How much money would you need to start a business?
One of the biggest obstacles faced by the Foundr community is finding enough money to get a company off the ground. Finances are a huge concern for start-up entrepreneurs, and the good news is that you don’t need to spend thousands of dollars to launch a new business.
Contrary to popular belief, there are many low cost online startup business ideas you can work on with just a little money, without splashing all your cash.
We’ve outlined our best low cost startup ideas that are perfect if you’re just starting your entrepreneurial journey with less than $100 in the bank.
These low cost business ideas removes any financial expectations that you may associate with a traditional business. There’s no rent, no electricity bills, few if any salaries, and so on.
As with everything in business, it won’t be easy. You will still need to work your buns off, develop a strong brand, invest your time in marketing and operations, and provide an excellent user experience.
In this article, we’ll outline five low cost startup business ideas that we hope will demonstrate that money isn’t everything when launching an online business. All you need is your passion and creativity.
1. Freelancing/Consulting as a Low-Cost Business
If you stop to think about it, you have probably spent the majority of your life studying. Grade school, high school, college, even kindergarten, the first 20 or 30 years of your life were likely spent learning skills.
Some of these skills you have developed over the years can be used to generate profit. That’s what a freelancing or consulting business is all about:
Using your knowledge and talents to solve the problems of other people: your clients.
With this low-cost business startup idea, your only investment is your time and you have the choice of spending a little money setting up a website if you like.
Freelancing is at an all-time high. A report from Freelancers Union and Upwork — the largest freelancing platform in the world — estimates that there are now 56.7 million freelancers in the United States.
Sadly, many people who decide they want to become freelancers end up realizing the harsh truth of the globalization era: that you’ll have to compete with cheap labor from far off countries.
If you try to compete with these people by undercutting yourself, you’ll lose. If you want to make five or six figures from your freelance work, you need to think strategically, like you’re running a business. You’ll have to charge what you’re worth.
You’ll have to drop unproductive and unprofitable clients. By focusing on the clients who are bringing in the most money, you’ll be able to make more in the same amount of time.
You’ll also have build a reputation by advertising your services consistently on different outlets and by publishing customer testimonials and success stories. This will eventually allowed you to charge higher rates for your freelance/consulting services.
If you want to succeed as a freelancer, you also need to learn how to market yourself.
As a freelancer or consultant, you’ll have several options to market yourself:
- Network with fellow freelancers and potential clients on social media
- Ask your current clients and friends for referrals
- Run ads in Facebook, Google, and other ad networks
- Cold pitch potential clients
- Write guest posts in authoritative and relevant industry blogs
- Speak at events that potential clients attend
Out of all these strategies, getting referrals is the most common one used by freelancers.
2. Launch a Digital Product
Providing services can be very lucrative, but another equally profitable and low-cost way to deliver a solution using your skills is through a digital product.
Whether that’s an ebook, a course, an article, a template, or anything in between; you can help people by digitizing your knowledge.
The premium courses we have developed at Foundr come from some of the biggest experts in the respective fields of each course—e-commerce, consulting, and landing page optimization.
Interestingly enough, some of these experts are consultants themselves. This means they are sharing the exact same ideas they use with their own clients, so you can learn from them and then implement them in your own startup business.
In contrast with traditional methods of teaching and sharing knowledge like seminars, books, or consulting; digital products allow you to help people at scale. This means you create the product once and then you sell it as many times as you want with almost no recurring costs involved.
Package your skills into a digital product and start making money right away.
Some of the costs associated with the launch of a digital product include the fees from a payment processor (Stripe, PayPal, etc.) which typically charges 2.9% plus $0.30 per sale, and the platform where you sell your products (Podia, Teachable, etc.) which typically charge a low monthly fee.
If you add up these costs, you can expect no more than 5 percent of your entire sales to go to the fixed costs of running your business. Of course, we’re not counting the marketing, operations, and costs of developing your product. That all depends a lot on your own offering.
You can spend as little as $5 to design an ebook cover on Fiverr and start selling your product using just your personal Instagram following if that’s what you want.
3. Social Media Marketing
You probably think of social media as a fun way to kill some time, but nowadays you cannot deny the power and influence it has on our day-to-day lives.
For a low-cost business ideas, it’s a way to leverage influence to make money for close to nothing.
Companies know this all too well and are willing to pay good money to enlist others to promote their own offers. That’s the entire business model of becoming an “influencer”. They are the people who amass loyal armies of followers that they develop strong relationships with.
If you can build a following on any reputable social media platform like Instagram, you can make money from it.
The key to monetizing an Instagram account isn’t to grow it as big as possible, but to build a loyal group of followers.
As explained by Simon Moss of Entrepreneur, micro-influencers – people with audiences between 1,000 to 50,000 followers – are just as capable of driving value to their business partners as influencers with larger audiences.
Aside from your time, the costs of growing an Instagram account are negligible. All you need is a phone (maybe a camera), editing software, and your creativity.
There are no direct costs associated with starting your Instagram following. All you need is to publish the right content for your audience and have a bit of patience.
As you start to grow your following, you need to think about monetizing it. To that extent, you have some different options:
- Publish sponsored posts on behalf of brands
- Become an affiliate of other companies
- Sell your own products (physical or digital
- Sell a service
- A mixture of all of the above
The amount of money you can expect to make will depend on your space, engagement rate, audience size, and the offer. Gaining followers an Instagram or any other social media platform can take time, but with the right tools and strategy, you can see real results.
For example, at Foundr, we grew our Instagram account to 10,000 followers in two weeks and over 500,000 in 12 months, just by having a clear idea of our audience, the right content to publish, and a consistent publishing schedule.
4. Start a YouTube Channel
With over 30 million daily active users, YouTube is one of the most popular websites in the world. It works not only as a site for entertainment but for education as well.
For the past 10 years, thousands of independent channels have been launched by regular folks with nothing but a camera and a computer. And the results have quite often been spectacular.
Many YouTubers have made thousands, if not millions, of dollars from a mix of advertising, sponsored videos, affiliate offers, and the sale of their own products.
In 2018, eight-year-old Ryan Kanji and his parents, who run the toy-review YouTube channel Ryan ToysReview, made $22 million from a mix of advertisements, sponsors, and affiliate products.
Obviously, you don’t need such a large audience to succeed with YouTube. Just like with Instagram, the goal is to have a loyal audience that trusts your brand, regardless of its size. In this case, as in many other cases in life, quality trumps quantity.
To start a YouTube channel, all you need is a camera and editing software. The camera doesn’t have to be like the ones used in professional television production. Your phone camera is enough for you to get started in launching your next big online businesses with low startup costs.
Lighting equipment can make a big difference in the quality of the video, so consider picking up a basic ring light. Ring lights don’t cost much and can make all the difference in a video.
Alternatively, you can use natural light for free. All you need is to find the right angle (often by facing the light) and a diffuser, which redistributes and balances the lighting.
Finally, you will need editing software. You can use free tools like Blender or Lightworks, or premium ones like Adobe Premiere Pro.
What’s truly important is that you think long term. It will take you time to develop an audience, so you will have to publish consistently every week and keep looking for new content ideas that engage and connect with your audience.
5. Start a Blog
Millions of people share a passion for writing. It allows us to break free from our daily routines and express our thoughts and feelings.
Blogging has been a popular way to build an audience since the late 1990s, and not long after it became mainstream then people started to make money using the medium.
Blogging as a profession comes with a lot of challenges. You will need to do a lot of research and write content that resonates with your audience. You will need to promote your content. You will need to adapt and innovate.
The same revenue streams mentioned in the ideas above apply for bloggers, the most popular in this case being affiliate marketing.
Thanks to affiliate marketing, a blogger can generate income (what some call “passive income”) without having to spend any money beyond the original content creation costs.
The costs you’ll need to incur to get started as a blogger include:
- Hosting: Cheap and reliable hosting companies like Bluehost and GoDaddy start for as little as $2.75 per month
- Domain: A .com domain costs $12 per year, while others range between from $1 for a .live TLD (top-level domain) to $14 for a .org.
- Design: Premium WordPress themes can start at around $30 and go over $100. Some popular companies that sell WordPress themes are StudioPress and ThemeForest.
Blogging is one of the best business ideas under $100. However, being a low-cost startup idea means it’s accessible to most and the competition can be tough, especially those exploring health, marketing, and business.
READ MORE: 100 of the Best Side Hustle Ideas and Jobs
Most of the work needed to drive traffic to a site requires you to find a unique angle, create highly useful content, and promote it to the right audience. But if you manage to grow a blog successfully, it can become quite lucrative.
Did we miss your favorite low cost business idea? Let us know in the comments below.