reviewed and distributed by Stacker.