Hour 7: Cost Cutting, Outsourcing & Cash Flow Tips

The 9 Hour Small Business Tune-Up — Hour 7

Cost Cutting, Outsourcing, and Cash Flow

This hour covers three ways to strengthen your bottom line without bringing in a dollar of new revenue: cutting wasted costs, deciding what to outsource, and steadying your cash flow.

It’s for any small business owner who wants to find money that’s already leaking out of the business. Review this part of the program once every six months to catch new waste before it piles up.

What follows are areas where money can usually be saved. Add your own cost-saving ideas to the list as you go.

Services

All businesses pay for services to operate. Not all of those services are still worth what you’re paying for them.

Review everything you pay for on a recurring basis and ask whether it’s still necessary, and whether you’re still getting a fair price. Software subscriptions are one of the easiest places to find waste: as of 2026, the average small business pays for more than 15 different software subscriptions, and typically wastes around 30% of that spend on tools or seats nobody uses anymore.

A single afternoon spent listing every recurring charge on your bank and credit card statements usually turns up at least a few subscriptions you forgot you had. Cancel or downgrade what you find, and you’ll often free up hundreds or thousands of dollars a year — money you can put toward advertising, paying off debt, upgrading equipment, hiring, or simply making the office more efficient and comfortable.

Assets

Assets that are not productive, have no future use, and don’t serve a purpose are a waste. If they are just sitting there gathering dust or depreciating, liquidate them as soon as possible and put the funds to work where they’ll actually help the business.

How many dead assets does your company have?

For example, suppose you own a warehouse that’s debt-free and attached to your office. It was once used for storing products. Now the manufacturers ship products directly to the customer, and you keep the warehouse because it’s convenient, you think you might need it someday, and it’s an investment.

But does it make sense to keep the warehouse? Sell the building and move to a more efficient location. Or, if you like the area and the office is convenient, lease out the warehouse so it at least brings in income. The point is to eliminate wasted assets and redirect what they’re costing you.

Exercise: Eliminate Unnecessary Costs and Assets

The items below refer to things that aren’t being used to their full potential. Freeing up the funds tied to them would increase your profits.

Do you have any of the following?

Subscriptions to magazines that you don’t read or memberships to organizations that are unnecessary.
Extra phone lines, unnecessary long-distance calls, or excessive cell phone use.
Vehicle leases.
Excessive payroll.
Unused services.
Ineffective advertising.
Luxury items or expenses that exceed your income.
Excessive stock (products that just take up shelf space).
Unused office space.
Company vehicles that are rarely driven.
Unused equipment.
Unused buildings or furniture.
Departments that are not related to your core business.

Fill in the table below:

List all of the items, business practices, and investments that you have that are unprofitable:

List all of the items, business practices, and investments that you have that are unprofitable:	Savings if you eliminated them:
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$
	$
Total savings:	$

Outsourcing

You can’t do everything yourself and expect the best results. Often it’s better to focus your efforts on your core business and outsource other jobs to other people or firms, so you can concentrate on running, directing, maintaining, and expanding what you do best.

Outsourcing may raise concerns about money or security. When weighing a decision, consider the time and money it would take you to do the job yourself while still maintaining the quality of your other work.

As for security, firms you outsource to may be even stricter about confidentiality than you are, since it’s part of how they stay in business. Bringing a new employee in-house to do the job carries its own security risks too — outsourcing doesn’t automatically add risk that keeping the work in-house avoids.

Before you sign on with an outsourcing partner, check more than just their reputation. A solid review covers:

Basic company information — how long they’ve been in business and who owns them.
Financial stability — can they reliably deliver over the length of your contract?
Legal standing — any active complaints, disputes, or regulatory issues.
Security practices — how they handle your data and who has access to it.
Track record — references from other clients doing similar work.

A quick reputation check through the Better Business Bureau is a reasonable starting point, but it shouldn’t be the only check you run before handing over sensitive work.

As of 2026, small businesses that outsource cite cost reduction and access to outside expertise as roughly equal reasons for doing it — it’s rarely just about the price anymore. Accounting and IT work remain among the tasks small businesses hand off most often, since they require skills that are expensive to build in-house.

Example:

Can you save money by preparing your own taxes? Yes, you can. But what are you really saving?

Do you have time to keep up with changing tax laws? Do you know about all the deductions you can legally take? Do you understand the tax system well enough to handle it yourself? Would you be better off focusing your energy on other parts of your business instead?

The only real advantage to doing your own taxes is staying more familiar with your own numbers, provided you’re keeping the books correctly. Instead of doing everything yourself, consider keeping a simple record of revenue and expenses and requesting a monthly report from your accountant for comparison.

Example:

You want to create your own stationery, letterhead, envelopes, and business cards, but this would require software and the skill to use it for the design work.

You’d also need to print the letterhead and envelopes, then print and cut the cards yourself.

Doing all this, how long would it take you to reach the point where you could actually use your stationery?
Would it be worth your time?
Do you want to do this?
Is this task an essential part of running your business?

Exercise: Is Outsourcing Right for You?

Make a list of every task in your business that you could outsource.
For each task, list the advantages and disadvantages of outsourcing it.

Cash Flow

Healthy cash flow is one of the biggest advantages a business can have. If problems are caught early enough, even a struggling business can survive on strong cash flow alone.

Cash flow pressure is common: as of 2026, the average U.S. small business holds only about 27 days of cash buffer, and slow-paying customers are the most frequently cited cause of cash flow strain. With a healthy cash flow, you can build a budget, get through slow periods, and qualify for a good line of credit when you need to expand.

Tips to Increase and Stabilize Your Cash Flow

Offer down-payments for products or services you sell on credit. If you’re waiting 30 days for payment, try to get a 20% down-payment, or something close to it.
Set your own payment deadlines at least one to two weeks later than your invoice dates. For example, if you give a customer 30 days to pay, try to get 45 days to pay your supplier. That gap means a late customer payment won’t necessarily make you late paying the supplier, and it gives banks time to process everyone’s checks.
Offer discounts for cash payments.
Look for ways to increase profits without jeopardizing the business.
Don’t spend time on jobs that don’t bring in money. That time is better spent on paying work.
Introduce a product line with a high turnover rate and require payment in cash.
Run a sale.
Liquidate merchandise you no longer want to carry.

Exercise: Improve Your Cash Flow

Brainstorm ways to apply the suggestions above to your business, and add ideas of your own. Make a list now — on your phone, your computer, or a pad of paper.

Key Points and Facts About Cutting Costs, Outsourcing, and Cash Flow

Cost Cutting

Small businesses commonly pay for services and subscriptions they no longer need or use.
As of 2026, small businesses average over 15 software subscriptions, with about 30% of that spend going to waste on tools nobody’s using.
Unproductive assets — unused space, equipment, or vehicles — tie up money that could go toward growth.

Outsourcing

Cost savings and outside expertise now weigh about equally in why small businesses outsource, per 2026 industry data.
Accounting and IT are still the tasks small businesses hand off most.
A full vendor check covers financial stability, legal standing, security practices, and track record — not just a reputation score.

Cash Flow

As of 2026, a typical U.S. small business has only around 27 days of cash on hand to cover expenses.
Late-paying customers are the most commonly cited cause of cash flow trouble.
Down-payments, faster invoicing, and cash discounts all help stabilize cash flow.

Action Steps for Cutting Costs, Outsourcing, and Cash Flow

Find and cut wasted spending

Pull 90 days of bank and credit card statements and list every recurring charge.
Cross-check each subscription or service against who actually uses it.
Cancel, downgrade, or renegotiate anything that isn’t earning its keep.

Decide what to outsource

List every task you’re currently doing yourself that isn’t part of your core business.
Weigh the time and money each task costs you against the cost of outsourcing it.
Vet any vendor’s finances, legal standing, security practices, and references before signing.

Stabilize your cash flow

Start requesting down-payments on credit sales.
Push your own supplier payment terms out further than your customer payment terms.
Offer a small discount for customers who pay in cash or pay early.

Checklist for Cutting Costs, Outsourcing, and Cash Flow

Audit recurring costs
- List every service and subscription you pay for.
- Flag anything unused in the last 90 days.
Review unproductive assets
- Identify unused space, equipment, or vehicles.
- Decide to sell, lease, or repurpose each one.
Evaluate outsourcing candidates
- List tasks outside your core business.
- Compare in-house cost and time against outsourcing cost.
Vet any outsourcing vendor
- Check financial stability, legal standing, and security practices.
- Confirm references from similar clients.
Shore up cash flow
- Set down-payment terms for credit sales.
- Extend your own payment terms with suppliers.
- Build a small cash buffer for slow periods.

FAQ: Cutting Costs, Outsourcing, and Cash Flow

How often should I review my business expenses?

Review recurring costs and subscriptions about once every six months. Waste tends to build back up quietly between reviews.

Is outsourcing always cheaper than hiring in-house?

Not always. Outsourcing often costs less for specialized or occasional work, but ongoing, high-volume work can sometimes be cheaper to bring in-house. Compare actual costs and time before deciding either way.

Is the Better Business Bureau enough to vet an outsourcing vendor?

No. A BBB check is a reasonable starting point, but a full review should also cover the vendor’s financial stability, legal standing, security practices, and references.

What’s the fastest way to improve cash flow?

Getting paid faster usually has the biggest impact — request down-payments, invoice promptly, and offer a small discount for early or cash payment.

References:

Next: Hour 8
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