Best Practices

How to Start a Business with a Low Budget

by Jim Hughes   August 10, 2020

Starting a business with a low budget may be a challenging feat, but it is not impossible. In this day and age, it is common for people to pursue their passions and interests outside of their nine to five jobs as a side project or small business. If it is successful, it may turn into a lifelong career and business. 

Request a Loan Today*
By clicking “Get Started”, I consent and agree to the Privacy Policy and Terms of Site Use.
*By filling out the form above, you will be routed to OpenCashAdvance.com’s loan request form.

Here are a few tips when starting a business with a low budget.

Start Small

Start a business.

If you don’t have enough money, do not throw all your savings into your business. You are just getting started, and it is risky to put all your life savings into a business that may or may not succeed. Be realistic about your goals and have a backup plan in case things do not pan out the way you expect them to. You may want to spend hundreds of dollars working on a sign or logo for your shop, but it is not necessary and you could find a much more affordable alternative. Watch your expenses closely and try not to go overboard with your purchases, no matter how much you think you need them. Keep an inventory of your items and track where your money goes to make sure you are not spending too much or too little on supplies or items for your business. 

Use All the Free Resources You May Have

Instagram, Twitter, Facebook, and LinkedIn are your best friends when starting a business with a low budget. They are all free and can be used for advertising and marketing purposes to help you get your business out there and known. The more of a presence you have on these social and professional platforms, the more likely you are to drive clients and customers to your business, which could potentially mean more revenue and success in the long run. 

Opening an Online Shop

Start an online store.

One of the best ways to start a business with a low budget is to open an online shop. You won’t have to worry about paying rent or additional expenses for a location, which will cut down your costs exponentially. There are expenses that come with owning an online shop, however, and depending on the site you choose to work with, you may have to pay listing, transaction, and payment-processing fees. A cash advance online can help fund these smaller expenses. 

Translation Services

If you are fluent in a second language or multiple languages, you may be able to provide translation services for those who cannot speak in a specific language. This kind of service may come in handy for businesses, large corporations, and political settings when language can be a great barrier between individuals who are working together. If you have the skills and stamina, you could start your own independent business and grow your team of interpreters over time.

Music Lessons

Those who are interested in learning a new instrument can sign up for music lessons at a school studio in the area. If you are musically inclined, you may consider providing lessons in your instrument of choice. Generally, music instructors have some kind of degree in music theory or have attended an institution that is specific to the instrument they have learned. Most instruments, unless you are teaching piano, can easily be taken anywhere with you. Students can bring their own instruments to your home, or you can visit them for lessons. It is a simple and inexpensive way to make money, and if you are successful, you can expand your business to include other music instructors in the future. 

Tutoring or Online Courses

When considering low-cost business ideas, one place to start is with your own interests and hobbies. You can pass on some of your own knowledge if you are especially skillful at something. A tutoring business can help students strengthen their skills in Math, English, Science, or whatever subject they are struggling with. However, you can also teach online courses on any subject or skill you may choose. It can be cooking, yoga, pilates, singing ... you name it. The possibilities are endless and you can grow your business quickly if you have the right tools and resources. 

Personal Chef

Personal chefs prepare meals in the comfort of their clients’ homes and cater to their dietary and nutritional needs. If this is something you are skilled in and are comfortable with doing, you can provide meals for those who are looking for an in-house chef. Expenses are not likely to be high as your clients should cover the cost of ingredients and the service fee, but you may be expected to pay for travel expenses and the proper cooking tools you will be using. 

Event Planning Services

If you’re a detail-oriented, organized, and creative person, you might enjoy planning parties and events for others. Event planning is an important part of hosting events such as weddings, birthday parties, company events, and class reunions. The more events you plan, the quicker you can build your credibility and grow your client base.

Business Budget 

When starting a business on a low budget, one of the most important things to take into account is a business budget. What is the business budget?

  • A business budget is used to estimate a business’s capital and expenses over a certain amount of time. 
  • Most business budgets include fixed and variable expenses and incomes. 
  • It provides an idea of what your revenue will be and helps you decide how much your marketing, equipment, and advertising costs will be. 

How does a business budget function?

When creating a business budget, you want to make sure that you are listing your variable and fixed costs on a monthly basis. You will then have to decide how to distribute your funds to pay for these expenses. You can also use different types of budgets to focus on specific areas of your business. Many businesses have fixed costs that are separate from their revenue, such as: 

  • Building eases or mortgage costs 
  • Loan payments 
  • Vehicle leases 
  • Insurance 
  • Equipment 
  • Utility fees
  • Payroll 

Variable costs might increase or decrease depending on the level of business activity, such as raw materials, shipping and delivery costs, advertising, maintenance, and contractors’ wages. You should try to be realistic about your budget and account for any expenses you may incur. Overestimating your costs is usually the best way to go if you are in doubt, and underestimating your revenues as well. As your business grows, you will have a better understanding of the numbers and what to expect in terms of revenue and costs. If you have a business, you need a budget. It is essential to any start-up and helps you to develop a better financial understanding when it comes to running your own business.

Tips for starting a business.

A Few Other Helpful Tips for Starting a Business on a Low Budget

  • Work out of your home – You will save money, time, and energy working from the comfort of your own home. 
  • Use your own equipment – Instead of spending money on additional supplies, use what you have lying around at home and buy whatever you need as you go. Paper, pencils, printers, and stationeries are all supplies you may have available. 
  • Purchase items through wholesalers – Wholesalers are more likely and willing to help out smaller businesses. 
  • Look into installment loans online to fund your business – These short-term loans can help you kick-start your business. 
  • Keep your workforce to a minimum until you can hire more people – If you can do the job on your own, do it. Build your team slowly. 
  • Turn your hobby into a business – Your business will be successful if you are doing what you enjoy. It will feel less like a job and more like a hobby. 
  • Know how much money you are willing to spend – Don’t spend too much money, but do not spend too little, either. You want to make sure you are being reasonable about your expenses and have done the proper research to learn what goes into your business. 
  • Make sure there is a market for what you are trying to sell – Does your idea appeal to one or two people, or will it appeal to potentially thousands of people? Do your research and see if there is a market for the product or service you are trying to sell. 
  • See who your competitors are – No matter what type of business you have, you will have competition. Learn who they are and what you can do differently from them to stand out to your customers.
  • Learn from your peers – Find a mentor or someone in the same industry as you, and learn from their mistakes and achievements. Take online business courses, or join groups with like-minded people who are also looking to start a new business. 
  • Meet some investors – Connect with investors in your area to see if they are interested in supporting your business. If they are interested in your product or service, they may be willing to help you out. 

Final Thoughts

Keep in mind that when trying to start a business with a low budget, you will undoubtedly encounter some surprise expenses. If you are still currently employed, you may be able to cover these expenses with a payday loan online. If that’s not an option, then you will need to have some sort of revenue stream.

We wish you a lot of luck in launching your new business.

 

Jim Hughes   OpenCashAdvance Marketing Manager
Personal Finance
Jim Hughes remembers checking his first email on the original BlackBerry 850 nearly 20 years ago. It was spam, and he fell for it. Even so, he’s been on the beat every day since, following the ebbs and flows of financial technology. Look to Jim for insider exclusives on shorter-duration loans, installment loans, and other popular products in fintech today.
Follow me: