In a perfect world, you’d have a large savings account at your disposal to help launch your business idea. But, sadly, that’s not usually the case. However, small-business owners often start their business with little more than heart and hard work. You can do the same.
So how can you start a business if you don’t have a nest egg? There are many ways to find a great business idea and start your business without money.
Find a free or low-cost business idea
First, identify your business idea. If you’re starting your business with no money, you’ll need to pick a business that doesn’t have significant start-up costs. You’ll also need to plan for your business to be a solo endeavor, as you won’t have the funds to hire employees until your business gets off the ground.
Many business ideas are free to start or have low start-up costs, including:
Freelancing
Freelancing allows you to create content or complete projects for companies on a contract basis. You’ll usually be paid on a per-project or per-task basis, depending on the type of work. Freelancing is common in creative sectors like writing, design and programming. To start freelancing, you’ll need access to a computer and the internet.
Social media influencing
Building a following on social media can come with financial perks, like direct sponsorship or gifts from brands. If you’re interested in becoming a social media influencer, create accounts on your preferred platforms and post regularly to attract followers. Having a personal brand or content focus like cooking, fashion or travel could accelerate your growth. To start working as an influencer, at minimum, you’ll need a computer or phone and internet access. You may also want extra equipment like lighting accessories, a microphone, video/image editing apps and a phone stabilizer for recording.
Home organizing
If you’re naturally organized, consider selling your skills as a service. Home organization is big business, and customers are willing to pay to outsource the work of tidying and purging their possessions. Home organizers work in a customer’s home, providing advice and assistance to create an uncluttered space. To get started as a home organizer, you’ll need personal protective equipment (masks and gloves) and labeling equipment (markers, tape or a label maker).
Dog walking/pet sitting
If you love animals, this might not feel like work at all. With the right marketing and enthusiastic word-of-mouth referrals, you can build a list of regular customers and turn dog walking or pet sitting into a profitable business. You can start a dog walking/pet sitting business for free, but you might find it helpful to have extra supplies on hand like leashes, food/water bowls and waste bags. Paying for liability insurance would also provide coverage against a range of incidents and give you peace of mind.
Related: The best small business insurance companies, chosen by CNN Underscored Money editors
Dropshipping
Dropshipping involves selling products online without having to manufacture or store them. Dropshippers receive orders and then coordinate with suppliers to ship the items to the customer. Starting a dropshipping business might be for you if you’re interested in running an online business but don’t want to directly manage a large inventory. To get started with dropshipping, you only need a computer and internet access, but you might find it helpful to spend on paid ads to build a customer base.
Tutoring
Tutors help students of all ages with homework, projects or prep for standardized exams. Consider tutoring if you like teaching or have expertise in a particular subject area. You can tutor in person or online. Be sure you have a computer and internet access if you want to get started with online tutoring.
Consulting
A consultant offers advice to companies or individuals on a project basis. If you have experience in a specific industry, you could offer your services as a consultant to share your knowledge and help others succeed. To start consulting, you need a computer and internet access. You might find time-tracking tools or other reporting software helpful depending on the type of customers you take on.
Photography
Photographers capture memories by taking pictures for weddings and family events. If photography is already a hobby, you won’t have the start-up cost of purchasing a camera, memory cards, tripod or camera bag. Consider monetizing your hobby and offering your photography services as a business.
Etsy selling
Through Etsy, you can sell your handmade crafts, jewelry or clothes to a worldwide audience. If you love to create (or resell), you can build an Etsy storefront to sell your items and showcase your talents. If you already have crafting or hobby supplies and a phone, your only start-up costs might be things you need when photographing your items, like a jewelry stand or decorative background.
Reselling
If you love to thrift and have an eye for a good deal, you could start a reselling business. Resellers find unique or valuable items in thrift stores or flea markets and resell those items at higher prices using online platforms. You can even get started for free by reselling your own collections.
Adam Pugh, owner of VinylJunction on Etsy, started his reselling business with no money by selling his own vinyl collection. “I had a lot of records, and knew I wanted to get into reselling, so I started learning by selling part of my own collection.”
Once his customer base grew, he expanded into selling vintage books, cassettes and record boxes as well, all thrifted and carefully restored for resale.
“For resellers, it’s important for each item to be in the best possible condition and for customers to feel confident in their purchase. For me, it’s worth spending money on specialty cleaning supplies and item restoration, like new cases for vintage cassettes. I also send stickers and bookmarks in each package, so receiving a purchase feels like opening a gift to the customer. Those small business expenses make a big difference in the customer experience.”
Develop a business plan
Once you’ve chosen a business idea, it’s time to write your business plan. A business plan is a roadmap that explains your plan to structure and run your business. It also describes how you plan to grow your business in the future.
A business plan is a great way for you to think through your business in detail right at the beginning. It can be a useful document to show to potential investors, who’ll want a lot of information about your business before handing over any investment money.
Business plans can be lengthy and detailed or just a quick overview of your vision. Don’t get overwhelmed if you don’t have all the information or answers right away; you can start your business plan as a brainstorming document and refine it further as your business grows.
According to the Small Business Administration, business plans often include information like:
Vision, mission or summary
Provide a quick overview of the business and why you think it’ll be a success. If you have a mission statement, include it here.
Company description
A company description is a detailed overview of what your business does. What problems are you solving? What competitive advantages do you have that will make your business a success?
Market analysis
Here you can describe the research you’ve done into your competitors, customers and the market in general. How will your business stand out from similar businesses?
Company organization
At the beginning, your company may have a very small leadership structure. Maybe it’ll just be you. But if you plan to expand and bring on co-owners or managers to help you run your business, you can explain your vision in this section.
Service or product line
What are you selling? Is it a service or a product? Here you can explain in detail what your business will sell.
Marketing and sales
How will you make your potential buyers aware of your new business? This section of a business plan allows you to think through your plan for marketing your product or service and your plan for sales. If you’re starting a small solo venture, you might start with social media. List any sites you plan to have a presence on and how you plan to handle purchase requests, payment and shipping, if applicable.
Related: The best e-commerce platforms, chosen by CNN Underscored Money editors
Funding
If you anticipate giving your business plan to potential investors, this is the section to sell them on your business idea. Explain what funding you’ll need and why you need it — give a convincing pitch on why they should invest with you.
Explore your funding options
Just because you don’t already have a nest egg ready to spend on your business idea doesn’t mean you can’t access money. There are a variety of ways to fund your business.
Review the notes you made in your business plan to get a sense of how much money you might need (if any) to get started, and then consider the following options.
- Use income from your day job: If you keep your day job while you start a business on the side, you can dedicate part of your paycheck toward your business. As your business grows and starts generating income, you can gradually reinvest that income until your business is self-sustaining.
- Borrow from friends/family: Once you have a solid business plan in place, consider pitching your idea to friends or family. They might be interested in working on the business idea with you or investing money in your business. Be sure to put any financial agreements in writing — even with family — so that everyone is on the same page about repayment expectations.
- Crowdfund: There are several online platforms available to help you crowdsource funding, including Kickstarter and Indiegogo, among others. These sites allow you to present your business idea to a large audience and ask for small donations from a large number of people. Keep in mind that crowdfunding sites usually have fees, terms or conditions that come along with the money, so choose one that works well with your business idea and financial situation.
- Loans: If you have good credit and/or items that can be used as collateral, you could apply for a loan to start your business. Banks and credit unions offer many loan types, each with different repayment terms. Many loans will require you..
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