How to Start a Business With No Money


Starting a business goes beyond having the best idea ever. Do you plan to start something of your own and quit your current job? If so, you should be well-prepared for what comes next, especially if you don’t have funds on the side.

This is the time to learn how to start a business with no money and increase your chances to succeed. Every new business venture comes with founding and recurring costs. You must be prepared for those in advance if you want to avoid failure later. Official small business stats show that about 20% and 50% of new SMBs fail in their first and fifth year, respectively.

Read further and discover what expenses are waiting ahead. Also, find ways to fund a new business without significant savings, as well as the best types of companies to start without money.

Starting a Business With No Money

It’s entirely possible to register a company and make a profit doing what you love without investing a lot of cash. You just need the right strategy and tips to accomplish this goal. The lack of personal capital shouldn’t be a reason for you to give up on your dreams.

Here are some of the steps that ensure your success:

  • Think of things you can get for free.
  • Focus on business ideas that don’t require expensive tools, material, working and/or storage spaces.
  • Ensure you have paying clients before starting the company. Find investors to boost your starting capital. 

Can You Start a Business With No Money?

There is no magic amount of money that will help you start a business. The U.S. Small Business Administration claims that you need about $3,000 to start a microbusiness. If you want to open a home-based company, however, you should have between $2,000-5,000.

Still, these figures aren’t carved in stone. Some people saved up much more and founded their companies with at least $10,000. Others, however, had to start a business with no money whatsoever. But what makes money so important for a startup? Well, we will list all the standard expenses associated with starting and running a business in the 21st century.

  • Permits and licenses – Certain types of businesses require that you obtain special permits and licenses. Depending on where you live and what market you’re entering, such specific paperwork and registries can turn into unexpected costs.
  • Supplies and equipment – Do you have a computer, a printer, office supplies, etc.? All these things cost money and are necessary for successful working. Starting a business with no money is possible only if you already have all the essential supplies and equipment.
  • Office space – Unless you’re based in your home, renting or buying a working space is the most significant expense coming your way as a new business owner.
  • Utility expenses – With a business, you will also have new utility costs to worry about. Think about internet, electricity, water, heating, and anything else relevant to your month-to-month operations.
  • Recurring costs on subscriptions, memberships, etc. – Will you use payroll software, some online tools, or anything else that comes with monthly or annual fees? These are some of the things to keep in mind if you plan to start a business with no capital. Don’t forget to include the costs for the services of the best financial advisors or legal counselors either.
  • Salaries for employees and contractors – Even if you’re a one-person show, you will still have to make enough money to pay for your salary. If your business depends on other people’s services, you must calculate those, too. It doesn’t matter if you have a full-time employee helping you or you hire freelancers and contractors.
  • Website and marketing expenses – These days, you don’t exist if you don’t have a website and a good marketing game. Both of these things, however, cost money.
  • Taxes – The average small business tax rate in the USA is 19.8%. The rates vary from 13.3-26.9%, depending on your business entity.

Funding a Business With No Money

Now you know what all that money is needed for. So, you may wonder how to achieve your goal without any cash. Well, there are ways to do this. All of these require planning, saving, and research.

Lower Your Costs

The most obvious step is to simply lower your costs. For this, you must adjust your business model and remove anything unnecessary from your business plan. Home-based businesses, for example, require an initial investment of only $1,000. Starting a business in a rented office, in contrast, needs about $3,000. If possible, start your operations from your home and then upgrade when you have enough funds. This is a critical step for starting a small business with no money.

Another thing to consider is being the sole employee, at least at the beginning of your journey. This is your business, so you should be the one investing their time in it. Paying other people to do your job doesn’t make sense when you’re struggling financially. Statistics show that 73% of self-employed SMB owners do their own booking. That’s a lot of money saved right there.

Finally, save on anything else, as far as your company allows it. Do the research and get the cheapest supplies. Avoid buying a new laptop if the one you own is functional. Don’t waste time and money decorating your working space until you have made at least some profit. It doesn’t make sense to wonder how to start a business with no money and then waste cash on useless items.

Save up Six Months’ Worth of Expenses

Another proven step of accomplishing your dream of running an SMB is to save money beforehand. That’s right. If you know what your expenses are going to be, you want to save at least six months’ worth of costs.

Let’s say you’re starting a home-based consulting business and you expect your monthly costs to be around $1,000. In this case, you want to save at least $6,000 before starting your company. This way, you are starting a business with no money, but you also have a safety net if things go south.

Stats show that new businesses become profitable after 18-24 months from their date of founding. So, unless you already have paying customers, you may want some savings on the side.

Apply for Grants and Loans

Governmental agencies, banks, and lenders are all possible funding sources for new business owners. State and local agencies exist to help SMBs grow by offering grants and loans with favorable terms. Banks and lenders usually have worse offers and higher APRs. Plus, financial institutions will require that you have a good credit score to qualify for a loan. Still, if you want to start a company with no money, all of these are suitable options.

Consider Finding Investors

Without your funding, it’s smart to consider other sources of financing. A business can’t thrive without money, so this is a step that many people choose and don’t regret. Finding investors, naturally, isn’t the easiest task. Especially if you don’t know where to find them.

  • Individuals – Some people want to invest money in new ventures. Many of them would like to become your partners, too. This option is an excellent idea for those who want to finance a business with no money and don’t mind sharing the “throne.”
  • Angel Investors – These are people who just pour money into businesses they deem worthy in return for partial ownership. Angel investors usually stay away from the operations and just take their share of the profit when the time comes.
  • Crowdfunding – Believe it or not, there are millions of people worldwide who are willing to help you out. Crowdfunding is about lots of individuals donating a small amount of money for your cause. So, instead of asking one person to give you $5,000, you can ask 1,000 people to give you $5 each. With crowdfunding, you get to start a business with no money but also without owing anything to anyone.
  • Venture Capitalists – In their essence, these are similar to angel investors. The main difference lies in the fact that venture capitalists tend to be organizations rather than individuals. Also, they try to enter founded businesses rather than startups.
  • Friends and Family – If the people you’re close with are in a good place financially, they may be willing to help you out. Rather than taking out loans that come with fees and APR, you can get a free loan from your parents. For plenty of successful entrepreneurs, this was the best way of funding a business with no money.

Start Small

A huge mistake among new SMB owners is starting big. Here, we refer to offering tens of different services, hiring more people than necessary, renting out a huge space, etc. All these things make it impossible for you to organize your operations and maintain your cash inflow.

Make the smart move and start small instead. Offer one or two services in a specific niche. Avoid employing people in the first few months. Start your company in your home. As your workload grows, your company can expand, as well.

What Business Can I Start With No Money?

Not all businesses are the same when it comes to the starting investment they require. Founding a company that requires lots of expensive equipment, for instance, isn’t likely if you have no money. Other businesses, in contrast, require only a laptop and an internet connection. So, let’s go over some options for future SMB owners who don’t have any starting funds.

How to Start a Retail Business With No Money

With an online retail business, you can do everything from your home. You will need a professional website and vendors. Nothing else. In this category, dropshipping is especially popular among those wondering if you can start a business with no money. With as little as $2,000, your retail business can be up and running. Just make sure you have a strategy for reaching customers because the competition in this industry is unforgiving.

Starting a Personal Creations Business Without Funds

Are you making unique arts and crafts? Well, you can establish a personal creations business right from your home. Sites like Etsy and eBay are the best places to reach millions of potential customers. You can sell jewelry, paintings, candles, and tons of other stuff there. If starting a business with little money sounds good to you, this is the path to choose.

If you’re already doing arts and crafts, it’s likely that you have all the necessary supplies. So, just create enough items for your webshop and start selling. Please note that in some countries and states, you need a license to sell arts and crafts. So, make sure to obtain these and avoid any headaches later.

How to Start a Food Business With No Money

The median investment for starting a restaurant is about $275,000. So, at first, this doesn’t sound like a good idea for starting your own business without money. A food business, however, doesn’t necessarily need to be a large restaurant. You can, instead, prepare takeout and catering food in your home. The essentials for this venture include cooking items, a top-quality oven, and food packaging. Reach out to nearby firms and coffee shops that would be interested in your services. Once you have one or two positive replies, your journey can start.

Starting an In-Home Services Company Without Cash

This is a broad term because in-home services include various business ideas. Most of them, nonetheless, are great businesses to start with no money. From baby and pet sitting to content writing and consulting—there are options galore. When you base your business in your home—or offer your services in customers’ homes—you won’t have any extra costs for renting and furnishing a space. Just get the essentials and start making money.

How to Start a Construction Company With No Money

To run a construction company, you need various licenses, several employees, and expensive equipment. In the USA, to establish this type of business, you will need at least $50,000 as an initial investment. So, it’s not quite possible to consider it an option for starting a business with no money.

If you want to enter this market, you will need third-party investment from angel investors or venture capitalists. Alternatively, you can take out a loan or apply for a grant to help you get started. Otherwise, you may want to move in a different direction and with another business idea.

Bottom Line

If you have a good idea and an area of expertise, you can likely establish a successful company. Registering a brand name is the least of your worries, however. Especially if you don’t have any initial investment for your venture.

In this situation, knowing how to start a business with no money is critical. In this article, you have everything you need to plan your steps and improve your chances of success. Remember, you will have to make some sacrifices in the beginning, like acquiring debt or finding a partner.

In the long run, nonetheless, all of this will be worth it when your business starts generating its first profits.