What Are the 10 Biggest Costs in Your Business?
Write them down. Challenge each one. See how even small reductions could put meaningful cash back into your business.
You don't need accounting knowledge, a budget model or a cost-cutting programme. You need ten lines and an honest question about each of them. Start simple: list your ten biggest costs, then challenge them one at a time.
A 15 to 20 minute exercise. Nothing you type leaves your browser.
Enter your top 10 costs
Annual amounts, roughly. Estimates are fine — this is about direction, not precision. Describe each cost however it makes sense in your business.
€0
per year
What's 10% worth?
Before you challenge anything, it helps to see the scale. These are simple illustrations of what small reductions across your ten biggest costs could be worth.
€0
annual saving
€0
monthly cash saving
€0
annual saving
€0
monthly cash saving
€0
annual saving
€0
monthly cash saving
€0
annual saving
€0
monthly cash saving
This is not a recommendation to cut every cost by 10%. It is simply a way of seeing what relatively small changes across your biggest costs could be worth.
Now challenge each cost
Open one cost at a time. Ask whether it can be reduced, how, and — just as importantly — what would happen if you did.
Any figure from 0 to 100, decimals included. 0% is a perfectly good answer.
€0
€0
Your cost challenge results
€0
€0
€0
0.0%
0
0 / 0
Cost by cost
Enter your costs above and your results will appear here.
A saving isn't a saving if it damages the business
Reducing a €250,000 payroll cost by 10% appears to save €25,000. But if that reduction causes the business to lose €100,000 of revenue, it wasn't a saving.
Removing unused software licences may save €4,000 without affecting customers, employees or revenue.
Always consider the consequence of reducing a cost, not just the saving.
My top 3 cost actions
An analysis only matters if something happens next. Pick three, name an owner and set a date.
Take it away with you
The tool above is free to use and never asks for your details. If you would like to keep your work, share it with a colleague or repeat the exercise each year, we will email you the Excel version.
The workbook has three tabs:
- Start here — why this isn't a budgeting exercise, the five questions to ask of every cost, and the framework: identify, question, challenge, calculate, act.
- Top 10 Cost Challenge — your ten costs, with automatic annual and monthly savings, a summary of what 1%, 5%, 10% and 15% would be worth, and columns for actions, owners and dates.
- Example — a completed illustration using fictional figures, including two costs deliberately left at 0%.
The percentage scenarios in the workbook are illustrations of what small reductions could be worth — not a recommendation to cut every cost.
The download form is just below ↓
Educational disclaimer. This material is general educational information about cash management. It is not investment, tax, legal, accounting or regulated financial advice, and it does not take account of your circumstances. Consider speaking to a suitably qualified professional before making financial decisions.
What's 1% worth?
Sometimes you don't need a dramatic cost-cutting programme. Even finding 1% can matter.
€0
€0
€0
Why start with your biggest costs?
Because that is where the money is. Reviewing forty small expenses takes an afternoon and rarely changes anything. Reviewing the ten largest takes twenty minutes and covers most of what leaves your bank account. A 5% improvement on a large cost is usually worth more than eliminating several small ones — and it is far less disruptive.
Should every cost be reduced?
No. Costs are not the enemy. A business exists to spend money in ways that produce more money than it spends. Some of your largest costs are the reason you have customers at all. The honest answer for several lines on your list will be "no realistic reduction available", and that is a perfectly good outcome — it means you have checked.
Look for waste before you cut capability
Most businesses carry some spending that produces nothing. It is worth looking there first, because removing it costs you nothing at all:
- Unused subscriptions
- Duplicate services
- Poor supplier terms
- Uncompetitive contracts
- Unnecessary banking and payment fees
- Underused licences
- Excess consumption
- Unnecessary processes
Renegotiation can matter as much as cutting
Many costs can be reduced without changing anything the business does. Contracts roll over at prices that were competitive three years ago. Suppliers quote better rates when asked, or when they know you are asking others. Payment and banking fees are often accepted rather than compared. Paying less for exactly the same thing is the cleanest saving there is — see our guide to how payments actually move and what they cost.
Small percentages become meaningful amounts
A 7% reduction sounds modest. On €400,000 of annual costs it is €28,000 a year, or over €2,300 a month of additional cash — money that did not require a single new customer. This is why the tool shows monthly figures alongside annual ones: monthly is how cash pressure is actually experienced.
Turning savings into cash flow improvement
A saving only becomes useful when it reaches your bank balance. Costs ultimately become cash, so reducing unnecessary expenditure improves the cash available to run, protect and grow the business. The next step is to put the reduced figures into a forecast and see what changes, then compare that forecast with what actually happens using cash flow variance analysis.
Reducing what you pay out is one of the more reliable ways to strengthen working capital and build the reserves that let a business absorb a bad month. We cover that in protecting the cash your business already has.
Frequently asked questions
- What are the biggest costs in a business?
- For most small businesses the largest costs are people, premises, stock or materials, software and subscriptions, professional and financial fees, marketing, insurance, utilities and delivery. The mix differs by business, which is why the exercise starts with your own list rather than a fixed set of categories.
- How can I identify my biggest business expenses?
- Take twelve months of bank statements or your accounting software's expense report and sort the payments from largest to smallest. Group anything that is clearly the same thing, then take the top ten. Estimates are fine — the aim is to see where the money goes, not to reconcile to the penny.
- How can a small business reduce costs?
- Usually by renegotiating contracts, retendering, consolidating suppliers, removing unused licences and subscriptions, reducing consumption, eliminating duplicated services and reviewing banking and payment fees. These reduce spending without reducing what the business can actually do.
- What business costs should I cut first?
- Start with waste rather than capability: things you are paying for and not using, or paying more for than you need to. Costs that directly generate revenue or protect customers deserve far more caution.
- How do I calculate cost savings?
- Multiply the annual cost by the reduction percentage you believe is realistic. A €24,000 annual cost reduced by 15% saves €3,600 a year, or €300 a month. The monthly figure is the annual saving divided by twelve.
- How much would reducing costs by 10% save?
- It depends entirely on the size of the costs. If your ten biggest costs total €400,000 a year, a 10% reduction across them would be €40,000 a year, or roughly €3,333 a month. That figure is an illustration of scale, not a recommendation to reduce every cost by 10%.
- Should businesses try to reduce every cost?
- No. Some costs earn their place and some cannot sensibly be reduced at all. The useful question is not how much can be cut, but whether the money is being spent in the right places and whether the business is getting value for it.
- What is the difference between reducing costs and cutting costs?
- Reducing a cost means paying less for the same outcome — a better contract, less waste, fewer unused licences. Cutting a cost often means buying less of something, which changes what the business can do. Both have a place, but they carry very different consequences.
- How do lower costs improve cash flow?
- Costs eventually become cash leaving your bank account. Every euro of unnecessary spending removed is a euro that stays in the business, improving the cash available to run it, protect it and grow it — usually more reliably than trying to win extra revenue.
Read next
- Free cash flow forecast template — see what your reduced costs do to your cash.
- Cash flow variance analysis
- Payment rails explained
- Cash management needs discipline, not complexity
- All Practical Cash Management guides