How to Start a Small Business With Low Investment

Open for business

The least expensive small businesses to start provide services rather than products, because you usually do not need to stock an inventory or invest in a retail location. Your investment for a service business is limited to the tools you need to perform the service, and additional funds for marketing your service to your prospective clients. To keep your expenses down, start your business from your home.

Instructions

1. List your skills that might translate into a service that people or businesses would pay you to provide. Maybe you are a good marketer, web designer, writer or graphic artist. All of these types of activities translate into good freelance or consulting businesses you can start with little to no investment.

2. Create a separate entity for the business or be a sole proprietor. If you're a sole proprietor, most states allow you to operate your business using your legal name and without filing any special paperwork, but your personal assets have no protection from the business. You and the business are the same entity. If you decide to separate your personal assets from those of the business, set up a limited liability company or a corporation.

3. Create a portfolio or website of examples to show prospective customers. If the nature of your services cannot be displayed in a portfolio or on a website, get testimonials from people who have used your services. Consider providing a few services for free or at a discount in exchange for testimonials.

4. Advertise for customers. The Internet offers a number of inexpensive advertising opportunities, but your best source of customers will be word-of-mouth referrals. Consider using direct mail campaigns, calling local businesses, and hanging flyers where prospective clients might see them.

Tips & Warnings

• Keep your business finances separate from your individual finances. Even if you use one account for all of your transactions, label which expenses are business related so you can properly file your taxes.

References

• Entrepreneur.com: Start a Business Without Going Broke

Resources

• Sba.gov: Small Business Association