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If you’ve ever dreamed of working for yourself, you’re in good company. According to data from the Federation of Small Business, the UK is home to 5.5 million small businesses, which account for about £2.4 trillion worth of turnover every year.
But starting a business of your own is notoriously tricky. Entrepreneurs must run the gauntlet of raising capital, choosing a team and working out a workable and sustainable business model.
But often, the most challenging part is coming up with the right idea – so Forbes Advisor has compiled a list of 10 business opportunities that require relatively low upfront investment.
1. ‘Ghost’ kitchen
‘Ghost’ kitchens – sometimes called ‘dark’ or ‘cloud’ kitchens – are food businesses that operate on a delivery-only basis.
Rather than maintaining a premises that customers visit, these businesses advertise online and via delivery services such as Deliveroo, Just Eat and Uber Eats.
However, these platforms charge a commission on sales, often upwards of 20%. They may also charge an initial on-boarding cost.
This business model surged in popularity during the pandemic, when lockdown restrictions prevented diners from eating out and home delivery demand soared. According to Statista data, there were around 750 ghost kitchens in the UK in 2020.
Provided you have the right food safety standards in place, you can start a ghost kitchen from your home, so start-up costs are low.
However, before your first takeaway leaves the kitchen, you’ll need to register as a food business with your local council and have your workspace approved for health and safety.
2. Digital marketing agency
If you’re a good online communicator, a digital marketing agency could be the business opportunity for you.
These agencies offer online marketing services to other businesses, including branding, copywriting, search engine optimisation and social media marketing.
Starting your own small-scale agency comes with minimal start-up costs, and allows you to do your job from anywhere that has reliable internet access.
3. Affiliate marketing
If you already have a website or blog, affiliate marketing can help you monetise it.
Affiliate marketing is the practice of promoting products or services offered by other companies on your website. Each time someone follows a link or makes a purchase from the company, you’ll earn a commission.
The value of each commission varies, and could be worth anything from 1% to 20% the value of the customer’s purchase, depending on search volume and transaction value.
Setting up this type of business is fairly low-cost – the only essential purchase is a website. However, it can take time to build a strong site that will attract affiliate partners.
4. Dropshipping business
If you’re always making product recommendations, dropshipping might be for you.
With this business model, entrepreneurs curate a collection of products sold by third party vendors and list them on a user-friendly website.
When a customer places an order, the dropshipper buys the item from their chosen vendor, who then ships to that customer directly.
Dropshippers don’t maintain an in-house inventory, which allows them to offer a wide range of products and side-step the hassle of storage, packaging and delivery. Dropshippers make a profit by selling items at a higher price than they bought them for.
To get started, you’ll need a website with ecommerce functionality. Because you’ll only be buying products after customers have ordered them, upfront costs tend to be low.
5. Website design
In an interconnected world, every organisation needs an online presence – and web designers help make that happen.
Starting a web design business could be a good option for would-be entrepreneurs who have coding skills and a good eye for detail.
Unless you’re employing other designers, start-up costs are very low. You’ll just need a decent computer and your web design software of choice.
6. Freelancing
If you want to start a business with virtually no upfront costs, freelancing could be the answer.
Whether you’re a writer, graphic designer, financial advisor, photographer or social media marketer, you can sell your services to clients around the world.
Exactly what you’ll need to get started depends on your area of expertise. But a good laptop, business cards and an online portfolio of your work is a great place to start.
7. Event management company
Always seem to be the one organising group activities or family holidays? Put your skills to financial use by starting an event management company.
Event managers plan everything from concerts and weddings to birthday parties and work functions on behalf of their clients, working with each to plan an event unique to them.
New businesses might start out planning events for individuals, local clubs or schools, before scaling up to event planning for companies and larger organisations.
8. Clothing business
Selling clothes can be a lucrative business. In the UK, an average household spends about £840 a year on new clothes, ONS data suggests.
If you love fashion, and have a clear vision for your aesthetic, starting a clothing company could be the right business opportunity for you.
To get started, you’ll need to invest in quality materials, packaging and an ecommerce website or physical space to sell your wares.
Since renting a whole shop floor is costly, you could consider starting online, and giving your customers a face-to-face experience at local craft fairs and markets.
9. Photography and videography
Good photographers have an eye for detail and know how to capture the moment. If this sounds like you, it could be worth turning this skill into a business.
You can expect to be called upon for everything from professional headshots, to weddings, to pet portraits.
Start-up costs could be non-existent, depending on what equipment you already have to hand. You’ll need a decent camera, a means of transportation, editing software and a website to advertise your services.
10. Teaching classes
Whether it’s painting, yoga and public speaking, sharing your skills with others can be a good business opportunity.
If you’ll be teaching pupils one-to-one, start-up costs will be minimal. If you want to scale, you could also hire a videographer or graphic designer to help you create premade courses you can sell online.
How to identify new business opportunities
Whether you pick one of these ideas or go down a different route, you’ll need to size up the market and know your competition before diving in.
Below are a few techniques for scouting out the best business opportunities.
Market analysis
Conducting market analysis will help you understand whether your business idea is workable.
There’s no one size fits all approach to market research, but you could start by identifying key players in your chosen area, speaking to industry professionals and surveying your potential audience.
SWOT analysis
This acronym stands for strengths, weaknesses, opportunities and threats. Exploring these four categories can help you build up a picture of how viable your new business idea is.
For instance, if your analysis unveils a new market trend, this could present an opportunity for your business, and inspire you to improve products or access a new audience.
Questioning process
Asking questions about your business can be a good way to refine your ideas, products or services.
Questions might include:
- Can I get the same results with lower spending?
- Can I deliver products or services faster?
- Can I make my products or services more accessible?
- Is there a more sustainable way to operate my business?
When asking these questions, try to keep an open mind.
This process is suitable for both existing and hypothetical businesses.
