How to start a business without money

Dreaming of starting your own business but are short on cash? Don’t worry, you might still be able to make it happen. Keep reading for tips to turn your entrepreneurial dreams into reality.

As of 2023, the UK is home to 5.51 million small businesses, making up over 98% of the country’s business population.

Many small business owners may have faced financial challenges and started their ventures with little or no money.

If you’re in a similar situation, don’t give up.

Being creative and resourceful can allow you to start a business without much money.

Learn how to start a business without money and launch your low-cost start-up with minimal risk and financial investment.

Use the skills you already have

It can be a good idea to start by identifying what you’re good at.

Launching a business based on your existing skills can be a smart move.

Consider making a list of your skills and experience.

This could include technical skills, creative talents, business know-how, or in-depth knowledge in a specific area or industry.

Think about your work history and the experience you’ve gained over time.

You may also have a network of contacts who could be very helpful.

They might offer advice, potential business opportunities, or even want to team up with you.

Keep in mind that where you start your business may not be where it ends up – so be prepared to think creatively.

For example, if you dream of owning a restaurant but don’t have the funds, consider starting as a personal chef, catering small events, or offering cooking lessons instead as a way to get started.

Choose the right free business idea for you

Choosing the right business idea is key, especially if you have limited resources and funds.

Service-based businesses can be cheaper to launch than product-based start-ups, as they rely more on your skills and time rather than involving significant upfront costs.

Here are some low-cost ideas:

• tutoring or coaching – help others in a subject or skill
• virtual assistant – offer remote administrative or technical support to clients
• bookkeeping – help businesses keep track of their finances
• dog sitting or walking – provide services to pet owners who need help
• freelancing – offer other businesses support in your particular area, from programming to project management
• cleaning services – start a residential or commercial cleaning business
• dropshipping – sell products online without holding inventory.

Choosing a business idea that fits your budget and skills can increase your chances of success and make the process more enjoyable.

Read our guide to dropshipping.

Don't give up your day job – yet

Keeping your job while you start your business on the side – known as a ‘side hustle’ – can have many benefits.

The income from your job can give you financial stability and let you invest in your new venture.

Starting as a side hustle lets you test and improve your business idea before going all in.

This can be a good, low-risk way to see if your idea has potential before committing more fully to your new venture.

Balancing your start-up with a full- or part-time job helps you gain the skills you need to build and run your business effectively.

Growing your business slowly can be smart, giving you time to make thoughtful decisions and avoid mistakes.

Maintaining your current job could also help you to expand your professional network, so you could gather contacts and potential clients for your start-up.

Read our guide on how to turn your side hustle into a business.

Use free or low-cost business tools and resources

Business tools can be incredibly helpful when starting a business, but monthly subscription fees can be expensive.

Free or low-cost options can help you keep you on top of your tasks.

These could include Google Workspace for getting organised, Canva to create graphics and marketing, and WordPress to create a website for your business.

There are also a number of free sources of business tips for UK start-ups, including networking groups such as the Federation of Small Businesses (FSB) and government Growth Hubs.

Joining LinkedIn groups or local business groups could also help you find the right business guidance when you need support.

Borrow or rent what you need

Instead of buying equipment for your new business, think about borrowing it.

Friends, family, or local networking groups might have spare computers, printers, or office furniture they can lend or donate to you.

You can also check out organisations that recycle used business equipment, often giving it away for free or cheaply.

If you need more professional or specialised equipment, consider renting.

Many companies offer rentals for electronics, machinery, and other equipment.

If you need office space, some companies offer fully equipped offices with desks, meeting rooms, and other amenities.

This could significantly reduce your start-up costs while providing the tools you need.

Market on a shoestring budget

Marketing your business doesn’t have to be costly.

Social media and content marketing can be cost-effective ways to build an audience by creating engaging and valuable content.

This can help you in a number of ways, such as boosting online visibility, increasing awareness of your business, generating sales, and encouraging trust in your new brand.

Here are some budget-friendly marketing methods:

• social media – regular posts on platforms such as Facebook, LinkedIn, and Instagram can help to reach a wider audience
• website content – publish useful and engaging blog posts to establish your business as an industry expert and improve your Search Engine Optimisation (SEO)
• email newsletters – keep in touch with your target market through regular email newsletters, updating them on your services and special deals
• join professional groups and online communities – expand your reach and introduce your business to new audiences and potential customers.

Read our full guide on how to market your business on a shoestring.

Monitor your expenses to stay profitable

Tracking your income and expenses is essential for making your start-up profitable, especially in the early years.

Free or low-cost accounting software can help you make beneficial financial decisions, both short-term and long-term.

Growing your business without spending a lot requires careful planning.

It can be wise to monitor costs and always look for cheaper alternatives.

Depending on your business, this might include:

• outsourcing tasks or using automation tools rather than hiring full-time employees
• collaborating with other businesses to share resources
• focusing on retaining customers with excellent customer service.

Accessing funding

While there are many things you can do at a low cost or for free, you may still wish to give your start-up a financial boost.

If that’s the case, consider looking into possible sources of funding for your business - there are several options available to entrepreneurs.

You could consider using any savings or redundancy payment you may have, loans from friends and family, bank loans, or angel investors.

Crowdfunding can be a good option for start-ups that serve the local community, as members of the public can invest small amounts into the business.

You might also consider whether a Start Up Loan could be the best way for you to get your business up off the ground.

A Start Up Loan offers eligible applicants a loan from £500 to £25,000 at a 6% interest rate plus a year of free business mentoring.