How to Start a Business with Little or No Money

There’s something very powerful about the idea of starting a business, but what can you do if money is a major obstacle? Many businesses require significant capital expenditure, and if you don’t have the funds to begin your venture, that will be an issue. All is not lost though - with some creative thinking and a slightly different approach, you can “bootstrap” your business with very little cash.

Bootstrapping is the discipline of starting a business with very little upfront cash. It means you don’t typically take out loans or investments or get VC funding. Instead, you rely on limited personal savings and revenue created by your business to grow it. Bootstrapping has created many successful businesses — Dell, HP, Apple and Microsoft all started with very little cash, and now they are some of the biggest companies in the world.

Here at Incfile we know a thing or two about starting a business.

Since 2004 we’ve helped over 500,000 business owners, and now we’re here to help you. You don't always need a lot of capital to get a business started. That's why we've put together this guide to starting your own business with low-or no-investment

Read on to find out exactly where to start, what to do next and what questions you should ask to give your new, bootstrapped business the best chance of success. We’ll cover:

Why a lack of money shouldn’t stop you

Developing your business model and business plan

What to expect from starting a business

Getting the right legal structure in place

Finding examples of businesses that don’t need much money

Complying with rules, regulations and taxes

Maintaining your business

Setting up your business operations

Choosing the type of business to start

Learning the art of bootstrapping

Why a Lack of Money Shouldn’t Stop You From Starting a New Business

Starting a business is one of the most powerful things you can do. It’s an opportunity to create unique products and services, bring your ideas to life and create something truly valuable for your customers, employees, suppliers and peers.

A lack of money doesn’t stop you doing any of those things.

It might mean you have to manage operations more carefully, pay closer attention to finances, drive your product to market sooner and slow down your expansion plans, but none of those areas alone will kill your business.

In fact, the discipline of founding and growing a business with very little capital will teach you important lessons about financial control, decision making and the art and science of being an entrepreneur. True, some business options will be off the table...but with a little creative thought and a lot of planning and dedication, there’s every reason you will succeed.

What to Expect When Starting a Business with Low Capital

As a new entrepreneur, here’s what you can expect throughout the lifecycle of starting, running and growing a business with a lack of finances!

There will always be too much to do and too little money

You will need to balance time, effort, money and outcomes on a constant basis.

The biggest issue you will have is cash flow

You will need to minimize and strictly control costs. You must manage your finances on a daily basis and quickly build up a financial buffer.

There is lots (and lots) of competition

Some of them will have money, some of them won’t. Competition is a fact of life and shows there’s a demand for what you’re offering.

There are plenty of people out there who can help

And they don’t all cost money! Although you can pay for professional help, taking part in online discussion groups, meetups and networking events can often get you some good advice for free.

Getting your idea and product or service fit right is essential

Although you won’t be risking as much financially, you should always spend at least as long researching and validating your idea as you do on setting up your business.

Grow organically

Without the cash for big marketing efforts or customer pushes, you should grow organically and sustainably instead.

Learn from your mistakes

You'll make plenty of them; just make sure they’re not irreversible.

Expect to be stressed and anxious

A lack of money is stressful. Until you see sustainable success, expect some sleepless nights.

Choosing a Type of Business to Start with Little or No Money

The type of business you start will be constrained by your lack of capital, but you still have hundreds of options available. Although bootstrapping is a major factor in the type of business you choose to start, there are several other factors at play.

What Are Your Current Skills, Interests, Expertise and Experiences?

Go into a field you already know something about. Choose a business type that aligns with your expertise and insight.

Can You See Yourself Doing This in 10 Years?

If you want to run a business for the long-term, think five or 10 years out. Can you still see yourself doing it after all that time? What will success look like to you then?

Have You Researched the Types of Businesses Out There?

This part of the process is where you want to spend most of your time. Extensively research and take a deep dive into the various types of business you could start. You could try:

A creative and design business like freelance writing, running an Etsy shop or starting a marketing agency

In-home services like with-no-money, yard maintenance, building, painting or other trades

A professional services business like accounting, real estate, law, architecture or consultancy

Technical businesses like web design and creation or software and development

...and many more

Low or No Cost Business Ideas

Here are some great examples of business ideas with low investment. There are many other great lists with ideas for low cost startup businesses


Creative Businesses

You can sell your creative services. If you’re a painter, illustrator, writer or designer, you can make money providing products and services to individuals and businesses. Whether you work on a freelance basis or you sell products, neither needs much capital to set up. You can sell crafted items through portals like Etsy, sell freelance services through Upwork or Fiverr or sell your designs through print-on-demand services like Cafepress or Zazzle.


Home Help and Trade Services

People always need help around their homes, and they’re happy to pay for it. You could try dog walking, with-no-money, yard work, babysitting, landscaping and more. You’ll only need to put a little money out for basic supplies; if you're great at your job, you’ll soon have repeat clients. If you have a trade you’re trained in, you can leverage that into a business too. You could become an interior designer, carpenter, builder, plumber, electrician or another type of tradesperson.


Selling Goods Online

While most retail requires you to buy stock and inventory up front, you still have a couple of options for getting into ecommerce. Dropshipping allows you to sell products that are shipped directly from manufacturers to end customers - you don’t pay until the order is made. You can also get into affiliate marketing, where you send people to another website to purchase something and get a commission on any sales you refer.


Using Your Knowledge

You may have other types of knowledge you can turn into a small business. Perhaps you know how to code and develop, or you can design and build websites. You might be a social media expert or a great blogger. You could look into tutoring and teaching. The internet has lowered the barriers to starting knowledge-based businesses, and they are a great place to start if you're low on capital.


Consulting and Expert Advice

If you have insight, expertise and experience that’s useful to others, you could get work as a consultant. If you have an extensive background in a particular field, think about the type of advice and services other people would be willing to pay for.


The Gig Economy

The gig economy also provides plenty of opportunity for starting a small business without much capital. If you have a spare room, you can rent it through Airbnb. If you want to drive, there’s Lyft or Uber. For local tasks, you can try out TaskRabbit or set yourself up as a personal concierge.

There are many other great lists with ideas for low cost startup businesses.

The Art of Bootstrapping

If you’re going to bootstrap your business, you’ll need to learn the art of the hustle. Here are some tips for making your money go further, keeping costs down and generating that all-important revenue.

Stay Away From Loans and Debts

If possible, don’t go into debt to start your business. That means no putting expenses on credit cards, taking out a bank loan or remortgaging your home. Likewise, try to avoid borrowing money from family or friends.

Understand Where Every Penny Is Going

Make sure you understand exactly how you’re spending money. Review your finances every day, including your income, spending, cash flow, emergency savings and more. Having a separate business-only bank account can help you see things more clearly. If you don’t need to spend the money, don’t spend the money.

Don't Outsource What You Can Learn Yourself

If you don’t have money to hire others, you will need to learn skills yourself. Fortunately, there are lots of great courses, videos, interactive guides and books to teach you almost any talent. Again, you will want to prioritize the areas that will have the greatest beneficial impact on your business.

Launch as Soon as You Can

You need a business model that lets you get your product or service out there as soon as possible. You don’t need to be perfect before you launch; you just need to be “good enough.” Work out what “good enough” looks like, and when you have a product or service that meets those needs, put it into the world. You can always refine and adjust toward perfection later.

Know Your Profit Margins

A healthy profit margin is essential to your success. Work out exactly how much money goes into the products and services you sell - that includes the base cost, packing, shipping, distribution, customer service and more. It also includes shared costs that your business is responsible for like utilities, rent, software, hardware and other areas.

Maximize Your Return on Investment

Only spend money on activities or things that are going to either help you create more revenue or reduce your costs. If an expense isn’t going to accomplish either of those things, don’t spend the cash. You will also want to prioritize your expenses and put off non-essential spending for as long as possible.

Work Out Your Personal Budget

Your business has to make enough money for you to survive, and that means you need to take money out as a salary you can live on. Calculate exactly how much money you need to live, and work that into your business as your minimum salary.

Partner With Other Entrepreneurs

If you need expertise but don’t want to do something yourself, look for other small businesses with those skills and see if you can exchange services. Entrepreneurs are often happy to barter - perhaps you can get a designer to build a website for you if you take care of their social media marketing.

A Business Model for a Bootstrapped Business

All businesses need a business model, which represents the way you will generate sales, provide services and make money. Think about your business model now, because it’s better to have that in place so you can start acquiring customers and generating revenue from day one. This is particularly important when you’re bootstrapping; creating revenue almost immediately is critical.

You will also need to look at financial projections for your business.

What are your expected sales and revenues? What is your profitability? How much money will you keep in the business to grow it? How much will you pay yourself and others? If you can, try to plan your revenue out for the next month, three months, year and two years. Work hard to minimize expenses and maximize profits.

Write a Business Plan for Your Business

Business plans do vary slightly, but they should cover the following areas:


An executive summary with the most important points from your business plan


Your goals and what you hope to achieve with your business


A description of your business, background information and context


A market analysis and likely demand


An overview of how your business is structures


Your business model


How you will market and sell your offerings


Financial projections, revenue and profitability



We’ve got the perfect guide to writing your business plan.

Choose the Right Business Structure and Register Your Business

Now you have all the background information for your business, it’s time to make it into a reality. That starts by choosing the right structure or “legal entity” for your business. In the U.S., there are four main business structures. They are:

Sole Proprietorship

This is the "default" business structure and is what your business will be if you decide not to create a more formal structure. We don't recommend this type of business as it doesn't give you the legal protections you need.

Limited Liability Company or LLC

The most common type of business entity. An LLC is fast, simple and inexpensive to setup and maintain. It protects your personal finances and assets and is a great way to start your no money business.

Series LLC

This is a special type of LLC entity that's only available in certain states. It allows you to create "mini" LLCs, each with their own limited liability and separate assets, under the umbrella of a master LLC.

S Corporation

This is a more complex type of business and isn't generally recommended for smaller organization.

C Corporation

These are the largest and most complex types of businesses and are far more than the average entrepreneur or business owner will need.

For more information on the advantages and disadvantages of different types of businesses, please see our in-depth guide. If you’ve still got questions, we’ve answered them to help you choose the right business structure for your with no money business.

In most cases our recommendation would be to create an LLC. We’ve got a complete guide to everything you need to do and we can set one up for your business. LLC formation does vary from state to state, but we’ve got you covered, wherever you are.

Start Your Business with Us, Today!

Setting up Your Business and Business Operations

Once you've legally created your business, you’ll need to get some other things in place.

Location of your business

Setup a location to run your business from. To keep costs down, you will likely start by working from home, a shared workspace or even a coffee shop.


Get the equipment you need to run your business. Ideally you should already have everything you need, but you might be able to beg, borrow or buy secondhand.


You will likely focus on word of mouth and referral marketing in the beginning since it’s low cost and can create good buzz around your business.

Software and processes

Establish the various software and business processes you need to run your new venture in the most efficient, optimized way.

The Complete "Start Your Business" Checklist

A Clear and Comprehensive Guide to Starting Your Business the Right Way

Rules, Regulations and Taxes for Your Business

Of course, along with running a business there are certain rules, regulations and legalities you need to be aware of. You will need to explore local, state and federal licenses and permits, and we can also help out with your licensing needs.


Taxes are a fact of life, and if you’re in business there are various ways you will need to file and pay them.

File with the IRS

Let the IRS know you are setting up a business.

Payroll tax

If you pay employees, you will be liable for payroll tax.

Sales tax

If you’re selling locally, you may also be liable for collecting and paying sales tax. To register for sales tax, see your Secretary of State website.

State tax

Most states do have a state income tax. If yours does, you will be taxed on your earnings as normal. To register for state tax, see your Secretary of State website.

Federal income tax

You will need to pay income tax on any profits or earnings you take from your business. In most cases, profits from the business will “flow through” to your individual tax return and you will be taxed there.

Corporation tax

If you incorporate as a C Corporation, you will also need to pay corporation tax — you will be taxed both on your profits as a business and when you extract earnings from your company. This “double taxation” is one of the reasons we normally recommend LLCs as a good business structure, since they avoid this.

Self-employment tax

Unlike employees, the earnings from your business will be taxed under a self-employment tax (FICA and Medicaid). This is just over 15 percent of your earnings.

Other taxes

In certain circumstances you may need to pay some other types of taxes. Talk to your accountant to find out what else you may be liable for.

As a rule of thumb, we recommend keeping back around a third of your earnings to pay your taxes. We can prepare and file your tax returns for you

Maintaining Your Business

There are certain forms and legalities you need to follow to keep your business in good standing.


File an Annual Report

Most states require all businesses to file a report once a year. This report has details of any major changes to who owns a business and other major impacts on a business’ legal status. We can file your Annual Report on your behalf.

Annual Report

Maintain a valid Registered Agent

Most states require you to have a registered agent on file for your business. This is a party available at a physical address (not a P.O. Box) who can sign for and receive legal notices and documents on your behalf.

Registered Agent Service

Pay estimated taxes

You will be expected to pay estimated taxes on what you plan to earn in the current business year. You will need to pay estimated taxes in April, June, September and January (of the following year).


Prepare Your Taxes

You will need to work with your accountant to prepare all the taxes you need to pay.


Pay payroll and sales taxes

If applicable, you will need to make payroll and sales tax payments on a regular basis.


Renew Business Permits and Licenses

You will need to file your taxes once a year.


File your taxes

Your federal, state, regional and city licenses and permits may need to be renewed on a regular basis, typically once a year.


We hope this guide has shown you that starting a business with no money isn’t just possible, it’s practical. You can start with nothing and build something unique that will make a powerful difference in your life and the lives of all the people you touch.

The time to start your new business is now.