Starting a traditional business can be expensive. Various expenses begin to stack up: rent, utilities, supplies, inventory, wages, advertising, research and development (R&D), licenses, and web hosting (just to name a few).
Finding this money can be intimidating. It takes money to make money, and not everyone has a crazy-rich uncle or happens to be best friends with a venture capitalist.
Fortunately, not every venture requires a massive savings account or small business loan to get off the ground. There are plenty of low-cost startup business ideas you can start with little to no cash—and we outline the ones with the most potential below.
These startups help you make money from the get-go, and they eliminate costly expenses like rent, salaries, and cost of goods sold (COGS). You’ll still have bills to pay, and you’ll need things like a computer, internet access, and electricity (however, you can find these things for free at your local library), but the costs are practically free compared to traditional business expenses.
That doesn’t mean it’ll be simple, though. This article isn’t about easy businesses to launch. While you won’t have to inject a large amount of cash up front, you’ll still need to invest time and energy.
First, let’s answer a couple of common misconceptions—then, we’ll dive into the low-cost startup business ideas.
Can Low-Cost Business Ideas Lead to High Profits?
Of course. With few business expenses to worry about, most of your revenue will be solid profits. You won’t have to waste months or years working toward profitability—you’ll be making real income in days or weeks.
However, these low-cost business ideas can sometimes take longer to scale, especially if you’re unwilling to invest money into them. Over time, you can accelerate your business growth and pass plateaus with an injection of capital, but you won’t need it at launch.
Is There Any Downside to Businesses with Low Startup Costs?
There can be. One of the most motivating factors of running a business is pushing towards profitability. Low investment can sometimes lead to low commitment and low drive, and that can weaken your results.
Often, people undervalue things they receive for free. You’ll need to push past that mentality with your startup to succeed. Your home or retirement account might not be on the line as collateral, but your hopes and dreams of owning a successful business are—and that can be just as inspiring.
9 Low-Cost Startup Business Ideas
Sell your talents to clients as a freelancer. You could freelance as a virtual assistant, writer, SEO (search engine optimization) expert, programmer, designer, photographer, or recruiter. Think of any career option, and there’s a solid chance you could turn it into a freelancing profession.
Freelancing doesn’t require many upfront costs. Like with all the low-cost startup business ideas we mention, you’ll need a computer and an internet connection, but the rest beyond that is optional.
You’ll eventually want a website to host your portfolio and give yourself an added layer of professionality, but you don’t need one. You can get by just fine with LinkedIn, Dribble, Facebook, and GitHub profiles.
If you’re a marketing freelancer, you might need annual software subscriptions to things like writing tools, project management apps, and SEO analysis platforms—but you can find adequate freemium models to help you get started.
Freelancing is a competitive market. You’ll have to compete with talent worldwide, which can make it a complex numbers game when it comes to pricing. If you don’t have clients already, you’ll have to find them and help them find you. You can start with your existing relationships across your friends, family, and LinkedIn connections—and that might yield adequate work.
However, you might need to invest money into marketing your talents to find your first few clients. After that, you’ll start to build a reputation—and you can begin to use referrals and word-of-mouth marketing to help you keep the momentum going.
The more clients you earn, the more experience you gain—and the more experience you gain, the more you can charge your clients. To scale your business, you’ll need to learn to up-sell, cross-sell, and replace low-paying clients with higher-paying ones.
The terms consulting and freelancing often get used interchangeably, but they don’t mean exactly the same thing. Consultants typically offer advice, strategy, and expertise, while freelancers tend to provide deliverables: articles, landing pages, designs, photographs, apps, and the like.
Consulting is a low-cost startup idea to kick off because you don’t need anything to get started. However, it does take years of experience and know-how.
Your value as a consultant comes from what you’ve accomplished or learned how to do. While you can go and start a consulting business tomorrow, you’ll need to have spent months and years gaining education and hands-on experience for someone to want to pay you as a consultant.
If you’ve already spent your career gaining experience and building your portfolio, you’ll be ready to hit the ground running. If that’s not the case, you’ll need to build up your portfolio and network to accelerate your consulting startup.
Finding your first handful of paying clients is the hardest part, but we have the resources you need to attract and win the best consulting clients. Once you’ve dialed that down, you’ll need to learn how to write stellar consulting proposals and how to price yourself to customers.
3. Course Instructing
Creating an online course can be a great way to build passive income now and into the future. We’ve built an entire business around developing and selling excellent courses, so we speak from experience.
You can create a course with just your laptop, but you’ll likely want to purchase extra equipment to make it more high quality. Think about buying a camera and a microphone—tripods and lighting are good, too, but you can get by with natural lighting, lamps, and a desk with books on it.
You can get started on these platforms for free. However, you’ll likely need to upgrade to a monthly subscription down the road to unlock better transaction rates, additional features, and greater scalability. You’ll have complete management control, and that means you’ll have to do the advertising and find the students.
The other option is to host your course on an online course marketplace. These include popular sites like Udemy, Skillshare, and Coursera. These platforms will host and market your course to their massive audiences, but they’ll control your student’s data, design elements, and pricing—plus, they usually take a big cut out of your profit margins.
4. Social Media Marketing
Every business has (or needs) social media profiles, but they don’t always have an experienced in-house person to manage it for them. That’s where you come in.
All you need to launch a social media marketing startup is social media prowess and a willingness to Tweet, Pin, and DM your day away. You’ll want social media management tools like Hootsuite, Buffer, or Sprout Social, but most companies will be responsible for deciding on the software and footing this monthly bill.
If you’re getting really fancy creating and editing images, you might want a subscription to Adobe’s visual design products, but that’s not necessary. You can get by (and do a pretty awesome job) using free tools like Canva and PicMonkey.
Finding your first clients may require some marketing and advertising spend, but you have a huge market. You might need to start working with local small businesses and startups, but you’ll eventually gain the experience and portfolio you need to scale to bigger companies.
Blogging has been a popular way to build an audience since the late 1990s. Not long after it became mainstream, people started to make money using the medium.
You can use a blog to drive traffic to your website. This could be through SEO, paid ads, guest blogging, or your social media following. Once you’ve built consistent traffic to your site, you can begin to monetize:
- Affiliate marketing: Link to other products to earn a commission on every sale that’s driven through your links.
- Ecommerce: Use your blog content to sell your own products and services to your audience. This could be a great place to sell your online course.
- Advertising: Sell ad space on your website to earn revenue from the clicks and eyeballs it drives.
- Sponsorships: Sponsor products you know and love and review them on your site. You’ll earn stipends from sponsors, free products, and commission through affiliate marketing links—it’s a triple whammy.
- Membership plan: Offer standard content for free but save the exclusive content for the paying members—this adds another layer of authority to your content. Use a platform like Patreon to add different membership levels and rewards.
- Donations: Ask your audience to contribute to keep the content coming.
Once you have regular traffic coming to your site, you can easily convert them to different channels, too. For example, you can turn your blog readers into Instagram followers, YouTube watchers, podcast listeners, and email subscribers. From these channels, you can further monetize your loyal following.
Blogging could help you earn freelance and consulting clients, too. When readers see and value your writing talent, they may be willing to pay you to do it for them.
6. Affiliate Marketing
We mentioned affiliate marketing in the blogging section, but it deserves its own detailed highlight. Affiliate marketing isn’t just limited to your blog—you can do it across your social media followings, email list, and YouTube channel.
Affiliate marketing is one of the simplest ways to monetize traffic because it has no costs. You don’t need to invest in building a course or selling products—you just sell what already exists.
Affiliate marketing makes you money while you sleep. Once you place the links in your high-traffic content, you can just set it, forget it, and watch the payments roll through.
However, to be successful, you’ll need a following or website traffic. And building that is easier said than done.
Podcasting is a great low-cost startup idea for entrepreneurs looking to create audio content. You’ll have to pay a subscription fee to host your podcast on a platform like Buzzsprout or Captivate ($10 to $20 per month), and you’ll likely want to invest in a decent microphone and audio-editing software.
Once you’ve pumped out great, consistent content and have established loyal listeners, you can start to monetize your podcast in a few different ways:
- Podcast subscriptions: Lock certain episodes (or, if you’re popular enough, your entire show) behind a paid subscription. Spotify and Apple have added services to make it easy for podcasters to gate their content, but you can also do it on your own through your website or a platform like Patreon. Expect to pay anywhere from $3.99 to $19.99 per month for these subscription privileges.
- Sponsorships: Companies want to get their brand in front of your listeners, and they’ll pay you to do it. Plenty of podcasts make all their revenue through sponsorship programs.
- Affiliate marketing: Talk about products and services on your show, and then link to them in your show notes. You could also repurpose this content on your blog for additional affiliate marketing opportunities.
- Ecommerce: Use your podcasts to spread awareness about your own physical and digital products. You could sell physical goods, brand merchandise, courses, or even ebooks.
8. Virtual Fitness Training
Virtual fitness training has been on the rise since the birth of Peloton, but it’s taken off with the COVID-19 pandemic. Gyms and studios are taking their classes online, and new fitness apps are launching with opportunistic vigor.
Now (more than ever) is the time to get in on the virtual fitness training action. Building an app could be expensive, and maybe that’s something you consider down the road—however, you could get started hosting classes online with Zoom, Instagram live, or a webinar license (depending on the format you’d prefer).
People enjoy at-home workouts. As gyms reopen and focus their efforts on in-person experiences, you’ll be in a prime position to capitalize on those who prefer to exercise in a virtual class.
Starting costs may include a video streaming subscription, professional camera and microphone, and some at-home gym equipment—but you can improvise to make all these expenses negligible. Instead, you’ll want to focus your initial budget on advertising to attract your new gym members.
Don’t forget your local market. Your classes may be online, but your local influence carries more weight than you’d think. Peloton’s large classes of strangers can be intimidating, but there’s something more confidence-boosting about joining a virtual fitness class with your friends—empower your community to make that a reality.
9. Website Building
Every business needs a website, but not many people know how to custom-build a domain beyond the free provided templates. If you’re a savvy developer who can help businesses with design elements and integrations, there’s a massive market that needs your skills.
Getting started is cheap. You’ll likely want a site of your own to feature your talent, and you’ll want subscriptions to design tools and editors that help you with mockups and website creation. You’ll also need to set aside a budget to market to your customers. Everything else is optional.
Businesses are looking for a variety of website builders. Some want help with design, others need help with back-end SEO, and several need programming skills to add ecommerce integrations and custom products.
Find your niche, and become the go-to expert in that field. Build a few custom sites of your own to show off your abilities. You’ll continue adding to your portfolio to attract bigger (better paying) businesses as you gain clients.
Make Your Low-Cost Startup Idea Come to Life
Speaking of low-cost startup business ideas—with Foundr+ you have access to step-by-step frameworks from proven instructors that have built multi-million dollar businesses.
Ready to make your low-cost startup idea a reality? Sign up for Foundr+ to learn how to start and scale your dream business.