How to start a business with no money: 10 ways to make it happen

We’ve all dreamt of starting our own business at one time or another. In fact, almost two-thirds of Americans have had a business idea, but 63% say lack of funding is the biggest thing holding them back. 

The good news? Starting a business with little to no money isn’t impossible. Today, it’s faster and easier than ever to get your business up and running without the need for a huge financial investment.

Below, we’ll show you how to start a business with no money and turn your existing skill set into a successful business on a shoestring budget.

• Keep your day job
• Make a realistic business plan and budget
• Set goals
• Determine if you can operate totally online or at home
• Make a savings plan
• Ask for help
• Apply for loans and grants
• Get into crowdfunding
• Work your credit
• Look for free resources

1. Keep your day job (for now)

Though taking the entrepreneurial plunge is a worthwhile venture, try to not put all of your eggs in one basket—especially when starting a business with no money. Instead of trying to live off your savings or a credit card, consider keeping your day job or going part-time until you get your business in a comfortable position financially. 

Having a steady income as you grow your business will allow you to be more flexible when it comes to your business finances. When your business profit is more consistent and you feel confident in where it’s going, you’ll be in a more comfortable position to leave your day job and focus solely on your growing business. 

To determine if you’re in the position to comfortably leave your day job, consider the following: 

• How much money should you be earning monthly to live comfortably? 
• Is your business profit large enough to both fund your business and live off of? 
• Are you able to pay your bills and business expenses with your business profit?

2. Make a realistic business plan and budget 

Before taking the plunge to become a business owner, make sure you take the time to calculate your business expenses and come up with a plan for spending both on a monthly and yearly basis. This can help you understand how much (if any) money you’ll be spending upfront and how much you’ll need to fork over month over month. Typical business expenses include: 

• Rent
• Tenant improvements
• Office furniture and supplies
• Labor
• Tools and equipment
• Raw materials
• Opening inventory
• Website design and hosting
• Advertising or promotions
• Software
• Insurance, licenses, or permit fees

Determine what expenses are the most necessary to operating your business, what you can do without, and how much money you’ll need to set aside for each expense. This can help you determine how much money you’ll need for additional funding. 

The only costs you may not be able to avoid as a business owner are any licensing or permit fees required by your county, city, or state for your type of business, and legal fees if you decide you want to incorporate. 

Investing your time into building a business is hard work, so make sure you have your business plan outlined so it’s ready to pitch to friends, family, and potential investors. It can also help you set realistic expectations so you can have a smooth first year in business. 

3. Set goals 

Just because it’s easy to set up a business with no money doesn’t mean it’s going to be easy to run one—or that you’ll instantly find the freedom, gratification, and work-life balance you’ve been seeking.

Data has found that about 18% of businesses fail within their first year. This could be due to a lack of money, misguided marketing efforts, and most of the time, failure to plan and set realistic business goals.

Before launching your business, answer these questions: 

• How will I get income while I’m building my business?
• What business expenses do I need to fund? 
• What expenses can I eliminate or find creative no-cost solutions for?
• How long until I see a steady cash flow?

4. Determine if you can operate totally online or at home

When thinking about starting a business, there are some costs you could expect to incur, like rent, labor, opening inventory, and permit fees. Most small businesses need startup funds to get them off the ground, but if your business idea allows you to operate online or from home, it can save you the cost of having an office or storefront and needing funds to operate both. 

To significantly reduce your spending on these costs, an online business, service or knowledge-based business, or home-based business could be the best solution. 

For example, a home-based business lets you eliminate rent, tenant improvements, and office costs—and maybe even take a tax deduction for using part of your home for business. If you do everything yourself, you can eliminate labor costs.

5. Make a savings plan 

If you’re an entrepreneur thinking about starting a business with little money, chances are you’ve probably started putting aside some money to help fund it. Though there are plenty of funding options available for new business owners, having a good amount of savings set aside for your business can help pay for necessary costs, like inventory. 

A good rule of thumb is to save up at least six months' worth of savings for business expenses. 

Try to avoid combining your personal savings and business savings so you can ensure you have enough money set aside for both personal emergencies and business emergencies. Some great ways to build your savings include:

• Track spending and pinpoint costs 
• Get a business credit card with great returns like cash back
• Set a monthly budget and don’t exceed it 
• Create business savings goals

6. Ask for help 

Funding from friends and family is a common source of financing that many use to help get their business off the ground. After all, who has more faith in you and your abilities? However, be wary of relying on handshake deals and verbal agreements, or you may risk strained relationships if things go south.

Treat it like any other business deal and make sure a written agreement is in place to avoid any issues in the future. Make sure all involved know the terms and conditions. Consider questions like:

• Is the money a gift you don’t have to repay?
• Is this considered a loan? 
• What is the time frame for repaying? 
• Is it an investment, and if so, what percentage of the company does your funder own, how much say do they expect to have in operations, and how soon are they expecting the investment to pay off?

All of this should be discussed, agreed on, and documented the same way you would with any other lender or investor. If the prospective family member or friend isn’t willing to engage in that kind of process with you, you might want to look elsewhere for a funding source to protect your business and your relationship.

7. Apply for loans and grants 

If your budget is limited but you’re ready to get your business off the ground and looking for a lump sum of money, you may want to consider applying for a small business loan. Small business loan options include: 

• Small Business Administration (SBA) loans
• Traditional business loans
• Business lines of credit 
• Invoice factoring 
• Specialty loans 
• Loan alternatives 

Eligibility requirements for receiving a loan may be different depending on the lender, but generally, all lenders will look at your credit history, business history, business plan, collateral, and other factors, so make sure you’re prepared for this. 

Receiving a loan is a huge decision, so a grant may be a better solution for you. There are many grant programs from government and private sources, and unlike a loan, small business grants don’t have to be paid back. Though a grant seems like the perfect option for someone starting a business with no money, it’s usually more difficult to get funding. Small business grants are typically available for specific types of businesses that the grantor wants to incentivize, such as:

• Nonprofits
• Green businesses 
• Rural businesses
• Businesses catering to certain groups of people (women, veterans, minorities, etc.) 

The application process can be lengthy and exhaustive, and to win grant funding, you must have a detailed business plan, current financial and financial projections, and an explanation of why you should receive the grant. 

This kind of funding can come with spending constraints and reporting requirements that may restrict the way you do business. This can lead to more time and money spent on compliance. Familiarize yourself with the terms and conditions of the grant before you apply so you know exactly how it could impact your business.

8. Get into crowdfunding 

Crowdfunding is the process of raising funds from potential customers for a project or new business venture through crowdfunding platforms like GoFundMe and Kickstarter—which are changing the landscape of traditional methods of raising capital. From tech gadgets to making an art documentary, any type of business and product can raise money to bring the idea to reality, typically in return for some kind of consideration, such as free products or shares of stock.

There are four types of crowdfunding, including: 

• Donation-based crowdfunding 
• Reward-based crowdfunding
• Equity crowdfunding
• Debt crowdfunding

Crowdfunding also helps to gauge the reaction of the market before you actually launch your product. You don’t have to undergo any kind of credit check or provide an extensive business plan. However, it requires a lot of expertise and effort to run a successful crowdfunding campaign, and the outcome is far from guaranteed. According to Kickstarter, only about 40% of their crowdfunding campaigns have been successfully funded.

9. Work your credit   

Many small business owners have funded their businesses using personal credit cards. If you have a good credit rating, this can be a much faster and easier way to get a loan, as you don’t need a business plan and don’t have to go through a lengthy application and underwriting process. 

The downside is that interest rates can be very high—ranging anywhere from 16% to 20%. Those interest costs can become significant if you’ll be carrying the balances for a long time, so be sure to include that in your financial projections. Other downsides to using personal credit for business expenses include: 

• Hurting your personal credit score if you’re unable to make payments on time
• Not building business credit to improve your business credit score 
• Getting audited by the IRS for not differentiating business and personal expenses on your taxes 

Obtaining a business line of credit is also another option. Similar to a loan, a business line of credit gives you access to a set amount of funds once approved. This can help pay for startup costs and inventory while you get your business up and running. Once you start to see some cash flow, you can use it to pay off your credit card debt. Though a business credit card is an easy way to pay for the costs to start your business, there are some drawbacks to keep in mind—like high interest rates and fees. 

This is more of a short-term financing option but can be beneficial in building your business credit.

10. Look for free resources 

Starting a small business with no money can be scary, but there are plenty of free online resources that can guide you through the process. This includes workshops, events, mentorship programs, learning materials and tools, and networking opportunities. 

Some helpful websites that offer a ton of free resources include:  

• Small Business Administration (SBA) 
• Service Corps of Retired Executives (SCORE)
• U.S. Chamber of Commerce 
• QuickBooks' Starting a Business Resources Center 

In addition to sound business advice, there are other free tools available that can help you grow your business, like social media for marketing your products or WordPress for building your business website. These free tools and resources can help you minimize spending so you can focus on building your business. 

How to start a business with no money FAQs

It’s not uncommon for a ton of questions to come up about gathering money for starting a business. Here are some answers to common questions you may be wondering the answer to. 

What is a good business to start with little money? 

There are many different business ventures you can embark on with little to no capital needed. Here are a few easy ideas to help get your business ideas flowing: 

• Internet-based businesses: drop shipping, blogging, affiliate marketing, virtual assistant, graphic designer 
• Service-based businesses: dog walking or pet sitting, grocery delivery, handyman services
• Talent-based businesses: photography, art, personal training, music lessons

How much does it cost to start a business?

This can vary and is dependent on the type of business you plan to start. Research from Shopify found that on average, small business owners spend $40,000 in their first year of business. However, it is possible to start a business with no money with funding options like loans, grants, and crowdfunding—or, depending on the type of business, no capital may be needed up front at all.  

Do I need to get a business license? 

Yes. In order to legally do business in the state in which you reside, you must register your business, which entails obtaining a business license. Aside from getting a business license, there are other steps you’ll need to take to register your business—like registering your business name, registering with the IRS and receiving an EIN number, registering with state and local agencies, and applying for any additional permits your business may need.  

Many people dream of owning their own business but still wonder how to start one with no money. Fortunately, a lack of capital doesn’t need to hold you back. Today, there are plenty of free resources and funding options available that can make starting a business with little money a reality. QuickBooks Capital can help you get business funding and qualify for a small business loan that’s right for you. 

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