Start a Business With No Money

Have you ever dreamed of owning a business? I can’t blame you. The advantages, after all, are crystal clear. Mainly, you get to be your own boss, set your own…

Have you ever dreamed of owning a business? I can’t blame you. The advantages, after all, are crystal clear. Mainly, you get to be your own boss, set your own hours, and make a living off of a passion.

Because of this, it’s not surprising that about three in five Americans (61 percent) have an idea for starting a business, and about a third (34 percent) have had more than one idea.

A lack of funding is by far the most common reason Americans gave for not starting a business: 63 percent said that’s what stopped them from pursuing it. But money isn’t the only thing holding people back. Here are the other barriers potential entrepreneurs told us stopped them from starting a business:   

  • They didn’t know how to get started—39 percent
  • They were worried about failing—33 percent
  • They didn’t have access to business tools—29 percent
  • They weren’t sure how to work with the tools/technology needed to run a business —26 percent
  • They didn’t have enough time for a new venture—25 percent
  • They didn’t have support from friends, family, and/or peers—23 percent
  • They didn’t have access to group plan benefits—22 percent

Despite this, it remains a dream to many due to funding constraints. In fact, according to Zapier, 63% of Americans haven’t followed through with starting a business due to a lack of funding.

To be fair, that’s a valid concern. After all, it costs money to start a business. And, if you’re already on a limited budget, this could further complicate matters.

There is some good news though. A business can be started, or even expanded, for free if you think strategically and utilize available resources.

How Much Does It Cost to Start a Business?

Depending on the industry and location, starting a small business can cost anywhere from $0 to a million dollars. For example, the cost of starting a network marketing business will be far less than starting a specialty coffee shop. The exact amount of capital you will need to start your business is impacted by a few variables such as how much equipment you need, the cost of licensing your business, and more. For example starting an Amway business is just $64.

A good place to start is by understanding the types of costs you will need to account for before starting a small business:

  • Fixed costs are the expenses you will incur regardless of whether your business is open or not. Three examples of this are insurance, labor costs, and lease payments.
  • Variable costs are expenses you can anticipate paying but the exact amount you pay will vary such as utilities and materials.
  • Ongoing costs are expenses that will be incurred continuously and typically increase in cost.
  • Essential costs are expenses that are absolutely necessary to the success of your business. A few examples of this are marketing and bookkeeping costs.
  • Optional costs are typically made when there is an excess of capital. These aren’t expenses that are essential to the operation of your business and may not contribute to your return on investment (ROI).

How Do I Start a Business With No Money?

The Andrew Carnegie Formula

  1. First. Fix in your mind the exact type of business you desire. It is not sufficient merely to say “I want a small business.” Be definite as to the type of business.
  2. Second. Determine exactly what you intend to give in return for the business you desire. (There is no such reality as “something for nothing.)
  3. Third. Establish a definite date when you intend to possess the business you desire.
  4. Fourth. Create a definite plan for carrying out your desire, and begin at once, whether you are ready or not, to put this plan into action.
  5. Fifth. Write out a clear, concise statement of the type of business you want and amount of money you intend to acquire in your business, name the time limit for its acquisition and development, state what you intend to give in return for the business and money you want to earn, and describe clearly the plan through which you intend to build the business and accumulate the money generated by your business.
  6. Sixth. Read your written statement aloud, twice daily, once just before retiring at night, and once after arising in the morning.

Starting a business without money is not impossible. However, it does require following the 6 Steps referenced above, careful research, a clear business plan and the determination to succeed. Here are some additional steps to help you and get you started.

Solve a problem with your idea

Before you start a business, you have to have an idea. The most effective business ideas combine your passion or skill set with a problem that people need solving. For example, your neighbors are driving to another town to get pants and dresses hemmed or tailored. You know this is a problem because your friends frequently complain about it. If you know how to sew, consider providing your services locally. Problem solved! And as your client list grows, you can bring in others skilled with a needle.

Define your business

The most successful businesses have a clear business plan with goals. They also have a business strategy for achieving those goals. You should know exactly what you want and how to achieve it.

Start by defining your business concept, noting what product or service your business will sell, how it will sell it and what makes it different from other businesses in the same market. Your business concept should be as unique and valuable to consumers as it can be.

Consider your target market carefully and make sure you offer something they want or need. Write actionable short- and long-term goals for your business. You may need to revise your business plan several times to create a solid business idea.

Analyze Your Strengths and Weaknesses

Successful entrepreneurs aren’t good at everything they try their hand at; they are aware of their strengths and weaknesses and utilize them to the advantage of their business. Be honest with yourself about what your skill level is and where you might need improvement or the help of a more experienced resource.

Knowing your strengths and weaknesses can help you establish attainable business goals and secure necessary resources to help where needed, increasing your chances of success.

Create a Solid Business Plan

Your business plan is the roadmap to the first three to five years of your business’s life, and it is absolutely essential to the success and wellness of your business. Developing an effective business plan will help you accomplish the steps necessary to reach important milestones. 

Conduct thorough market research

Performing market research before launching your business can help you identify your target consumers and develop a strong business strategy. You can research your market by:

  • Assessing your potential competitors: Analyze their marketing strategy and products or services. Note any gaps in their approach that you could capitalize on. For example, if your competitors do not engage customers on social media, setting up social media accounts and creating consumer-focused content could help set your business apart.
  • Finding industry trends: Use trends to anticipate the challenges your business could face. For example, you may find companies that provide landscaping services have slower business during the winter when grass and plants grow more slowly. Your new venture might include snow shoveling to maintain revenue during cold weather.

Build your professional network

Members of your professional network may be potential investors, advocates for your business, sources of advice or all three. Contact people who have had an impact on your professional career and strengthen those bonds by arranging to meet in person. Attend trade shows, conferences and other industry events and make new contacts. Industry forums and social media channels are also good places to form virtual networks.

Talk with contacts about your business concept and ask if they have any advice. If they cannot help you directly, ask if they know anyone who could help you. Other professionals you meet through your contacts can be valuable additions to your professional network.

Take advantage of what you have

Let’s say that you love pizza. Who doesn’t? But, you’re such an avid pizza fan that you want to have your own pizzeria.

Even if you actually know how to make a mouthwatering pie that people would line up for, you need a lot of money upfront. Besides a physical location, you need key equipment like pizza ovens. Simply going the food truck route would also cost a pretty penny.

Another option? About taking your passion and knowledge and sharing it with others through a blog. Believe it or not, you can set up your own blog via Blogger or Medium. So, that means you’re only investing your time. And, eventually, when you get a following you can make money with ads and affiliate marketing.

That’s just a long way of saying that when starting a new business consider what you have at your fingertips.

  • What unique skills do you currently possess?
  • Do you have any past experience?
  • What areas are you knowledgeable in?
  • Identify your relationships with others, map out your network of contacts, and consider how your connections can assist you in using what you have to your advantage.
  • What are your resources and what can you access?

Consider what you have available in greater detail than what springs to mind immediately. And, you should also document your findings so that you take stock of what you already have and how that can assist you.

Focus on businesses that require little upfront capital

After considering what you have at your disposal, are there any low-cost business ideas that correspond? Again, if you’re a pizza aficionado, then starting a blog is an obvious business idea that requires little capital upfront.

In fact, the number of businesses you can start today requires little or no money initially. Particularly, service-based businesses.

A service-based business is one in which you sell services as your primary product. Due to the fact that you won’t be selling products, you won’t need inventory, a shop to manufacture the goods, or a warehouse to store them.

Almost any service business can be started on a shoestring budget. Online businesses, especially, are well suited to this. Often, you need nothing more than a computer, an internet connection, and your time. Suggestions would be consulting, freelancing, or dropshipping.

There are also so offline ideas like dog walking or being an Airbnb host.

Vet your idea

You’re probably going to put money into your idea eventually, even if you’re reinvesting the profits.

“Before you put money in your business, make sure you validate your idea within your trusted circle. Sometimes, we think we have a great idea, but when we explain it or pitch it to others, we often realize that the concept may be a tough sell.

It’s important to ensure your idea has legs that will make it worth your time and ultimately earn you a profit despite the low startup costs.

Calculate essential business expenses

It’s always a good idea to calculate your expected costs before you start a business with no money. Why? Because this will establish a savings goal so you have enough money to get started.

Shopify estimates that starting a business with zero employees normally costs $18,000, while up to four employees typically spend $60k during the first year of operation.

Shopify’s study included 300 business owners, and the following were the ways they funded their businesses;

  • 198 drew on personal savings
  • 90 reinvested revenue
  • 69 received support from friends and family
  • 63 obtained a personal loan

As such, the number one way to start a business is by bootstrapping, so you’ll most likely need some type of personal capital eventually. According to Shopify, businesses should aim to spend a certain percentage of their budget on the following various aspects of the business.

  • Operation: 10%–15%
  • Product: 28%–36%
  • Shipping: 8%–12%
  • Online: 9%–10%
  • Marketing: 7%–12%
  • Team: 14%–30

The good news is that your budget will only be about $1,500 per month for a year’s worth of operation.

Now, if you’re starting an online or service-based business, you can drastically reduce these expenses. Take operations, as an example. Instead of paying for Quicken you could use free alternatives like GnuCash.

Regardless, at some, you will have to invest in your business. So, it’s not a bad idea to get ahead a start with your savings.

Don’t quit your day job

It’s cool to have a big idea. It’s even cooler to actually make that idea a reality. But, let’s be real here. Ideas don’t put food on the table.

It’s rarely a good idea to quit your day job and start a business that hasn’t been tested. Moreover, your chances of succeeding are better if you stay employed at your day job.

The reason? As you begin and build your business, it will be easier for you to take risks if you have a steady income. Although this may be difficult at first it will help you scale your business faster. Additionally, this gives you the freedom to pursue new opportunities.

Additionally, you can invest and grow your business faster with your income. You will also find transitioning from an employee into a business owner much easier once your business begins to thrive. In other words, you should build a solid foundation if you hope to achieve long-term success.

How long should you keep your day job? That depends. However, it’s suggested that wait until you have at least six months of expenses saved. It usually takes about six months before you begin to see any cash flow. So, if having this stashed away prevents you from living on credit or depleting your savings.

Invest only what you can afford to lose

A golden rule of investing is to never invest money that you can’t afford to lose. And, that definitely also applies to starting a business.

You can maintain flexibility in the business by investing only what you can afford to lose. It also reduces stress and prevents overreaching. And, you may never launch your business because you’ll invest only when you expect a specific return.

As an example, let’s say that there’s a person who refuses to quit their well-paying job until they find one that pays more. In contrast, one might decide to invest a small amount of money and three years into a project that they’re passionate about — regardless of whether it will pay more than they’re making now.

Minimize your spending

When starting a business with no money, lower your costs as much as possible.

You can start by taking these steps;

  • Work from home. A business that can be run from home requires less capital than a storefront, warehouse, or office.
  • Enact a spending freeze. Choose a length of time, whether a week, a month or six months, during which you do not purchase any products or services you do not need.
  • Use cheap or free services. WordPress or Wix are free services that allow you to build a basic website and market your business using Facebook or Instagram. For accounting and project management there’s Wave and Wrike respectively.
  • Get free or used equipment. You might be able to get a free computer, for instance, over at FreeCyle. Or, you can head over to EquipNet to scope out used office equipment or furniture.
  • Invest in only what’s essential. Deciphering wants from needs can be tricky. In general, if something is essential to your survival, then it counts as a need. For your business, this should be directly related to revenue generation, such as marketing and training.

Get in the trenches

Who else is going to invest as much time, energy, and resources into your business as you? No one.

With that in mind, you’re going to have to put in the time and effort as a business owner. What’s more, you’re also going to have to wear multiple hats until you can afford to hire freelancers or employees.

You must do everything you can to build a solid base for your new business. Whether that’s learning new skills for free online, making cold calls, writing blog posts, engaging your audience on social media, or attending trade shows.

You will also make mistakes when you are in the trenches. In fact, mistake-making is an important element of setting up a new business. Making mistakes is the best way to find out what works and what doesn’t work for you or your business.

Having all the groundwork laid beforehand will also make onboarding new employees more convenient. Due to your firsthand experience of what it takes to succeed in your business, you will be able to guide your employees to success.

Find alternative funding sources

Despite the fact that you may need little to no money to start a business, there is a good chance you will incur some expenses along the way, especially if you expand. Fortunately, you have several funding options available to you.

  • Friends and family. Prepare a business proposal to help you raise money if you know someone with enough capital to help fund your venture. Most importantly, you should set clear expectations about doing business with family or friends to avoid misunderstandings.
  • Credit cards. While they may be the easiest way to obtain short-term financing, they have some drawbacks as well. One drawback is that they are very expensive. Most cash advances come with high-interest rates. Cash advances are typically charged an upfront fee of between 3% and 5% with credit cards.
  • Business loans. Usually, a bank or alternative lender will make a business loan to a company. Small business loans come with high-interest rates, fees, and repayment terms, so do your research before applying for one. Generally, lenders consider your credit history, business history, annual revenue, and ability to pay back the loan when approving your loan.
  • Home equity loans and home equity lines of credit. If you have sufficient equity in your home and are a homeowner, this will be an option. However, the collateral for the loan is going to be your home. You’re still responsible for the equity loan or line of credit if your business fails.
  • Retirement plan loans. The IRS allows you to borrow up to 50% of your vested interest in your plan, or $50,000. But, you must continue working in order to receive the loan. You will need to repay the loan within 60 days if you leave your job to start your new business venture.
  • Business grants. Business grants are a form of free capital given to companies to help them expand. They come with a number of requirements and stipulations, though. The competition for business grants can be fierce as well. This means that you should only apply for grants that directly relate to your business, such as business grants for women or business grants for minorities.
  • Crowdfunding. Consider crowdfunding (raising money from many donors) if you don’t feel comfortable asking someone to help finance your business. It is possible to raise money through a donation, debt, reward, or equity crowdfunding campaign.

Run a business trial

Running a trial before you officially launch your business is a good way to identify potential challenges you may not have accounted for and determine its feasibility in your market. 

Consider having a small local launch before making your business national or launch it on your existing social media before creating channels dedicated to the business. Collect feedback from your first customers to learn what you are doing well and what you could improve. Analyze whether you have any logistical issues to overcome before working on a larger scale.

Scale the business up

Scaling a business means taking steps to grow your business and increase its processes and production. It’s best to scale your business in smaller degrees so you can make small adjustments without impacting your limited finances. Consider these small steps to scale your business:

  • Offer products and services to a wider consumer market.
  • Hire a few employees to increase productivity.
  • Expand your marketing efforts.
  • Provide products and services nationally, then internationally.
  • Find a larger workspace.

Consider Businesses with minimal capital requirements

If your funds are limited, consider starting a business that needs little to no capital. This will also reduce startup time and financial resources. An Amway Network Marketing Business is an excellent choice because the costs of starting and ongoing capital is very limited and the earning potential is unlimited.

Expenses Tax Deductions for Starting a Business

There are two types of expenses that you can deduct from your taxes – startup costs and ongoing operating expenses.

Startup Cost Tax Write-Offs

The IRS allows three types of startup costs eligible for tax deductions (IRS source). You can only write them off of your taxes if you actually opened the business.

  1. Creation – Costs for research, competitor analysis, surveying markets and visiting possible business locations. These costs can be associated with creating a new company or investigating an existing business for investment consideration.
  2. Preparation – Costs for opening your company such as equipment, employee training, travel to suppliers, advertising and marketing expenses, business cards and legal fees.
  3. Organizational – Expenses for incorporating your company, registering trademarks, salaries for company directors and accounting fees.

The IRS allows you to deduct up to $5,000 business startup costs and $5,000 in organizational costs totaling $10,000 BUT only if your total startup costs are $50,000 or less.

If your startup costs are over $55,000 you are not allowed these deductions. These monies can be applied to reduce your taxes in the year before you open your business in the following year.

Need help calculating your startup costs?
Learn how to correctly estimate your startup budget and capital needs – including costs list by industry in my guide here

Business Operational Tax Deductions Expenses

Once your business is open for customers your list of tax deductions expands dramatically to include these expenses:

  • Car transportation – You can deduct a portion of your car expenses (including gas and oil) when you use your vehicle for business purposes such as traveling to customers, suppliers, trade shows and delivering merchandise.
  • Housing – If you have space in your home that you have dedicated to your business you can deduct the costs of that space (including mortgage, insurance and property taxes) from your taxes.
  • Utilities – Dedicated phone lines for businesses are legal deductions as are costs to heat and cool your home business.
  • Travel Entertainment – If you travel to trade shows, customer presentations and to suppliers, your travel expenses can also be used as tax write-offs.
  • Eating Out – If you hold business meetings over dinner you can deduct 50% of the cost of restaurant meals.
  • Computer Equipment & Furnishings – Section 179 of the IRS tax code allows up to 100% of computer equipment to expense annually up to six figures. This is good news since it means that your new computer can be deducted in the same tax year.
  • Computer Software
  • Office Supplies
  • Insurance Premiums
  • Education

Frequently Asked Questions About Starting a Business With No Money

1. Do I have what it takes to start a business?

Even if you have an idea for a business, the best place to begin your planning process is to decide whether you have the skills required to start and operate a business

An objective assessment of your skills, abilities, and talents as well as an assessment of your strengths, weaknesses, and personal situation are necessary when determining whether you possess business acumen.

2. Can I really start a business for free?

Short answer; yes.

It is possible to start a low-cost business on a shoestring and scale it up later. It is not unusual for businesses to start small, working from home or online, then expand and hire more employees while finding a larger location.

3. What kind of business should I start?

If you’re unsure, you should start something in your area of expertise. You should view the start-up of any business as an investment in your own human potential. Although you could generate income for another company using your skills, you decided that opening a business will be a better option for you.

In the same way that you wouldn’t invest in stocks or other investment vehicles outside your comfort zone, you shouldn’t do that with your own strengths. If you choose a business in a category you already know a lot about, starting a business will be easier, even if it’s not always a seamless process.

4. How will I market my business?

Marketing your business will be easier if you know your target audience. B2B audiences may respond better to webinars and white papers, while younger audiences may benefit from social media.

Understanding where and how you will market your business is crucial before you start a business. Brands that have successfully communicated their value proposition have become world leaders. Defining your unique selling proposition and communicating it to the right people should be your marketing focus before you launch. Poor marketing can be fatal for new companies.

5. When can I expect my business to turn a profit?

Generally, it takes between six months and a year to reach profitability. Taking this into consideration, technological advancements and advances in communications have made it very easy to start your own business with almost no overhead, especially in a service-based economy. Here is where the importance of a business plan shines brightest, since a plan will allow you to project your profitability.


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Does this spark your interest?

What if you had an opportunity that could change the course of your entire life? What if it were presented right in front of you?

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When I first met my mentor, I was told that if I followed exactly what he asked me to do, that I could have anything I want…and know something? I had zero belief in myself, but I believed that he believed in me.

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Interested contact us now.

Sydney Reitenbach

Michael Kissinger

Reitenbach-Kissinger Success Institute

Phone: 650-515-7545



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