Whether you want to be your own boss or just to shore up some extra cash, there are several cheap businesses you can start with little in the way of money. Sure, you may not become the next Facebook or Apple overnight with just a business idea and $500 in your pocket, but there are plenty of opportunities to launch a small business with an equally small investment.
>> Read next: Don’t Go Broke: The Best Ways to Save When Starting a Business
20 cheap businesses you can start with $500 or less
Here are 20 businesses you can start with an initial investment of $500 or less.
1. Online seller
Whether you want to sell apparel, collectibles or something else, you can easily get up and running online on the cheap. Marketplaces like Amazon and eBay will let you sell your products for a cut of the sale, while e-commerce platforms charge a low monthly fee to hawk your products over the internet.
It doesn’t take too much money to purchase your initial inventory. You can buy bulk items online or at a local discount store, or tap into the inventory you already have at home. (All those old baseball cards may be worth something!) The idea is to sell the products for more than you purchase them, taking into account any marketplace or e-commerce platform fees.
If you’re interested in e-commerce, dive into our guide to the costs of starting an online business.
2. Virtual educator/trainer
One of the cheapest ways to start a business is to provide your own services if you have a talent or skill. Melissa Schneider, executive and leadership coach at Melissa Schneider Leadership Coaching & Development, pointed to a chef in Nashville, Tennessee, who was laid off during the pandemic. He used his love and knowledge of cooking to start offering online cooking classes. The startup cost wasn’t too much, amounting to a computer and internet connection.
“He was able to sell his service in a completely different way,” Schneider told business.com.
Get creative with how you can use your skills in a new and unique way to educate others. If you differentiate your product from the competition, you’re more likely to gain clients or students. One successful education trend that may help is gamification, which encourages interaction and engagement.
Cash-strapped would-be business owners can start a dropshipping business. With this business model, you build an online storefront or use an e-commerce platform, but you don’t hold the inventory. The products are shipped directly from the manufacturer after a customer makes a purchase from your online store. To get a virtual store up and running using this method, all you need to pay for is the domain subscription and the fees associated with using an e-commerce or dropshipping program.
“The beauty of the dropshipping model is you don’t have to actually manufacture any products to get started,” said Meghan Stabler, senior vice president of marketing at BigCommerce. “Rather, you partner with a manufacturer that makes your products and ships them directly to your customers, freeing you up to focus on the fun part: the marketing and customer experience.”
4. Social media marketer
Social media has become a powerful tool for companies to get the word out. If you are social media-savvy, there are tons of businesses looking for your expertise to help them develop social media marketing strategies, set up and post on their accounts, and increase their number of followers (and hopefully sales). If you’re an expert with popular platforms like TikTok and Instagram, even better. Knowledge, not money, is the key to getting this low-cost business up and running. [Learn how to get your business on TikTok before it’s too late.]
5. Freelance writer or editor
If you have a knack for editing and/or writing, you can turn your expertise into a small business. With the proliferation of online content and social media, there are tons of opportunities to get paid for writing and editing. It takes little money to get up and running, but you will have to prove your worth to clients.
With the recent introduction of generative AI platforms like ChatGPT and Bard, some organizations may be relying on technology instead of freelancers for their content creation. As a result, it’s more crucial than ever to set yourself apart from the competition and prove why your work is superior.
6. Sales consultant
Whether you want to sell makeup or cookware, there are many low-cost businesses you can start by selling products for existing companies. Take the skincare company Rodan + Fields as an example: It costs just $45 to start selling their products. Meanwhile, Avon charges $5, while Beachbody costs $39.95 for the initial investment and then $15.95 a month.
7. DIY crafts and treats
If the pandemic taught us anything, it’s that Americans are resourceful and innovative. Scores of people took advantage of the time at home by starting businesses selling crafts, desserts and other items that proved popular. The only costs are for materials. Facebook has been a successful place to market these products locally.
8. Lawn care
Equipment is the biggest outlay for launching a lawn care business, but if you start small, you’ll need only a lawn mower and leaf blower. Depending on where you live, this might be a seasonal business, but one that can easily expand. Besides the equipment, all you need are flyers and a Facebook page to advertise.
9. Airbnb host
If you have an extra bedroom or living unit, you can become an Airbnb host. The barrier to entry is low – it’s completely free to list your property and become a host. Of course, you will need to have the extra property or space to begin with, but you won’t receive any revenue until you actually start booking reservations. If you’re considering renting out your property, read our article on how to become a full-time Airbnb entrepreneur.
10. Repair service
People are spending more time than ever in their homes and consequently are more focused on home improvement projects. If you have skills in this area, it’s easy to become a repair person without a lot of capital.
11. Pet sitter/walker
This business costs nothing more than the expenses associated with your marketing plan. You just need to have a lot of patience and a love of pets. It’s another one of those enterprises that can easily expand with little overhead.
12. Virtual assistant
Business owners need help with everyday tasks, from organizing record books to responding to customer emails. As a virtual receptionist, you’ll perform all these tasks from the comfort of your home, and you can take on multiple clients at once. All it takes is a computer and internet connection to start a virtual assistant business.
Our ultimate checklist for starting a business from home can come in handy for several ideas on this list.
13. Delivery/errand runner
In the same vein as a dog-walking service, a delivery or errand-running business doesn’t require a lot of upfront cash. You’ll just need to print some flyers, get business cards and promote your service on social media and other online channels. While demand for errand runners rose out of necessity during the pandemic, many have gotten used to the luxury of having others run their errands for them, so finding clients shouldn’t be much of a challenge.
Are you a math expert? Do you play an instrument or have excellent computer skills? Then you can become a tutor, and all it costs is your knowledge. You can conduct tutoring sessions in person or virtually, charging by the hour or half-hour. Your level of experience and client base will determine how much you can charge for your services.
Businesses need advice, but not all of them want to hire a full-time employee to get it. That’s where consultants come in. Use your background and expertise to find the areas where you would bring the most value. That may be offering consulting services on marketing, accounting, engineering, information technology or any other area you can find demand for.
If you provide good service at a reasonable cost, your reputation will grow, allowing you to expand your business. To get up and running, you’ll need a website or social media presence and the ability to network on platforms like LinkedIn.
16. Professional organizer
People looking to declutter often turn to professional organizers for help. Customers pay around $30 to $130 per hour, depending on the project and your level of expertise. The overhead costs to become a professional organizer are very little at first: You just have to invest in training and education, design a website, and land your initial customers. After a few successful gigs, word-of-mouth should kick in, growing your clientele.
If you’re fluent in another language, you can easily launch a translation service. There is demand from the medical, legal, publishing and small business communities for people who can translate information into English. A freelance translation business won’t cost you anything in startup expenses and can quickly expand as your customer base grows.
18. Mobile public notary
Certain documents require approval from a public notary, including wills, loan paperwork, powers of attorney, property deeds and other court papers. A mobile public notary visits clients at their homes or places of business.
Depending on where you live, it can cost $50 to $150 a year to become a public notary. Some states require training courses in addition to those fees. Volume is the key to making money as a public notary. You can charge anywhere from 25 cents to $20 per document.
19. Laundry service
If you have a washer and dryer at home or access to a laundromat, you could offer washing, drying, ironing, and pickup and delivery services to people in your community. Before you get started, figure out if you will use your own equipment or bring items to the laundromat. After that, your only costs are detergent and laundry bags or baskets.
20. Cleaning service
Americans are busy, and the last thing many of them want to do at the end of a week is clean their home. That is where a cleaning service comes in. According to FreshBooks, the average fee for cleaning a home is $180, with an average hourly rate of $45 to $50 per cleaner. Launching a cleaning service won’t break the bank; all you need is a good vacuum, cleaning supplies and a positive attitude.
We listed 20 great business ideas above, but you can draw inspiration from all aspects of life. You can even learn valuable business lessons from the fictional companies you see on TV!
What to know before starting a business
Ready to take the leap into entrepreneurship? There are a few things you should do and understand before starting a business:
- Business idea viability: Ensure you have a sound business idea. That doesn’t mean you need a 20-page business plan, but you should have a passion for or interest in the enterprise you’re starting.
- Industry research: Track industry trends and do research about the market, the potential for growth and the initial investment needed. If you want to launch some kind of online business, Stabler said, you need to find a niche or need in the market and start there. If you try to ride a trend, you’ll face a crowded market, and demand for the product or service could quickly fizzle. It’s also essential to understand the shopping habits of your customers and what makes them want your products or services over a rival’s.
- The four P’s: Stabler said business owners should know their “four P’s”: price, product, placement and promotion. Keep this concept in mind before and during your route to entrepreneurship. You’ll want to know exactly where your business will stand when it comes to each component so you can execute accordingly.
- Industry language: The business world comes with its own set of vocabulary. It can be helpful to review the ABCs of running your own business so you understand the jargon and tools you’re likely to encounter.
“The tools and technology available today make it really easy to get a new business up and running quickly and affordably, even with as little as a few hundred dollars,” said Stabler.
That said, Stabler added, “It’s important to remember that starting a business with little cash does not also mean you jump in recklessly. Every entrepreneur should take a measured approach to selling and invest the time upfront to understand their market and their consumer.”
Skye Schooley contributed to this article. Source interviews were conducted for a previous version of this article.