In the late 1960s, Richard Branson was a teenager with a nose for entrepreneurship. He made an office out of his high school phone booth, and he didn’t even have the money to use the phone.
But he managed to sell a necklace for $200, and with that $200, Branson finally had the money to call potential advertisers for his fledgling magazine. The rest, as they say, is history. That $200 would eventually grow into the Virgin Group, now a multibillion-dollar brand, operating in industries ranging from aerospace to communications.
With $200 and his wits, Branson started an empire. That got me thinking—with all the technology within entrepreneurs’ grasps, what’s the minimum you’d need these days, realistically, to start an online business?
The answer we came up with: $127.
How to Start an Online Business
The reason this is possible is that there has never been a better time in history to be an entrepreneur. We firmly believe that anyone can start a business today, as long as you have an idea and the hustle.
Starting a business online these days is also surprisingly cheap. If you’re dying to get out there and start making money online, but you think that surely you’ll need thousands in the bank first, we’re about to prove you wrong.
How To Start An Online Business
Now, is $127 all you need to build a massive conglomerate right away? Probably not. And some of these price tags are going to vary, depending on the type of business you’re looking to get into.
But with $127 or less, you can get the ball rolling.
With $127 or less, you can get the idea out of your head and into the real world.
With $127 or less, you can start your entrepreneurial journey.
Here’s how to start an online business with $127 or less.
Come Up With a Great Idea for a Business ($0)
The great thing about coming up with a million-dollar idea is that it’s completely free.
In fact, ideas themselves are dirt cheap, and whether you have a million of them or only one, all you really need is a pen and piece of paper in order to start working on your business idea.
Even if you happen to be a little short in the ideas department, there are a few places you can go to find some inspiration for your startup idea.
Take a look at what problems you’re facing right now in your life, whether it’s something that annoys you a little bit, or something that can potentially uproot your entire day. See if you can find a solution to that problem, if you’re experiencing this issue, you can be pretty sure there are others out there who are going through the same thing.
If you can save those people even five minutes of time, if you can make that process even a little bit easier, then you have yourself a profitable business idea right there.
Once you have an idea, it’s time to figure out what the business is going to look like. It’s time to break out the trusty Business Model Canvas.
If you’re a longtime reader of Foundr, you’ll be familiar with this simple tool. If you’re not, the business model canvas is basically a worksheet that helps break down the nine essential elements of your business. It’ll allow you to take an objective look at your business idea and consider areas that you might not have thought about before. Its a key part of learning how to start an online business.
With nothing but a pen and paper, you can start understanding what your business is all about, how much money you can potentially make, and what you need to do to make it a success.
OK, so technically you have to buy a pen and paper, but maybe you can steal some from your day job’s supply cabinet. Your secret’s safe with me.
Validate Your Business Idea ($10)
Once you’ve got an idea, it’s time to start spending a little of that $127 and see whether or not your idea is actually worth something or if it’s a dud.
As per the lean startup methodology, you’re going to want to create a minimum viable product, or MVP, and use it to validate your idea.
A common mistake that many people make when it comes to validating their business idea is that they’ll need to invest hundreds or thousands of dollars developing an MVP. You actually want to spend very little at this stage.
Whatever your idea of an MVP is, it can actually be even more on the minimum side, and can often be covered by the cash balled up in your pocket.
That isn’t to say that you won’t be building more MVPs as you go, after all an MVP is a process that you’ll be repeating over and over again as you grow.
But for starters, the two most cost-effective validation techniques, which also happen to be the most effective, is to either build a website or do the coffee shop test.
For the former, do a smoke test by building a simple landing page advertising your product and what it’s all about. You don’t need a ton of bells and whistles; all you need to know is whether or not people will actually pay money for it.
With $10 a month, you can set up a simple website (more on this a little later) and all you have to do is see how many people are interested in what you have to offer.
Just take a look at the landing page we did for Instagram Domination.
Nothing fancy, just a simple video explaining what we had planned for Instagram Domination and a button for people to click on if they were interested. Simple validation.
But my personal favorite validation method for under $10 is to do the coffee shop test.
Just head out to your local cafe, set up a small sign saying that in exchange for a coffee all you need is 10 minutes of someone’s time, and spend the whole day talking to people. All you really need are some concept photos, even a simple slideshow, and then talk to as many people as you’d like to gather valuable information.
You can find out what they like about your product, what they don’t like, how much they’d pay for it, and tons of other great info. It’s an insanely cheap and easy method to validate an idea.
If you happen have a little more room in your budget and you’d like to splurge, offer them a muffin too.
Like go all out and spend that extra $3 on a double-choc
Get a Library Card ($0)
Now the cost of this one might vary depending on the library near you, but in my experience, a membership to your local library is always one of the best investments you can make. And most of the time, they are free.
To put it plainly, you can’t be an entrepreneur, let alone start an internet business, unless you’re ready to learn.
There’s nothing more valuable to an entrepreneur than knowledge, and a library card gives you access to a treasure trove of information.
You can use WorldCat to find a library near you
And even if you’re not a big fan of reading print books, let’s not forget that we’re in the midst of the information age, when all the information you could possibly want is at your fingertips. There are tons of information out there that you can access for free that’ll teach you everything you need to know about starting a small business.
Just on the Foundr blog, we’ve got full articles detailing how to do a product launch, in-depth guides on how to grow your Instagram account, the best ways to come up with a startup idea, and so much more. The best part is that it’s all free.
If you’d rather learn directly from game-changing entrepreneurs themselves, then just tune into the Foundr Podcast, where we speak with entrepreneurs like Gretta Rose van Riel on influencer marketing, or how to become a master networker like Jordan Harbinger.
The best entrepreneurs are always the most curious ones, and getting a library card, or the other free alternative of your choice, can open up a whole world of information for you. And if you make sure to actually return your books on time, then you don’t have to worry about late fees either!
Create Some Buzz With Social Media ($0)
No matter what kind of industry you’re in, you’re going to have to learn how to use social media as part of your marketing. Whether it’s LinkedIn, Facebook, or Instagram, you’ll need to master at least one of these platforms.
Generally speaking, though, the rules for social media promotion are similar across platforms. You have to make sure that you’re posting quality content, and that you’re posting consistently.
How you define quality content depends on your audience and what they find valuable. At Foundr, we’ve found that our Instagram audience likes motivational quotes and updates about what’s going with the Foundr podcast.
On the other hand, with our Facebook audience, we’ve found videos to be particularly powerful in terms of bringing in new followers and engaging our existing followers. It’s also a great platform for us to promote the latest post on the Foundr blog, and the occasional motivational quote as well.
The great thing is that creating your own professional-looking social media is incredibly easy with a tool like Canva, which you can use by signing up for free. Even with their free version, you have access to thousands of templates and images.
The second part of the equation is consistency, as you can’t build a strong social media following without consistency. While you can post onto your preferred social media platform manually, it can end up becoming a real chore.
We always recommend using a social media scheduler tool of some sort.
There’s a ton of great services out there that you can use once your brand is more established and you can afford to access features like built-in analytics, managing multiple channels, and link trackers.
Set Up a Website for Your Business ($30-$60)
Now this is the most expensive part of starting an online business, but you should be able to build yourself a website for $60 or less.
Whether you’re simply setting up a website to create an MVP landing page, or you’re creating a blog, you’re going to need to set up a homepage of some sort that you can direct your audience to.
Depending on what hosting service you decide to go with, the initial cost can potentially be as low as $5 a month. On average though, purchasing a single domain name and setting up a basic WordPress site shouldn’t cost you more than $10, leaving you with just enough to invest into your site’s design. Here’s some more info on what to look for in a good web hosting provider.
The key thing to remember is that at this point you’re not trying to build a fantastic, well-developed website just yet. All you’re trying to do is create an MVP website that you can start directing your customers and potential audience to.
It doesn’t have to be the most impressive looking thing ever. Just take a look at what Foundr’s first website looked like:
Remember that the goal here isn’t to build the most amazing business ever in just one night. The goal is to get the ball rolling.
If you want a bit more polish on the design of your site and you’re willing to spend a little more, then I’d highly recommend that you check out marketplaces like Creative Market or ThemeForest and purchase a template or design that you like.
For those who are getting into the world of ecommerce or looking to start their own online businesses, then do be sure to check out our recent in-depth reviews of ecommerce platforms like Shopify, Big Cartel, and Squarespace, which offer free trials.
Shopify and Squarespace each offer a 14-day free trial of their services, which is more than enough time for you to get a basic version of your store up and running as a test. Other sites like Big Cartel allow you to use their service for free if you have fewer than five product listings.
Cultivate Leads With Email Marketing Software ($10-$20)
If I’ve send it once, I’ve said it a thousand times, your email list is one of, if not the, most important asset you have when growing an online business.
Your email list is going to be your most direct form of contact with your audience. It’s been proven to be the most effective marketing channel available to you, and for years, email marketing has consistently outperformed every other digital channel when it comes to acquiring sales, leads, and customers.
People on your email list are not only more likely to be customers, but you can use the power of email to help nurture a lead by regularly sending them quality content through something like a newsletter.
We personally use Infusionsoft at Foundr, because we have a subscriber list of over 300,000 people. For someone just starting out, however, there are several tools out there that you can use to get your email marketing into shape and even create automated email campaigns.
MailChimp is by far one of the most popular choices, offering you enterprise-level marketing automations, along with features like analytics and data reports for free if you have fewer than 2,000 subscribers.
Although if you already have built yourself a strong audience, whether through your content or your social media, then you can dive straight into their “Growing Business” plan, which gives you access to even more features for just $10.
If you’re willing to spend a little more, and I’m talking about $5 more here, I’d personally recommend GetResponse with their most basic plan costing you $15 for up to a thousand subscribers. Even then, they also offer a generous 30-day free trial, more than enough time to get your business up and running.
Besides the two listed, there are dozens of great services out there that you can use to start building your email list for cheap or even for free!
Build Your List by Creating a Lead Magnet ($10)
While this isn’t strictly necessary, I would highly recommend that you invest a little cash into creating a lead magnet to help you grow your email list quicker.
A lead magnet is basically a piece of content that you give away for for free to potential customers, in order to capture their attention and convince them to hand over their contact information. Most people aren’t going to sign up to your mailing list just for the sake of it, so a lead magnet allows you to ask for something in exchange for something your audience finds valuable.
A lead magnet can be anything from a YouTube video, to a cheatsheet, a webinar, or even an ebook. As long as it’s filled with information that your audience wants, you can promote your lead magnet anywhere in order to get more signups to your list.
To keep things simple, though, I’d recommend creating an ebook. You really can’t go wrong with the trusty ebook, as it’s a fantastic way to provide your audience with quality content, introduce them to your brand, and establish yourself as an expert in your space.
While there are certainly expensive services out there that you can use to create your ebook, you can actually do it yourself for free with tools like Google Docs, Microsoft Powerpoint, and Canva. Armed with nothing but these tools, you can easily create a well-designed eBook lead magnet.
But if you want your eBook to stand out from the crowd, and you really do, then take your $10 and hire someone to create you a great-looking ebook cover on a marketplace like Fiverr.
Design is extremely important when it comes to creating a high-converting lead magnet, so I’d definitely recommend spending a little on an eye-catching design.
I’d also recommend getting a second set of eyes to go through your writing as well, just to make sure that there aren’t any grammatical errors or spelling mistakes. You can simply ask a friend to do this for you, or if you don’t mind spending a little bit more then you can find a professional copy editor to do it for you.
Keep it simple, and keep it lean.
Learn from Entrepreneurial Experts ($15-$20)
No matter how much free information there is out there in the world, nothing really beats learning directly from the experts themselves. But in order to do that, you’re going to need to be able to get in touch with them first.
There’s a variety of ways you can get in touch with influencers, or just get on their radar, which you can read about in this article: The Ultimate Guide To Finding, Reaching, And Interviewing Top Influencers
However, I’ll be delving into another tactic you can use to get in touch with experts and learn directly from them. Which is where the $15-$20 comes into play.
Now that might not seem like a lot, but when used wisely it can help you meet face-to-face with world-famous entrepreneurs like James Altucher, Seth Godin, and Tim Ferriss.
There’s bound to be at least a dozen different events going on in your city no matter where you live, and participating in these events not only gives you the opportunity to develop your network and relationships. But every event brings you one step closer to learning directly from an expert.
You might not know this dear reader, but I wouldn’t even be working at Foundr if I hadn’t happened to be at event where Nathan was invited to speak.
First photo Nathan and I took together when we first met
The $15-$20 is to cover the ticket price, but the majority of these events are usually free. Keep an eye out on the speakers and guest lists and see if there’s anyone you’d like to connect with. Being in the same room with them will make it that much easier to develop a rapport and establish a relationship.
If you happen to have a bit more free time, then reach out to the event organizers and see if you can volunteer or help in any way. That way you’re guaranteed a backstage pass and a higher chance of striking up a conversation with an expert one-on-one than if you just walked in through the door.
If you need some guidance on how to connect with influencers, download our free step-by-step guide, “How to Connect with Influencers & Land Interviews.” We even include the exact “copy & paste” emails we used to contact Sir Richard Branson, Arianna Huffington and many more A-players.
How To Start An Online Business?
Alright, so let’s do a price breakdown:
- Come up with a great business idea. Ideas are cheap, just get some pen and paper and you’re all good. Total so far: $0
- Validate your business idea. ($10) Getting a proof of concept is not an expensive procedure as long as you follow one, or both, of the techniques listed above. Total cost so far: $10
- Get a library card. ($7) Head to your local library and sign up for a membership, if it costs you more than a couple of dollars I’ll be surprised. Total cost so far: $17
- Create some buzz with social media. ($0) There are a ton of free resources out there that you can take advantage of to start making your presence known online. Total cost so far: $17
- Set up a website for your business. ($30 – $60) Go to a hosting service, purchase a domain, find a nice website theme or find a designer. Setting up your first landing page is quick, easy, and most importantly, cheap. Total cost so far: $77
- Cultivate leads with email marketing software. ($20) You’ll want to start building your email list as soon as you can. Take advantage of the free trials and inexpensive plans on offer so you can get started. Total cost so far: $97
- Build your list by creating a lead magnet. ($10) An eBook is as low-cost as you get when it comes to lead magnets. You can easily find someone to create a great-looking design for you for $10 or less. Total cost so far: $107
- Learn from entrepreneurial experts. ($20) The average ticket price for your local entrepreneurial event is $15-$20, the knowledge and connections you get from it though? Priceless. Total cost so far: $127
And there you have it, for $127 or less you can start building your business. Will you need to invest more time and money into your business as it grows though? Most definitely.
But with $127 you can open up shop and get the ball rolling. It turns out you don’t need a million dollars to start a million dollar business.
How much did you invest in your business? Have any other money-saving tips? Let us know in the comments below!