5 Best Businesses to Start for Under $2,000

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Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.

dog walker/pet sitter walking dogs

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.

3. Blogging

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.

4. Drop-shipping

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.

4. Insurance

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!
LenderRates (APR)Loan Amount 
1 Includes AutoPay discount. Important Disclosures for SoFi.

SoFi Disclosures

  1. Personal LoansFixed rates from 6.199% APR to 15.365% APR (with AutoPay). Variable rates from 6.145% APR to 14.685% APR (with AutoPay). SoFi rate ranges are current as of June 15, 2018 and are subject to change without notice. Not all rates and amounts available in all states. See Personal Loan eligibility details. Not all applicants qualify for the lowest rate. If approved for a loan, to qualify for the lowest rate, you must have a responsible financial history and meet other conditions. Your actual rate will be within the range of rates listed above and will depend on a variety of factors, including evaluation of your credit worthiness, years of professional experience, income and other factors. See APR examples and terms. Interest rates on variable rate loans are capped at 14.95%. Lowest variable rate of 6.145% APR assumes current 1-month LIBOR rate of 1.97% plus 4.175% margin minus 0.25% AutoPay discount. For the SoFi variable rate loan, the 1-month LIBOR index will adjust monthly and the loan payment will be re-amortized and may change monthly. APRs for variable rate loans may increase after origination if the LIBOR index increases. The SoFi 0.25% AutoPay interest rate reduction requires you to agree to make monthly principal and interest payments by an automatic monthly deduction from a savings or checking account. The benefit will discontinue and be lost for periods in which you do not pay by automatic deduction from a savings or checking account.
  2. Terms and Conditions Apply:SOFI RESERVES THE RIGHT TO MODIFY OR DISCONTINUE PRODUCTS AND BENEFITS AT ANY TIME WITHOUT NOTICE. To qualify, a borrower must be a U.S. citizen or permanent resident in an eligible state and meet SoFi’s underwriting requirements. Not all borrowers receive the lowest rate. To qualify for the lowest rate, you must have a responsible financial history and meet other conditions. If approved, your actual rate will be within the range of rates listed above and will depend on a variety of factors, including term of loan, a responsible financial history, years of experience, income and other factors. Rates and Terms are subject to change at anytime without notice and are subject to state restrictions. SoFi refinance loans are private loans and do not have the same repayment options that the federal loan program offers such as Income Based Repayment or Income Contingent Repayment or PAYE. Licensed by the Department of Business Oversight under the California Financing Law License No. 6054612. SoFi loans are originated by SoFi Lending Corp., NMLS # 1121636. (www.nmlsconsumeraccess.org)

2 Important Disclosures for Citizens Bank.

Citizens Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.

* Important Disclosures for Upgrade Bank.

Upgrade Bank Disclosures

  1. Personal Loan Rate DisclosureFixed interest rates from 6.49% – 19.49% (6.49% – 19.49% APR) based on applicable terms. Lowest rates range from 5.99%-18.99% (5.99%-18.99% APR), are for eligible applicants, require a 3-year repayment term, and include our Loyalty and Automatic Payment Discounts of 0.25 percentage points each, as outlined in the Loyalty Discount and Automatic Payment Discount disclosures. Subject to additional terms and conditions, and rates are subject to change at any time without notice. Such changes will only apply to applications taken after the effective date of change.
  2. Loyalty Discount: The borrower will be eligible for a 0.25 percentage point interest rate reduction on their loan if the borrower has a qualifying account in existence with us at the time the borrower has submitted a completed application authorizing us to review their credit request for the loan. The following are qualifying accounts: any checking account, savings account, money market account, certificate of deposit, automobile loan, home equity loan, home equity line of credit, mortgage, credit card account, student loans or other personal loans owned by Citizens Bank, N.A. Please note, our checking and savings account options are only available in the following states: CT, DE, MA, MI, NH, NJ, NY, OH, PA, RI and VT. This discount will be reflected in the interest rate and Annual Percentage Rate (APR) disclosed in the Truth-In-Lending Disclosure that will be provided to the borrower once the loan is approved. Limit of one Loyalty Discount per loan, and discount will not be applied to prior loans. The Loyalty Discount will remain in effect for the life of the loan.
  3. Automatic Payment Discount: Borrowers will be eligible to receive a 0.25 percentage point interest rate reduction on their Citizens Bank Personal Loan during such time as payments are required to be made and our loan servicer is authorized to automatically deduct payments each month from any bank account the borrower designates. If our loan servicer is unable to successfully withdraw the automatic deductions from the designated account two or more times within any 12-month period, the borrower will no longer be eligible for this discount.
7.73% – 29.99%$1,000 - $50,000
Check rate nowon SLH's secure site
6.15% – 15.37%1$5,000 - $100,000
Check rate nowon SLH's secure site
6.87% – 35.97%*$1,000 - $50,000Visit Upgrade
8.00% – 25.00%$5,000 - $35,000
Check rate nowon SLH's secure site
4.99% – 29.99%$10,000 - $35,000Visit FreedomPlus
5.99% – 18.99%2$5,000 - $50,000Visit Citizens
15.49% – 34.49%$2,000 - $25,000Visit LendingPoint
5.99% – 35.89%$1,000 - $40,000Visit LendingClub
5.49% – 18.24%$5,000 - $75,000Visit Earnest
9.95% – 35.99%$2,000 - $35,000Visit Avant
Our team at Student Loan Hero works hard to find and recommend products and services that we believe are of high quality and will make a positive impact in your life. We sometimes earn a sales commission or advertising fee when recommending various products and services to you. Similar to when you are being sold any product or service, be sure to read the fine print understand what you are buying, and consult a licensed professional if you have any concerns. Student Loan Hero is not a lender or investment advisor. We are not involved in the loan approval or investment process, nor do we make credit or investment related decisions. The rates and terms listed on our website are estimates and are subject to change at any time. Please do your homework and let us know if you have any questions or concerns.