Microfinance facilitates small amount of loans to individuals to help them establish a small business, or use their skills for generating more income. It has been successful across the globe, which indicates that the available capital amount, large or small, may not necessarily matter for success in a business venture. What matters is the traits, skills and passion of an individual to start and run a business. We look at a few low-cost businesses that can be started with less than $1000. Most remain service-oriented, requiring dedicated time and effort from individuals. (For more, see: Start Your Own Small Business.)
There are many other low-capital businesses which can be easily started and operated online, say like freelancers working as programmers, content writers, or website creators. However, the Internet offers an international playing field, where competition gets intense and an individual from a high-cost region competes against (and often loses out to) those from a low-cost region, as the latter has the competitive price advantage. We keep our focus on those businesses that don’t have this drawback. (For more, see: 5 Biggest Challenges Facing Your Small Business.)
Starting Businesses With Less Than $1000
There are a good number of businesses which can be easily started with very low capital, and yet remain profitable.
1. Home-Based Catering: Is cooking a passion for you that always results in compliments from your near and dear ones? Consider starting an order-based catering business from your home-based kitchen, as permitted by local laws. Start by offers of meals, tiffin, sandwiches or your specialty cakes based on the orders received. Starting with one or few customers who are networked to others can help getting more customers. For example, serving a quality meal to a student or to an office employee, will lead to free word-of-mouth publicity within their respective larger circles of other students and office colleagues. Preparation is based on orders received, and starting from home kitchen will save a lot in costs keeping it within $1000. Care should be taken to ensure quality, timely delivery, freshness of food items, and adherence to required standards.
2. Fitness Trainer: Passionate about fitness with specialization in traits like yoga, tai-chi, or aerobics? Establishing yourself as a personal trainer on pay-per-visit charges can be a good starting point. Costs may involve purchasing necessary equipment like yoga mats, and small costs towards listing yourself in local business directories. Getting a dedicated website designed for yourself can be an added plus, and can be accomplished at zero or minimal cost. Target customer group can include elderly or those having limited mobility, who need at-home services and are willing to pay for it. It may require intensive travel with high mobility, but return on this low-cost venture will be higher, with liberty to work during your own preferred hours.
3. Coach/Instructor: Similar to a fitness trainer, one can start as a dance or music teacher, or a tuition coach for kids. Such business may be started at home instead of personal visits, given the possibility of getting more than one pupil attending the class. Starting at home will require no costs towards real estate, and minimal cost going towards basic infrastructure for dance/music/tuitions. The caveat with this setup is that one should have sufficient space, and activities should not disturb the neighborhood. As the business grows with more candidates and increasing income, one can consider moving to a rented location.
4. Online Sales: A lot of stuff can be sold online, which includes scrap material, unique artifacts (like home-made fragrant designer candles), paintings, furniture items, and designer costumes on demand. However, going solo with your own dedicated website may lead to challenges of site promotion, customer engagement and advertising costs. For a small cut that portals like eBay (EBAY), Amazon (AMZN) or Etsy (ETSY) take, a seller gets to showcase his goods to millions of potential customers nationally and globally, as these sites already have dedicated buyers. To beat the competition and maintain the edge, identify items which are unique, prepared by your own or available only within your locality, and can be shipped nationally or globally. Most ecommerce portal support “build-on-demand” orders, which aids the seller to prepare items only when an order is received.
5. SME Work and Consultancy: Are you a subject matter expert (SME) in interior designing who can help make a restaurant lounge more attractive, are you a certified financial planner who can help clients with investments and taxes, or have you done a beautician course to encash opportunities for bridal makeups? Such specialization and skills can allow consulting and work opportunities where you can establish your business based on paid visits. These are different from web-based online consultancy, as these will need visit to client locations. Setup costs will be towards getting yourself listed in local directories, creating online and printed catalogues, and initial advertising through pamphlets and flyers distributed locally.
The Bottom Line
Capital-scarce businesses often get labor-intensive - one needs to put in lot of hard work to realize profits. Most such businesses don’t have a proper establishment, and connecting with clients remains a challenge. In the beginning, the sales are adhoc and uncertain. One needs to be mentally prepared for struggle during the initial phase, and attempt to grow with pragmatic optimism making necessary changes in their business approach based on observations. Once there are signs of business growth or stabilization, expansion can be considered including taken a small business loan (Further suggested reading: Tips To Improve Chances Of A Small Business Loan)