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Flexibility, creative freedom, personal satisfaction and unlimited income are just some of the potential benefits to owning your own business.
If you dream of becoming a business owner but are hesitant to take the plunge due to a lack of funding, it is, in fact, possible to start a business with nothing. Intrigued? Keep reading to find out how you might go about it.
How to start a business with no money
If you’re exploring the idea of entrepreneurship or would like to launch a business with no money, these tips can set you up for success.
1. Keep your day job
As soon as you decide to start a business, it may be tempting to immediately leave your full-time job and fully commit to your venture. Doing so, however, is risky, especially when you have minimal or no funds available.
If you maintain your job and focus on your business in the evenings, on weekends or whenever you’re not at work, you won’t have to live off your savings or credit cards. You’ll have a steady income that allows for greater flexibility.
Once your business is in full swing and you’re confident you earn enough to cover your business expenses and live comfortably, you can reduce your hours – or quit.
2. Choose an idea that doesn’t require upfront capital
The most difficult yet most important part of entrepreneurship is figuring out a business idea. If your goal is to start a business with no money, consider a service industry business. Here are several small business ideas to inspire you.
- Freelance writing: You can write content for a variety of businesses and publications. This might include website content, blog posts, brochures and e-books
- Virtual assisting: As a virtual assistant, you offer administrative services to various clients. Your clients may ask you to make phone calls to their customers or vendors, plan events, schedule appointments, manage databases or book travel
- Social media management: Social media management is when you help businesses promote their offerings via Facebook, Instagram, LinkedIn and other social media platforms. You’ll also interact with their fans and followers
- Graphic design: The goal of graphic design is to create eye-catching designs that can be used for various marketing purposes, such as brochures, posters, packaging and logos. Advertising, marketing agencies or businesses may hire you directly to create graphic designs
- Tutoring: If you’re patient and specialise in a certain subject or topic, you may want to tutor. You can tutor virtually, in your home, at libraries or coffee shops, or in clients’ homes
- Bookkeeping: Bookkeeping is a time-consuming task that many business owners are keen to outsource. As a bookkeeper, you’ll reconcile bank accounts, generate income statements and balance sheets, and clean up general ledgers
- Home organising: Home organisers help clients sort through their clutter and create clean, organised spaces. With this business, you’ll visit client homes and assess their organisational needs. Then, you’ll design a strategy to get rid of unnecessary and unwanted items, and a way to store and organise the ones they keep. You might be called upon to organise their entire home or just a room or two
- Photography: Photography can give you the chance to express your creative side while providing your clients with photographs they’ll cherish for years to come. You can offer a diverse menu of services or take on a speciality such as family or maternity photos, for example
- Dropshipping: Dropshipping is when you sell things without buying inventory. A customer will pay retail price on an item from your online store. Then, you’ll send their order to your supplier and pay them the wholesale price.
3. Carry out market research
Of course, before you move forwards with your business idea, you should determine whether it’s actually viable through extensive market research.
Identify your competitors and figure out your unique selling point – which is essentially what you can do better than them. Perhaps your services will be faster, more innovative or less expensive.
You can also host focus groups and speak to potential customers directly to get a better feel for their needs, wants and buying behaviours. In addition, don’t hesitate to utilise social media and online reviews of similar businesses.
4. Write a watertight business plan
A business plan is a road map for how you’ll grow your business. With a well-written business plan, you can anticipate potential challenges and plan for them accordingly. You may also attract investors and employees as well as secure financing.
As you write your business plan, emphasise why your offerings stand out. Be sure to avoid industry jargon and use plenty of visuals to break up the text and make your plan more visually appealing. The key parts of a business plan include:
- Company overview: This is a description of the business you’re about to start. Be sure to mention your business model and legal structure if relevant
- Market research: Summarise your market research findings. Explain how your products or services will meet the needs of your target audience and allow you to stand out from your competitors
- Marketing strategy: Marketing strategy refers to how you plan to promote your business to reach new customers. This may include email marketing, social media marketing or event marketing, depending on the nature of your business
- Financial plan: The financial plan should outline what you’ll do to earn and spend money. Ideally, it would feature a balance sheet, cash flow projections and other financial data and documents.
5. Wear many hats
While in the future, you may be able to hire help for your venture, when you first launch, you’ll want to be a ‘Jack of all trades’, handling the various tasks on your own to reduce costs. For example, if your business idea is virtual assisting, it’ll be up to you to market your services, create client contracts, perform the work, send invoices and collect payments.
Keep in mind that while you may not be able to do everything perfectly, you’ll learn a lot and save a great deal of cash. Hiring help too soon is risky, especially when you don’t have much money to start with.
5. Run a trial
While you can go ahead and officially launch your business once you have a business name and marketing strategy in place, it’s wise to have a ‘soft’ launch before you go big. This way, you’ll be able to pinpoint potential challenges and make proper adjustments.
During your trial, ask your customers for their honest feedback and what you can do to improve your offerings and service. Chances are you’ll learn about some pitfalls that you didn’t know about before and reduce your risk of failure.
6. Scale up
Your business will likely start small. But as you achieve success and meet your goals, don’t be afraid to grow. This may require you to cast your products and services to a wider market, hire a few employees to boost productivity, expand your marketing efforts or find a larger workspace. It’s in your best interest to scale slowly but surely so that you can make small changes without impacting your limited funds.
7. Lean on free resources
Believe it or not, there is no shortage of free or low-cost resources to help entrepreneurs and aspiring business owners such as yourself. Just Google-search workshops, mentorship programmes and networking opportunities in your area.
You can find much more than tax information under the setting up a business section on the .Gov website – and even try your local library.
By taking advantage of free resources, you can reduce your spending and launch your business in the most cost-effective way possible.
8. Network
Sometimes, it’s not what you know but who you know. And if you’re trying to start a business with no money, network, network and network. Build connections with industry professionals, potential investors and other entrepreneurs.
They can share meaningful advice, introduce you to interesting people, promote your offerings to their customer base and could even be future investors. You may network online or attend networking events in your local community. It’s also a good idea to look for conferences and trade shows related to your industry.
9. Design a savings plan
As an aspiring business owner, it’s up to you to build a savings account for your venture. To do so, track your spending and identify your costs. You may also want to get a business credit card, some of which offer perks like cashback and travel points. Just make sure you repay what you spend as interest rates are high.
In addition, set up a monthly budget and make every effort to stick to it. While your unique situation will dictate how much money you should save, a good rule of thumb is to save up at least six months’ worth of savings for business expenses.
10. Look for alternative funding
Fortunately, there are many places you can turn to for small business funding. Here are some potential options:
- Friends and family: If you have a loved one who supports your business venture, they might provide you with some capital in the form of a low- or no-interest loan or grant. Just make sure you put the terms of the loan or grant in writing so that everyone is on the same page
- Venture capitalists: Professional investors such as venture capitalists offer money in exchange for a percentage of your business profits or stock. You’ll need to share a business plan and financial statements to secure this type of funding
- Angel investors: Angel investors differ from venture capitalists because they use their personal money to help fund your business. In many cases, they’ll serve as mentors and guide you as you launch and grow
- Small business loans: Take a look at what’s available from the government in terms of competitive lending to start-ups. For example, you could apply for a government-backed Start Up Loan. These lend between £500 to £25,000 to businesses that have been trading for less than three years. Find more on this and our Best Business Loans For Start-ups
- Crowdfunding: Crowdfunding is when you ask prospective customers to provide you with money upfront in exchange for a unique perk or promise down the road. Fortunately, there are many online crowdfunding platforms to help you set up a campaign, such as Kickstarter, GoFundMe and JustGiving.
Bottom line
While money will undoubtedly make it easier to start a business, it’s not always necessary. If you don’t have a lot of cash at your disposal, you can still fulfil your dream of becoming your own boss. As long as you’re persistent, work hard and take advantage of all the resources available to you, there’s every chance of being a success.
Frequently Asked Questions (FAQs)
What is the best business idea that requires no money?
The ideal no-cost business idea depends on your particular interests, strengths and desires.
In most cases, however, service-based ventures including virtual assisting, tutoring, dropshipping and social management are the most feasible options.
What happens with tax?
You will need to register as a sole trader with HMRC (the UK’s tax office).
As a sole trader you’re required by law to pay tax through the self-assessment tax system. This means you must file a tax return every year to notify HMRC of your earnings.
To do this you must first register for self-assessment. It’s important to be aware that as a sole trader you are personally liable for any business debts.
Do I need a licence for my business?
You may need a licence to operate legally in some cases – for example, if you are a street trader, plan to sell food or alcohol, or if you want to play music.
This will form part of the process of registering your business with HMRC.
You should also contact your local authority or council to see what the legal requirements are for your business.
Can I have a business and be a full-time employee at the same time?
Many business owners start their ventures as side hustles until they earn enough revenue and are confident they can support themselves without their full-time job.
