Small Business Ideas for Entrepreneurs on a Tight Budget

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Dreaming of starting a small business isn’t the same as actually taking the leap into the world of entrepreneurship. Although you might aspire to start your own small business, for various reasons, this may not be a dream you’ve pursued.

Perhaps you don’t believe you can justify the cost of starting a business. While this is an understandable and practical concern, as the following small business ideas illustrate, there are plenty of ways to start a business and be your own boss without spending more than you can afford.

Budget-Friendly Small Business Ideas: The Importance of Research and Planning

Although the following small business ideas mentioned in this blog are less risky than business ideas that require a substantial upfront investment, it’s still important to conduct a certain degree of market research before launching a business. You need to confirm that there will be demand for the types of products or services you plan on offering.

Ways to conduct market research on a tight budget include:

Use social media to generate interest in your business idea, and distribute surveys to your social media followers to learn more about their degree of interest in your products and services
Closely analyze what your successful competitors are doing right
Read and subscribe to relevant industry news websites, blogs, etc.
Attend relevant networking events

You can also simply test out your business idea on a small scale for a brief period of time to get a sense of whether there’s strong enough demand for your services or products. If an initial test proves successful, you may begin devoting more time and energy to transforming a small business idea into a thriving operation.

Examples of Low-Cost Small Business Ideas

The following small business ideas are all types of businesses you could potentially start while spending very little money. Consider starting one of these businesses, or use this list to inspire your own idea:

Service-Based Business Ideas

Offering a service instead of selling products is often an affordable way to start a business. Service-based small business ideas may not require you to invest in substantial inventory or tools, saving you a lot of money in upfront costs.

The types of services you offer will depend on your skills and expertise. Examples of service-based small business ideas you can start on a tight budget include:

Consulting
Virtual assistant services
Home and/or office cleaning
Physical training (if you have the necessary qualifications and certifications)
Freelancing
Tutoring

It’s essential that you prioritize client satisfaction when offering these types of services. Because you don’t have much money to invest in marketing, word of mouth will play a big role in your success.

When you’ve completed a project for a client, ask them if they’d be willing to provide a testimonial that you can share with other potential clients. Better yet, ask them if you can film their testimonial.

Written testimonials can certainly be effective tools for helping you attract more clients. However, video testimonials can be even more powerful because they combine dynamic images with stronger emotional emphasis than text alone.

Online Business Ideas

Coming up with legitimate small business ideas that don’t require a substantial upfront investment on your part is easier than ever in the digital age. Because an online business doesn’t need a physical location, starting one can be very affordable. As your business grows, you could eventually set up a brick-and-mortar shop if you reach a point where doing so seems necessary.

There’s also no shortage of online small business ideas to consider. Examples include:

eCommerce shop
Dropshipping
Affiliate marketing
Online teaching

Creating an online business could also give you an opportunity to monetize your own interests or hobbies. For example, perhaps you’ve cultivated enough knowledge in a particular subject area to qualify as a genuine expert in that subject. If so, you could create and sell an online course, making money off your knowledge.

(Tip: Make you’re your online presence more engaging with multimedia elements such as animated videos. Research shows that students often retain information better when it’s presented in the form of video content.)

A low-cost online business could also consist of you making some money off your own creative projects. For instance, thanks to the internet, it’s now possible for self-published authors to make a living (and, in some cases, earn millions of dollars) publishing their own books online and selling them directly to customers instead of working with traditional publishers.

Home-Based Business Ideas

Like an online business, a home-based business doesn’t require you to invest in a brick-and-mortar location. Depending on the nature of your business, you also might not need to purchase a significant amount of equipment, materials, and tools to get it up and running.

Low-cost small business ideas that you can start from the comfort of your own home include:

Creating and selling crafts
Tutoring
Freelance writing, app design, video editing, graphic design, etc.
Transcription services
Pet sitting
Small-scale catering

The following are some ideas for promoting your home-based business:

Create a website
Maintain an active social media presence
Find your first customers among friends and family members, and ask them for testimonials or referrals
Email potential clients or customers directly

Alternative Funding Options

While all these small business ideas involve a relatively small financial investment on your part, you might nevertheless still need to raise some money to start and grow your business. If traditional options like taking out a bank loan aren’t viable, alternative funding options to consider include:

Crowdsourcing through platforms like Kickstarter
Applying for grants
Applying for microloans
If you’re comfortable doing so, ask friends and family for investments

All that said, as these examples demonstrate, you might not need to raise very much money to start a small business. However, if you’re dedicated, running a small business could help you earn quite a bit of money.

Create Video Content for Your Small Business With Powtoon

There are various reasons you might generate video content as a small business owner. If you’re selling an online course, you could include a video to make the course more dynamic and engaging. Or, you might simply use animated video content to pitch your services to clients in an entertaining way.

Luckily, you don’t need a large video production budget or even much video production experience to create video content for your small business. Powtoon is an online video-maker designed for beginners like you. Sign up today to get started!

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Hanna Abitbul

Hanna is Powtoon's Content Marketing Strategist. She joined Powtoon as a copywriter in 2019, after graduating from university with a specialized degree in marketing and business. She continues to inspire people to create incredible video content with blog posts, videos, guides, and more. Hanna's passions include reading, singing, and caring for animals (#proudvegan). Nothing makes her happier than waking up to her two black kitties who, contrary to popular belief, are good luck!