How Do You Start a Business on a Shoestring Budget in 2023?


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Considering starting your own business? Find out the steps to launching a business with minimal cash on hand.

Key takeaways:

  • There are several steps to starting a small business on a budget, from developing a business idea and doing market research to creating a business plan.
  • At first, you can minimize expenses by limiting spending on services, software, and other business needs.
  • It’s possible to start your own business for as little as $100 in only a few weeks. 

How Do You Set Up Your Small Business on a Budget?

There are dozens of different types of businesses you could launch. And, to be clear, you can’t start any business for under 100 bucks. Even so, plenty of options can be exercised if you don’t have thousands of dollars.

Find a business idea

Think about what you enjoy doing, your skills, and what type of equipment you already have. For example, if you already have a Cricut die-cutting machine, you could easily start a custom line of clothing, tumblers, and car stickers.

Do you have a laptop and a little experience running social media campaigns? A social media consulting or management company might be perfect for you.

List of business ideas

We have created a set of awesome business ideas, along with a few other low-cost ideas below:

  • Lawn and snow removal service
  • Home or office cleaning service
  • Dog walking
  • Senior caregiver
  • Copywriting
  • Digital marketer
  • Social media manager
  • Branding and design
  • Stock photography website
  • Website design and hosting
  • Tutoring
  • Cake decorating
  • Birthday party characters
  • Gift basket design
  • Mobile DJ
  • Adventure guide

You might also find inspiration by solving your own challenges. Here are some steps to take to get started.

1. Research and planning

Once you decide on what type of business you want to start, the next step is to research the market and start planning.

Do market research

This involves gathering data and information about the market you want to enter, including who your customers are, your competitors, and the location and needs of your potential customers.

This step-by-step guide to doing inexpensive or free market research starts with evaluating the characteristics of your potential customers.

Some questions to consider are:

  • How much do they earn?
  • Where are they located?
  • What do they like/dislike about the current offerings?
  • What problems are not currently being solved?
  • What are they willing to pay for a solution to their problem?

Concentrate on online methods if you don’t have money to do focus groups to get this information. You can host a free survey through Google Forms. Ask qualifying questions to ensure they are in your target audience.

You can reject the answers of people not in your target audience. Consider offering an Amazon gift certificate or similar prize to encourage people to complete your survey.

Request email addresses and ask if they want to sign up for your business newsletter. Here is a guide on email marketing, including a list of popular platforms. Some offer free plans.

Research the status of your industry as a whole. Next, you need to look at your competitors and:
  • What they offer
  • Their price points
  • Where their offerings fall short

This can all be done online for free — create a spreadsheet and start Googling.

For example, if you want to start a lawn care company, Google “lawn care company, your city” or even “best lawn care company, your city.”

Setting up your spreadsheet

Add each competitor to the right column of your spreadsheet and then start adding information such as:

  • Cost
  • Type of service
  • Unique features
  • Biggest customer complaint
  • Any other information that makes sense to you

At the end, you will have a clear idea of what the market looks like and how your business can stand out.

What is your unique value proposition?

Looking at customer complaints is essential because it helps you determine where to stand out. For example, when searching for lawn care companies in Chicago we see that the customers value communication and reliability.

If you were starting a lawn care business, you could focus on those aspects as the unique value proposition (UVP), also known as a unique selling proposition (USP). Small businesses are encouraged to focus on their USP when marketing themselves.

Write a business plan

Your next step is to start writing your business plan, which serves as a visible, concise roadmap for your business. Taking the time to write all this down will give you a clearer view of the future.

Start by reading other business plans. This will give you an idea of what information you should include and may raise some issues you hadn’t considered. 

Costs of research and planning: Free.

2. Funding and grants

Starting a business on a shoestring budget means leaving no funding stone unturned. With extra funds, you can hire additional staff, get better equipment, market your business more successfully, or even scale up faster.

Here is the good news – just because you don’t have cash doesn’t mean you can’t fund your business. Thousands of grants from private and public sources can help you build your business.

Where to look for funding and grants

Not sure where to start looking for funding? Here are seven places you might be able to find funding for your small business.

  1. SBA
  2. Crowdfunding
  3. Your city or state government (Google “your city small business grants”)
  5. Women’s Business Centers
  6. The alumni association from college you attended
  7. National Association for the Self-Employed

Additional funding resources

Looking for more? Check out these resources for finding funding and grants for your small business:

Cost of grants: Free

3. Legalities and formal setup

Small business owners have several options regarding legal setup. This section will demystify the different business structures and help you choose the right path for your business.

Registering a business name

If you are planning to do business under any name other than your legal name, you will need to register your business. There are two options for filing your business name.

You can file a Doing Business As (DBA) or create a business structure, such as a limited liability company (LLC). If you file an LLC, you will register your name as part of the process.

How to file a DBA

Choose a business name. You can use business name generators to find a unique name.

Research your name to make sure it isn’t taken. Start with Google, then check with your local county clerk’s office to see if anyone else is using that name.

Next, file a DBA with your state government. The process will vary by state, so start by researching the requirements in your area.

Not all businesses incorporate early

Note that many businesses do not file an LLC or incorporate early on and simply operate as self-employed.

This can make filing taxes simpler (depending upon your business) and helps limit unnecessary costs prior to becoming profitable.

Here are the different types of business structures and their benefits and drawbacks.


If you are the only worker at the business, you can choose to work simply as self-employed. In most cases, you do not need to file any paperwork, you simply track your income and report it on your taxes at the end of the year.

You will need to pay the federal government estimated taxes throughout the year. Make sure to research to see if you also need to pay estimated state taxes.

A drawback to being self-employed is your assets are not protected if your business gets sued.

Sole proprietor

A sole proprietor is a step up from self-employed. All you need to do is register your business name, and you are good to go in most states. (Make sure to see if your state requires a business license or other paperwork.)

In a sole proprietorship, your business is not a legal entity, so your business’s debt is your debt.


An LLC is the simplest way to incorporate your business. It is designed to protect your personal assets if your business is sued. Also, it offers tax benefits and helps your business look legitimate.

For most businesses, an LLC offers a perfect balance of benefits and protections without requiring an overwhelming amount of paperwork. Learn how to file an LLC here.

Other types of businesses

There are several other ways to structure your business. These are outside the scope of what most small businesses need but include:

  • Corporation: Complex business structure that must comply with a wide range of taxes and regulations. The business is a separate legal entity from the owners.
  • S corp: A type of corporation that allows profit and losses to be filed through personal tax returns. Specific regulations must be adhered to, including a limit on the number of stockholders.
  • Partnership: A simple way to structure a business for two or more people, where each partner reports net profit or loss on their taxes.

View this IRS resource on business structures to learn more about the tax implications of the different types of businesses.

Cost of legalities and formal setup: Free (if you choose to register, costs vary between $50 to $150 depending on your state)

4. Other legalities and licensing

Depending upon your location and type of business, there may be other legal considerations to keep in mind. For example, you will likely need commercial liability insurance if you have a storefront.

This SBA resource will help you find out if there are other licenses or permits you need based on your location and industry.

Costs of legalities and licensing: Free (if no licensing needed – industry dependent)

5. Setting up a workspace

You’ve figured out what type of business you will start, and you have a handle on the legalities; now, where will you work?

You have a few options.

If you have the space at home, this can be the most cost-effective workplace. A desk in your bedroom, a spare room, or even the kitchen counter can function as your workplace.

Where else could you work?

What if you can’t work at home? You can choose communal working spaces, but those cost money. What is a business owner on a budget to do?

Here are a few places to work for cheap or free.

  • Local coffee shop (order a plain coffee and skip the $6 Frappucinos)
  • Local library branch
  • Library at a college near you
  • Hotel lobbies
  • Bookstores
  • Local parks

Approximate costs of workspace setup: Free (providing you own a laptop or PC)

6. Brand identity

Your brand identity includes your logo, font, brand colors, and other visual components customers use to recognize your brand.

Many business owners hire a designer to create these elements for their business. However, that can get pricey.

Several budget-friendly options cost less, including:

The most important part of creating a brand identity is to be consistent with colors and fonts so customers will recognize your business across different platforms, such as social media and your website.

Cost of brand identity: $5 to $10

7. Building an online presence

In today’s digital world, most people use the internet to find businesses.

Local search is a powerful marketing tool for small businesses, and research shows it drives traffic. On top of that, when people search for a local business online, they usually want to make a purchase.

Building an online presence means your business will show up when people search online. Here is how to do it for cheap or even free.


Gone are the days of needing to spend thousands of dollars to launch a website. Using a managed WordPress site and a free domain, you can get your website launched in just a few hours.

If you have some funds, you can choose a dedicated domain for just $5 a month. (Meaning you can use versus

If you are feeling crafty and looking for a good deal, check out the likes of NamecheapSiteGroundInMotion Hosting, and GoDaddy – all of these offer managed WordPress plans with useful freebies.

Social media

There are dozens of social media sites, which can get overwhelming to new business owners. Don’t try to be in all places at once. Instead, choose one or two platforms you know your audience uses and focus your efforts there.

Here are a few resources for learning how to do business on social media:

Claim your Google My Business listing

If you want your business to show up in Google, this is a critical step.

Claiming your business in Google is free and will share information such as your hours, location, website, reviews, and phone number. Here is how to claim your Google listing.

Cost of getting online: $45 to $75 per year

What Should You Avoid Spending Money on When Starting a Business?

Starting a small business for less than $100 is completely doable. If you are willing to spend the time to research and learn, you can save thousands of dollars.

But a big part of owning a business is learning as you go – and sometimes those lessons can be expensive.

Mistakes to avoid

To save you from making expensive mistakes, here is a list of things to avoid investing money in when you are just getting started.

  • Gazillions of business cards: Instead, buy a limited amount and get more when (or if) you need them.
  • Branding and logos: Use the tools recommended above to get you started, and then upgrade down the line if needed.
  • Web development agencies: You can easily build a website for free using WordPressWix, or similar website builders.
  • Paid marketing: Use this to grow your business after being profitable. See our guide to Cheap Online Marketing.
  • Top-of-the-line equipment: Focus on what you need right now. If your old Macbook still works, use it for now. You can upgrade later.
  • An accountant: Instead of spending tons of money, use a service like QuickBooks to track your expenses. 
  • Project management software: Instead, use a free service like TrelloPodio, or Asana. All have limited free plans.

Frequently Asked Questions About Starting a Business on a Budget

What should you consider when creating a business budget?

Once your goals are defined, you can create an effective, foolproof budget by analyzing costs, negotiating costs with supplies, estimating your revenue, and knowing your gross profit margin. Also, estimate your future cash flow, consider seasonal and industry trends, set spending goals, and, lastly, bring all of this information together.

How do I start a business on a shoestring budget?

There are seven steps: self-assessment, choosing the right business, considering your name and brand, drafting a business plan, finding funding, and creating your physical and digital shop.

Can you start a business with a minimum budget?

Launching a business with minimal funding can be done, but it is challenging.

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