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How to Safely Start a Low-Cost, Low-Risk Small Business

Starting a business involves risk of some form or another, but it doesn’t have to be the kind of financial risk that could sink you personally if things go in the wrong direction. If you’re interested in venturing into business ownership but aren’t looking to risk it all, this post and the advice below are for you.

Low Cost Business Ideas

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Starting a business with little or no money starts with identifying a business opportunity that has low startup and overhead costs. Of course, you should also find an opportunity that’s in need, something you are good at, and something you’ll enjoy doing. Here are some ideas and resources to get the wheels spinning.

Become a Freelancer

There are plenty of freelance opportunities out there. Freelance writing and editing, graphic design, and photography are among the most in-demand, but there are opportunities for freelance web developers, hair stylists, makeup artists, accountants, and more.

One of the biggest advantages of becoming a freelancer is that startup costs are typically very low. For example, if you want to become a freelance writer, pretty much all you’d need is a computer. And if you already have one, you’re set. Another advantage is that you can start freelance on the side and keep your full-time job.

The biggest challenge, which will be the case with starting practically any business, is letting people know you’re available for freelance work (often identified as FL) and getting your first clients. For that, make sure to check out this guide that offers advice on how to become a freelancer.

Start an In-Home Daycare

Though many of our suggestions are able to be started as side jobs, this is one that will require you to go all in right away. But as this recent study shows, there’s an increasing gap between the supply and demand for affordable, quality childcare, which makes this a great opportunity for anyone interested in opening an in-home daycare.

Interestingly enough, one of the biggest advantages of starting an in-home daycare could be to avoid daycare costs themselves. Many families with young children weigh the pros of cons of both parents continuing to work against one parent staying at home, spending more time with their children and not paying for daycare. With an in-home daycare, you can achieve the best of both worlds: maintaining an income and eliminating childcare costs while spending more time with your own children.

Start a Service Business

Starting a service business, like a handyman or lawn service business, is another low-cost business option. Startup costs will vary based on what equipment you already have versus what you’ll need, but these types of businesses can be started as a part-time business where you primarily work during weekends and build up a client base and awareness slowly but surely.

One way to make sure you keep your costs as low as possible is to buy equipment as you need it. Rather than trying to plan for every scenario possible and buying all the equipment you’d ever need upfront, evaluate what equipment you’ll need to complete a job that you’ve bid out and been hired to do. Then, purchase new equipment on an “as-needed” basis. And if a job requires expensive equipment that you can’t afford right away or isn’t worth the cost to own at the time, you always have the option to rent equipment as well.

Start a Blog

The startup costs for a WordPress blog can be as low as $70 if you’re willing to do all of the work yourself. Obviously, the costs can go up from there, and it might be worth investing more into your blog, especially if you’re unfamiliar with how to build a blog or don’t have a knack for design, but the costs are definitely on the low side compared to other business options.

If this is something you’re interested in, it’s important to consider ways to monetize your blog. Traffic alone won’t generate revenue, so have some ideas of how you’d use options like affiliate marketing, Google AdSense, or even consulting to turn a blog into a revenue stream.

Start an Etsy Business

If you’re looking to sell a product rather than a service, an e-commerce business is a great option. By going this route, you can avoid the need for a brick-and-mortar location, which will drastically reduce costs.

E-commerce businesses can take some time to build up, which makes websites like Etsy incredibly powerful. Etsy provides a platform for those interested in selling products. With plenty of resources available to learn how to attract customers, the ability to join teams that serve as support communities, and tools that make managing your shop simple, Etsy is be the perfect, low-risk way to start your own business!

And Etsy isn’t the only online marketplace that can help you jump-start your sales efforts. Check out this article that shows how Amazon, eBay, Bonanza, and others can help you reach new customers.

These are only a handful of low-cost business ideas to get you started. For more ideas, check out this post, which offers 25 business ideas that cost less than $100 to start.

Start Your Business at Home

Woman sitting at a desk working from home

After deciding on what your company will be, you have to decide where you’ll work from. Working from home is a great way to make sure you have low costs and overhead when starting a small business. Some of the biggest advantages of starting your business from home include:

  • The financial savings of starting a business from home are by far the biggest advantage. By not locking yourself into a lease right away, you reduce startup costs and allow yourself to keep more of the money your business makes.
  • You can be flexible with your time and work more easily when motivation strikes or when you find you have some free time. It also provides flexibility to test your business. By not committing to a significant amount of overhead, you have the freedom to experiment and shift directions at a pace that works for you. Of course, if your business gets to a point where it’s no longer the best option, you also have the flexibility to make that move whenever you’d like.
  • Working from home makes sense when trying to safely start a business because it’s easily the best option for anyone starting their business on the side, which is our next recommendation.

One final note is that when starting a business from home, it’s important to understand the state and city laws, zoning restrictions, and even neighborhood bylaws. In most cases, you won’t run into any issues, but it’s important to take this step to make sure.

Start Your Business on the Side

Starting as a side business is one of the best ways to reduce risk. Rather than quitting your job and losing your salary and benefits to go all in on your new idea, keep working a full-time job until you’ve proven that this thing is going to work and are making enough money to keep yourself afloat. Some of the biggest advantages of starting a side business include:

  • You maintain the security of a salary and any benefits you have at work.
  • You can build your business at your own pace without the pressure that comes with supporting yourself and others purely through your newly founded business.
  • If you do need even minimal funding to make your business work, it’s possible that it can come from your salary rather than taking out loans. This is a great way to reduce risk.
  • You get the chance to have a test run. From making sure that the business idea has real money-making potential to making sure the idea is something you enjoy and want to continue to pursue, starting as a side business allows you to change your mind without losing much other than time.
  • By earning money on the side, you’re creating a second revenue stream in addition to your salary. And when you get to the point where your time is more valuable when spent on your business, you can always take the leap and go all in at that point.

Similar to starting your business from home, you’ll need to make sure that your current employer allows you to run a side business while working for them. You also need to understand the contract you signed when you were hired by your current employer. If you’re transparent about it, and there isn’t a conflict of interest, chances are good that there won’t be any issues.

Don’t Hire Employees

Man brainstorming ideas

At least in the beginning, taking the “solopreneur” route is a much safer approach. Of course, starting a side business and doing it alone puts a lot of weight on your shoulders and will require you to spend a significant amount of your time away from your day job building your own business, but from a financial perspective, it’s definitely the way to go when starting a business with little money.

Outsource When Needed

Whether you need some help in an area that falls outside of your expertise or need some additional manpower, hiring freelancers or outsourcing to an expert is a much safer decision than hiring full-time employees in the beginning stages.

Be selective about outsourcing, but don’t get stuck in the mentality of doing everything yourself, especially if it’s something that will cost you significant time or that you won’t be able to do effectively. This is one area where being too frugal could actually hold you back.


Trying to avoid spending as much as possible? One option could be to barter. If you can find other small business owners that specialize in something you need and could also benefit from what you specialize in, you might be able to avoid paying cash for those services. If what you’re offering is a service, you will need to account for the time you’ll have to invest.

Don’t Spend Unnecessarily

One of the most common mistakes you can make when starting a small business is to spend on things you don’t really need. Buying new equipment and furniture for your office, paying an agency a premium rate to design your logo, paying for high-end business cards, and paying for top-of-the-line software are all things that are unnecessary in the early phases. If money is tight, the last thing you need to do is sink it into things that you don’t need.

Get Paid Upfront

Though it won’t always be an option for certain business models, getting paid at least partially for the work you’re about to do is a great idea. This will be especially relevant for lump-sum jobs and less so for hourly-rate jobs or assignments that pay for the amount of work you’re getting done. Obviously, for those selling a physical product, this isn’t an option at all. If it’s appropriate and you have the chance to ask for payment upfront, it will help with cash flow, which is essential for new small businesses.

Starting a business doesn’t have to be a high-risk decision. Though the tips mentioned above might require you to be more patient and grow your business slowly, they also provide a far less stressful way to launch your own business.