Introduction
A small team sits around a wobbly table, laptops open, counting weeks of runway on a spreadsheet while a kettle hums in the corner. This is the normal start to something big. What happens next depends less on the size of the first cheque and more on how carefully that cheque is turned into proof. The early stage is a test of discipline. Spend too slowly and you can miss the learning window. Spend too quickly and you run out of road just before the product clicks.
This guide takes a neutral, practical view of controlling costs without slowing momentum. It focuses on decisions you can make now, the ones that convert cash into learning, traction, and time. The tone is steady for a reason. Hype does not pay suppliers. Clarity does.
Set a clear runway and watch your burn
Runway is the number of months you can operate before cash hits zero. Burn is how much you spend each month. Put these two numbers in full view for the team, then update them weekly. Treat changes like weather warnings, not footnotes.
A simple approach works. List expected cash in and cash out for the next six months. Separate fixed costs like salaries and rent from variable costs like ads and contractors. If your burn is ten per cent higher than planned for two weeks in a row, stop and ask why. If runway falls below six months, consider a plan to reduce burn, raise capital, or speed up revenue. None of these choices are pleasant, although facing them early is cheaper than ignoring them.
Separate the must haves from the nice to haves
Most early purchases look reasonable in isolation. Together they add up. Before any spend, decide if it is a must have for survival, a should have for speed, or a nice to have for comfort. Put a cap on the last group. Keep a running list of deferred items with dates, so you can revisit them without emotion.
This filter is especially useful for software, travel, and workspace. A fancy tool can save minutes, not hours. A trip can be replaced by a short video call. A premium office can wait until customers visit often. Teams that stay strict here find that focus follows frugality.
Budget that breathes and adapts
A static annual budget is a poor fit for a moving target. Use a rolling plan, updated monthly, that extends six to nine months ahead. Give each functional owner a small discretionary amount they can spend without approval, then require a lightweight case for anything larger. The goal is not bureaucracy. The goal is to slow down only the decisions that meaningfully shift the cash curve.
Track actuals against plan in a single source of truth. If you use accounting software, mirror the budget categories there. Reconcile weekly. Many founders say this rhythm is the only way to spot creeping costs before they harden into habit.
Favour variable costs over fixed commitments
Flexibility is a hedge against uncertainty. Where possible, pick pay as you go over long contracts. Choose coworking passes or short licences rather than multi year leases. Use cloud credits and consumption models. Rent equipment before buying. The premium you pay for flexibility is often smaller than the cost of a bad commitment.
There are exceptions. If a fixed deal locks in a clear saving for something you will use heavily, and the break clause is fair, then consider it. Read the fine print on auto renewals. Calendar the notice dates. A quiet calendar nudge can be worth thousands.
Build a scrappy, reliable stack
Your tool chain should be simple, secure, and easy to swap. Aim for a short list of well supported services that cover essentials like communication, storage, analytics, and deployment. Consolidate where it makes sense. If one platform can handle three jobs acceptably, you do not need three logins and three invoices.
Security is part of cost control. A breach can wipe out months of progress. Use multi factor sign in. Keep access on a need to know basis. Rotate keys when people leave. None of this is glamorous. All of it is cheaper than an incident.
Hire with intent, not inertia
Headcount is usually the largest fixed cost. Hire to unlock a clear objective, not to feel busy. Start with contractors or part time help when the work is episodic. Convert to full time only when the need is persistent and central to value. A small, aligned team moves faster than a larger team with fuzzy roles.
Pay fairly and set expectations clearly. Short feedback loops reduce rework, which reduces cost. Many founders find value in a simple weekly memo that lists top priorities, risks, and decisions. It keeps everyone pointed in the same direction and exposes duplication before it grows.
Make every dollar face the customer
In the early stage, the best spends put you in front of users or make the product better for them. A modest research stipend for interviews can beat a large brand campaign. A quick usability test can beat a glossy video. Improve time to value, not production values.
Think of advertising the same way. Test small, measure, then scale only what pays back. Track spend by channel and by cohort. Cut what does not work within a fortnight. Keep the creative basic while you figure out the message. Beautiful waste is still waste.
Tighten contracts, payments, and procurement
Money is lost in the gaps between intent and detail. Use clear purchase orders with scope, price, and deliverables. Ask for monthly invoicing, not quarterly. Negotiate payment terms that match your cash cycle. Where you can, pay on delivery rather than in advance. If a deposit is required, tie it to a milestone.
For subscriptions, nominate an owner for each one. Their name sits next to the tool in a shared list, along with cost and renewal date. If the owner leaves, review the need. Empty seats cost as much as full ones. Run a quick audit every month to cancel unused licences. This is one of the fastest ways to reclaim cash.
Know your unit economics early
Unit economics tells you whether each sale makes or loses money before overheads. Define a unit that matches how customers buy. For a software product it might be a seat for a month. For a marketplace it might be a completed transaction. Calculate the gross margin after direct costs. Estimate the cost to acquire a customer through each channel. Then check how long it takes to earn back that cost from gross profit.
These numbers will be rough at first. They will sharpen with data. Even a rough view helps you avoid scaling loss making behaviour. It also guides pricing. If customers love the product but the margin is thin, revisit the price or the packaging. Discounts should be rare and justified by volume or learning value, not habit.
Use local incentives without warping your plan
Australia offers grants and tax settings that can extend runway. The research and development tax incentive is one example. Export focused businesses may find support through marketing grants. These can be helpful, as long as they do not bend your roadmap toward paperwork. Treat incentives as a tailwind, not a steering wheel. Build your plan on revenue and prudent cost control, then treat any rebate as upside.
If you do apply, keep clean records from day one. Track time against projects. Store invoices and statements in one place. A tidy file saves hours when you need to substantiate a claim.
A short checklist for weekly discipline
• Update runway and burn, reconcile accounts, and resolve variances.
• Review the must have list against current goals, defer what no longer fits.
• Audit subscriptions, seats, and upcoming renewals.
• Check ad and channel spend, pause anything that fails to pay back.
• Confirm hiring plans against milestones, not mood.
Closing
The early stage is a race to find truth before money runs out. Careful spending buys more laps. None of this is glamorous. It is practical and human. Teams that watch the numbers, protect flexibility, and point every dollar at learning tend to last long enough to get lucky. That is often the difference between a lesson and a company.