How To Start A Business With No Money
Facebook’s move into the metaverse will open up new opportunities for event planners in the near future. Party.Space, for example, has raised capital to scale up its metaverse-themed virtual events business. If you want job security for the future, virtual event planning is a good way to go.
How to Start a Business with No Money in 2022
Maybe you have no money to use for a fledgling business. Do you think you need small business loans to kick things off? BS! Sure, there are some types of businesses where full ownership will be limited if you can’t come up with your own capital to fund things (e.g. a franchise).
However, plenty of businesses require no up-front funding to begin. Don’t think for a second that you have to possess a lot of cash to get a business up and running. In fact, some of the best businesses can be started with little or no money whatsoever.
To start a business with no money, you need to choose the right kind of business. A great strategy is to start building clientele while keeping your day job, then gradually shift more focus to the new business as it grows.
Still not convinced? Before you consider taking out a loan to fund your new business venture, watch the video below. It features Mark Cuban, a self-made billionaire and business owner, who talks about funding a startup.
Developing the alternative entrepreneurial mindset
1. Start with what you have
It is recommended that you think carefully about your responses to these questions. Go beyond what comes to mind immediately and think a little more deeply about what you have at your disposal. In this process, be sure to write down your responses to these questions.
2. Take into account who you know
What you have needs to be combined with who you know for it to have real power. Take stock of the relationships you have with others, map out your network of connections and consider how your connections could enable you to use what you have more effectively.
Sarasvathy points out that the alternative means of venture creation advocates “stitching together partnerships to create new markets.” Relationships, particularly equity partnerships, drive the shape and trajectory of the new venture.
3. Invest what you can afford to lose
There is a big difference in your mindset if you start with the perspective that “I am investing this amount and I expect a 30% return” versus “I can afford to lose this much, therefore I will put it into the business and see if I can make it work”.
If you have only put in what you can afford to lose, you maintain flexibility in the business and minimise stress in managing it. If you are only willing to invest when you expect that you can get a specific return, there is a strong chance that you may never take the leap and launch the business you always dreamed of owning.
An example of this is the entrepreneur who refuses to leave a well-paying job until he finds an opportunity that he predicts will pay more, versus one who decides to invest a small portion of her savings and two years of her life in a project that she believes is worth that amount of time and money – irrespective of whether it will pay more than what she currently earns.
4. Experiment and adapt
Existing firms typically take longer to adapt than new firms because they have more incentive for things to remain the same and they have established routines and practices that reinforce the status quo.
New firms are not tied to the way things have always been done and thus entrepreneurs can benefit from shifts in consumer preferences or shifts in technology or changing legislation by realigning their businesses to take advantage of such developments.
The entrepreneur with the alternative mindset, “in contrast, has to stand ready to make do with what comes her way and learn to transform both positive and negative contingencies into useful components of new opportunities.”
How Much Money Do You Need to Start a Business?
Technically, you don’t need any money to start a business. You could walk across the street, cut your neighbor’s grass, collect your payment, and you’d have started a lawn care business without spending a dollar.
- Equipment: You’ll likely need at least a computer to run your business. Depending on the services and products you offer, you may need additional equipment and software.
- Utilities: Even if you’re just using a computer, you’ll have to pay for your internet and electricity. These are (relatively) minor bills, but they’re still expenses you need to consider.
- Hosting: Even consultants and freelancers need websites to market their services, and these require annual hosting, domain, and security fees.
- Maintenance: Computers need replacing, software needs debugging, and equipment needs fixing. Even if you’ve already purchased equipment, you’ll have to pay to maintain it.
- Licenses and Permits: You’ll have to pay local, state, and national governments to operate and sell, depending on your industry.
Don’t forget to factor in the cost of your time. While that’s not a number you’ll see on your financial spreadsheets, the time you spend working on your business is time that could have been spent on something else. Calculate your opportunity costs to understand your true gains and losses.
So, how much money do you really need to start a business? Regardless of your business or industry, plan on spending at least a few hundred dollars every year. Of course, this number can widely vary depending on your products and services, but this should be a baseline to ensure you don’t go under.
4 Best Businesses to Start with No Money
Yet, that doesn’t usually cost money. Influencers will want to join your podcast for more exposure, not necessarily for cash. However, that means you’re going to need to build adequate traffic to your podcast channel before you can monetize it.
As far as expenses go, you’ll want a decent microphone and basic recording software. Eventually, you’ll want to invest in a nice setup, but you can get by in the early days with your laptop microphone and free audio-editing software like Audacity or Audiotool.
2. Freelancing & Consulting
There’s a market for virtual assistants, writers, programmers, designers, photographers, recruiters, and more. If you’ve built a solid career and portfolio in any of these fields, then there’s a good chance clients will be willing to pay for your work.
Eventually, you’ll want a website to host your portfolio and build your credibility—but it’s not a necessity on day one. If you’re struggling to find initial clients, you’ll need to invest in marketing yourself. However, you should be able to get started by networking with your friends, family, colleagues, and previous employers.
Your earnings may start small as a freelancer or a consultant, but they’ll grow steadily alongside your experience and portfolio. Every client you win isn’t just a paycheck—it’s an opportunity to create career-long relationships. It’ll also help make you a better writer, which will help you bump up your rates and score bigger, higher-paying clients.
Blogging often gets hyped up as a way to go from nothing to six-figure income in months. While there’s real earning potential behind this profession, approach it with a bit more realism—optimism, too, but realism first.
It doesn’t take much to start blogging. Instead of building an audience on third-party sites like Facebook, LinkedIn, Medium, or Tumblr, invest in your own property. It’ll cost a few bucks, but it’ll give you more versatility with monetizing your audience in the future.
You’ll want to build a basic website, and most of these come with pre-made blogging functionality built-in. Hosting fees for a website and a domain will cost you around $100-$200 a year, which provides plenty of functionality for you to get started.
Monetizing Your Blog
- Ecommerce: Sell your own products on your website. If you don’t want to invest in inventory, consider selling print-on-demand or digital products. For example, you could write and publish an ebook or course for free and sell it on your site.
- Affiliate marketing: Don’t want to sell your own products? Sell other businesses’ products and get paid a commission when your readers click through your affiliate links and make a purchase.
- Advertising: Run ads on your page and get paid for impressions or clicks.
- Donations: Notice those sites that ask you to donate $5 for a cup of coffee or to help support the great content? That might seem like a small amount of money, but it can be a significant revenue-maker if you’re raking in thousands of monthly viewers.
- Memberships: If people are devouring your content, they might be willing to pay for it. Consider locking premium content behind paywalls. For example, you could start a subscription-based newsletter using a membership platform like Substack.
- Sponsorships: Brands may want to get in front of your niche audience, and they’ll be willing to pay to do it.
Selling a course doesn’t require too many expenses. You’ll want a decent microphone and camera to record your lectures, but some laptop’s built-in hardware can provide adequate quality. After equipment, you’ll need to consider how you’re going to host the course—and this is where you might need to invest a bit of cash.
While you can host your course on a platform like Udemy or Coursera for free, you’ll have greater flexibility and earnings potential by self-hosting your course on platforms like Teachable or Thinkific. These self-hosting platforms will cost you anywhere from to $99 per month, but they’re well worth the expense (especially since it’ll be your only significant cost).
Think about what educational content you could provide. Do your friends, family, or colleagues frequently ask you similar questions? Do you possess a talent or knack that others struggle with? If so, your idea has the potential to be a lucrative course.
Start small and test out your idea. Don’t make your first course a 30-hour-long piece of content. Start with a 2 or 3-hour course and see if you like it (and if your audience wants it). Course creation is an excellent side hustle you can experiment with without quitting your 9-to-5, giving you an added level of security.
Three tips for choosing the best business idea
The small business ideas we’ve covered might be easier to run when it comes to logistics, but that doesn’t make them easy. There are at least three things you should keep in mind as you consider your options, no matter what business you decide to start.
1. Focusing on a niche makes marketing easier
As with any business, marketing is what unlocks your success. It’s not enough to know that there’s demand for your products—you need to figure out ways to reach the people that are most likely to buy them. You need to get the right visitors to discover your products.
Luckily, marketing is a lot easier when you’re catering to a specific target audience or identity (e.g., vegans, board game lovers, photographers in your city). You can produce social media content that resonates with these people or run ads that target their interests. Taking this approach also helps you project a consistent brand because you’ll have a more specific idea of who exactly you’re talking to.
Think about how you can zero in on a specific audience for your products and how the business you build can serve them. If you already have a sizable audience (a blog, a YouTube channel, or an Instagram account), maybe you can even find a way to base your business off of that existing audience.
2. Pricing is about more than profit
Price your products too low and shoppers might assume they’re low quality. Price them too high and you risk scaring some customers off. In any case, you’ll need to find a sweet spot that also lets you factor in the cost to acquire customers and offer discounts, especially if you plan on paying for ads.
With many of the small business ideas explored in this post, you may not be shipping your products, but you still need to cover the cost of shipping. Consider your shipping costs and how they will vary in the different countries you want to serve.
Many online sellers try to bake their shipping costs into their retail price so they can offer free shipping or at least a reasonable flat rate. Others focus on encouraging shoppers to add more items to their cart with conditional free shipping (e.g., free shipping on orders over $50) to maximize their profit.
3. Test, learn, and grow as you go
Products can be swapped in and out fairly easily (especially when you’re not stuck with stock). Your store can be redesigned. Your prices can be adjusted. You can switch to a better supplier. And you can validate all of these decisions based on the dozens of signals you have at your disposal (traffic, how much time people are spending on your site, reviews, abandoned carts, etc.).
There are aspects of your own business you can always salvage if you try a different product or approach. The brand you invest time into creating and the followers you amass on social media or in your email list can be assets you repurpose for your next business idea.
How to start a small business from home
- Use the time you have available:It’s good to have a balance of ambition and realism with your business aspirations.
- Identify a new business idea: This could come from your personal interests, a market opportunity, an experience—anywhere, really.
- Validate your business idea: This is where you identify if your idea is viable or not. Are people willing to spend money on this?
- Find a business name: A strong name should be short and simple, memorable, and original. If you need help, check out our tips for generating business name ideas.
- Make a plan: Your business plan is critical for keeping your business on track, as well as securing partners, investors, lenders, and more.
- Understand business finances: Open your business bank accounts, secure funding, and set up strong bookkeeping and accounting processes.
- Develop your product or service: The fun part! This is where you bring your product or service idea to life.
- Pick a business structure: Your business structure influences taxes, operations, personal liability, and more. Choosing the right business structure is about balancing the legal and financial protections you need with the flexibility offered by different options.
- Research licenses and regulations: Your business is subject to the laws governing businesses in your area, as well as laws and regulations specific to your industry. It’s important to understand this to avoid bigger problems down the road.
- Select your software systems: Accounting, email, ads, project management—you need an entire tech stack to run your business.
- Find a business location: Identify where you can open up shop based on space, retail needs, and fulfillment needs.
- Plan workload and team size: If you plan to do all of the work yourself, you’re limited by the time you have available to invest. If you plan on hiring help, you’ll need to account for those costs—as well as the time involved in finding and onboarding freelancers or employees.
- Launch your business: Leverage your network, build buzz with promotions, and test paid ads to get word out about your newly launched business.
Coming up with great business ideas
There are many ways to come up with good business ideas of your own. You or someone you know might have a poor personal experience with a company—and you know you can do better. Or maybe there’s a complete gap in the market: for example, demand for a specific product but no one meeting it. Other ideas come from everyday moments, in the shower or right before you fall asleep.
Brainstorming business ideas
If you’re feeling stuck on good business ideas or want to come up with more, there are a few ways to brainstorm even further. Write down all your ideas. Keep a brainstorming board, be it tactile or digital, and plaster your ideas there whenever they come to mind. Then revisit it with fresh eyes.
There’s power in numbers, too. Recruit help from colleagues or friends and family to brainstorm new ideas. Survey your existing customer base or audiences and get their ideas. Look at what people are saying on social media or searching for online. Start with lots of ideas and then refine your list to the top ideas to explore further.
Protecting unique business ideas
Entrepreneurs have a few options when it comes to legal protection of their small business ideas, both now and in the future. The right one depends largely on the types of businesses you’re talking about.
- Copyright:Copyrighting protects your intellectual property, meaning that others can’t use it without your permission. This applies to text, art, photography, music, graphic design, and similar mediums.
- Trademark:Trademarking is another intellectual property protection. Essentially, you “own” a word, phrase, logo, symbol, or design—preventing others from using it.
- Patent:Patents are applicable for inventions—a patent prohibits anyone else from making, selling, or using your invention in their business for a period of time.
- Confidentiality and non-disclosure agreements (NDAs): These legal documents prohibit people from sharing information, as outlined in the NDA.
- Non-compete agreement: If you hire employees or contractors, you can have them sign this document, which prevents them from working with direct competitors.