Managing Business Expenses Without Killing Growth

Vinu: Manu, I want to control expenses, but I’m worried it might slow down my business growth. How do I balance this?

Manu: Good concern, Vinu. The goal is not to cut costs blindly—it’s to control waste without affecting value creation.

Vinu: How do I identify which expenses to cut?

Manu: Divide expenses into three categories—

Essential, Growth, and Waste.

Vinu: Can you give an example?

ManuSure.

Salaries ₹4 lakh and rent ₹80,000 → essential.

Marketing ₹2 lakh → growth expense.

Unplanned travel ₹70,000 or unused subscriptions ₹30,000 → waste.

Vinu: So I should cut only waste?

ManuFirst priority, yes. Then optimise essential costs and evaluate growth spends based on returns.

Vinu: What do you mean by optimising essential costs?

For example, renegotiating rent from ₹80,000 to ₹70,000 or improving staff productivity.

VinuAnd growth expenses like marketing?

ManuTrack returns.

If you spend ₹2 lakh on marketing and generate only ₹1.50 lakh additional contribution, it’s inefficient.

Vinu: Many times, expenses increase as business grows. Is that normal?

ManuYes, but they should grow slower than revenue.

If sales increase by 20% but expenses rise by 35%, profitability will fall.

Vinu: What’s the biggest mistake entrepreneurs make?

ManuEither overspending in the name of growth or over-cutting and damaging future potential.

Vinu: Any simple control method?

ManuFix a monthly expense budget—say ₹15 lakh.

Any expense beyond that should need a strong justification.

Vinu: Final takeaway?

ManuSmart businesses don’t just grow—they grow efficiently, by controlling costs without compromising future opportunities.

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