How to Start a Business with No Money

The QuirkyCents.com blog posted an article a few years back titled 8 Ways to Start a Business with No Money. For many Work From Home Forever dreamers, we often lack the time, money or both to go all-in on a new venture. Many of us want to dip our toes and test out the waters to see if a project or venture has the potential to help us realize our goals. This post highlights how to start a business with no money for future entrepreneurs.

Our editors wanted to highlight a few of these startup business ideas with no additional investment from the article.

Become Instafamous on Instagram

You need a smartphone and access to the internet and you can download the Instagram app for free, so technically, you can register for Instagram with no money.

However, achieving Instagram influencer status is less of a business plan and more like playing scratch off lottery tickets.

Instagram influencers must be prolific posters and have an interesting or engaging personality. People follow their profiles because they offer a unique perspective and the sad fact is that most people are not very interesting.

However, achieving Instagram influencer status is less of a business plan and more like playing scratch off lottery tickets.

The likelihood of reaching even micro-influencer status (defined by this backstage.com article as having 10,000 to 100,000 followers) is not great. In fact, this medium.com article highlighted that roughly 15% of Instagram users have between 10,000 to 100,000 followers while 80% of users have less than 10,000 followers.

As you can see, the odds of becoming an influencer are very low and, while you can get on Instagram for free, it will likely turn out to be a very unprofitable venture for you.

If you are one of the few that reaches micro-influencer status, you could make anywhere from $2,000 a month to $3,500 a month. On a yearly basis, that income level is skirting the poverty line. While it’s not enough to live lavishly, that kind of money would be a very nice secondary income stream for an individual.

Handmade Products

The article listed examples of handmade products such as crafts, jewelry, artwork, woodwork and t-shirts as handmade products that can be made using materials available at home or materials that can be donated.

If you have the materials and you have the skills to create sellable handmade products, this is certainly a good start. However, there is a considerable difference between selling a shirt or two on Etsy or at a local flea market than scaling it to a larger t-shirt operation.

For a successful shirt, crafting or woodwork business you need to invest in equipment, inventory and tools to make the leap from making one-off products in your spare time to fulfilling larger orders that will bring in sizable sales.

If you want to pursue a t-shirt business, for example, you would be better off starting a print-on-demand business where you focus on creating and marketing your designs. You invest the time and energy up front during the design process and only pay for materials, production and shipping when you sell a product.

Dropshipping

Dropshipping is a way for you to market and promote a manufacturer’s product. Your role is to get the customer’s order and place the order directly with the manufacturer. The manufacturer is in charge of fulfilling the order and shipping it directly to the customer. You pocket the difference between what the end customer paid you and what you pay the manufacturer.

The beauty about dropshipping is that there are so many products that you can source and sell for profits.

There are some challenges, however, with dropshipping:

• Finding a manufacturer to work with you. Some suppliers prefer to work with established businesses rather than unproven entities. Manufacturers may screen start-up businesses by reviewing your web address, asking for your current sales and asking for references from other manufacturers you currently sell for as well. Don’t worry, if they don’t go with you, chances are there is the right supplier who will want to work with you.
• Finding the product to sell. The article highlighted possible products to dropship like socks, jewelry, essential oils and iPads. For dropshipping to make sense, we recommend that you put some parameters around the product. For example, when we evaluate dropship opportunities, we ask ourselves:
  • Is the end profit per item that I’m going to make worth it for my time? For example, socks are probably not going to make a lot of sense. If the average sell price of socks is $20 and you are going to make $8 in profit after you pay your supplier and after you pay the transaction fee from your payment processor like PayPal, Stripe or eBay. Is $8 worth all the hassle or should you look for a product with a higher average sell price like a $350 iPad instead?
  • Is there enough demand for the product I want to sell? Jewelry, for example, is a challenging one to succeed in. Customers are so finicky that the items you choose to promote may not draw enough interest or customers may be quick to return your products if the pictures weren’t perfect or even if they didn’t read the descriptions closely. Is there enough profit and sales potential to keep you going when there’s a lull in sales or if you’re dealing with too many customer returns?
  • What are the shipping and handling costs with these products? With the essential oils example, many of these come in a multipack with multiple scents and fragrances. These products may have some bulk and added weight which leads to higher shipping costs which may erode your profits. Also, shipping bottles of oil may result in shipping damages from time to time. In addition, some e-commerce sites ask for plenty of documentation when it comes to shipping potentially hazardous materials with products that have chemical contents or fragrances. You have to consider the headache associated with returns or providing documentation to remain in compliance.

Getting enough profit margin to make it worth your while. Keep in mind that you are late to the game. There are many successful dropshippers who have carved out a nice space for themselves over the years and will defend their positions fiercely.

These established dropshippers have strong relationships with their suppliers and are likely buying the same products at lower prices than you. These players defend their turf by living with low profit margins to drive out the competition.

For example, how many dropshippers can you find on Amazon who are all selling cases for the latest iPhone? If you found an iPhone case supplier, you would be hard pressed to find a profit of $1 to $2 per each item. Is $1 or $2 worth your time and hassle to compete with the larger dropshippers?

Our Rating: 2 of 5 WFH Forever score

Of the ideas we discussed in greater detail, we believe dropshipping offers the best opportunity to give you an income stream that you can cultivate with little to no cost.

Note, you need to be creative to identify unsaturated markets and to find the right suppliers who have good product quality, fair prices for you to make a satisfactory profit and can service your customers in a timely manner. If you can find the right product and suppliers to make this happen, you are in a great position to succeed.

As for the Instagram influencer business plan, it’s such a competitive space and you have to have an interesting angle. Plus, the platform rewards those who post frequently so you can’t just go viral on a single post and be set for life. You have to be interesting all the time. In order to do this, there’s a lot of planning and editing which takes a lot of time. When you factor in the fact that the average influencer makes $2,000 to $3,500 a month, you’re probably averaging minimum wage type returns.

Finally, homemade gifts sound more like a hobby rather than a scalable business. If you want to make custom t-shirts, bracelets or painted glasses, you will need to invest in inventory, supplies, possibly equipment like a Cricut and even packaging to ship your products to your customers.

We believe in the power of entrepreneurship and we recommend that you start out small. Keep in mind, however, that no money down will likely yield lower returns and as you get your footing, you will need to spend money or reinvest your profits early on to fuel your business.

All the best!