Here’s a checklist of what it takes to start a business: live in Silicon Valley, raise millions in venture capital, spend hundreds of thousands of dollars on inventory or retail space.
Right? Not even close. But unfortunately, many aspiring entrepreneurs carry around these false beliefs about what it takes to succeed, and it prevents them from taking that first, crucial leap into the unknown.
It has to stop.
Today, anyone reading this could start a business that supports a comfortable lifestyle, while meeting important needs of people around the world.
A business that gives you the flexibility to control your own hours and be your own boss, working anywhere there’s a laptop and an internet connection.
A business that gives you a conduit to share your passions with the world, even if you’re still figuring out exactly what those passions are.
At Foundr, we’re always striving to help people achieve this goal, and one of the biggest recurring questions we hear from our audience is this lingering concern about how much money it really takes to launch a business. The answer depends a lot on the business, of course, but it doesn’t have to be a big number.
In this post, we’re going to deliver three proven blueprints for starting a business on a tight budget—each requiring under $1,000. In fact, while we’ll start with a budget of no more than a grand, we’ll strip it back even further to zero dollars, believe it or not.
Whichever path you take, let this be your license to let those money fears go, and start building your dream.
The Best Business to Start With Less Than $1,000
If you’ve got a bit more cash to spend, a great option is starting a business selling physical products on the side. The unique advantage of this business model is that it doesn’t require a lot of cash upfront, or any deep, real world experience (that’s often required to start a course or a service-based business) and it can scale really fast.
But don’t drop everything you’re doing, open a store and sell products in person. We recommend you start an ecommerce business where you can leverage the power of the internet to achieve nearly infinite scale.
Here’s a great example of why: To open a physical McDonald’s storefront you need a minimum of $500,000 in personal assets for a down payment. Plus, you have to pony up another $45,000 to cover the franchise fee for the rights to the systems to run the store.
I don’t know about you, but when I was first thinking about starting a business, I didn’t exactly have half a million lying around.
The good news is, you don’t need even a fraction of that kind of money to start an ecommerce business today. In fact, with a budget of less than $1,000, you can easily have all the tools, systems, and parts you need to begin generating real, significant income from an online store.
The key is being smart about how you invest that money. Even though you can make $1,000 go a long way today, you can’t afford to make costly mistakes. Mistakes burn money faster than any good choices.
That’s why I recommend investing at least 20% of your initial budget on your education and training, whether that’s through courses, coaching, and/or your own research. This is 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 payoff.
For example, my friend Howard Tseng spent almost a decade as a professional advertiser. Throughout his career, he helped businesses sell millions of dollars of products online. And if I had to guess, I’d say he’s probably in the top 5% of advertisers on the planet.
But after years of running advertisements for other people, he got into a disagreement with a client. He knew what the client should do. They wouldn’t do it. And instead of fighting about it, he decided it was time to start his own business—where he could call the shots 100% of the time.
Based on his experience selling supplements, he knew keto was a hot trend. And after helping some of the biggest supplement companies on the planet, he knew how to sell supplements at scale.
The problem was, he knew nothing about packaging, how to work with manufacturers, or even how to set up an online storefront.
That’s why one of the first things he did was find a coach, even though he was starting a business on a small budget. Could he figure out all this stuff on his own? Yeah, but a coach would allow him to go so much faster.
So he took a few hundred dollars out of his small launch budget to work with a guy who had started several supplement companies before. Howard estimates that the first thing his coach told him saved him over $10,000, paying for the investment tenfold overnight.
The coach told Howard to not launch anything without testing.
Howard’s first and only action item was to build a simple landing page with a mockup of the product he wanted to create and a buy button, like this:
The button wouldn’t allow people to buy. Instead, it gave an error message:
“We’re Sorry! The Product Is Currently Out of Stock. But If You Enter Your Name and Email, We’ll Email You When It’s Available With A 50% Discount Code.”
Howard built a landing page with a mockup of the product he wanted to build using this strategy and then spent $500 buying ads to that page over the course of a few days.
The coach told him that the goal of this experiment was to build a list of people who wanted to buy the product. If, at the end of a few days, he didn’t have that list, he would have known his idea was a flop.
And he would have found that out for less than $500—a small price to pay considering how many people spend months of their time chasing business ideas that never pan out.
As for him, when he built a simple landing page using this strategy, he collected over 200 emails from people wanting the product when it was live. This was a greenlight for Howard to go build the product and get the store launched.
The coach showed him even more steps along the way. Today, he has grown that store to over $20,000 in sales (you can check it out here).
But it all started by taking calculated actions and investing in his education up front.
The amazing thing is he didn’t any inventory upfront. He was able to work with the manufacturer to dropship his products—as he sold them. This lowered his upfront investment even further. As for other tools and software, his only needs were:
- A Shopify for his store design and payment setup that costs $29.99/month
- A Facebook account to run ads (which is free to have but costs money for traffic)
- An email service provider. He uses Klaviyo which costs $30/month.
That means for less than $60 a month in fixed costs, he was able to build a store to over $20,000 in sales and it only continues to grow.
If you’re interested in getting your start in ecommerce, we have a free in-depth guide that walks you through all the key steps, including finding your viral product idea, building a beautiful storefront and getting your first few customers.
With a budget of just $1,000, you can do a lot. That being said, I know some people don’t have that kind of money set aside to build a business today. That doesn’t have to be a barrier though, you just need to do things a little bit differently if you have less cash on hand.
Here’s the plan…
The Best Business to Start with Less Than $100
If you have less than $100 to invest in starting a business, there’s one model I recommend you focus on: a freelancing or consulting practice.
Here’s why: To start a business like this, all you need is a list of potential people you can help and a service you can offer and you can begin making real money, relatively fast.
For example, I once did a public experiment where I tried to make $5,000 as a brand new freelance writer. And because I followed a simple system anybody can use to make money as a freelancer or consultant, I made $9,000 in one month.
In fact, Foundr has created an incredible, totally free resource on exactly how to get your first paying client and find out which services people will pay you for as a consultant.
As your consulting business begins to make real money and you have more money left over to invest, that’s when you can begin thinking about building a product, setting up a website, or building software.
But the reality is, when you’re on a tight budget, the best business you can start is the one that just sells YOU as a service provider.
In this scenario, I recommend putting your entire $100 towards taking potential clients out to coffee or lunch. Don’t put any of it into building a website or ads in the beginning. Those things are totally unnecessary when you’re starting out as a freelancer or consultant. Your entire focus should be in following the steps in this guide.
By the way, while this business route might seem less sexy than selling a course or drop-shipping a product, as a consultant, you could charge as much as $1,500 per hour.
Besides, you can always add digital products or online courses to your freelancing or consulting practice later on. And the great thing about digital products is you barely need any upfront investment to get started. Because they’re digital, you can build them quick, sometimes in as little as a weekend. And since you don’t have inventory, you can sell them with infinite scale.
But 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.
That being said, even $100 is a stretch for some. I don’t want that to stop you though. So here’s what I recommend if you have no money to invest in a business today.
The Best Business to Start With $0 in the Bank
If you’ve got no money to your name but still want to start a business, don’t worry. Plenty of entrepreneurs got their start when they had nothing.
But if you are strapped for cash, you will need to pivot your plan, ever so slightly, to give yourself some breathing room. Because if you’re under money stress, you’re never going to have the focus and attention you need to start the business you want. You’ll likely end up chasing quick profits and make bad decisions in the name of making money—not building a real business.
So first, you gotta 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 is to print out your bank or credit card statement and start looking at how you’re spending your money right now.
It might shock you how fast the little coffees and lunches you’re paying for add up.
For example, in this post, I talked about how I found four items costing me $138.89 every month without ever thinking about them. By cutting these expenses, I was able to save $1,666.68 per year.
The truth is, almost all of us have little things like this 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.
Next, try 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-$1000 a week doing this. And many people do.
Just remember, 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 along the way.
Last but not least, you can try finding a cofounder.
You’ll likely need to give them equity in the business you build together. But if you don’t have money you can invest in a business right now, that doesn’t mean you don’t have a valuable resource you can contribute.
In fact, you may have a resource that’s even more valuable than money: your time.
If you can find someone who has money to invest, you can partner with them and do the hard work of investing your time to build the business while they fund some of the efforts in the beginning. Some of the best businesses like Apple and Microsoft got their starts when two people partnered together to build something great.
The key is finding a person you can trust and being able to work together on the same vision. If you can find that person, you don’t need nearly as much money upfront as you might think to build something amazing.
No Budget is Too Small!
Do you have any questions about starting your business on a small budget?
As someone who’s personally built a business on the side with $0 out of pocket and grew it to $9,000 in 30 days, I’m here to help!
Whether you’d like me to expand on creative ways to generate money to fund your business or need help finding ideas for your company, fire away.
I’ll be hanging around in the comments, responding.
So leave a comment. And help share this message with people who need to read it.