Looking to start a business with little money? You’ve come to the right place. Starting a business without thousands of dollars to draw from may seem daunting, but it’s perfectly manageable for the diligent entrepreneur.

Choosing What Type of Business

The first step is deciding what kind of business you want to open. It’s worth considering how much time you’re willing to invest, whether you’re looking for a full-time venture or part-time work, and whether your idea is something you’re passionate about or simply a means to an end. Knowing your personal limits and your enthusiasm for the work will go a long way.

There are plenty of business types with low start-up costs. For entrepreneurs with degrees, consulting in your field is always a strong option. Years of education and hands-on experience in a given field carry real value, and many businesses are willing to pay for that expertise on a contract basis rather than hiring a full-time employee. Whether your background is in finance, marketing, healthcare, or education, there are likely individuals and organizations that could benefit from your knowledge. Consulting also tends to have very low overhead, since the service you’re selling is largely your time and expertise rather than a physical product.

Without a degree, don’t worry, there’s a market for a wide range of skills. Are you good at a particular school subject? There will always be demand for online and home tutors.

Do you enjoy social media and making your account look great? Local businesses are constantly looking to improve their marketing reach. Online marketplaces like eBay and Facebook Marketplace are full of opportunities for entrepreneurs with a mind for reselling. And for those who enjoy working with their hands, auto detailing, home repairs, and lawn care are all stable, reliable options.

Budgeting

Developing a budget is critical for making the most of your $500. To start, there are plenty of free tools available to the frugal entrepreneur. Business accounts on social media platforms are free, and sites like Canva offer design templates to make your posts look polished. From marketing to accounting to learning about business trends, there’s no shortage of free online resources.

As for registering your business, costs vary by location, though a sole proprietorship typically costs little to nothing in most states. It is always important to research the specific laws and regulations in your area before getting started. Many of the business models mentioned here have minimal operating costs, with some online businesses requiring nothing more than an internet connection. More hands-on businesses may require some equipment, though using what you already own is advisable when possible.

Whatever your budget looks like, always set a portion aside as a rainy day fund, because complications and emergencies have a way of showing up unexpectedly.

Starting Up

Once you’ve chosen your business and set your budget, the next step is building a client base. Starting an Instagram or TikTok page is easy and gives you an online presence from day one. More often than not, your first client will be someone you already know, so start by asking around your immediate network. From there, research businesses that might need your services, find the right point of contact, and send concise, personalized pitches. Engage with relevant online forums and groups in your field as well. Most importantly, put your best effort into every job early on, because referrals and testimonials from your first clients are some of the most powerful tools you’ll have for growing your business.

Starting a business with a modest budget is completely doable. Join AFE to stay up to date on how to make the most of limited budgets and smart business practices.