Startups, especially today, need to be smart about where their cash flows. But that doesn't mean they should simply choose the cheapest option — if your startup hits it big, you could end up scaling fast, and you don't want your tools to let you down in that pivotal moment.

In this article, Max Bramwell, founder of FounderPass, shares nine smart ways to save money without sacrificing on power.

Having built businesses across industries ranging from e-commerce to marketing agencies and subscription companies, one thing I’ve learned is how quickly costs can spiral out of control. Managing these expenses without compromising on the quality of your tools is key to long-term success.

With this in mind, I founded a business, FounderPass, dedicated to helping founders control their costs, minimize SaaS spending, and ensure they get the best, most suitable software for their needs.

9 ways to save money as a startup without sacrificing power

Here are some of my top tips for spending smarter as a startup. The aim here is to save without sacrificing power, giving you the ability to scale fast without sacrificing power.

1. Leverage free credits to control cloud hosting expenses

For most startups, one of the fastest-growing expenses when scaling up is cloud hosting. As your website, app, or service attracts more users, the demand for your infrastructure grows, and so do the costs associated with maintaining that demand. Without proper planning, hosting can quickly become a major financial drain.

Fortunately, there are several ways to minimize these expenses without sacrificing performance. One of the best strategies for startups is to take advantage of free startup credits offered by major cloud platforms like Google Cloud and AWS. These credits can provide thousands of dollars worth of resources, helping you manage the initial stages of growth. Platforms like FounderPass often offer exclusive AWS startup credits, allowing startups to access even more resources than if they applied directly, thanks to unique partnerships.

Additionally, optimizing how you allocate resources is key to avoiding unnecessary expenses. Implement features like auto-scaling and on-demand services, which ensure you only pay for what you use, scaling up or down based on actual traffic. This way, you’re not overpaying for capacity you don’t need. Finally, make it a habit to monitor your usage and costs regularly. Many startups get caught off guard by surprise bills when usage spikes unexpectedly, so keeping a close eye on your spending will prevent unpleasant surprises down the road.

Summary tip: Use free credits available to startups to reduce your hosting costs, optimize, and keep an eye on your bill.

2. Use free marketing channels and automate tasks

Marketing will likely also be one of your highest costs, but you can get scrappy and build a strong marketing engine without over-spending.

Start by exploring low-cost channels including social media and owned channels like email — these can offer excellent reach with minimal investment.

LinkedIn and TikTok are two great platforms that still offer high reach, and all you need to get started is a smartphone and a willingness to experiment. Depending on your business, Reddit or industry-specific Slack groups can be another great way to engage directly with your audience to gather feedback and build interest. The key is choosing a platform that makes sense for your business, posting consistently, and building a solid, authentic presence over time to drive awareness, sales, and feedback.

Email is the most popular marketing channel for a reason — it is low-cost and high-reward, and you can quickly generate data on the types of content and offers your audience gravitates towards. To make your efforts even more efficient, consider leveraging a marketing automation platform like Ortto.

These tools can automate many aspects of your marketing, such as email campaigns and audience segmentation, reducing the need for multiple marketing tools and helping you cut costs. By streamlining your marketing processes, you’ll save time and resources, allowing you to focus on creating personalized campaigns that resonate with your audience and keep your costs in check. Ortto offers a discount for startups and is known for its ease of use and great.

Summary tip: Focus on free marketing channels, generate experiments, and use automation to streamline your efforts.

3. Get discounts on SaaS tools and reduce your subscriptions

As your startup grows, so does your reliance on various tools and software, but monthly subscription costs can quickly pile up as you add more services to your tech stack. One way to minimize these expenses is by taking advantage of exclusive discounts available through platforms like FounderPass.

FounderPass negotiates directly with SaaS companies such as Slack, Notion, Google Workspace, AWS, and Intercom to secure special discounts for its members. It’s free to join, with a premium option offering access to even bigger discounts worth thousands, perfect for startups looking to cut costs while maintaining access to top-tier tools.

Remember, many SaaS platforms offer free tiers or heavily discounted plans specifically for startups. A crucial step in managing these costs is regularly auditing your software stack. Look for overlaps, are you paying for two tools that do the same thing? It’s easy for startups to sign up for multiple services without realizing they duplicate functionality. Evaluate whether the tools you’re using are still the best fit for your needs and budget. Don’t hesitate to switch to a competitor offering a better deal or a more comprehensive solution. Also, keep an eye out for limited-time discounts or annual deals to further maximize savings.

Summary tip: Regularly audit your subscriptions, consolidate where possible, and don’t hesitate to switch to better deals.

4. Consider outsourcing and remote working

Hiring full-time employees can be a significant expense, especially when you factor in benefits, office overhead, and other associated costs.

While there are certain positions where full-time staff are invaluable, startups should be strategic about hiring. For specific tasks or short-term projects, using freelance platforms can be a much more cost-effective solution. Remote contractors or freelancers allow you to bring in the expertise you need without the long-term commitment or overhead of a full-time employee.

That being said, we’re not against hiring full-time staff—when you find the right talent, they can deliver tremendous value and more than justify their costs. The key is to balance your long-term team-building goals with the flexibility that outsourcing can provide, ensuring you’re not overspending in the early stages of growth.

Summary tip: Balance full-time hires with freelancers for short-term needs and budget flexibility. Consider the best fit for your business without overcommitting to overhead.

5. Automate some customer support

As your customer base grows, so do the demands on your customer service team, which can quickly become overwhelming and costly to manage. To keep up with these increasing needs without overextending your resources, consider using AI-driven or AI-supported help desks. These platforms can help customer support scale, handling routine queries and directing customers to the right information with less human intervention. This saves time while ensuring customers receive faster, more consistent responses, improving their overall experience.

Tempting as it may be to outsource all of your support to AI, a hybrid approach is often best. Automation and AI can handle common, repetitive questions, but more complex issues or early-stage feedback should still be handled personally. Gathering feedback and maintaining a personal touch is crucial for understanding your customer’s needs and building strong relationships.

Additionally, setting up self-service options like FAQs, knowledge bases, or automated chatbots can reduce manual workload. This approach lowers operational costs and empowers customers to solve problems quickly and efficiently, ultimately enhancing satisfaction and loyalty.

Summary tip: Balance automation with personalized support early on, using self-service tools to handle routine tasks while gathering crucial customer feedback.

6. Reducing your accounting and bookkeeping costs

Manual bookkeeping and hiring accountants can quickly become a significant expense for startups, especially as your business grows. Instead of relying on costly professionals for routine tasks, consider using affordable accounting software like Xero or QuickBooks to automate financial tracking and tax preparation.

These tools streamline your financial processes, helping you stay on top of cash flow, invoicing, and tax compliance without the need for constant manual input. There are also Quickbook alternatives that can help automate these tasks, so you can reduce both costs and human errors in your financial management.

You’ll still likely need an accountant, but you can drastically reduce your costs by using software for day-to-day tasks.

Summary tip: Automate your bookkeeping with accounting software that integrates with your tools to save on costs and time.

7. Consider co-working and remote working

Office space can be one of the biggest fixed costs for a startup, but it’s often unnecessary. By embracing remote work, you can eliminate the need for expensive office leases. Remote work cuts down on rent and reduces associated costs like utilities, office supplies, and commuting expenses.

When in-person meetings are required, co-working spaces or virtual office services like WeWork or Regus offer flexible, cost-effective solutions. These spaces provide the professional environment you need without the commitment of a full-time lease, allowing you to keep overhead low while still having access to meeting spaces when necessary.

Summary tip: Opt for remote work to cut office costs and use co-working spaces as needed.

8. Scaling your operations efficiently

Make sure to streamline as many of your startup’s tasks as you can, whether this is just making the tasks faster manually or implementing automation tools like Make or Zapier, you can help you automate repetitive tasks, reducing the time and resources spent on manual operations. By automating processes like data entry, customer follow-ups, and workflow management, you can keep your team focused on higher-value activities.

Regularly auditing your operations is key to identifying areas where automation can make the biggest impact. Look for repetitive tasks or bottlenecks and apply automation solutions to streamline them. This not only saves time but also ensures you can scale your operations efficiently without hiring additional staff.

Summary tip: Use automation to streamline operations and scale efficiently without increasing costs.

9. Make sure to cover your legal and compliance needs

Legal services and compliance checks can seem expensive but they are also essential, especially as you grow. You can look to reduce costs by using legal companies designed for startups rather than traditional legal firms. These platforms offer packages for incorporation, contract drafting, and compliance, helping you stay legally sound without the hefty price tag.

To further reduce costs, you can automate compliance tracking and reporting using specialized software. This reduces the need for manual oversight and minimizes the risk of costly mistakes. Staying on top of legal obligations doesn’t have to drain your budget if you leverage the right tools.

Summary tip: Use affordable legal services and automation to cut down on compliance costs.

Final word

Scaling a startup is a delicate balance between cutting costs and ensuring you have the right tools and resources to grow effectively. While it can be tempting to go for the cheapest options, that approach can hurt you in the long run, especially when your business starts to grow rapidly.

As we've seen, there are many smart ways to reduce expenses without sacrificing power. From leveraging free credits on cloud platforms, getting discounts on software and experimenting with free marketing channels to automating customer support and accounting processes, every penny counts when you're scaling up.

With a bit of creativity and resourcefulness, startups can save money in key areas like infrastructure, marketing, and operations, all while maintaining the tools they need to succeed.

One of the key things to remember is to be strategic about where your money goes, focus on tools that scale with you, and optimize your spending to ensure your startup remains lean and efficient as it grows. By applying these nine smart strategies, you can scale your business while keeping your financial health intact.