How to Start a Small Business Without Money

A man sits at a table while learning how to start a small business without money

Do you have a fantastic idea for a small business, but you find yourself lacking the money necessary to get your idea off the ground? If so, you’re not alone.

The lack of capital is one of the most common reasons why many small business ideas never make it past being nothing more than an idea.

Fortunately, starting a small business without any capital is not impossible. If you are confident in your idea, driven to succeed, and you are resourceful, it is possible to start a small business without money.

Here are a few steps on how to start a small business without any capital.

How to Start a Small Business

1. Keep your current job.

If you are currently working at a full-time job, but you really want to branch out and start your own business, it can be tempting to quit your current job and devote all of your time and energy into turning your small business dream into a reality.

As enticing as this sounds, it can be rather harmful. By staying at your current job, you maintain a steady cash flow, which will allow you to continue paying your mortgage (or rent), food, and other necessities. You may also have a family to support.

While it may take a bit of extra effort to maintain your full-time job and start putting together your new business, it will be a lot easier in the long run to keep your new business afloat when you aren’t struggling to pay off the debts you may have accrued otherwise.

Without having to worry about additional expenses, your transition into becoming a business owner will be made much easier.

2. Flesh out your business idea.

While having an idea for starting a small business is great, that idea is just the beginning. An important step of a small business startup (regardless of whether or not you have any capital to start) is to flesh out your idea and create your business plan.

Having a well thought out business plan is a key element in securing the funding you may need to get later in order to get your business up and running. In creating your business plan, you should ask yourself several questions, like:

  • Is your idea unique, and will it attract customers?
  • How are you different from your competitors?
  • How much will you charge for your goods or services?
  • How much will it cost you to provide your goods or services?
  • What equipment will you need (if any)?
  • How will you grow your business?
  • How many employees, if any, will you need for your business to run smoothly?

By answering these questions, you’ll begin to form the foundation of your business plan.

3. Analyze your market.

You may have this wonderful idea, but do you know if someone else had the same idea and is already in business? Or, maybe there are a few different businesses out there that already had a similar idea.

That doesn’t mean that what you have to offer isn’t unique, but you will have to conduct some research and analyze your market before you get started. If your idea is similar to something that is already out there, can you offer something better? Can you provide a higher quality, possibly at a lower cost?

Along these same lines, you will also want to look at your idea and figure out if potential competitors can do these same things to your current idea. It is important to understand the challenges that you may potentially face, and figure out what you can do to overcome them.

Understanding the market you want to break into is important not just for helping you to become (and remain) profitable, but will also be important if you approach a bank or investors for funding.

4. Use your skills.

One of the easiest things you can do when starting a small business with no money is to do something that is within your skill set. This way, you don’t have to worry about getting additional training or education, which can quickly become expensive and send you deep into debt.

Another way that you can start a business without money using your skills is to sell a service, rather than a product. Selling a product often requires that you have more money available to pay for materials, equipment, and the like.

If you don’t have any money to start, trying to start up a product-based business can either prove very difficult, or sink you deep into debt. A service-based business, on the other hand, requires very little. You may only need as much as a computer and an internet setup, both of which you most likely already have.

Have your heart set on selling a product? That’s okay. Start by selling your services. Some of the greatest product-based companies got their start selling services.

For instance, Microsoft got its start by doing software development. In selling services first, you give yourself the opportunity to earn the capital you will need to start gathering the equipment, material, and other supplies to start making your products.

5. Keeping startup expenses as low as possible.

Let’s face it, starting a small business can get expensive, and it can do so quickly. The amount of money it can take to start a new business can often scare many away from going for their dreams. But it doesn’t have to be this way.

Take a deep breath and start looking for ways to keep your startup expenses to a minimum. There are several ways in which you can do this.

One way in which you can keep startup expenses low is to take inventory of, and utilize, the assets you already have. For example, do you own your own home? Great. Rather than renting a space, make use of a spare room or a garage. Turn this space into a home office.

Companies like Facebook and Apple got their start from humble beginnings such as these. You can also use your home office as a tax write-off. Your home isn’t the only asset that you can utilize. Need to drive around? Turn your car into a company car.

It can also be quite tempting to run out and buy brand-new everything, such as office chairs, computers, and other equipment. After all, isn’t that what company (or even personal) credit cards are for?

As enticing as this is, it is in your best interest to avoid accruing significant amounts of debt. Instead of running out and refurbishing your new home office, use what’s already there. If you don’t have anything, you can look into bartering for what you need.

If you really want something new for your office, but can get by with what you currently have (or what you can barter for), save up some of your revenue and use that money to finance your new purchases instead.

6. Protect what you’re building.

It’s not easy to start and grow a business. It’s even more challenging when you have little or no money to fuel your success. That’s why one area where you should consider spending money is business insurance.

The 10 most common small business claims average between $8,000 to $50,000? Can you afford to lose that? Probably not. And even if you could, wouldn’t it be better to keep that money?

Of course. And we agree. That’s why we specialize in finding general liability coverage for small business owners. We shop for top-rated policies from leading insurers. And we can do all that in just 10 minutes.

You can get a quote anytime online. Or one of our friendly small business insurance pros can take care of you on the phone. Give us a call at (855) 869-5183, Monday-Friday, 8am-8pm ET.

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7. Look into alternative funding.

Sometimes, starting a business with no investment means that you will need to secure funding from other sources. However, as a new business, it’s not that easy to walk into a bank and secure a loan.

Providing a loan to a new business is a risky investment for banks, and many are not willing to take that leap of faith. But just because you can’t secure a traditional loan does not mean that you are out of luck. It just means that you need to get a little creative.

There are actually several options available to you in order to get your small business up and running. You could go with asking your friends or family for a loan, but many individuals are uncomfortable borrowing money from people that they are close to.

However, it can be helpful if you do ask someone close to you to borrow money to draw up a contract that outlines your repayment terms to avoid any issues down the line.

Small business loans.

Rather than seeking out a traditional loan, or if the bank turns you down for a traditional loan, you may look into a small business loan, or a microloan. Microloans are designed for entrepreneurs who are looking to start up a small business and who don’t need a significant amount of money.

Oftentimes, people forget that banks are businesses too, and are looking to make money from the individuals they lend money to. It costs a bank the same amount of money to underwrite a check for $400,000 as it does to underwrite a check for $40,000.

Banks stand to earn significantly more with a larger check than they do with a smaller one. You also often need to have a solid credit history in order to secure the loan. Microloans are designed for those who are just getting started, and may have little to no credit history. And all you really need to provide is a solid business plan and some collateral.


Crowdfunding has become a very popular way to raise the capital you need to get your small business going. There are numerous popular sites, such as Kickstarter and Indiegogo. With these websites, you are able to pitch your ideas to a wide audience of potential investors.

When you create your page, you set a monetary goal. In exchange for people investing money in your small business, you reward them with “perks.” These perks will vary based on your specific business, and may include (but are not limited to) the goods and/or services that your business plans to provide once it is off the ground.

The more interesting or unique your idea, the more successful you are likely to be in securing a wider array of investors and gaining the money you need.

Angel investors.

Another option you may consider is an angel investor. Angel investors are entrepreneurs who are already successful businessmen and women. They have already built their businesses, and are now looking to invest some of their money (and their time) in assisting a new business to become successful.

Often, they are simply investing for the fun of it. However, angel investors can be rather picky about who they want to assist. They don’t get involved with, or waste their time with, a business that they don’t believe will make it.

In order to catch the attention of these types of investors, you need to have a top-notch management team, a well thought out business plan, offer a truly unique product or service, and be scalable.

Business grants.

The only thing better than securing the funds you need to start up your small business is not having to worry about paying back the money you borrowed. Seems too good to be true, right? Actually, there is such a thing, and it’s known as a small business grant.

Small business grants are usually provided by nonprofit organizations; however, they may also be provided by government agencies or corporations. Many organizations that provide small business grants tend to offer money to specific types of businesses, such as those that are run by women or those that are run by veterans.

The biggest issue you may encounter with a small business grant is that they can sometimes be difficult to secure. Everyone wants free money. If you are willing to take the time, and put in the effort, however, you may find that securing a small business grant will really pay off in the long run.

8. Be wary of “Get Rich Quick” schemes.

Everywhere you look, both online, in print, and even in person, there’s someone trying to sell you some way to “get rich quick.” These people prey on those who are looking to make a lot of money in a short amount of time.

They tell you everything you want to hear and make you all kinds of promises about getting large sums of money with little to no work involved on your part. As tempting as it can be to buy into these sales pitches (especially when you don’t have any money to start your new business), avoid them at all costs.

True success takes time and effort. It may take a few years to become the success you want to become, but your perseverance can really pay off in the end.

9. Get your name out there.

So, you’ve got this great idea, you’ve worked on your business plan, and you’ve got everything set up and ready to go. So, all that’s left is to sit back and wait for business to roll in, right? Not quite. Now you’ve got to get your name out there.

In today’s digital age, this has never been easier. Social media platforms, including Facebook, Twitter, and Instagram, have made it exceedingly easy to create buzz about your business. You can also create listings on sites like Craigslist, or comment on forums where your target customers can be found.

Of course, as great as it is that you can do just about everything online, there are many other ways to get your name out there as well. Create flyers. Go door to door. Network. Use your family, friends, and others to help generate buzz.

The more ways you work to get your name out there, the better your chances of gaining a customer base. Once you have them, give them a great experience, and they will be much more likely to recommend you to their friends and family.

The Secret to How to Start a Small Business

When money is tight, you may be wondering just how to start a small business with no capital. Attempting to do this can seem like a very scary task. While daunting, it is not impossible.

If you love what you are doing, are confident in your plan, and don’t let your current lack of money hold you back, it is very possible to turn your dream business into a reality.

When starting a business, don’t forget to get a business insurance quote to ensure you’re covered.

Mariah Bliss

I love writing about the small business experience because I happen to be a small business owner – I’ve had a freelance copywriting business for over 10 years. In addition to that, I also head up the content strategy here at Simply Business. Reach out if you have a great idea for an article or just want to say hi!
Mariah writes on a number of topics such as small business planning, contractor insurance, and business licenses.