Business Finance

Starting a Business with No Money: How to Begin

Starting a business requires a certain amount of planning, which includes determining how much capital you’ll need. It’s possible to start a business with little or no money, but doing so can test the limits of your creativity and commitment. If that’s your goal, and you intend to grow it on a shoestring, it’s helpful to know what options you have. 

Overcoming the Challenges of Starting a Business With No Money

An undeniable truth about starting a business is that money matters. A 2022 survey from Skynova, a website that aims to help small businesses get paid faster, asked startup founders to name their top reasons for failure. Forty-seven percent cited a lack of financing, while 44% said that they simply ran out of cash.

Starting a business with no money or minimal capital can limit what you can do to grow and scale in the early stages. For example, when you have no money it can be more difficult to:

  • Hire employees or support staff
  • Purchase necessary inventory or supplies
  • Advertise and market your business

How impactful a lack of money is can depend on the type of business you’re hoping to start. If your budget is limited, then you might consider what kind of businesses you could start with zero investment. 

Low-Cost Business Ideas

Some businesses cost more to start than others. You might need $100,000 or more to open a restaurant, for example, while you may be able to get a food truck up and running for a fraction of that amount. 

The best businesses to start when you have no money are ones with minimal upfront costs. They’re the kinds of businesses you might be able to start from home with nothing more than a laptop and an internet connection. 

Here are some of the best low-cost business ideas you might consider.

  • Content creation for online businesses
  • Freelance writing or blogging
  • Virtual assistant business
  • Social media manager or consultant
  • Online course creator or online tutor
  • Online bookkeeper
  • Dropshipping
  • eBay reseller
  • YouTube or TikTok creator
  • Graphic designer
  • Video editing

These are all businesses that you could run from home, without having to spend a lot of money. There are also some businesses you can start offline that don’t require startup cash. 

For example, you might start a dog-walking or pet-sitting business, become a tutor for local students, or teach art or music lessons. These are all businesses that allow you to leverage your skills to make money without requiring you to spend any money. 

Creative Financing Options

There are a number of ways to finance a new business without having to spend any money yourself. Comparing different options can help you to decide what might be right for you. 

  • Small business grants. Small business grants provide money to support entrepreneurship, and unlike a loan, it doesn’t need to be paid back. The SBA supports a number of grant programs, including ones for minority-owned, women-owned, and veteran-owned businesses.2
  • Crowdfunding. Crowdfunding platforms allow people to contribute money to campaigns in small amounts in order to help entrepreneurs launch their businesses. Some of the most popular platforms for seeking support include GoFundMe, Indiegogo, and Kickstarter. 
  • Microloans. If you’re comfortable borrowing to fund your new business, you might consider a microloan. The SBA’s microloan program allows you to borrow up to $50,000 to start a business and you can repay it over a period of up to six years.3 
  • Credit cards. Business credit cards can help you to pay for the things you need to start or run your business and they can be easier to qualify for than loans. Depending on which business credit card you choose, you might be able to earn cash back, points, or travel miles on your purchases. 
  • Peer-to-peer lending. Peer-to-peer loans allow you to borrow money from the crowd. Investors contribute money to fund loans and borrowers pay them back over time, with interest. Loan rates and terms can depend on your overall creditworthiness. 

Traditional small business loans might be harder to get if you’re still in the beginning stages of starting a business. Typically, lenders require you to have one to two years of operating history and a minimum level of revenue to qualify. Working on establishing business credit could help you to qualify for loans later once your business is up and running. 

Bootstrapping Techniques

Bootstrapping simply means using the resources you have at hand to fund your business. Choosing to bootstrap a business could help you avoid taking on debt, but whether it’s realistic can depend on your financial situation. 

Some of the ways to bootstrap a business include:

  • Using funds in personal savings accounts or CD accounts
  • Borrowing against your 401(k)
  • Taking an early withdrawal from an individual retirement account (IRA)
  • Pulling equity out of your home
  • Selling things you don’t need for cash
  • Putting together a fundraiser locally to ask for donations
  • Asking friends and family for a loan

Each of these options has pros and cons. Borrowing against your 401(k) or taking money from an IRA, for example, can shortchange your retirement savings since the funds you take out aren’t benefiting from compounding interest. Not to mention, you could be subject to a 10% early withdrawal penalty on distributions.4

Internal Revenue Service. “Retirement Topics: Exceptions to Tax on Early Distributions.

Taking a home equity loan or line of credit, meanwhile, carries its own risks. If the business fails, you’ll still be responsible for paying back what you’ve borrowed. Should you default on a home equity loan or line of credit, your home could end up in foreclosure. The bottom line is that before you bootstrap, it’s important to look at both the advantages and disadvantages of doing so.5

Leveraging Free Resources

Starting a business is no easy task and you may need some help along the way. You could hire a business coach but that requires money, so it’s helpful to know where you can find small business resources for free. 

Here are some of the places you can look to get free help when starting a business. 

  • Small Business Administration. As mentioned, the SBA offers a number of resources to help small business owners, including the SBA loan program as well as educational articles covering how to start a business. 
  • Small Business Development Centers. Small Business Development Centers are local organizations that assist small business owners with things like planning, accessing capital, and scaling for growth.6
  • SCORE. SCORE is a network of mentors who are committed to helping small business owners find success. Entrepreneurs can connect with a SCORE mentor to get help with planning and starting a business, growing a business, or exiting a business when they’re ready to move on.7
  • U.S. Department of Veteran Affairs. The VA offers support to veterans who are interested in starting small businesses. That includes access to educational resources and training for would-be business owners.8 
  • National Women’s Business Council. The National Women’s Business Council is committed to helping women entrepreneurs succeed. Specifically, that centers on helping women in STEM get the capital they need to start their businesses.9 

You can also check for free resources locally. For instance, your local chamber of commerce might sponsor free workshops or seminars aimed at helping budding entrepreneurs. You can also look for local nonprofits that serve the small business community. 

If you’re starting a business with no money, there’s one more free resource you can utilize. Social media can be an effective way to market your new business without spending a dime on advertising. It may take a little longer to build an audience if you’re not actively spending on ads, but it’s a zero-cost way to spread the word about your business. 

The Critical Role of Budgeting

When starting any business, it’s important to have a budget to follow. Your budget serves as a financial guide to help you understand your costs when getting your business off the ground. 

What your business budget looks like initially can depend on what kind of business you’re starting. If you’re pursuing a low-cost business plan, your startup costs may be much lower than someone who’s starting a brick-and-mortar business. 

In terms of how to make a small business budget prior to launching, it’s important to add up all of the costs you expect to have. That might include:

  • Purchasing inventory or supplies
  • Renting or leasing a business space
  • Buying equipment
  • Paying for marketing or advertising
  • Hiring staff

Your budget should be as detailed as possible so you have a realistic picture of what your spending might look like. You can then compare that to an estimate of what you expect your sales or revenue to be once your business launches. 

Budgeting for a business isn’t something you do once, either. It’s important to review your budget monthly to see how cash flows in and out of the business. Keeping expenses to a minimum is one of the best ways to maximize cash flow while your business is still in the fledgling phase. 

Networking and Collaboration: Your Path to Success

You might be starting a business solo but if you want it to grow, it can be helpful to focus on building the right connections. That’s where networking and collaborating come in. 

Having a sizable network could benefit you in different ways. For example, you might have a connection who could introduce you to someone who’s interested in investing in your business. Or you might be offered an opportunity to promote your business on someone’s podcast or YouTube channel, which is a great way to get free exposure. 

In terms of how you build your network, it can depend on what type of business you have. If you’re starting a brick-and-mortar business, for instance, then you might want to look for connections locally first. That might include joining your local chamber of commerce or small business development council. 

If you’re starting an online business, then you could use online resources to connect. LinkedIn could be a good place to start your networking efforts. You can also branch out to other social media platforms to forge professional relationships with business owners or influencers in your niche. 

Building a Robust Online Presence on a Budget

With 62% of the world’s population using the internet and 85% of Americans getting online every day, it makes sense to establish a virtual presence for your business.11 That can include setting up a website or blog, launching a YouTube channel, getting active on TikTok, or building a presence on Facebook, X, or Instagram. 

One of the best things about using social media to market a new business is that it doesn’t have to cost anything. While you could spend money on ads, it’s free to create profiles on social media platforms. If you’re interested in setting up a website or blog for your business, platforms like Wix allow you to do that for free. 

If you’re hoping to build an online presence without spending money, you can certainly do so. It’s also important, however, to think about which channels will offer the best return on investment for your time. Understanding where your potential customers gravitate when they’re online can help you identify which social media channels are worth targeting. 

Can I Start a Business With $0?

It’s possible to start a business with $0 if you’re choosing something that utilizes the skills and resources already available to you. For example, if you’re interested in getting paid to write, you could start a freelance business from home and all you’d need to have is a laptop and internet connection. 

What Is the Best Business to Start With No Money?

The best business to start with no money is the one that allows you to use your skills, knowledge, and resources in a way that produces maximum return and maximum enjoyment. If you love dogs, for example, then starting a dog-walking or pet-sitting business could be a good fit and it doesn’t require a lot of money.

What Is the Easiest Business to Own?

The easiest business to own is one that generates passive income. Passive income is money that you earn without having to do a lot of ongoing work. For example, blogging can provide a passive income if you’re making money from affiliate marketing or online ads. You could also make passive income by selling digital products that you only have to create once, such as printables, journals, or ebooks. 

The Bottom Line

It’s possible to start a business with no money if you have an organized plan and strategy. Knowing what you’ll need to do to get your business started is the first step. Once your business is up and running, you can explore the best ways to grow it in order to achieve the level of success you desire. That might include¬†applying for small business loans, which can help you to scale and expand.

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