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Home » Start Your Business

The $100 Start – Up

$100 start up

Last week the Wall Street Journal published an article on the costs of starting a business. Citing Babson College, who have made a study of the costs of start ups who has estimated that on average it takes about $65,000 to start a business, a figure that can include everything from buying equipment and inventory to paying employees. Some industries come with even higher price tags, according to the Kauffman Foundation—$82,000 for construction, $98,000 for retail and $175,000 for manufacturing, to name just a few.

But the truth is to start a  small business, you don’t need anything like a large cash outlay. In fact, I’m a firm believer that you can start a business for less than a $1000 easily, because you don’t need anything like the things you think you need.

You don’t need:

  • an office, you can work from home
  • business cards
  • fancy furniture
  • Employees, you can rope in friends or famiy or outsource stuff you can’t do yourself
  • A 99 page business plan (just a clear idea of what you’re going to do and how)
  • qualifications
  • Large capital

You don’t need any of these things, at least not at the begining.

All you need to do is this:

Meet a need and someone willing to buy

It’s as simple as that. It really is.  Many people starting out for the first time get hung up on the trappings of ‘being in business’ that they don’t actually get started and never actually get their business off the ground.

How to get started in two easy steps:

1. Do something: Meet a need

If you start out by meeting a need by having something to sell, then you’re half way there.   But don’t spend forever either trying to come up with something or over developing a product, adding features that aren’t necessary.  Start small and meet the need. You can always add extra features at a later date.

3. Have someone willing to buy

If you start out by meeting a need, then you’ll have people willing to buy. But you need to be able to identify people who are in a position to pay for your product or service.  Generally speaking when starting out (especially if you have a small budget) it’s best to target people or business who have a need that is currently not being met.   If people have a need, but they don’t know it then you’ll have to spend a tonne of time educating them in why they need your product. If you’re a good salesman you’ll probably pull this off. Maybe. If you’re not a good salesperson, then the chances of you pulling it off are remote.  So you’ll end up wasting time and money and not getting anywhere fast.

Where people recognise that they have a need, you don’t need to spend a lot of time selling your product – the product or service will sell itself.

For example, if you had a car that was dirty and someone offered to wash it for you for $10 you’d probably say yes.

But if someone offered to replace your car’s brake pads with ceramic ones,  you’d probably say no (especially if you knew the price).

So, the key question to ask for anyone starting out in business is this:

Who will buy my product or service?

If you can’t answer that,  then you don’t have a business.

Here’s some ideas of businesses you can start on a budget:

  • A car washing or valeting business
  • internet marketing
  • cake baking
  • become a personal assistant  to the busy homeowner (dog walker, gardener, collector of parcels from the post office)

So, if you were to start a business today, with less than $1000 what business would you start – could you manage on even less, say $100?

If you were looking at this being a permanent replacement to your current income, would the answer be different?

6 Comments »

  • El Edwards said:

    $65K?! That’s incredible! Less than $100 start up? Sure. $10 for a domain name, $9 a month for hosting, $40 subscription for my wonderful theme and a free trial version of Photoshop for a month to get my site looking beautiful.

    What else? Hmmm, auto-responder via MailChimp so it’s free for the first 500 subscribers.

    To be honest, my biggest costs have been on learning materials. I spent all my birthday money on books and stuff to help me get even better.

    Can it be done? Sure, I’m doing it.

    The irony is, all my life I’ve been a bit of a flitter. I used to think it was a bad thing. I love trying new things (except eyeballs. They may be new but I am not trying them!) and get bored quite easily. The wonderful pay off is that I’ve learned a tonne of new skills over my time. Now I wouldn’t want to charge for many of these skills because they take me soooo long (in particular, I’m thinking graphic design stuff) but it has allowed me to start up at super duper low cost.

    As for your question about whether the answer would be different for an income to replace my current one, I can’t answer that because I’m already thinking about the end game.

  • Ben said:

    When people see stuff like “it takes 65k to start a business” it’s no wonder that as a country we ship off all our business to other parts of the world.

    The really cool thing is that you can start a cracking business on 100 bucks. You’ve given some great examples here Matthew!

    I’m with El in the respect that I’ve started my “business” for less that 100 bucks and have found the need that people need to be met.

    The big stumbling block for a lot of people is that they think their business needs to be completely new and original to be successful. No it doesn’t, you can be surrounded by a lot of people who meet the same need but if you do it better than anyone else you’ll always make a profit.

  • Steve said:

    65k start up costs seem pretty darn daunting.

    As you said though with internet marketing and a few other economical ways it is very easy to get started for less than 100$.

    The basic start up costs for IM is well under 100. For all of the “extra” type things ou can purchase as you go from profits. (and there are really not too many costs tied up in those.

  • Caileagh said:

    Great advice. I’m in the very early planning stages of starting a new business. Even with needing some equipment, it’s amazing how little I will really need to get started. Even less if I can get some local companies to donate things, which I think is doable using my extreme powers of persuasion 🙂

    I know all the mental barriers to getting started. I’ve had to face them myself and will continue to face them until the day the doors open. But I know it’s doable and with the fantastic support base I’m building any fears will be diminished by their smiles, encouragement and uplifting words.

  • Savings Sally said:

    What a great idea of being able to start a business for much less money. I’d love to try something like this with arts and crafts projects.

  • Matthew Needham said:

    Well there’s no reason why you can’t Sally!