FRUGALITY IS GENERALLY considered a positive quality. The philosopher Aristotle as well as the Stoics regarded it as a moral virtue, similar to temperance and prudence. Religious traditions hold up frugality as a sign of humility, self-control and gratitude — the opposite of greed and wastefulness. In economics and business management, well … it gets a bit tricky.

As the economist Thomas Sowell notes, with just about any action that involves the allocation of resources, there are only tradeoffs. Spend money in one area, and you give up the opportunity to invest in another. Don’t spend money, and you forgo a possibility for growth. Every decision you make or don’t make involves sacrificing something.

Over the course of normal economic cycles, these decisions are easier to make. When times are good, you can take bigger risks. When times are slow, it’s often best to rein in your spending. The current U.S. environment falls somewhere in the middle.

While 52% of the PETS+ Brain Squad — our reader survey group of independent retailers and service providers — reported revenue as “up” in January, that number has slowly fallen, to 48% in February and 43% in March. Anecdotally, members point to nervous consumers as a leading cause for the decline, with their reasons for uncertainty changing with the national and global news headlines. Adding to the challenges pet indies face are ongoing supply-chain and operational disruptions within the industry.

In such times, being prudent is rarely a bad strategy, but cutting costs in an overly aggressive fashion can cause its own problems. As a rule, you can’t shrink your way to success.

On the following pages, we suggest tips and ideas collected from our favorite business writers, pet industry experts and Brain Squad members on how to lower your expenses by adopting a mindset of resourcefulness, experimentation and cost-cutting — while still laying the foundations to boost productivity and growth in times of uncertainty and keeping an eye on those all-important trade-offs.

GENERAL RULES

Adopt a Growth Mindset

A fundamental question every owner of a mature business must ask is: Are you aiming to be bigger and better, or just cheaper? The central belief of a cost-cutter is that profits rise when costs are lowered, says Roy H. Williams, author of The Wizard of Ads, adding that this viewpoint is often correct, but in a self-defeating way. “A company that doesn’t invest in growing revenue will shrink, allowing the cost-cutter to say, ‘See how smart I am? If I hadn’t reduced expenses, we’d really be in trouble right now.’” Ultimately, a purely defensive approach will see the business shrivel. It’s better, and usually easier, Williams says, to increase revenues through investments and advertising than to cut costs. “A cost-cutter buys grapes and makes raisins. An entrepreneur buys grapes and makes wine.”

Dig a Moat

Don’t let your focus on reining in costs tempt you to compete with the lower prices of e-commerce or big-box stores. As an indie, you don’t have the resources or scale. Instead, aim to create monopoly-like conditions through unique products and services. Finding specific situations where you can win (such as being the go-to for pet nutrition or the preferred grooming for reactive dogs) was one of the core arguments of Peter Thiel’s business bestseller Zero to One. When you have a moat protecting you, you can sleep a little easier.

Exploit Technology

Depending on who’s predicting the future, artificial intelligence will either bring about an age of peace, prosperity, health and leisure, or it will take all the jobs and destroy humanity. The reality will probably be somewhere in between. Regardless of how you feel about AI, you owe it to your business’s future to get familiar with it. “Give it a try,” Pet Boss Nation’s Candace D’Agnolo says. “Even small, simple tasks like writing emails, product descriptions or social posts can save time, boost creativity and help you work smarter, not harder.”

Reframe Scarcity

Turn a limited budget into an advantage: Restrict options and prioritize essentials to force creative problem-solving. Not only will you save a few dollars, but you might come up with your next brilliant service idea. There’s a growing understanding in business circles that creativity thrives on constraint. Google sometimes puts fewer engineers on a problem than it needs to force ingenuity. Your budget can do the same. Challenge your team to design a July 4th window display using only materials already in store. The pressure won’t limit them — it’ll force inventive workarounds. (For further inspiration, see D’Agnolo’s “Purposeful Repurposing” column.)

Lean Into Irrationality

Most financial advice assumes humans are rational beings. But countless studies have shown we aren’t. (Just look at how we use our credit card balances as if they were Monopoly money.) The fix starts with awareness — then employs tactics that exploit our biases. The “debt snowball” is one example: Regardless of interest rates, start with the smallest balance, then the next, etc. It doesn’t make mathematical sense. But the psychological boost that comes from quickly eliminating a debt, then another, will provide momentum to keep going.

TOP PRIORITIES

Target the Big Leaks

Small savings feel good but don’t move the needle. Start by listing your monthly costs (rent, payroll, COGS, fees, etc.), pick the top two and focus one 90-day initiative on cutting 5-10% there — small percentage cuts have more impact than slashing minor line items. As a broad rule of thumb, former Wall Street banker Khe Hy recommends this mental trick: The only three digits of your net worth that matter are the left three. If you have $364,855, the $855 is trivial from a big picture view — so you can spend up to $999 without overthinking. “Where your attention goes, your energy goes,” Hy notes.

Stop sweating the small stuff and focus on what actually impacts your business.

Make Profit Non-Negotiable

Treat your business like your paycheck: Pay profit first, and then operate on what’s left. Behavioral finance shows we spend whatever’s on hand, so force discipline by putting income into dedicated buckets such as “Profit,” “Owner Pay,” “Taxes” and “Operating Costs” as soon as the cash comes in. Start by:

• Opening separate accounts and automating transfers on payment.
• Allocating 1-5% to “Profit” and raising it gradually.
• Reviewing targets quarterly and tracking percentage of revenue going to “Profit” and “Owner Pay.”

The result will be clearer cashflow, fewer impulse spends, guaranteed owner pay, and a business that survives and grows without sacrificing margin.

Get Better at Quitting Stuff

The best poker players have something in common with the most successful business owners: They know when to fold. In her book Quit, former pro player Annie Duke notes that in Texas Hold ‘Em, the pros play fewer than 25% of their hands before other cards hit the table. Amateurs play more than 50%. Similarly, retailers who are quickest to cut their losses on bad buys and ill-fated new ventures do the best. “Success does not lie in sticking to things,” Duke writes. “It lies in picking the right thing to stick to and quitting the rest.”

When You Do Bet, Play the Dollar Table

Don’t gamble inventory, capital or staff time on big unproven ideas. Run short, low-cost experiments (weeks, not years) to validate products, services or promotions. “Launch, measure, pivot or persevere,” says Eric Ries, author of The Lean Startup. Use simple tracking. Debrief after every test and decide whether to scale. Possible examples for pet indies:

• “New Puppy Weekend” promotion — Offer free 15-minute consultations on everything from puppy nutrition and teething tips to crate training and leash walking, with a customizable checklist of product recommendations to measure conversion.
• “Premium Spaw Station” experiment — Designate one self-wash tub for two weeks with upgraded shampoos, conditioners and tools at a higher price point, tracking whether customers upgrade when the option is clearly presented.
• “Vet-Approved” shelf test — Partner with a local, like-minded vet to co-curate a small product selection they personally endorse, measuring whether the third-party credibility lifts sales over a four-week period.

Pick One Goal

Min Zhao, a marketing professor at the University of Toronto, found that having just one savings goal — like that new tag engraving machine or additional glassfront freezer — works better than multiple targets. “A common mistake is emphasizing numerous reasons to save,” Zhao says. “That prompts people to ruminate about saving without actually doing it.” Pick one goal and watch yourself naturally cut unnecessary expenses.

OPERATIONS

Automate the Boring Stuff

Repetitive admin tasks eat into profitable time, while automations pay back quickly. Explore how AI can take on tasks such as inventory planning, appointment confirmations and reminders, and marketing creation. This will allow team members to spend time on higher-value tasks. Shell Jeffery of The Spaw in Rapid City, SD, says, “We have automated our reminder system so that staff can function on other tasks and can increase profits there.”

Take the Discount

Taking advantage of vendor discounts for fast payment has always been a good policy. “Some attractive terms for early payment can be well worth the outlay, providing thousands of dollars a year in savings,” says David Brown of Edge Retail Academy. Pay fast, save big, and watch your vendors suddenly become your best friends.

Tighten Your Turns

Those unpopular toys hanging from a fixture for six months? They’re costing you more than you think in lost sales. Reclaim that money by tightening turns: Cut slow-moving SKUs, focus your assortment on best sellers, set strict reorder triggers, and mark down aging lines on a schedule. Consolidate purchases with a few dependable suppliers to earn volume discounts. Review turns and adjust orders monthly. Here’s how Gary Hughes of Gangsta Dog in Norfolk, VA, does it: “We classify all inventory into three buckets: maintenance, quarterly and seasonal. Maintenance products are items that must be ordered every couple of weeks to monthly. Quarterly products must be gone through 90% in a quarter to justify reordering. Seasonal are tied to holidays or specific seasons and are ordered once a year. If an item can’t fall into any of those three buckets, it is discontinued. This cuts down on slow-moving inventory.”

PENNY PINCHERS

Do a Mid-Year Review

June is the perfect time to review recurring expenses. “You could have a service contract you don’t need or that can be reduced,” Wharton lecturer and small business expert Robert Chalfin says. The Mill Stores in Pylesville, MD, found the former. General manager Cassie Holloway says, “We switched from a local security provider to Ring cameras and services. Significantly cheaper, with better service! This has also saved us money as much less product has walked off our front porch.”

Another area you could be hemorrhaging money includes duplicate systems. Molly Lewis of Dog River Pet Supplies in Hood River, OR, says, “We consolidated our payroll service with their scheduling app, so we don’t have to pay for a separate scheduling app. Lots of little things, but they add up!” Schedule an audit every June and be thrilled with the savings you find.

Shane Somerville of Paddywack in Mill Creek, WA, uses six months as the standard for her loyalty program.

“Requiring at least some activity on a rewards account every six months or the rewards points reset to zero. Our rewards program is generous (5% back), but we would sometimes have people who hadn’t shopped in years come back once, use a $10 reward they’d earned all those years ago, and then disappear again. We think a loyalty reward should come because of at least semi-regular loyalty.”

Go Green, Save Green

From bags to receipts, you can increase sustainability and reduce costs by buying and printing less. Some stores accept recycled bags for reuse, while others train staff and customers to use fewer. Pamela Cura of Paw Prints in Intercourse, PA, says, “We note if customers already have a larger shopping bag and ask ‘Would you like a separate bag, or would you like to use the one you already have?’” Krysta Fox of Pug & Hound Pet Apothecary in Geneva, IL, rewards customers for buying and reusing insulated totes they charge $6 for. “When customers use them, we give them 50 bonus loyalty points as a thank you for saving our bag expense.” And Claudia Harden of Cat Depot in Sarasota, FL, says, “We have moved to sending receipts via email or by text to cut down on printing costs.”

Go Jugaad

Read enough management literature and you’ll come across the term “jugaad” — a Hindi word to describe a flexible approach to problem-solving that uses limited resources in an innovative way to speed execution of business plans. While not revolutionary, the approach underscores the truth that you don’t have to throw money at problems. Frugal substitutes such as local sourcing, secondhand or refurbished equipment, and shared assets and services will often do just fine for more expensive inputs, note Navi Radjou, Jaideep Prabhu and Simone Ahuja in their book Frugal Innovation.

Haggle

There are cost savings just about everywhere — if you are prepared to demand them. Don’t have time to negotiate? Services such as Billcutterz.com will do it for you. It haggles utility, internet, cell phone, alarm and security, and trash bills for no starter fee. You and the site split the savings 50-50. Don’t want to share the savings? Put such contracts up for competitive bids every year. Doug Staley of Pet Palace of New City in New City, NY, shares, “Since the New York ban on pet sales, we have been way down in revenue, so I have had to renegotiate our rent, cable bill, garbage collection, our vendor pricing and payment terms. By doing this we are still in business.”

Don’t Crank the AC

Before you lower the thermostat to beat summer heat, consider this Cornell University study: When office temperatures were low (68 degrees), employees made 44% more errors and were less than half as productive as when temperatures were warm (77 degrees). “When our body’s temperature drops, we expend energy keeping warm, leaving less for concentration and inspiration,” researchers found.

Focus on Fees

If you’ve been putting off calling your credit card company about a lower rate, stop procrastinating. A creditcards.com survey found that 78% of customers who asked got what they wanted. “People have way more negotiating power than they think,” senior analyst Matt Schulz says. “The worst that can happen is they say no, but most of the time, they say yes.” One phone call could save you thousands annually.

If the company does say no, reduce credit card usage at your business by following the lead of Pamela Holbert of Powell Pet Food and Supply in Powell, TN. “I now offer a 2% discount for paying cash. With my merchant card fees being well over that, I save money in fees overall and my customers get a small break. It’s a win-win for both of us!” It also puts a positive spin on the practice of charging a credit-card convenience fee.

That said, don’t be afraid to pass along certain fees to customers as needed and with full disclosure. For example, Katherine Ostiguy of Crossbones in Providence, RI, explains, “We added a 10% processing fee on all refunds a few years ago. Our credit card processor no longer returns credit card fees on refunds (around 2.7-3% depending on how the customer paid), and our sales platform makes it very difficult or impossible to produce the itemized receipts the state Department of Revenue wants to see for sales tax refunds (7%). It may feel steep to the customer, but we cannot afford to lose that money when a customer changes their mind about a service they’ve purchased. We make this policy very, very clear in all of our contracts, service agreements and receipts.”

10 More Money-Saving Ideas From The PETS+ Brain Squad

1. An auto transfer of just $250 to my business savings account each week. I’ve used it numerous times now for unexpected or forgotten-about expenses. — Paige Elder, Buzz n’ B’s Aquarium & Pet Shop, Erie, PA

2. Changed 300-plus fluorescent bulbs to LED and saved more than a third on electric. — Paul Lewis, Birds Unlimited, Webster, NY

3. Store policy to count each item at checkout and match on the sale screen. — Jessica Tiersma, Local Paws, Redmond, OR

4. Using shampoo foam ducks instead of dilution bottles. It has cut shampoo use down by two-thirds. — Kelly Lawrence, Barkingham Palace Pet Grooming, Houma, LA

5. Stock up on my fast-selling products during vendor sales, which increases my profit margins on a yearly basis. — Denise Strong, Pawz on Main, Cottonwood, AZ

6. No longer keeping cards on file in our POS to save on the extra charge for processing without the card present. — Jodi Etienne, Razzle Dazzle Doggie Bow-tique, Bradley, IL

7. Staying on top of grants to help us continue to grow our business! — Amy Kenkel, Leaps & Bones, South Windsor, CT

8. Reducing the frequency of our recycling pickup, as it was not filled weekly. — Michelle McConnell, A Natural Pet Pantry, Osprey, FL

9. Instead of custom-printing all of our boxes and bags, we now use stickers on generic packaging. — Alexis Quiroga, PAWsitively Sweet Bakery, San Antonio, TX

10. Purchasing finger scanners for inventory, which made inventory go faster — less payroll. — Dorothy Vetrovec, Nature’s Feed, Spring Grove, IL