About two years ago, my husband and I were facing hefty medical bills and needed to boost our income. We thought about businesses we could start, but most required a large investment.
So, we began looking at low-cost ways to earn a profit right away. We ended up launching a pet-sitting business for less than $1,000. Within a few months, we were earning between $500 and $2,000 per month.
Our experience isn’t uncommon; there are many companies you can launch without investing a ton of cash. Here are some of the best businesses to start on a small budget.
5 best businesses to start
I’m a huge advocate of side hustles because of the flexibility and earning potential they offer, but they do have one major drawback: A large portion of what you make goes to the company behind the app or service instead of you. Starting your own business allows you to keep all your earnings.
Most traditional businesses require significant funding to get started. According to the Global Entrepreneurship Monitor, the median cost to start a business in North America is $18,673.
Coming up with that much money can be difficult. You might have to take out personal loans or use a credit card to get the funding you need. Going into debt can put you at a significant disadvantage, and it can be risky.
However, starting a business doesn’t have to be expensive. There are many ways you can become an entrepreneur for less than $2,000. Here are five ideas.
1. Pet-sitting business
If you love animals, launching a pet-sitting service might be a good idea. You can start on your own, watching animals in owners’ houses or your home. Then, as your clientele grows, you can hire help, expanding your business’s reach and your profits.
It can be a lucrative source of income. A survey by Pet Sitters International found that its member pet sitters earned $60,625 per year on average. Even better, startup costs are low. According to industry site Time To Pet, you can start a successful pet-sitting business for less than $750.
2. Cleaning service
Another option is starting a cleaning business.
Like pet sitting, the costs to start a cleaning service are low. Beyond normal business costs, such as insurance and permits, you only need to buy cleaning supplies and have reliable transportation to get started. Cleaning Business Now reported that it typically costs less than $2,000 to launch your business.
Wages can start relatively low. According to the Bureau of Labor Statistics, house cleaners earn a median hourly wage of $10.99. However, as your business grows and you hire help, you can earn more.
If you love to write and have a topic you’re passionate about, you can make serious money blogging. In fact, one woman’s blog turned into a million-dollar business.
To get started, you just need to purchase a domain name — which can cost as little as $14.99 — and web hosting. You can earn money by featuring advertisements on your site, doing sponsored posts, or using affiliate links.
If you like the idea of opening a retail business but don’t want to manage inventory or handle shipping, drop-shipping can be a great option. Drop-shipping businesses have high earning potential and require little money to start.
With drop-shipping, you don’t deal with the actual products. Instead, you market them and sell them on behalf of a wholesaler or producer. They’re responsible for fulfilling the order, and you get a percentage of the sale. Even better, there are few costs. You can sell on existing sites like Amazon or purchase a domain and create your own.
You can sell anything through drop-shipping, including clothing or toys. One man started a drop-shipping business selling crickets online, and now he makes over $600 per month.
5. Home baking
If you have a major sweet tooth and enjoy baking, you could turn your passion into a business. Bakers can make a lot of money with their creations.
One woman earns over $1,000 per month from her cookies. Depending on the laws where you live, you could start your baking business in your kitchen using supplies you already own.
4 business expenses to expect
There are many businesses you could start for under $2,000. But make sure you think about all the associated costs. Many new business owners overlook these common expenses.
1. Cost to form your business structure
When you start your business, you need to choose a structure, such as a sole proprietorship or limited liability company (LLC). Some business structures require you to pay a fee, and the paperwork can be extensive.
Some people opt to pay a service to handle the process for them, which can add to the costs. For example, the price starts at $79 plus fees to form an LLC with LegalZoom.
2. Permits and license fees
Unfortunately, you can’t just start selling products or offering services. You’ll likely need multiple permits and licenses, such as:
- A business license
- A home occupation permit
- A sales tax license
- A health department permit
Depending on where you live, you might have to pay fees for each permit or license.
3. Bookkeeping software
For a new business owner, handling inventory and bookkeeping can be overwhelming. It’s a good idea to use software to navigate the process, and it will come in handy at tax time. Depending on your needs, you might have to pay hundreds for a service robust enough for your business.
Insurance is likely one of the biggest costs you’ll face when you start a business. Although you might be tempted to skip it, getting an insurance policy for your business is essential for your personal and financial well-being. Plus, depending on your business, the federal government and some states require certain forms of insurance.
Funding your business
Now that you know about the best businesses to start on a budget, you can begin your journey to entrepreneurship.
As you start developing your business plan and selling to clients, you might find you need additional funding to succeed. If that’s the case, consider low-interest personal loans before you turn to more expensive options.
Interested in a personal loan?Here are the top personal loan lenders of 2018!
|Lender||APR Range||Loan Amount|
|1 Includes AutoPay discount. Important Disclosures for SoFi.
2 Includes AutoPay discount. Important Disclosures for Payoff.
3 Important Disclosures for FreedomPlus.
4 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
5 Important Disclosures for LendingPoint.
6 Important Disclosures for LendingClub.
All loans made by WebBank, Member FDIC. Your actual rate depends upon credit score, loan amount, loan term, and credit usage & history. The APR ranges from 6.16% to 35.89%. For example, you could receive a loan of $6,000 with an interest rate of 7.99% and a 5.00% origination fee of $300 for an APR of 11.51%. In this example, you will receive $5,700 and will make 36 monthly payments of $187.99. The total amount repayable will be $6,767.64. Your APR will be determined based on your credit at time of application. The origination fee ranges from 1% to 6% and the average origination fee is 5.49% as of Q1 2017. There is no down payment and there is never a prepayment penalty. Closing of your loan is contingent upon your agreement of all the required agreements and disclosures on the www.lendingclub.com website. All loans via LendingClub have a minimum repayment term of 36 months or longer.
7 Important Disclosures for Earnest.
8 Important Disclosures for Avant.
* The actual rate and loan amount that a customer qualifies for may vary based on credit determination and other factors. Funds are generally deposited via ACH for delivery next business day if approved by 4:30pm CT Monday-Friday. Avant branded credit products are issued by WebBank, member FDIC.
** Example: A $5,700 loan with an administration fee of 4.75% and an amount financed of $5,429.25, repayable in 36 monthly installments, would have an APR of 29.95% and monthly payments of $230.33
* Important Disclosures for Upgrade Bank.
Upgrade Bank Disclosures
** Accept your loan offer and your funds will be sent to your bank via ACH within one (1) business day of clearing necessary verifications. Availability of the funds is dependent on how quickly your bank processes this transaction. From the time of approval, funds should be available within four (4) business days.
|7.73% – 29.99%||$1,000 - $50,000||Visit Upstart|
|5.81% – 15.37%1||$5,000 - $100,000||Visit SoFi|
|6.87% – 35.97%*||$1,000 - $50,000||Visit Upgrade|
|8.00% – 25.00%2||$5,000 - $35,000||Visit Payoff|
|4.99% – 29.99%3||$10,000 - $35,000||Visit FreedomPlus|
|5.99% – 18.99%4||$5,000 - $50,000||Visit Citizens|
|15.49% – 34.49%5||$2,000 - $25,000||Visit LendingPoint|
|6.16% – 35.89%6||$1,000 - $40,000||Visit LendingClub|
|6.99% – 18.24%7||$5,000 - $75,000||Visit Earnest|
|9.95% – 35.99%8||$2,000 - $35,000||Visit Avant|