You’re thrilled to start a business. Maybe you even have an idea, or you’re just fascinated with the idea of launching and growing your enterprise. You’re eager to take some risks, like leaving your current corporation or going without personal revenue for a while. But there’s one obstacle stopping you: The lack of money.

In the beginning, this seems like a significant problem. Believe it or not, but a lack of personal capital shouldn’t stop you from pursuing your dreams. It’s possible to start and grow a business with barely no private financial investment – if you know what you’re doing. Your time and some savings are your friends.

Why does a business need money?

Firstly, please consider some of the costs associated with your business. According to different statistics, you will find the most common expenses to be considered while starting up your business. Luckily, you can significantly reduce many of these costs if you are starting with micro or home business. To mention:

  • Incorporation fees: Under $400
  • Website / Online apps: About $150 per month
  • Office space: $100-$1,000 per employee per month
  • Equipment: $1,000 to $100,000
  • Inventory: 17-25% of the total budget
  • Office furniture and supplies: 10% of the total budget
  • Taxes: Variable, but 21% corporate tax rate
  • Marketing: 0-10% of the total budget
  • Utilities: About $1-3 per square foot of office space
  • Payroll: 25-50% of the total budget
  • Professional consultants (incl. educational training): $1,000 to $5,000 per year
  • Insurance: An average of $1,200 per year
  • Travel and shipping: Variable
  • Debt financing: Interests from the corporate loan (variable).

Having this in mind, you have two main ways of starting a business with less money:

  • reducing your costs or 
  • increasing your available capital from outside sources.

Again, you have three options here:

Related: The Complete, 30-days-guide on how to start your business

Reduce your needs

In the beginning, you can change your business model to the one that demands fewer requirements from the listed above. For example, if you were planning on starting a company as a freelancer (designer, coach, software developer, etc.), you could reduce your labor costs by being the sole employee at the start. For the majority of reasons, you can work from home – prepare the space around you, so you feel comfortable. As the next step, find cheaper suppliers or cut out entire product lines that are too expensive to produce at the outset. You are lucky if you deliver only services, but in case you have a physical product to deliver, this step might be vital for your business.

Nevertheless, there are a few expenses that you won’t be able to avoid. Licensing and legal fees are mandatory and might set you back even if you cut back on everything else. According to the Small Businesses Administration, many home-based businesses can be started for as little as $1,000.

Be agile

The second option invokes the idea of a “warm-up” period for your business. The approach comes from the software development world but it is perfect when starting a new business. You set up things in so-called Sprints – a package of activities that bring value at the end of a 2-week-period (usually, you can shorten it if you need). 

Instead of going “bold” right into full-fledged business mode, you’ll start with just the basics. Examples, you might launch a blog and one niche service, reducing your scope, your audience, and your profit to get a head-start. You’ll avoid some of the highest initial costs if you can start as a self-employed individual. A payment processing company, such as Stripe, can be a big help when you are struggling to invoice and follow up professionally. Once you start booking some income, you can think about upgrading your business, so you will get into the dreamt state step by step rather than all at once. I highly recommend you use this second method if you are a more home-based entrepreneur rather than a SpaceX-like company.

Talk to Angels, Ventures, and Family

The third option is all about getting funding from outside sources. I have prepared just a few potential sources for you:

  • Angel investors. A wealthy individual who invests his or her own money in an entrepreneurial company, typically in exchange for partial ownership of the company.
  • Venture capitalists. Just like angel investors, but acting more like organizations or companies.
  • Crowdfunding. It’s famous for a reason: with a good idea and enough work, you can attract funding for anything. Some of the top crowdfunding platforms are Kickstarter, Indiegogo, Patreon, GoFundMe, Crowdrise, Razoo, RocketHub, Crowdfunder.
  • Friends and family. I know it might be difficult to ask, but don’t rule out the possibility of getting help from friends and family. Maybe they cannot help you raise money, but they might help you get customers.
  • Government grants and loans. The Small Business Administration exists solely to help small businesses grow. Visit their website to check for the available grants and loans.
  • Bank loans. This should be your last resort. It seems like easy money, but it’s not. There is always a time to open a line of credit, but at the end of the day, you need to pay it back. In case you are short of money or you do not have your cash-flow it means trouble. So think about it once your business is more or less stable. Be sure to keep your money right.

Related: The Top 10 Ways To Avoid Failing In Your Business


Having a business is always about reducing costs and increasing revenues. To begin with, you should be able to reduce your financial investment to almost nothing taking the above suggestions under consideration. As long as you believe in your business idea, none of these losses should stand in your way. Raising capital is a significant hurdle to overcome, but it is nothing that cannot be overcome.