Finding a decent concept is half the fight when it comes to launching a business. It's being paid for by the other half.
You don't have to give up your dream of being an entrepreneur just because you have a wonderful company concept and little money. There are several methods to establish a business without spending any money. All you need in most circumstances is an entrepreneurial attitude, which includes patience, hard effort, innovation, and a desire to try new things.
This tutorial will show you how to start a business on a shoestring budget. What is the goal? You may start producing money and then reinvest in expansion afterward.
How to Start a Business With No Money
Here's how to start a business with little money, from verifying your idea to making your first dime.
1- Find a Free Business Idea
The development of a concept is the first step in beginning a business. If you're not sure what that is, here are six innovative business ideas you can start without spending any money.
Sell Your Services
Selling your services is the simplest method to start a business with no money. Even if you haven't mastered a certain skill, knowing how to do something better than the ordinary person allows you to create a business that benefits them. So, begin by examining the skills you possess that are superior to those of others. Make a service out of that skill set, such as:
- Virtual assistant
- Freelance writing
- Handyman services
- Social media marketing
“Because you don't yet have the money, start with what you do have, such as your experience, knowledge, abilities, and resources.” When you just have $0, these are the smartest investments you can make”Kei Nishida, owner of Japanese Green Tea Co
If you don't have a lot of expertise, don't count out starting a service firm. Your time is valuable; busy people frequently pay someone else an hourly fee to complete jobs they don't like (or don't have time to complete). This covers jobs such as:
- Dog walking
- Car washing
- Personal shopping
- House or pet sitting
Many entrepreneurs dismiss these low-cost company concepts because they believe they will only be able to make minimum payments. However, service-based firms can be profitable. Within two years of starting their firm, some freelance writers may earn six figures per year. Within a year, one window cleaner had earned $250,000.
Dropshipping is a popular business concept for entrepreneurs who want to establish a small business without investing any money. Simply set up an online store and select a dropshipping provider such as DSers or AliExpress. When a customer places an order, your e-commerce platform sends the information to your supplier. It is their responsibility to choose, pack, and ship your customer's purchase.
“I didn't have much spare cash as a master's degree student, so I decided to learn how to dropship.” Because it wasn't discussed as much as dropshipping on your store or into Amazon, I chose to dropship on Wish”Zaid Shahatit, founder of Fighthaus
The nicest aspect about dropshipping is that it can be done on a shoestring budget. Vendors will only charge you for inventory when you sell it, rather than buying it before it sells and holding it in a costly warehouse. Begin with a Shopify Lite subscription for $9 per month.
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Print On Demand
According to estimates, the worldwide market for customized products is approximately $38 billion. With a print-on-demand business, you can take advantage of that possibility even if you don't have the capital to invest in inventory up front.
The technique of private-labeling things (such as tote bags, t-shirts, or hats) and selling them on a per-order basis is known as print on demand. Suppliers like Printful will print your designs on inventory, send them to the consumer, and then bill you for their services when you've received payment from the buyer.
“We began with a print-on-demand business, which required no upfront operating expenditure.” To begin with, we were essentially just a website to prove the concept”Katheriin Liibert, co-founder of #muhoov
Starting this sort of company has low costs, similar to dropshipping because you only pay for goods when a consumer purchases them. The print-on-demand concept also has no storage expenses, making it a viable alternative if you're wanting to establish a business on a shoestring budget.
Sell Handcrafted Goods
Do you want to establish a small business with a more hands-on approach? Sell homemade products through your online store or marketplaces like Etsy to turn your pastime into a second job. This can include things like:
- Woodworking projects
“We began out in a garage, buying powders from websites and collecting mixing jars from random places.” Our initial sample came in the form of powder in Ziploc bags and a funnel, and it was given by hand”Carl Starkey, founder of AWSM Sauce
Katrina Bell is an example of an entrepreneur who used this strategy to start a firm with no money. Katrina opted to sell candles because they “do not have a high learning curve, do not require any government control and regulation, and can simply be created in larger and larger quantities,” according to Katrina, who is now the owner of The Copper Bell.
After being laid off at the outset of the epidemic, Katrina's side business transformed into her full-time employment. “I instantly decided to fully push my business online with Shopify,” she recalls, “and after a few months of full-time labor, I saw significant growth.” “In the autumn of 2020, sales took off, and I'm now running the business out of a professional manufacturing facility rather than simply my house.”
Bonus: When you're first starting, bundle your homemade products into a subscription box to generate some additional income. The regular revenue you'll get from recurrent purchases may be re-invested in the creation of new goods, providing you with initial capital without the need for outside cash.
“We've re-invested the majority of our revenues on merchandise and advertising.” We're attempting to grow at a healthy rate so that we won't need to rely on outside capital”Francois Mathieu, co-founder of Hojicha Co
Sell Digital Products
Digital items may be created and sold using just an internet connection, making them an excellent method to start an online business without spending any money.
Begin by picking a subject about which you know more than the typical individual. Then, conduct some web research to find out what issues individuals in the area are facing. Make a digital product out of your solution, such as:
- Online courses
- Worksheets or templates
Digital products have the advantage of being scalable. Using the Digital Downloads app on Shopify, you may create them once and sell them numerous times. It's no surprise that so many entrepreneurs employ digital items to generate passive revenue.
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Become a Social Media Influencer
Over the last decade, the term “influencer” has taken on a life of its own. More individuals than ever before are generating money through social media. All it needs is a little patience, a little social media know-how, and some fascinating material to share—all of which can be done for free.
Begin by establishing a presence on a prominent social media network, such as Instagram or TikTok. But hold off on the hard sell for now. When people know, like, and trust what you have to say, they may be monetized.
This opens up options to gain money later on, such as:
- Affiliate Marketing. Promote your favorite brands' items and earn a percentage of your followers buy them.
- Blogging. Through your blog, you may sell ad space, offer sponsored material, and promote digital items.
- Selling Merchandise. Add your company's name, logo, or slogan to the goods. It will be paid for by loyal followers.
This method has been utilized by entrepreneurs to generate funds for a product-based firm. Emma Chamberlain, for instance, began uploading movies to YouTube in 2017. Chamberlain Coffee, her first direct-to-consumer business, was created just two years later to capitalize on her popularity.
2- Write a Business Plan
A business plan is a roadmap for how you'll expand your company. Your content will be determined by the low-cost business plan you've chosen. But, in general, it entails:
- Company description. A summary of the business concept and legal framework for the firm you're intending to launch.
- Market research. Include demographics relevant to your target market. Will you sell directly to consumers or through wholesalers, for example? How does this stack up against the competition?
- Products and services. You'll profit if you sell one of them. Describe the product or service and why people will want to buy it.
- Marketing strategy. Explain how you'll use social media, advertising, or email marketing to promote your company and reach your target market.
- Logistics and operations plan. What strategy do you plan to use to get your product or service into the hands of paying customers? Dropshipping vendors, third-party logistics businesses, or printing labels yourself are all possibilities.
- Financial plan. Make a plan for how you'll make (and spend) money. Include your financial requirements, costs and expenses, a balance sheet, and projected cash flow.
Do you want assistance in composing yours? To help you get started, here's a free business plan template with samples.
3- Choose a Business Name
The next step in launching a company is to come up with a name. This should be memorable, catchy, and, most importantly, not previously taken. If you're stumped for a name, try our free company name generator.
Remember that the name you pick for your company will be with you for the rest of its existence. To minimize headaches down the future, be sure it's one you enjoy—and can imagine scaling with you.
Secure online assets that match the business name once you've discovered yours, such as:
- A domain name, such as BRAND.com
- Social media handles, such as facebook.com/BRAND
4- Launch a website
Until now, the process of founding a firm from the ground up has been completely free. While you may continue on the $0 route, an online store is the best investment you can make. Your website is your new business's virtual home, where you may educate potential clients about the items or services you offer.
If you're on a budget, Shopify Lite options start at $9 per month and include a 14-day free trial with no credit card necessary. That's a little sum to spend for a professional-looking website that will assist you in making your first sale.
5- Validate Ideas with Preorders
It takes a lot of trial and error to start a business from the ground up. Some of your ideas will be a smash, while others will not be as well-received as you had hoped. Preorders can help you reduce risk by allowing you to test your ideas.
Pre-ordering works by accepting money for things that have yet to be made. It gives you money upfront to invest in manufacturing, creates buzz, and gives you a sense of exclusivity. People are attracted to the chance to experience something new before the rest of the world.
Remi Martins is an example of a businessperson who has taken this strategy. Remi decided to create an Instagram page to showcase the types of products she wanted to sell after coming up with the idea for Natural Girl Wigs while working a full-time job: “This is how I got feedback that people are interested in the product and there was a market for wigs specifically made for natural-hair lovers.”
Remi went with the presale option, working with a hairdresser who “agreed to produce it with the prospect of getting compensated if someone purchases the product.” Remi followed up with an iPhone photography shoot, which he shared on his new Instagram account.
“The first sale arrived, followed by the second. “We sold 50 things in the first 60 days of a company by relying on consumers to place orders and then manufacturing the product with their money,” Remi explains. “I ultimately put $1,000 into the business to buy products and sell them,” she says.
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6- Source Funding to Grow
If you don't have any money to start a business, you'll most likely need to commit a substantial amount of time/energy or seek advice from a support network. Even if you're able, to begin with, with low resources, if you want to scale, you'll need cash.
“We were so convinced in the items that we decided to combine the money we had accumulated over the prior eight to ten years from our retail consulting firm.” We decided to go all-in and haven't looked back. This money was used on the initial phase of product development and production, as well as social media promotion”Bindu Sharma, founder of Vya Naturals
According to research, 29 percent of small enterprises fail due to a lack of capital. Some businesses want starting capital—money they may put into inventory, marketing, or hiring their first employee—in order to survive and develop.
There are a variety of ways to fund your new company endeavor, including:
Crowdfunding. This kind of fundraising collects little sums of money from a big number of people. Use sites like Kickstarter, Crowdfunder, and SeedInvest to get average people to invest in new enterprises. In exchange for their contribution, so-called “backers” receive benefits such as pre-order access or stock.
Friends and family loans. Do you have a personal support system in place to help you with your new business venture? Request that they put money into your business. The majority of people will donate in exchange for a higher return (plus interest) or a minor equity position.
Small business loans. Larger sums of money can be obtained from a lender, such as Shopify Capital, to be used for payroll, inventory finance, or marketing. It's important to keep in mind that loans are only a possibility until you start to notice results. Before you're accepted, you'll almost certainly need proof of income—proof that you'll be able to repay the loan.
Capital investors. Angel investors and venture capitalists are examples of them. Both give funds to small firms in return for a share of the company's ownership. (Think of transactions like those on Shark Tank).
Small business grants. Small enterprises are offered one-time lump money payments. Most don't require money, but you'll have to complete certain requirements before obtaining any funds. Some grant issuers may place restrictions on how the money can be utilized.
” In 2019, my sister and I launched our Shopify e-commerce brand, every, by obtaining a Chase Bank 0% APR business credit card. It had a credit limit of $12,000 available to it. We utilized that money to cover the costs of forming an LLC, registering a domain name, and hosting our website, as well as our Shopify theme, recurring fees, logo design, packaging, raw materials, production, and marketing. We gradually paid off our credit card debt over our first year in the company”Shokouh Hatch, co-founder of everlur
“I had enthusiasm and a real interest in shooting my children using a beginner's DSLR camera that was donated to me,” Alicia Ho said when she initially launched her photography business, Precious One's Photography, with $0 in her pocket. Friends and relatives began to notice my work, and I began to take on clients and earn a tiny bit of money.”
Alicia “knew it was time to take my business to the next level” when she reached that point. As a result, she sought out a local non-profit that provided loans and scholarships to young entrepreneurs. “It was the finest move forward for my business since I was able to get a $10,000 loan as well as qualify for a two-year mentoring program,” she adds.
You Don't Need Money to Start a Business
If there's one thing this tutorial has taught you, it's that you don't need money to start a business.
Many entrepreneurs have built extremely successful firms from the ground up, frequently with no outside capital and while working a full-time job. You'll go further than you think with a fantastic concept, commitment, and entrepreneurial spirit.
How to Start a Business FAQ
Print on demand is a business strategy that may be started with little or no money. Create a bespoke design with free online graphic design tools and add it to items with a service like Printful. When a buyer orders the goods, you'll simply have to pay for the production charges.
Because you only pay for merchandise when a consumer buys it, dropshipping is one of the simplest methods to start a business without money. There are no unnecessary product production costs or warehousing fees. With Shopify Lite, you can get started for as little as $9 per month.
In the first year, the average small company owner spends $40,000. However, employing business methods such as dropshipping, print on demand, and selling digital items, it is feasible to establish a business with little money.
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