You don’t need millions to start a successful business.
In fact, there are many great businesses that can be started with little or even no money. Many aspiring entrepreneurs never take the first crucial leap into the unknown because they hold false beliefs about what it takes to succeed.
At Foundr, we are often asked how much it really costs to get started as an entrepreneur. Admittedly, the answer depends on the nature of the business. However, the idea that you must have thousands invested in inventory or venture capital doesn’t hold.
Really, anyone can start their own business and live comfortably. All you need is a laptop and an internet connection.
In this post, we’re going to deliver three proven low-cost ideas for starting a business on a tight budget. Whether you’re starting off with $1,000 or nothing, you can start a fantastic business with very little money.
Let those money fears go, and start building your dream job.
The Best Businesses to Start With Less Than $1,000
If you’ve got a bit of cash to spend, a great option is starting a business selling physical products.
This doesn’t require the same experience as it takes to run a course or a service-based company. There also aren’t too many upfront costs involved.
With a budget of less than $1,000, you can easily purchase all the tools and systems to begin generating real, significant income from an ecommerce business.
In its essence, ecommerce is making money by selling products on the internet. The longterm goal is to build an entire virtual storefront with branded products and merchandise.
Before getting started, you’ll need to choose your product.
What do your potential customers need and are willing to pay money for? Research the market and your target audience.
What’s selling at the moment? What isn’t selling at the moment?
Identify gaps in the market that you could fill.
Some things to consider when choosing your product are:
- What’s your retail price range? Ensure that you’ll be able to cover your margins including manufacturing and shipping costs.
- Can you personalise or improve the product? If you want to stand out, you’ll need a superior product. What’s going to set you apart from other similar products/brands on the market?
- How heavy or bulky is it? The smaller and lighter the item, the less it’ll cost to ship. This isn’t a breaking factor, but it’s definitely something to consider.
- Is it something that you feel passionate about? If you hate fashion, maybe starting a t-shirt business isn’t the best idea. Instead, try to find something you enjoy or identify with. Remember, this is your dream job you’re creating here!
Once you’ve chosen your product, you’ll need to set up a few things before getting started.
At this stage, you should begin thinking about your brand persona. How do you want to present your company? If you’re selling custom bookmarks, maybe you’ll want your brand to come across as vintage and classical. However, if you’re selling high-tech earphones, this type of branding wouldn’t make much sense.
Remember, this is all super basic stuff to begin. The goal here is to turn around enough cash to invest in your company down the track.
If you’re not good at design, don’t worry! There are plenty of free tools like Canva that even a complete beginner can use to create an effective logo.
Now that you’ve figured out your brand identity, you’re ready to get into some of the nitty-gritty details. This is where it can begin to get a little pricey. To start off, you’ll need:
- A Shopify store design and payment setup ($29.99/month)
- A domain for your store (approx $17.95/year)
- A Facebook and/or Instagram page (free, but costs money for ads)
- An email marketing provider ($20/month per 500 contacts)
That’s about $70 in initial costs to get a digital store up and running, leaving you with $930 to cover the logistics of manufacturing, packaging and shipping of your product. You’re also going to want to invest a good chunk of that in training or research, but more about that later.
Of course, this is where your costs are really going to depend on what it is exactly you’ll be selling and how you’ll be sourcing it. If you’re going to be making your own fabric face masks, how much will it cost to buy fabric and elastic? Do you need to purchase a sewing machine? Or do you plan on sourcing the pre-made masks from an international manufacturer like Alibaba?
The good news is that if you started with $1,000, you’ve got plenty of room to pivot from this point. Here are some tips to ensure that the launch of your new ecommerce business will be smooth sailing.
Tip #1: Invest in training and research
The key to a successful online store is being smart about how you invest your money. $1,000 can go a long way, but mistakes are expensive. That’s why I recommend seriously considering investing at least 20% of your initial budget on your education and training. In a situation where you begin at $1,000, that leaves you with $200 for training.
According to Kathleen Allen, professor at University of Southern California,
Neglecting research is the most “common error” for start-up entrepreneurs
Examples of training might be taking courses, finding a coach, or conducting your own research. It’s important because when you invest in proven systems and training, you can be more certain that future actions you take are more calculated and likely to pay off.
Tip #2: Test before launching
Like any good business mentor or coach will tell you, market research and testing is a crucial first step in the process of setting up an online store.
One option is undertaking some good old-fashioned market research. This might look like creating some paid surveys, a market research mobile app or hiring the services of a freelance market researcher.
However, these options might not be viable for an entrepreneur who is strapped for cash.
Another virtually free way to gauge interest from potential customers is by building a simple landing page with a mockup of your product. Instead of creating a ‘buy’ button, you could write a message like this:
“We’re sorry! This product is currently out of stock. If you enter your name and email, we’ll email you when it’s available with a 50% discount code.”
The end goal of this experiment is to build a list of potential customers who are interested in buying the product. If you don’t have the list after a few days, you know that the idea is a flop.
If you do manage to collect a solid list of emails, then you can use that in the future to stay in touch with your customers.
Tip #3: Dropshipping
If you’re tight for cash, you may be wondering how much it’ll cost to purchase inventory for your new business. True, purchasing products to resell at a markup does have an initial cost.
However, for the entrepreneur on a budget, there’s an alternative: dropshipping. This is when a third party stores and ships whatever it is you’re selling. In this way, you only need to deal with your product’s marketing and customer service.
While dropshipping may be a great low-cost business idea to experiment or test the market, we don’t recommend it as a long-term strategy. This is because you’re effectively putting the shipping of your product in the hands of a stranger.
That being said, it is a relatively cheap way to begin bringing in some income, which you can then use to invest in more strategic long-term business goals.
The Best Low-Cost Businesses to Start With Less Than $100
If you don’t have a grand lying around, don’t worry! You can still start the business of your dreams with as little as $100, you’ll just need to do things a little differently.
Freelancing and consulting work is one terrific way to get started making cash. Then, you can start working towards your long-term business goals.
Freelancing and consulting
When you don’t have the cash available to invest in inventory, the best low-cost business ideas are those that sell you as a service provider. This is why I recommend looking into starting a freelancing or consulting practice if you have less than $100 invest.
Before getting started, you should reflect on your experience, skills and what you have to offer to potential customers. Do you have a marketable skill such as writing or graphic design? Or maybe you’re fluent in a second language and great at teaching. Whatever it, ensure that it’s something people would be willing to pay for.
Once you’ve decided what service or skill you plan on offering, you’ll need to identify your target audience. For example, if you’ve decided to become a freelance writer, begin to research and compile a list of publications you might be interested in writing for.
Then, you’ll need to invest some time into personal branding. Luckily, it’s very easy to set up a personal website for a very low cost (or even free!) You may also want to consider creating a custom email signature, like this:
Not only is it free and very easy to create, but it also instantly makes you come across as more professional when you begin reaching out to potential clients or customers.
With these tools, you can begin making real money, relatively fast. As your consulting business begins bringing in some cash, you can start thinking about the next steps.
This might be investing in building a product, setting up a more professional website, or creating marketable software.
Before you get started, here are some top tips for creating a successful freelancing or consulting practice for less than $100.
Tip #1: Invest in potential clients
One of the most important things you can do when starting a freelancing or consulting practice is to invest in building relationships. For this reason, I recommend you use your $100 to take your potential clients out to coffee or lunch.
There’s no point in investing in a fancy website or ads if you don’t actually have any clients interested in your services. There is plenty of time for those things later down the track.
Tip #2: Expand digitally
One of the best things about this kind of work is that you can always add digital products or online courses to your freelancing or consulting practice later on. Also, selling digital products barely needs any upfront investment to get started.
Because it’s digitally run, you can build your business quickly. Sometimes, even in as little as a weekend. And since you don’t have inventory, you can sell with the potential for infinite scale.
Again, even though digital products present an enormous opportunity, I don’t recommend you start there. If you want the fastest and simplest way to start a business for less than $100, start consulting, add digital products after and then scale up to more cost-intensive and possibly lucrative models later on.
The Best Businesses to Start For Free
If you’ve got no money to your name but still want to start a business, don’t worry. Plenty of successful entrepreneurs got their start when they had nothing.
If you’re under money-stress, you’re never going to be able to devote the focus and attention you need to start the business of your dreams.
For this reason, you may need to pivot your plan to give yourself some breathing room.
The alternative is chasing quick profits and bad decisions in the name of making money—not building a real business.
Sell your old stuff
One way to get started is by selling things you no longer need for cash. Gary Vaynerchuk recommends flipping items you buy at garage sales on eBay! With just a couple dollars to start, he says you can easily make between $500-$1,000 a week doing this. And many people do.
Of course, the goal is not to be a yard sale flipper. It’s to save the money you make to put toward funding your business, setting up your website or investing in your education along the way. Plus, this is a great way to build your entrepreneurial skills and pad your pocket with some extra cash.
READ MORE: 100 of the Best Side Hustle Ideas and Jobs
While you’re working hard scouring eBay, here are some tips to keep in mind.
Tip #1: Clean up your expenses
Chances are you’re spending money every month on things you don’t need or even want. The easiest way to crack down on unnecessary spending is to print out your bank or credit card statement. Then you can start looking at how you’re spending your money and identify any opportunities for saving.
The truth is, almost all of us have little things that we’re paying for, even if we’re strategic about what we spend our money on. Cutting back to free up some cash is the least interesting but most essential step if you have $0 to invest in starting a business right now.
Tip #2: Find a co-founder
The next step is to look at finding a co-founder for your new business. Luckily, money isn’t the only valuable resource you can contribute to your project. Think about what else you have to offer.
If you’re a great writer, perhaps you can contribute to the project by writing all of the branding content or by creating a blog for your website. Maybe the best thing you can offer is your time. That’s also alright! Use that time to research, plan and organise your new company.
The key is finding a person you can trust and work with towards the same vision.
Find someone who has money to invest, and pitch your talents and skills. Why should they partner with you? Chances are that while you do the hard work of investing your time to build the business, they can fund some of the efforts in the beginning. If you can find that person, you don’t need nearly as much money upfront as you might think to build something amazing.
Other Low-Cost Businesses?
Do you have any questions about starting your business on a small budget? Feel free to leave a comment or question below.