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All businesses start with an idea.
But turning that idea into a money-making machine isn’t easy (or free). However, the good news is…
Thriving businesses don’t have to start with a spot on Shark Tank, millions of dollars, a team of investors, or venture capitalist funding.
In fact, you can start a business for less than $100.
Believe it or not, some of the most successful companies in the world began with a shoestring budget. So, it’s not crazy or impossible to turn that $100 into a sustainable lifetime income for you and your family.
If you’re not sure how to get started or what you need for your new business, you’re in the right place.
Ready to learn how to start a business? Let’s get started!
How to Start a Business on the Cheap: Our Bootstrapping Principles
If you have a business idea, you probably researched how much it costs to get started. However, your Google results might be a bit misleading.
According to one estimate, the average price tag for a new business is around $30,000.
However, we don’t believe that’s true at all. Many of the “new business” costs you see in these types of searches are unnecessary. In many cases, you can trim away thousands of dollars in expenses right off the bat.
Principle #1: Avoid the Shiny Objects
When people build businesses, they tend to focus on the wrong things. To be honest, you don’t really need:
- Business cards
- A fancy business bank account
- A business line of credit
- An LLC registration
- A branding specialist
- Web design services
- A copywriter
- Or an expensive business coach
These are all shiny objects you don’t need at the beginning stages of starting your business. They look nice and can be incredibly beneficial, but you don’t need them right now.
When you start making a profit, you can then (and only then) invest that money back into your business.
All you really need right now is a website (we recommend Bluehost, which we’ll talk more about in a minute), an email address, and a list of people who want to buy from you. For real. That’s it.
At this stage, it’s critical to focus on the things that get your business off the ground—and ignore everything else.
However, you can (and should) come back to these things when you can justify the cost and proof that you have a profitable idea.
Principle #2: Land Your First 3 Customers
A business without customers is just a hobby. That’s why you should be completely focused on getting your first three customers. From there, everything gets a lot easier.
This is a crucial step in proving your business idea is profitable. If you can’t land three customers, you’re never going to land hundreds or even thousands.
It doesn’t matter if you’re a graphic designer looking to launch that design firm, or you’re a dog walker looking for clients.
Spend time focusing on what you need to do to land those first three paying customers or clients. And leave everything else for later.
Principle #3: Gather Social Proof and Testimonials
Now that you’ve landed your first three customers, it’s time to start gathering social proof you can use to market your business.
Why is social proof so important? Good question.
As a small business owner, you’re a marketer. And there’s an increasing trend in consumers not trusting marketers. It sucks, but it’s part of the game.
Social proof and testimonials are the easiest way to gain trust and break down that barrier. Here are some statistics to really drive the point home:
- 92% of people trust non-paid testimonials more than anything else
- 88% say user reviews hold the same weight as personal recommendations from friends and family
- Testimonials can improve conversions by 34%
- 97% say online reviews affect their buying decisions
- People will pay 31% more for services or products with good reviews
The more testimonials and reviews you have, the easier it is to convert visitors into paying customers or clients.
Now, there are several ways to go about doing this, but the easiest way is simply asking your first three customers or clients for testimonials. You can do this via email, text, on the phone, or in-person, depending on how you typically communicate with your customers.
Most people are more than happy to talk about good experiences, especially with small businesses. But… you have to be straightforward and ask for what you want.
Once you have social proof, you can proudly display it on your social media profiles, on your website, and when speaking with potential customers.
Speaking of websites…
What Do You Really Need to Start Your Business?
A business plan, a name, a website, and an email address.
While you don’t need much to get a new business up and running, you do need a few things. Here’s a rundown of essential items necessary for launching a new business for under $100:
- A business plan — Free
- A name for your new business — Free
- Web Hosting — $59.40 (for the first year)
- Domain Name — Free for the first year through Bluehost
- G Workspace — $6 per month
In true bootstrapping fashion, you can get everything you need for $65.40 today. Then, you can upgrade to better tools and systems as your business grows.
A Business Plan – Free
Before anything else, you need to understand how you’re going to make money and what you’re going to do as a business.
Do you want to sell products? Maybe you want to start a blog and earn revenue with affiliate marketing. Or perhaps you want to offer services and other digital products that’ll help change people’s lives.
There are dozens of routes you can take, but the first step in starting a business is picking one.
Don’t be afraid to do some research into your market to understand what’s already out there. You don’t have to reinvent the wheel, but you do need something that sets your business apart from the rest of your industry.
After that, you need to decide how you’re going to pay for the things you need to run your business before you start making a profit.
In our case—starting a business for less than $100—you don’t need much. But there are tons of options for business funding, including a business credit card, a business loan, investors, or using your own money.
Once you’ve figured this out, it’s time to name your business.
A Name for Your New Business
Now that you know how you’re going to make money, coming up with a name is a lot easier than going in blind. You don’t need to do anything fancy, but it’s important to understand that your name is important.
It’s the identity of your business and how people will find you.
Here are a few tips to help you come up with an excellent business name:
- Keep it as simple as possible
- Avoid trademarked words and phrases
- Use words that are easy to spell and remember
- Avoid homophones that are easily misspelled
- Don’t use slang or industry jargon
We always start with brainstorming as many words as possible. These could be words you like, phrases that are related to what you do, your favorite colors, etc.
Just start by creating a healthy list of words. Remember there are no bad ideas in the brainstorming step.
From there, you can start combining words to form potential business names. Once you have a list of three to ten options, enter them into a search engine to make sure they’re not already taken.
If they are, remove that option from your list.
You should also use a domain name checker like the one below to make sure the URL is available for purchase. This is where your business lives online, so it’s important to get the domain name you want.
Once you find a name that isn’t taken and is available as a domain, you’re ready to move on to the next step.
Note: don’t buy your domain name yet! We’ll walk through how you can get a domain name for free in the next step.
Hosting + a Domain Name (Bluehost) – $59.40
Hosting and a Free Domain
Get everything you need to create a website for your business. All packages include hosting, basic website security features, 24/7 customer support if you get stuck along the way, and a free domain name. Snag everything you need to get started for $59.40 for the first year.
You can definitely launch a business without a brick and mortar location, but you definitely need a “place” for customers to find you. In today’s business world, this place is the internet.
A good business website doesn’t have to be fancy, and it’s possible to make an effective one for free. However, you’re better off investing a bit of money, here.
And the most affordable and reliable way to get started is through Bluehost.
They include everything you need, including a free domain name (for the first year), cheap web hosting services, and one-click WordPress installation.
So, it’s time to get started (if you haven’t already).
Head over to Bluehost to signup, follow their instructions, claim your free domain, and you’re ready to start building your website.
Google Workspace for Email – $6
In addition to a domain name and a basic website, you need a way for customers to contact you. The telephone is great, but the reality is that very few people want to pick up the phone to reach a business.
Instead, they want a quick and painless way to communicate with you.
Which… is where your business email comes into play.
Google Workspace is an affordable way to get your own business email address plus tons of other collaboration and content creation tools all for just $6 per month.
With Google Workspace you get all the functionality of a Gmail address with your own domain name as your email. This means the email address your customers see will be firstname.lastname@example.org.
Plus, you get access to Google Drive, Docs, Sheets, Slides, and more with up to 30 GB of storage space included.
Here at Crazy Egg, we use Google Workspace features literally every day. It’s that important to our business.
So, go get signed up.
Best for Business Email
Get access to 30 GB of cloud storage space plus access to Docs, Sheets, Slides, Gmail, and more. Here at Crazy Egg, we use it every single day. It's hands down the easiest and best way to manage your business emails.
Plans start at $6 per user per month.
Free Tools for Starting Your Business
While you probably can’t avoid every business cost, there are several typical business expenses you can get for free.
When you start a new business, one of the first questions you’ll confront is what kind of business entity you want to have. Should you form an LLC? What about a partnership? Are you okay working as a sole proprietor?
It’s easy to get overwhelmed by corporate terminology, and looking at this stuff can be enough to have any new entrepreneur calling a lawyer. However, legal work can quickly blow your budget. In addition, it costs money to incorporate in most states, and each state has its own rules and hoops to jump through if you want to form an LLC or corporation.
On the other hand, operating a sole proprietorship is free, and you don’t need to register with the state. This is probably why the U.S. has more sole proprietors than any other business type. If you’re interested in operating as a sole proprietor, it’s a good idea to check out the rules specific to your state.
Keep in mind, however, that being a sole proprietor means any business liabilities are your personal liabilities. For example, if a customer sues you, they can reach your personal assets if the court awards them damages. This is different from something like a C corporation, in which the business owner’s personal assets are shielded from litigation.
For startup businesses, however, a sole proprietorship is a free and easy way to get going. Once you start making an income from your business, you can always incorporate or form a different type of business entity down the road.
To make tax season easier, it’s a good idea to keep your business finances separate from your personal ones. For this, you’ll want to open a checking account solely for your business.
If you’re a sole proprietor, you can simply open a second checking account at your existing bank and use it for business transactions only.
However, there are a handful of banks that offer free business checking accounts. For example, Citizens Bank and US Bank both offer a basic business checking account with no monthly maintenance fees. You’re limited to a certain number of transactions per month, but the majority of new businesses won’t get anywhere near this limit for a while.
If you’re comfortable with online banking, web-based banks like Novo offer a free business checking account you can easily manage on the go. While Novo doesn’t have physical branches, it reimburses business checking account customers for all ATM fees. It’s also FDIC insured, and you’re not required to maintain a minimum balance to take advantage of all the perks.
Word Processing and Business Software
No matter what kind of business you have, you’ll need to take care of basics like invoicing customers and giving receipts for goods or services. For this, you can use word processing and other software you probably already have on your personal computer.
For example, Microsoft 365 offers thousands of free templates from invoices and spreadsheets to calendars and newsletters. If you don’t have Office installed on your computer, there’s multiple ways to get Microsoft 365 for free.
You can also use free invoicing software like Wave if you prefer something a little more high-tech. With a Wave account, you get access to invoicing tools, accounting software, and receipt scanning totally free. There are no hidden catches or trial periods.
Unnecessary Expenses to Avoid When Starting Your Business
When you’re starting a business and funds are limited, you’ll be pleased to know there are things you can most definitely do without — or at least save for later.
Business cards might make you feel official, but they’re becoming a thing of the past. According to Pew Research, 96 percent of Americans own a mobile phone, and 81 percent have a smartphone.
If you want to spread the word about your business, the best thing to do is make sure your name and number get inside someone’s phone. A business card is easy to lose or throw away. Once your phone number is in someone’s contact list, however, it’s likely to stay there.
A Fancy Website or a Web Designer
As covered above, you can build a website for free using a premade theme or template. In other words, you don’t need to shell out hundreds or thousands of dollars for a custom design.
In fact, there’s something to be said for a clean and simple design when it comes to business websites. Your site doesn’t need a lot of bells and whistles to be a good advertising tool. The only things you really need are your name and contact info listed in a prominent spot and a contact form that makes it easy for customers and potential customers to get in touch with you.
Once you’re ready to upgrade to a custom design, you can find excellent and affordable web designers on sites like Fiverr and Etsy. Look for designers who have a comprehensive portfolio and plenty of positive customer feedback. If you do your homework, you can find skilled designers who can put together a stunning website for a few hundred dollars.
A Professionally Designed Logo
Logos are fun to have, and plenty of entrepreneurs dream of having an eye-catching logo of their own. After all, just about every how-to business guide out there stresses the importance of “building a brand.”
When you’re starting a business for under $100, however, you don’t have much room in the budget to pay for a logo design. For most new businesses, a logo is like frosting. Can you bake a perfectly delicious cake without it? You bet. Is it nice to have as a finishing touch? Sure, but people who want cake probably aren’t going to complain as long as your cake is good enough.
As with the other “nice to have but not necessary” items on the list, a logo can come later once you’ve generated some cash. When you’re ready, you can turn to places like Etsy and Fiverr for affordable and attractive logo design.
In the meantime, check out Canva for logo designs you can make yourself. In fact, Canva is a startup business owner’s secret weapon when it comes to all kinds of free design tools. The site is loaded with templates that make it easy to pop in your business’s name and contact info. You can also make free business cards, brochures, posters, flyers, and more — all of it totally free.
20 Businesses You Can Start for Cheap or Free
Business ideas come in all shapes and sizes. Admittedly, it’s much easier to get rolling with a new business if you already have a good idea of what type of business you’d like to start.
If you’re coming up short in the inspiration department, however, there are plenty of businesses you can start with limited funds or no funds at all. Here are 20 ideas to consider.
1. Freelance Writer – Is your English degree gathering dust? Do you have a way with words? You can turn your wordsmithing skills into a lucrative career by writing content for other businesses.
2. Lawn Care Service – If you enjoy working outdoors, you can borrow some basic lawn equipment or buy gently used gear and launch a business in your own neighborhood.
3. Crafter – Sites like Etsy have made it possible for skilled artisans to connect with customers all over the world. Whether you make jewelry, T-shirts, original artwork, furniture, soap, skin care products, or just about anything else you can think of, Etsy can help you turn your passion into profits.
4. Child Care – Many parents are on the hunt for affordable and high quality child care. If you love kids and have free time, you can start a babysitting or child care business in your home or find work as a nanny.
5. Dog Walker/Sitter – Lots of pet parents will pay a premium to know their furry family members are lovingly cared for during the day. If you have a soft spot for four-legged creatures, you can start a successful business walking dogs or working as a pet sitter.
6. Tutoring – You don’t necessarily need a teaching degree to work as a tutor. If you have proficiency in one or more subject areas, you can build your own tutoring business. Many professional and skilled amateur musicians also offer music lessons in private homes or their own residence.
7. Residential Cleaning – Most of the big name residential cleaning companies started with little more than elbow grease and word of mouth. You can start your own cleaning business working for homeowners in your area.
8. House Painter – Painting is a chore few people want to take on. If you’re a DIY pro, painting might be a skill you already possess. One of the perks of starting this type of business is that it only takes a few referrals to build your customer list.
9. Virtual Assistant – If you’re organized and know your way around spreadsheets and word processing software, you can start a business helping other business owners as a virtual assistant.
10. Book Editor – In 2018, the number of self-published books jumped by 40 percent. Indie authors tend to have limited funds, and many of them are constantly searching for skilled and affordable editors. If you love to read and have an eye for catching typos, a freelance editing or freelancing business could be a good fit.
11. Graphic Design – Freelance sites like Fiverr and Etsy give talented designers a platform for selling everything from social media banners to company logos. You can build a portfolio with minimal funds and start producing work for customers.
12. Website Design – Most business owners know they need to have an online presence to be successful. However, few people have the design skills or technical knowledge to make their own website. If you know your way around WordPress or other platforms, you can start your own business as a web designer.
13. Computer Repair – Computer issues can be frustrating, and paying a big box company for repair services can bust anyone’s budget. If you’re tech savvy, a computer troubleshooting and repair business might be worth exploring.
14. Handyman – Are you a seasoned home improvement pro? You can turn your DIY skills into a full-time business.
15. Bookkeeper – If you have an accounting background or experience managing your finances, consider launching your own bookkeeping business.
16. Social Media Manager – Social media is a skill that looks deceptively easy. However, experienced social media managers know that drawing customers to a business’s social channel is no easy feat. If you’ve got proven social media chops, you can turn your abilities into a business.
17. Personal Trainer – You can include yoga instructor and CrossFit trainer to this one. If you love working out and you’re good at motivating people, consider a business as a personal trainer.
18. Baking or Gardening – Farmers’ markets continue to pop up around the country as more people turn to healthier, local food products. If you have a prize garden in your backyard or everyone in your circle raves about your baked goods, you can start a small business as a baker or local farmer.
19. Photography – You don’t need expensive equipment to take stunning photos. These days, even smartphones can take amazing shots. You can also find affordable used photography equipment to get your business off the ground.
20. Moving Business – Moving is one of those chores no one wants to take on. If you don’t own a big truck, you can still start a business as a professional packer. All you need are boxes, tape, some markers, and maybe a few plastic containers.