Cost Reduction Techniques

I wanted to share the most complete data I'm aware of to gauge potential inflationary effects of proposed Mexico, Canada, and China tariffs. What I've done is merge in data on domestic production, total imports, trade margins [think retailer and wholesaler markups], transportation costs, taxes & duties less subsidies, and purchaser prices from the Bureau of Economic Analysis 2023 Supply Table (71-industries) and then merged in Canadian, Chinese, and Mexican import data from the Census Bureau. For simplicity, I'm assuming a 25% across the board tariff on all three countries (note, I know the proposed expansion of tariffs on Chinese goods was just 10%, so keep in mind). Thoughts: •In the 4th column of data, we see the percentage of imports for each commodity type Canada, China, and Mexico account for. For example, 68% of oil & gas imports come from these three countries (Canada leading the way), 62% of electrical equipment (NAICS 335), etc. •To arrive at the percentage increase in purchaser prices, I multiply the Imports column by the Canadian & Chinese & Mexican percentage of imports column and then multiply by 0.25 (for the 25% tariff). I take this product and divide it by the purchaser prices column to arrive at the tariff shock estimate (last column). Across all goods, this number is 1.9%; the same figure applies for manufactured goods alone. The number ranges as high as 5.1% for electrical equipment to < 1%. •One thing to note: I'm not accounting for any cost pass-through dynamics in the supply chain (e.g., Canadian crude oil becomes more expensive means Midwest refiners increase prices to pass along higher costs). •I'm also assuming the trade margins (which are very substantial, especially for categories like apparel where they are much larger than the value of domestic production + imports) don't change. I don't see this as realistic, as sellers need to protect gross margin rates. This assumption likely counterbalances any over-estimate from the 25% tariff assumption. Implication: You can't look at these data and say that the Canada, China, and Mexican tariffs being floated won't be inflationary as it pertains to goods. My analysis gives possibly the most complete picture I've yet seen. #supplychain #shipsandshipping #economics #markets #freight

Negotiation tactics we used to decrease our SaaS spend by 30% in the last year: It’s amazing to me how much room there is in SaaS pricing. The price is not the price is not the price. You can always negotiate, and there are often loopholes that can save you a ton of money. Here are some of them: - Cancel the renewal before the negotiation. We send cancellation notices to our biggest opportunity negotiations months in advance, and tell them that we will only renew upon having a new deal. Often, account reps can provide special discounts for “at risk” clients. - Get your usage data. We always dig through our data before a negotiation. If our usage is lower than expected, we use that as leverage. For example, our hiring has gone down by about 60% post-ZIRP, but we still paid the same annual price for our applicant tracking system. We showed them the data and made it clear the software wasn’t worth what we were paying. - Be nice. Honestly, sometimes I get frustrated because I know I’m getting the runaround. Every time I do, it backfires. When I’m on my A-game, I’m nice - I tell them I love their software, it is useful, but we just don’t have as much of a need right now. It’s not you, it’s me. I do tell the truth, though, so they know I’m genuine with my praise and critiques. - Compare their costs to other options. There are 3 different types of comparisons: 1) direct competitors. Just call them and get a quote. 2) indirect competitors. Oftentimes another company offers a “basic” version of the software you’re using, so you can use that as leverage: “we don’t need an applicant tracking system because we already pay for Notion”. 3) budget competitors. Compare the pricing of x subscription with y subscription. We regularly compare unrelated products and say: you are the 2nd highest cost product we use, even though you aren’t the 2nd most valuable to us. - Ask 3x. You almost always have to negotiate at least three times to get the best deal. It doesn’t work with every company, but most account reps have latitude and at some point you’re not worth their time. Take advantage and just make sure you press multiple times in a row instead of taking the first offer. I’m surprised at how often we get our way in these negotiations. Sometimes I step in as the founder, but now my team has watched this playbook and gets the same results on their own. You don’t need to be a founder or a business unit leader to do this: act like an owner and make sure your company isn’t wasting money!

$250k/mo burn. 3 months runway left. No VC cash. "You don't need a miracle, you need a plan". That's what I told a startup founder who hired me as a CFO. Runway increased from 3 to 9 months. Here is how: ▶️ The crisis: • Baseline burn: $250k/month • Cash in bank: $750k → 3 months of runway • No VC lifeline: out of question for now. • Goal: buy time to hit 6+ months runway and qualify for non-dilutive capital. • Acknowledging that this situation is a failure in terms of planning. ▶️ The playbook: 4 levers to pull We attacked burn from all angles: cost cuts, cash flow optimization, revenue acceleration, and non-dilutive financing. 1. Cost reduction: saved $80k/month Why? Fixed costs are the easiest to control quickly. Tactics: • Cloud infrastructure (savings: $25k/month): => Renegotiated AWS commit discounts (locked in 3-year terms for 40% savings). • Software stack (savings: $15k/month): => Audited 35 tools. Cut duplicate/redundant apps. => Demanded 20% discounts from vendors by threatening cancellations (yes, dirty). • Team restructuring (savings: $40k/month): => Reduced headcount by 12% (underperforming roles). => Shifted to contractors in lower-cost regions. => Paused all non-critical hires. 2. Better payment terms: unlocked $20k/month in cash flow Why? Stretch payables without damaging relationships. Tactics: • Vendor negotiations: => Extended Net-30 to Net-60 terms with 4 key vendors. • Customer Collections: => Hired a part-time collections specialist to chase late payments (>30 days). 3. Faster sales cycles: added $20k/month in Revenue Why? Speed = cash. Tactics: •Removed friction: => Cut demo steps from 3 calls to 1. => Launched a self-service “Start Now” plan (no sales call, 14-day trial). • Upsold existing customers: => Targeted inactive users with a “reactivation” campaign (12% converted to paid add-ons). 4. Non-dilutive financing: added $300k in Cash Why? Buy runway without giving up equity. Tactics: • Revenue-based financing: => Secured $200k at 8% fee (repay 5% of monthly revenue until 1.4x repaid). • AR factoring: => Sold $100k of outstanding invoices (90% advance rate, 3% fee). ▶️ Results • New monthly burn: $130k/month (48% reduction). • Cash balance after 3 months: 750k(initial)−390k (3 months burn) + 300k(financing)=660k • Extended Runway: 660k/130k = 5+ months → 9+ months with financing. ▶️ Key takeaways for founders • Cut fast, cut deep: Focus on high-impact fixed costs first (cloud, payroll, SaaS tools). • Cash flow > Accounting profit: Stretch payables, pull forward receivables. • Simplify to accelerate: Remove friction in sales, pricing, and onboarding. • Get creative with financing: Revenue-based loans, prepayments, and AR factoring buy runway. You don’t need a miracle — you need a plan. If you’re staring down a single-digit runway, DM me. Let’s fix this.

An unacknowledged loop costs more than any front-facing glitch. 𝐇𝐢𝐝𝐝𝐞𝐧 𝐟𝐚𝐜𝐭𝐨𝐫𝐢𝐞𝐬: They’re the invisible vampires of your organization, quietly draining time, resources, and budgets while you’re focused on the shiny, visible processes. On paper, everything looks great—clear plans, detailed KPIs, and a confident team. Yet deadlines slip, and costs balloon. Why? Because beneath the surface, there’s an uncharted underworld of rework, ad-hoc fixes, and undocumented processes keeping the ship afloat. This “hidden factory” might be a production operator manually fixing defects or a marketing coordinator managing spreadsheets because the CRM can’t handle reality. It’s work that doesn’t show up in reports but shows up in your margins. 𝐖𝐡𝐲 𝐝𝐨𝐞𝐬 𝐭𝐡𝐢𝐬 𝐦𝐚𝐭𝐭𝐞𝐫? Armand Feigenbaum, the OG of Total Quality Control, nailed it: You can’t fix what you don’t measure. Hidden factories consume 𝟐𝟎-𝟒𝟎% 𝐨𝐟 𝐚𝐧 𝐨𝐫𝐠𝐚𝐧𝐢𝐳𝐚𝐭𝐢𝐨𝐧’𝐬 𝐜𝐚𝐩𝐚𝐜𝐢𝐭𝐲 and can be the difference between thriving and surviving. 𝟓 𝐏𝐫𝐚𝐜𝐭𝐢𝐜𝐚𝐥 𝐒𝐮𝐠𝐠𝐞𝐬𝐭𝐢𝐨𝐧𝐬 𝐭𝐨 𝐄𝐱𝐩𝐨𝐬𝐞 𝐚𝐧𝐝 𝐑𝐞𝐝𝐮𝐜𝐞 𝐚 𝐇𝐢𝐝𝐝𝐞𝐧 𝐅𝐚𝐜𝐭𝐨𝐫𝐲: 𝟏) 𝐔𝐬𝐞 𝐒𝐦𝐚𝐫𝐭 𝐌𝐞𝐭𝐫𝐢𝐜𝐬: Track hidden work with tools like MES and advanced KPIs (e.g., DPMO). 𝟐) 𝐋𝐢𝐬𝐭𝐞𝐧 𝐭𝐨 𝐄𝐦𝐩𝐥𝐨𝐲𝐞𝐞𝐬: Create systems to capture frontline feedback and reward solutions. 𝟑) 𝐒𝐭𝐫𝐞𝐚𝐦𝐥𝐢𝐧𝐞 𝐏𝐫𝐨𝐜𝐞𝐬𝐬𝐞𝐬:  Map workflows, eliminate waste, and simplify handoffs. 𝟒) 𝐁𝐞 𝐏𝐫𝐨𝐚𝐜𝐭𝐢𝐯𝐞:  Use predictive tools and preventative maintenance to avoid surprises. 𝟓) 𝐓𝐫𝐚𝐢𝐧 𝐂𝐨𝐧𝐭𝐢𝐧𝐮𝐨𝐮𝐬𝐥𝐲: Teach Lean and Six Sigma to empower a culture of improvement. 𝐅𝐨𝐫 𝐚 𝐝𝐞𝐞𝐩𝐞𝐫 𝐝𝐢𝐯𝐞: https://lnkd.in/ehy-XhAr ******************************************* • Visit www.jeffwinterinsights.com for access to all my content and to stay current on Industry 4.0 and other cool tech trends • Ring the 🔔 for notifications!

Layoffs cost 10X to 100X more than they save, but HR’s data only covers compensation, so business leaders only see savings. I use data to talk at least one CEO out of layoffs every month. Here’s how to protect your team from the chopping block. Quantify the Loss: The most common mistake is making the case with the value the team has created and the projects it has delivered. CEOs think about future value, not past gains, when making layoff decisions. What projects won’t deliver and how much revenue will be lost? CEOs need growth now more than ever. Build the case with data that quantifies the forward-looking value on the team’s product roadmap. Emphasize This Year’s Losses: Your CEO is being told that after an initial cost in the next 1-2 quarters, the business will see higher margins. Quantify this year’s lost revenue in big, bold terms. Showcase how internal efficiency initiatives will save the company more than the team costs. What external teams will miss their goals? Everyone advocates for themselves, so you’ll stand out by getting other leaders to add their voices. Use external teams’ KPIs and connect them to top-level strategic goals. Reduce Costs Without Reducing Headcount: Take high-cost, low or uncertain returning projects off the roadmap. Optimize hardware and cloud utilization. Push out tool and infrastructure purchases. Consolidate and put pressure on vendors to offer discounts. I frame this as, “I can’t reduce the staffing budget, but here are other areas where I can provide similar savings this year.” Instead of saying “No,” give your CEO alternatives and new options. Focus on informing vs. convincing. Every company’s CEO and CFO are taking a hard look at the technology budget, and layoffs are being discussed quarterly. Be proactive. Assume it’s coming and prepare the case now. Your team and career will be better off if you do.

10 Strategic Cash Flow Mistakes and How to Fix Them. ------- 💎If you liked this post, you’ll love the strategic finance insights I publish weekly in my free newsletter. 💎Sign up here: https://bit.ly/4300Di8 ------- If you're making these, your organization and career might be at risk. 1️⃣ Mismatching Cash Flow Maturities ↳ Utilizing short-term financing for long-term assets will lead to liquidity challenges. ↳ Match up the cash flows on the assets being financed with cash flows on the debt 2️⃣ Ignoring Foreign Exchange Rate Volatility ↳ Trading in multiple foreign currencies can quickly erode profitability, liquidity, and leverage. ↳ Design an active FX management strategy (forwards, options, etc) to safeguard against the adverse effects of currency fluctuations. 3️⃣ Ignoring Interest Rate Volatility ↳ Ignoring interest rate volatility can impact financing costs and cash flow predictability ↳ Develop an appropriate financing strategy to manage exposures (swaps, options, etc) and protect cash flows. 4️⃣ Misinterpreting Negative Operating Cash Flows ↳ Negative operating cash flows aren't a negative sign unless they're due to underlying financial distress ↳ Secure suitable working capital financing and avoid overtrading 5️⃣ Relying on One-Time Positive Investing Cash Flows ↳ Selling non-redundant assets to fund ongoing operating deficits can hide structural challenges ↳ Resolve underlying profitability issues early and seek sustainable financing solutions 6️⃣ No Growth Working Capital ↳ Failing to adequately finance growth working capital can slow expansions and deplete cash reserves ↳ Negotiate suitable working capital financing to fund current asset growth 7️⃣ Mismanaging Payment Terms ↳ Misaligning terms between suppliers and customers can lead to cash flow shortfalls and liquidity issues ↳ Negotiate terms that complement your cash flow cycle and secure backup financing 8️⃣ Failing to Leverage Cash Management Tools ↳ Manual cash management exposes organizations to errors and suboptimal cash positions ↳ Integrate modern cash flow management tools including automated receivables and payables for improved cash flow visibility and control 9️⃣ Neglecting Cash Flow Forecasting ↳ Lack of comprehensive cash flow forecasting will prevent opportunities and introduce undue risk, threatening business viability ↳ Use both short term rolling & long term cash flow forecasts 🔟 Ignoring Long-Term Strategic Implications of Cash Flow Decisions ↳ Short-term cash management decisions significantly diminish growth ↳ Balance immediate liquidity with long-term vision to align day-to-day needs with long term goals ---- ▶Get my on-demand video course with 5* reviews: The Cash Flow Masterclass: https://bit.ly/3NZJvSO ➕ Follow me for strategic finance, business, and cash flow insights 📌Grab my viral finance cheat sheet pack: https://bit.ly/3T3CtPm ♻ 𝐋𝐢𝐤𝐞, 𝐂𝐨𝐦𝐦𝐞𝐧𝐭, 𝐑𝐞𝐩𝐨𝐬𝐭 to share with your network ♻

What gets measured gets managed. If you don't know what to measure, you don't know what to manage. This is one of my trackers for managing operating and financial drivers, KPIs and metrics. Here's what it does: Let's assume you have a $50 million company that's realizing 28% gross margins (revenue less direct costs). This means you're making $14 million in gross profit. But you think you can do better. Examining the business, you observe 4 problems with direct costs: 1⃣ Problematic suppliers The companies is finding it difficult to manage uncertainty around the operations of its 20 overseas suppliers. The unreliable supply chain led to substantial delays and unexpected costs. To mitigate this, the company has decided to reduce the number of suppliers to 11 to ensure tighter control and more reliable operations. If the company can reduce complexity in its overseas supply chain, it may realize up to $353K in incremental profit. 2⃣ High variable costs / low contribution margin Inflation has led to skyrocketing material costs. Last-minute orders have led to higher material and freight costs. If the company can purchase in bulk and plan further in advance, variable costs can decline. This would lead to an estimated increase of contribution margin from 38% to 40% and incremental profit of $1.9 million. 3⃣ Manufacturing inefficiency Dated machinery and suboptimal scheduling has led to manufacturing inefficiency, worse that what it was in prior years. If the company can manage its manufacturing inefficiency from 13% to 8%, it can realize $616K in incremental profit. 4⃣ High rate of error The company has been dealing with quality control issues. Continuous complaints from customers about product quality have been traced back to inferior components. If the company can address its quality issues from 10% to 2%, it can realize $616K in incremental profit. --------------- Weighting the drivers and KPIs: Through an operational restructuring and process improvement, we believe we can bring an additional $3.525 million in profit (bringing margin up to 35% from 28%). But not all drivers are equal. This is how we weighted the impact of each initiative. 1⃣ Problematic suppliers - 10% 2⃣ High variable costs - 55% 3⃣ Manufacturing inefficiency - 17.5% 4⃣ High rate of error - 17.5% Therefore, improvements in direct variable costs are expected to bring the greatest benefit to profit, more than 3x as much as improving manufacturing inefficiency or errors and more than 5x as much as reducing the supplier base. What's this mean? If you're going to improve your company's financial position, you need to understand the strategic mapping and financial drivers. And you need to know which drivers move the needle the most. If you want to learn more about strategic financial mapping: https://lnkd.in/eRPRJf8N What questions do you have? #seidmanfinancial

Are you struggling to make money in your business? One of the fastest ways to turn the corner is to cut costs. Here are 7 ways to cut costs: 1) Conduct a cost audit The word audit makes chills go up my back. Going through an audit stinks. But this is a different type of audit. Do a thorough review of your expenses to identify areas where you can reduce costs without too much impact on the business. 1. Pull 12 months of transactions 2. Label them: - Fixed or variable - Essential or non-essential 3. Identify subscriptions or recurring charges 4. Group them into 3 buckets: cut, review, or keep 2) Optimize operational efficiencies Easy to say right? Do these 3 things: 1. Incentivize your staff 2. Bring in an outside expert in automation and/or processes 3. Create a process flow diagram for your major processes and look for areas of improvement Work with your team on the review items to decide which to cut. 3) Adjust employee authorizations Revisit who you’ve authorized to do what and spot-check employee spending. This keeps employees accountable. Yes, give employees authorization to make decisions, but only when you have the proper structures in place. 4) Outsource Non-Core Activities You can’t be an expert in everything. Outsource activities like accounting, IT, marketing, and HR. Each requires immersion to become great, so let the pros handle it. 5) Re-negotiate contracts Build a relationship and understand the other businesses' needs. Share yours as well, then look for areas of mutual benefit. Just asking “we need to lower cost by 10%; how can we make that happen?” can open up the floodgates. 6) Leverage technology Consider what can be: 1. automated 2. move to the cloud 3. made more efficient Tech can be expensive up front, but often you’re saving in time or error reduction. Don’t pinch pennies while your team spends hours weekly on workarounds. 7) Setup a regular review Regularly reviewing costs, softwares, and processes is a great way to stay on top of your costs. This creates a culture of accountability. This often slips when people get busy, so make sure it’s a priority and stays on the schedule. Cost-cutting should be a temporary thing. A constant focus on cutting cost is going to sow doubt among your team. Cost reduction is a great first lever, but it should never be the only measure. Thank you for reading! This was originally in my newsletter, where I share business finance tips for 40k SMB owners each week. Subscribe here: https://lnkd.in/gVigaTwi

𝐈𝐭 𝐩𝐚𝐲𝐬 𝐭𝐨 𝐛𝐞 𝐚 𝐜𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐨𝐟 𝐜𝐡𝐨𝐢𝐜𝐞! 𝑾𝒉𝒂𝒕 𝒕𝒉𝒆 𝒉𝒆𝒄𝒌 𝒊𝒔 𝒂 “𝒄𝒖𝒔𝒕𝒐𝒎𝒆𝒓 𝒐𝒇 𝒄𝒉𝒐𝒊𝒄𝒆”, 𝒂𝒏𝒚𝒘𝒂𝒚𝒔? 🔶 In my quest for info last week w/ my supplier peeps, I learned some have formal “customer of choice” programs, and some don’t.  🔶Anywho, being a “customer of choice” means you’ve got “elite” status with your supplier, which can come with benefits. Everyone likes benefits, right!? 𝐇𝐞𝐫𝐞’𝐬 𝐬𝐨𝐦𝐞 𝐜𝐨𝐦𝐦𝐨𝐧 "𝐜𝐮𝐬𝐭𝐨𝐦𝐞𝐫 𝐨𝐟 𝐜𝐡𝐨𝐢𝐜𝐞" 𝐛𝐞𝐧𝐞𝐟𝐢𝐭𝐬: 💎 Thought leadership. 💎 Market Intelligence. 💎 Prioritized capacity\ supply. 💎 Access to their “A-team” personnel. 💎 Preferred pricing, better commercial terms. 💎 Right-of-first refusal on innovation, Joint R&D, quicker GTM. *𝐵𝑒 𝑠𝑢𝑟𝑒 𝑡𝑜 𝑠𝑒𝑔𝑚𝑒𝑛𝑡 𝑦𝑜𝑢𝑟 𝑠𝑢𝑝𝑝𝑙𝑖𝑒𝑟 𝑝𝑎𝑛𝑒𝑙 𝑓𝑖𝑟𝑠𝑡. 𝑊ℎ𝑖𝑙𝑒 𝑐𝑢𝑠𝑡𝑜𝑚𝑒𝑟 𝑜𝑓 𝑐ℎ𝑜𝑖𝑐𝑒 𝑏𝑒𝑛𝑒𝑓𝑖𝑡𝑠 𝑎𝑟𝑒 𝑎𝑎𝑎ℎℎ-𝑚𝑎𝑧𝑖𝑛𝑔, 𝐼 𝑤𝑜𝑢𝑙𝑑𝑛'𝑡 𝑛𝑒𝑐𝑒𝑠𝑠𝑎𝑟𝑖𝑙𝑦 𝑒𝑥𝑝𝑒𝑐𝑡 𝑡ℎ𝑒𝑚 𝑓𝑟𝑜𝑚 𝑡𝑟𝑎𝑛𝑠𝑎𝑐𝑡𝑖𝑜𝑛𝑎𝑙-𝑡𝑦𝑝𝑒 𝑟𝑒𝑙𝑎𝑡𝑖𝑜𝑛𝑠ℎ𝑖𝑝𝑠. (𝐴𝑙𝑡ℎ𝑜𝑢𝑔ℎ 𝑖𝑡'𝑠 𝑎 𝑔𝑟𝑒𝑎𝑡 𝑤𝑎𝑦 𝑓𝑜𝑟 𝑠𝑢𝑝𝑝𝑙𝑖𝑒𝑟𝑠 𝑡𝑜 "𝑙𝑒𝑣𝑒𝑙-𝑢𝑝" 𝑡ℎ𝑒𝑖𝑟 𝑔𝑎𝑚𝑒.) 𝐑𝐞𝐥𝐚𝐭𝐢𝐨𝐧𝐬𝐡𝐢𝐩𝐬 𝐚𝐫𝐞 𝐚 𝟐-𝐰𝐚𝐲 𝐬𝐭𝐫𝐞𝐞𝐭, 𝐫𝐢𝐠𝐡𝐭? 𝐅𝐨𝐫 𝐲𝐨𝐮𝐫 𝐬𝐭𝐫𝐚𝐭𝐞𝐠𝐢𝐜 𝐚𝐥𝐥𝐢𝐚𝐧𝐜𝐞 𝐬𝐮𝐩𝐩𝐥𝐢𝐞𝐫𝐬 𝐬𝐩𝐞𝐜𝐢𝐟𝐢𝐜𝐚𝐥𝐥𝐲, 𝐡𝐞𝐫𝐞'𝐬 𝐬𝐨𝐦𝐞 𝐭𝐡𝐢𝐧𝐠𝐬 𝐲𝐨𝐮 𝐜𝐚𝐧 𝐝𝐨 𝐟𝐨𝐫 𝐭𝐡𝐞𝐦: ✔ Ensure they’re invited to participate in RFPs. ✔Explore longer contract terms where feasible. ✔Champion their ideas (ensuring you give them credit). ✔Host supplier days for them to showcase their capabilities. ✔Provide them with references to help them expand their business. ✔Recognize them publicly in the industry\ amongst their peer group. ✔Give them white glove service. Promote engagement with stakeholders & leaders across the organization. ✔Transparently share info and engage with them on: strategy, forecast data, biz dev plans, and news. ✔Consider allowing them to use your company’s logo in marketing materials (with pre-approval of course, and if policy allows.) ✔ Maybe they want to develop new capabilities, geographies, or markets. Be open to exploring those with them as an innovation & learning partner. 𝐖𝐫𝐚𝐩𝐩𝐢𝐧𝐠 𝐈𝐭 𝐔𝐩 & 𝐖𝐡𝐲 𝐈𝐭 𝐌𝐚𝐭𝐭𝐞𝐫𝐬: ▶ Not all suppliers require the same treatment. Segmentation is important! ▶ Particularly with your strategic alliance suppliers, explore customer of choice benefits 𝐴𝑁𝐷 ensure you're being a good partner in return. ▶ 𝑻𝒉𝒊𝒔 𝒊𝒔 𝒉𝒐𝒘 𝒚𝒐𝒖 𝒖𝒏𝒍𝒐𝒄𝒌 𝑹𝑬𝑨𝑳 𝑽𝑨𝑳𝑼𝑬 𝒊𝒏 𝑺𝒖𝒑𝒑𝒍𝒊𝒆𝒓 𝒓𝒆𝒍𝒂𝒕𝒊𝒐𝒏𝒔𝒉𝒊𝒑𝒔. 📢 𝗣.𝗦. 𝗪𝗵𝗮𝘁 𝗼𝘁𝗵𝗲𝗿 𝗰𝗼𝗼𝗹 𝗰𝘂𝘀𝘁𝗼𝗺𝗲𝗿 𝗼𝗳 𝗰𝗵𝗼𝗶𝗰𝗲 𝗯𝗲𝗻𝗲𝗳𝗶𝘁𝘀 𝗵𝗮𝘃𝗲 𝘆𝗼𝘂 𝘀𝗲𝗲𝗻?

9 out of 10 startups die because they run out of money from hiring too quickly. This is why having a big team isn’t a flex and how founders should think about hiring in 2025 👇🏾 Our team at Chezie is super lean. - Just 2 full-timers (myself and Co-founder Dumebi Egbuna) - 2 contract developers - 1 PT contract designer - 1 PT admin support Our total capacity is equal to ~5 full-time roles. This team setup has supported our growth to $750k+ ARR, and we’re establishing systems to maintain this team size all the way to $ 1- 1.5 M. Meanwhile, I watch pre-seed companies with 15+ people and Series A startups employing 25+, wondering what they're thinking 🤔 Startup culture encourages founders to celebrate having big teams. Founders treat new hires like funding announcements—they broadcast them for everyone to see how ‘well’ they’re doing. But in reality, only two metrics truly count: happy customers and revenue. The best approach to recruiting is simple: hire when it hurts. That means: - The founding team is regularly pulling 12+ hour days - Your team shows clear signs of exhaustion and productivity declines as a result - Your company starts to miss things that previously weren’t a problem (support tickets, sales follow-ups, etc.) Even if it hurts, hiring should be your last resort. Before looking to grow your team, consider: - Looking for freelancers and part-time specialists - Implementing software tools ($200/month is far cheaper than $100k/year for a new hire) - Incorporating AI and automation like @zapier to multiply your current team’s productivity Your only goal as a founder is to stay alive, and you do that by minimizing costs. The simplest way to minimize costs is to hire thoughtfully and intentionally. Celebrate staying in business over expanding your team. How do you think about startup hiring? Share below in the comments!