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How to Start a New Business With Less Capital

Updated on October 6, 2015

A business compromises of a dream of an entrepreneur, and sets out to highlight the desire he/she has to earn profits from it, innovate the offering and provide satisfaction to the end user. Starting a new business is a challenging endeavor. It requires a lot of planning and different aspects of making it successful need to be analyzed. Any successful business needs a strong, passionate and visionary entrepreneur, who will combine all the resources of the business, bear the risk and create a successful business, that satisfy the needs and wants of its target audience. The issue of money and the source of capital becomes a major huddle and sometimes, prevent businesses from even starting up. To make dreams come true, businessmen need to relay on a steady flow of cash, and sometimes entrepreneurs cannot find investors who are willing to invest in to the vision of others.

Those who are only interested in earning money in the form of profits, look towards businesses, which do not require a lot of start up capital. This article will suggest two such businesses that an individual can undertake without investing heavy amount of capital, they can start these business in the comfort of their homes, and develop order based inventory to save costs. We can say that, less capital equates to less risk and less financial help from outside sources.

The first business we are suggesting requires only $100 per month to start up. This includes the necessary supplies, the fixed assets that will be employed, labor and other factors. The business is making piñatas. This business is a home based business, which provides Piñatas for different festivities and events, for example, birthdays, weddings, bridal showers, baby showers, and bachelor/bachelorette parties. It is based on customer orders and runs entirely on the Internet and through personal contacts with the customers. Social networking sites provide big help to small businesses and a range of clients can be established through this. Another way to attract clients is by partnering up with an event management company, and using their resources to market your product- piggyback marketing. Lets breakdown the several aspects of the business one by one:


Making piñatas and its designs can be learnt and done by even one person. It does not require a big or even a small assembly line. It will completely depend on the number order the company anticipates to get in a day, week or even a month. It is wise to pay the labor based on a complete work of one piñata; rates differing with size, however paying them by the hour may not be very productive or feasible for the company. Costing done according to piñatas is easier.

Raw materials

Supplies for the piñatas can be bought from any art supply shop and even balloons can be bought from there. If a customer wants a particularly complicated design they can be charged extra for that.

Setting the price

The price of the piñata should be varied with size and design. A general rule is to provide them with price after 50% markup.

The delivery process

The cost of delivering the piñatas should be extra, and customers should be given the option to collect it themselves if they please.

The second business we are suggesting with less capital required can also be started up with $10 in hand for a monthly basis (initially). This business is gift-wrapping, providing people with different gift-wrapping and gift boxes tailored to suit a particular occasion. For example, announcing the birth of baby, give-aways or souvenir for a bridal shower or a simple birthday party gift boxes. These boxes and gift-wrappings can be customized to include the color and text the customer wants. This business is also based on the order a customer places. This minimizes the risk of the money invested, and creates a personal environment for each of the boxes.


Labour requirements are minimum and are dependent on the orders. As the business progresses, more labour can be added, but to start, three people making the boxes are more than enough.

Raw material

There is an option to buy boxes from the market and then customize them for the customer, or make everything from scratch. The supplies of the boxes and decorations can be bought from any supply stores

Setting the price

Price will depend on the order, and design. The minimum order that can be accepted should be at least 20 boxes. A markup of 50-60% is suggested.

Delivery process

Customers should be given the option of delivery free of charge; these decisions will depend on your costing and fuel costs in your respective countries.

Business with less than 5000 USD as start up Capital

Dog Trainer

Very little start up capital is needed for a dog training business, if you feel like you have the talent and know how of training dogs then you should look to take this route. In the world today dog trainers are in very high demand, if you want to start this business then you must come up with a name that is catchy and clear so that your customers have no confusion when they call for your services. When you have your business registered then the next step should be to cover insurance, this is especially important in the dog training business because you never know when a dog may bite a customer or worker. The most important step for you is to then advertise your business, social media can be a good tool for this.

Start a Catering service

If you’re someone who enjoys hosting dinner parties for friends and family a good business to start would be your very own catering service. Starting such a business involves very little capital; you can even start it from the comfort of your home and expand once you have a larger client base. First and foremost you need to concentrate on the sort of food you are preparing, going with appetizers and desserts would probably be a good way to start, although supplying food to weddings is something you should aspire to. Secondly you must decide on your menu, this will help you in working out how much kitchen space you need and the appliances that you have to buy. Finally the most important part is to taste your food, be your own biggest critic and even invite your friends to try, encourage feedback.

More Businesses that require less capital investment.

Delivery service

With the hustle and bustle of the modern world, very few people now have the time to go out a shop for themselves. This has given room to many delivery service businesses; these are not only relied upon by a vast majority of people but are also a very inexpensive way to start a business. When starting your own delivery service you first need to map out what you will be delivering, they can be groceries, movie tickets or fast food items. You then need to establish your delivery boundaries, the price of your service and the cost of transportation. Another great way to go about this is to contact businesses that don’t offer home delivery; it will also be helpful if you use a fuel-efficient car for delivering your goods.

Yoga or aerobics instructor

Many people are switching over from the corporate world to open their own Yoga studios, with the boom in demand for Yoga opening your very own studio or becoming an instructor can prove to be very lucrative. It is advised that you get a Yoga certification from your local Yoga alliance, this isn’t something which is a necessity but it will give you an edge in luring customers from your competitors. As is the case of any sole proprietor you need to draw up a business plan, location is one of the major factors when opening your studio. You need to make sure your studio is in a place where you have your largest customer base, proper equipment and a clean environment is also imperative.

Jewelry designer

This is a sort of business that you can even start from your home; very little capital is needed to start a jewelry designer business. If your not making your jewelry from scratch than it is important that you have suppliers who are well connected in the market. You then need to plan what kind of jewelry you will sell, whether you will make a wide variety or concentrate on one sort of design. Popularizing your business is also very important, for this you need to have a catchy name; you also should look into making your very own business cards. These must be attractive and professional, something, which will draw customers but also be worthy of the high standards you should be aspiring to reach.

Write a book

From the industrial revolution and the advent of the printing press, writing books have turned out to be great businesses for many people. Writing a book does not include much capital, all you really need is a laptop or typewriter, you would however be hassled by finding a publisher once you finish your book. This sort of business is tricky and may not be made for everyone, because normal people may not have the tools necessary of writing and marketing their own book. But with hard work and determination, this is a business that can make you loads of money, it does not require much running capital and can give you huge profits if you work hard and keep the faith.

Start a website

Starting a website can be very tricky business, this is mostly down to all of the competition you face throughout the world. That is why it is imperative that you make a website that appeals to a large number of people. If you want to start a low capital business a website is a good route to take, you would first have to hire a web designer and carefully lay down the ideas you want to apply. Your website can be a place of ecommerce, buying and selling off the Internet is something which has skyrocketed during the past few years. You can also create a website which is a place for advertisements to be showcased, either way creating a website can prove to be a very lucrative business venture.


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    • Sara Algoe profile imageAUTHOR


      5 years ago from Phoenix, Ariz

      Thanks fastfreta and businesstrader

    • fastfreta profile image

      Alfreta Sailor 

      5 years ago from Southern California

      I really like this, because I did just this about 25 years ago. I started my then business with little capital. Good suggestions. Rated up, useful, interesting.

    • businesstrader profile image

      Natalie Watson 

      5 years ago from Sydney, Australia

      Great hub!


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