If you have a killer business idea, want a side hustle, or want to be a full-time entrepreneur, you don’t need thousands of dollars in startup funds. There are plenty of business ideas and ways to get a business up and running on a budget. Start a business for under $500 with these helpful tips.
Choose a business with low startup costs
The first step is to confirm your business idea. It’s best to identify what skills, interests and talents you have and convert them into an actual business. Choosing a virtual office set-up will also save you on rent costs and give you the flexibility to reach wider audiences. Examples of businesses with low startup costs include:
- Online print-on-demand businesses
- Virtual educator or trainer
- Cleaning services
- Repair services
- Online consulting
- Marketing services
- Vinyl cutting business
- Event planning services
- Career coaching
- Soap making business
Create a business plan
Every business needs a business plan. It helps you identify startup costs, competitors and target audiences. A business plan also keeps your business on track financially and allows you to seek funding and measure growth. Need help writing one? You can use a free version of business plan software at enloop.com.
Legitimize your business
Once you’ve chosen what type of business idea you want to start, you have to choose a name. Ensure no other incorporated business has the same name. Other things include:
- Legally incorporate and register your business.
- Register for a Tax ID Number or a Federal Employer Identification Number (EIN).
- Complete all license and permit requirements.
- Get business insurance, if needed.
- Open a business bank account.
- Select a way to accept credit card payments.
The items on this checklist will be the main costs you have to start your business. So, getting this done first will also help you budget the remaining funds.
4 tips to save money as you launch
1. Do what you can yourself
While it may take time to learn new skills, doing as much as you can yourself will help you save significantly. Examples include:
- Build a simple website using a free or low-cost website host such as Wix and Ionos.
- Make fliers and social media content using easy design programs such as Canva.
- Set up business profiles on Yelp and Google My Business.
2. Save on business essentials
Save as much as possible on costs for supplies, equipment and software. For example:
- Keep your inventory minimal until you get paying customers.
- Try borrowing equipment from friends.
- Use resources at local libraries, such as computers, printers and scanners.
- Use free versions of software, such as Later, for social media content scheduling.
- Barter for services, such a business card printing, by offering a service in return.
3. Leverage “free” marketing methods
Word-of-mouth marketing is one of the best examples of free advertising. Ask friends and family to spread the word about your business. Other “free” marketing methods include:
- Choose a social media platform your audience frequents, and create content people are likely to like and share.
- Join networking organizations or meetup groups to pitch your business.
- Answer questions on platforms such as HARO (help a reporter out) to increase your credibility and links to your website.
- Implement an incentive for referrals.
4. Make strategic hiring decisions
There will be a point where you need additional assistance. Make sure you hire people who are driven, productive and can wear multiple hats. Also, consider hiring interns from local universities. If you need to speak to a lawyer, you can set up free consultation meetings or sign up for sites such as JustAnswer.
Ideas for funding
Having only $500 doesn’t mean you can’t secure additional funding elsewhere. You can find investors or business partners at networking events or on sites like AngelList. There are also grants, free services and loans available for small businesses. For example:
$500 can be enough to start a business
With the right business idea, efficient budgeting and implementing the suggestions in this article to save costs, you can start a business for under $500. Expect to invest a lot of your time to get it up and running. However, as you attract customers and grow, you can start to hire and outsource more tasks.