How to start your own business with no money

The internet, Software as a Service (SaaS), online marketplaces and sharing economy platforms have made it easier than ever to start a business with no money. Intuit QuickBooks has put together a guide on how to turn existing skill sets into a successful business on a budget:

How much money do you need to start a business?

The amount of money needed to become a founder depends on the nature of the business. Some of the costs you could expect to see when creating your starting budget include:

• Rent of a workspace
• Office supplies and furniture
• Tools and equipment
• Raw materials
• Website design and hosting
• Software
• Business Insurance
• Labour costs
• Marketing and advertising costs

The best businesses to start with little money

A low-to-no capital business would be one where the majority of the above costs don’t apply. Online or home-based businesses allow you to avoid having to spend money on renting a workspace. If you do everything yourself, you can eliminate the cost of employees.

Starting a business that uses the tools and equipment you already have allows you to eliminate the cost of buying new. You can avoid needing inventory or raw materials by starting a service or knowledge-based business, as you won’t be making or selling any physical goods. You’ll probably require a laptop, although you may be able to run some businesses entirely on your phone.

You may be able to avoid the costs of creating a website and advertising costs by setting up shop on an existing online marketplace or sharing economy marketplace that handles all that for you.

Below are some business ideas that you can start with no – or very little – money: 

• Offering errands, handyman work, and household tasks
• Starting a dog-walking business
• Selling media and technology skills
• Renting out a spare room in your home
• Offering a parking space to rent
• Renting out your car when not in use
• Selling homemade or resale products
• Delivering food or taxi passengers

Of course, these platforms take a healthy cut of your payment, so you’ll still be paying for the use of the app/website, advertising, and any insurance that they might offer. You may also need to factor in the cost of any licensing or permit fees you need for your type of business.

To help keep track of your finances and manage the tax you owe, it’s recommended to get accounting software.

Set realistic expectations

Although it’s easy to set up a business with no money, that doesn’t mean it’s going to be easy to run a business, or that you’ll instantly find the freedom, gratification, and work-life balance you’re dreaming of.

Being an entrepreneur is hard work — you may find yourself adjusting to the fact that you now have multiple bosses, although they’re now called “customers”. As you likely won’t have any employees, you will be responsible for everything, and there may be parts of running your business that you aren’t good at or dislike. You will likely find you’re putting in more hours at work than ever. And despite starting your business with no or little money, you will still need money to pay for your ongoing expenses like taxes, fees, subscriptions, transportation, office supplies or software.

Make sure you do your due diligence to get a realistic idea of how long it can take to get a steady income from your new business. 

How to stay afloat when starting a business

If you’re not independently wealthy or supported by a partner or a nest egg, you’ll need some source of funding to keep you afloat until you can make a living from running your business.

Here are seven ways to fund your small business:

• Keep your day job. Keeping your day job gives you a steady income as you grow your new business. On the downside, you’ll be working two jobs, which can take a lot of energy and slow down business growth.
• Get funding from family or friends. Friends or family may be able to provide financial support while you get your business off the ground. However, make sure to discuss and document the details of your agreement to avoid conflict later on.
• Get a loan. You may be able to get a loan from the government, the bank, or a P2P lending service. Keep in mind that these types of loans require you to pay interest and you’ll need to provide several documents upfront for your loan request to be approved.
• Apply for a grant. If your business idea evolves around conservation, renewable energy, social and community projects or farming, you may be able to get a grant from the government. However, government grants are often hard to come by and involve a long application process.
• Make use of crowdfunding. Crowdfunding involves a lot of individuals lending you money, usually through a crowdfunding platform. Be aware that, in return, you may need to give away equity or pay interest.
• Find private investors. If you have a truly exceptional business idea, venture capitalists or angel investors may be willing to invest in it in return for equity and decision-making power within your business.

Many people dream of owning their own business, and with today’s online marketplaces and sharing economy platforms, it’s easy to try out any number of business ideas without risking too much of your capital.