It's very easy to fall in to the trap of tool sprawl and escalating costs - particularly in the high speed world of startups. Let's take a look at some techniques we can use to keep a handle on it.

Tool sprawl is the accumulation of multiple tools which serve the same or similar purposes. Throughout any company's lifetime it's not uncommon to have disconnected departments using similar tools without even realising it. Suddenly you are paying for multiple SaaS contracts and your costs have doubled (or worse). Left unchecked, these costs can quietly bleed thousands from your burn rate - money that could be better spent on product development or growth.

Start with Monthly Plans

SaaS organisations are always in a hurry to get you to sign annual (or longer) contracts to lock you in. These deals look attractive as over the long term they will likely save you money. However you lose flexibility - and when your company is still figuring out its identity locking in to a service prematurely may result in spend in an area you no longer need to be spending in.

Enterprise plans often come with premium price tags — justified by SLAs (Service Level Agreements) that promise guaranteed uptime, priority support, and faster response times. But in the early stages of your startup, you may not actually need these guarantees.

Before locking yourself into a costly Enterprise contract, evaluate whether the promised SLAs are truly critical to your team’s success. Many smaller startups can operate perfectly well on standard or pro-tier plans.

Take a moment to review the service’s status page (most providers have one) and check their historical uptime and incident frequency. A well-run SaaS company with a solid track record may offer sufficient reliability without the need for an expensive support contract.

Some tools (like Auth0 and Sentry) allow you to adjust your expenses month by month which can help you save extra money during quieter months (e.g. if your app gets more traffic around the holiday season). It's also worth noting that most tools won't switch you off when you exceed capacity and provide a short period of grace so you can adjust your requirements.

SaaS Auditing

Schedule quarterly reviews of all your subscriptions. This isn't just about finding forgotten tools - it's about evaluating whether each service still provides value proportional to its cost. Create a simple scoring system: usage frequency, business impact, and cost per user or transaction. Tools that score poorly across these metrics are candidates for replacement or elimination.

During these audits, also check for seat optimisation. Many SaaS tools charge per user, and it's common to have inactive accounts for former employees or users who've moved to different roles. A monthly seat audit can save significant money over time.

Capacity Tracking

One technique I use to manage non-seat SaaS tools is to track the capacity usage of our vendors so I can record and see how usage varies month on month. This provides predictability for the business, ensures we remain on the right plans and gives me the benefit of negotiating early when services need to scale.

For example:

Vendor	Current Capacity	Plan Allowance	RAG	Action Required?
Auth0	890 MAU	1,000 MAU	Amber	Adjust to next plan level
Sentry	1,500 errors	50,000 errors	Green	—
etc

Create a Spreadsheet

Everyone's favourite friend - the Excel / Google Sheets spreadsheet. As much as we mock it, it allows you to stay on top of the costs for your tools early on.

I tend to track a list of the tools, departments, cost type, frequency and how much is estimated/spent per month. Cost type is either Cost of Goods - costs directly tied to your product's delivery like the app, infrastructure or APIs; or Expenses which covers tools used for operations.

Tool	Description	Dept.	Cost Type	Frequency	Jan	Feb	...
Auth0	Auth Provider	Tech	Cost of Goods	Monthly	$x	$x	$x
Sentry	Error Reporting	Tech	Expense	Monthly	$x	$x	$x
etc

Encourage a "New Tool" Process

While you don't want to slow down your startup, having a short process that requires an employee to request a tool before it can be expensed ensures that the usage of the tool has been well thought out and keeps adoption disciplined.

Look out for Freebies

If you are a startup, freebies are everywhere. You just need to look for them. Often your startup investors will be able to provide codes and links to get you started. The cloud platforms are particularly keen on AI startups at the moment and may have additional discounts for them.

Here are some of the discounts available at the time of writing:

• AWS Activate offers a wide range of benefits for startups - including up to $100k in AWS credits and discounts on other tools.
• Github offers a year of free Enterprise access for up to 20 seats.
• Google offers a number of programs for the Google Cloud Platform.
• Microsoft also offer a number of startup discounts for Azure.
• Miro offers a $1000 startup credit - which is roughly a year of Miro access for a small team.
• Retool is great for quickly building admin panels for your application, and offers startup credits up to $60k.
• Stripe offer a startup program with access to financial benefits and experts to help you grow.
• Some investors have their own portals for providing additional discounts, so do speak to them.

Don't forget about open source alternatives either. Tools like Grafana, Supabase, and PostHog offer robust open source versions that can significantly reduce costs while you're building product-market fit.

Live a Task (and Look to Automate) Before Hiring

Hiring people is expensive, and hiring the wrong people is even more expensive. In a startup it's essential to get the right fit. Before hiring for a role to fulfill a task, actually carry out the task yourself so you can understand the skills you need to make the right hire. And if at all possible, use Saas tools to automate the task rather than hiring.

Look at tools like Zapier to easily automate workflows between SaaS tools. Sometimes a $50/month automation tool can replace a $5000/month hire, at least in the early stages.

Negotiate Everything

Don't accept the first price you see. Most SaaS companies have flexibility, especially for annual contracts or when you're close to moving to a higher tier. Come prepared with usage data, competitor pricing, and a clear understanding of your growth trajectory. In the past I've managed to get discounts that have even surprised me simply by asking multiple times.

For critical tools, consider negotiating contract terms beyond just price: cancellation clauses, feature guarantees, and support SLAs can be just as valuable as discounts.

In Summary

SaaS cost management isn't about being cheap - it's about being intentional.

Every tool should earn its place in your stack through clear value delivery. Your startup is likely moving at 100mph, so new SaaS tools are introduced quickly and frequently. But regular audits, careful capacity planning, and strategic consolidation will keep your costs predictable and your team productive.

Remember that the goal isn't to minimize SaaS spend at all costs, but to ensure every dollar spent contributes meaningfully to your business outcomes. A well-chosen $200/month tool that saves 10 hours of developer time is infinitely more valuable than a free alternative that creates friction and technical debt.

By implementing these practices early you'll keep ahead of the tool sprawl trap that catches so many young and growing businesses.