In Pictures: 13 Businesses You Can Start For Under $5,000 |
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If you think it takes money to make money, Richard Krueger has news for you. Within the last year, the 45-year-old Manhattan resident and serial entrepreneur has launched not one but two businesses--and each racked up less than $5,000 in start-up capital.
The first, called About Face Digital, helps clients craft guerrilla public relations campaigns on Facebook, Twitter and other online social networking sites. Initial expenses: about $650 annually for Web-site design and hosting, plus another $500 for business cards, phone bills and travel within New York City. Early clients include Bearingpoint (a publicly held tech consultancy), Better Homes and Gardens and chess-master-cum-political-dissident Gary Kasparov.
"I've been really close to what's going on out there in social media, and I feel like there's gold to be mined," says Krueger.
In Pictures: 13 Businesses You Can Start For Under $5,000
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See Also: Thirty Social Networking Terms You Should Know Have questions about how to run your business better? Go to the Forbes.com Small Business Exchange and ask our cadre of experts. |
Samepoint.com, Krueger's second venture, derived from the first. It lets users comb social networking sites for what's being said about certain companies, individuals or other specific search terms. The operation requires more computing horsepower than About Face, but that only translates into $2,500 in hosting expenses annually.
Krueger saved even more cash by paying his programmer and graphic designer in company equity. As for office rent, Krueger doesn't pay any: A local direct-marketing company was glad to let him keep an office in the building in exchange for online-marketing advice.
There are plenty of Kruegers out there. And a lot of them didn't have--or need--gobs of green to launch their businesses.
Direct selling is serious business ($30 billion in the U.S.), and the country's 14 million independent agents can make good money. Big names that will pay you to go door-to-door (but not for your gas) include cosmetics companies like Mary Kay and Avon, as well as houseware firms like Home Interiors & Gifts.
At Mary Kay, a starter kit runs $100 to $200, plus shipping and tax, and includes product samples, brochures, catalog and trays and mirrors; agents bag 50% of every sale. A Home Interiors & Gifts representative needs to pony up between $39 and $129 (depending on the level of merchandise) to get started, while it costs $10 to sign up as an Avon representative--though you'll have to pay for catalogs and product samples.
Fledgling entrepreneurs also can save a bundle by selling services rather than products, which tend to require larger outlays for equipment and inventory.
Take interior design. While the $275 billion home-improvement market will certainly take a hit in an economic downturn, if homeowners can't afford to upgrade to bigger digs, at least they might look to spruce up what they already have.
To call yourself a certified interior designer, you'll need a degree (in 25 states), a bit of work experience and a passing mark on a $720 qualifying exam administered by the National Council for Interior Design Qualification. You'll also need books of wallpaper, paint and carpet samples, which can cost anywhere from $35 to $250 (for each book); an accounting program, such as DesignManager, to manage finances; and perhaps additional software to help you work on 3-D interior diagrams. (Microspot Interiors Professional for Mac runs about $250.)
The best services to choose from are those that people don't want to do themselves. Take yard work. Landscapers who plant shrubs and build irrigation systems and patios need a license to get started, perhaps a few hundred dollars. New tools can cost a pretty penny, but you can buy them used for around $1,000 to $2,000, and plan to spend another $2,000 to $3,000 on a truck to cart them around. You might also want to fork over $1,000 to $1,500 for basic liability insurance, in case anyone trips over that sprinkler you just installed.
Educational services are attractive too, such as teaching yoga, ballroom dancing or even how to take that nail-biting SAT exam. Competition to get into college has never been more intense, so there's a hungry market for this service. Certification isn't necessary but makes for great marketing--it costs $45 to be certified as a professional tutor through the National Tutoring Association. You'll also want to buy the test-prep book your students might be using: The big three test-prep publishers--Kaplan, Princeton Review and Barron's--all offer guides for around $20 to $30.
Then there's the Web. While there are myriad ways to make a buck online, most don't require a lot of start-up capital. (Some, like Web hosting, may require a bit of hardware, such as servers and the like.) For a starter list of ideas, check out "Eight Ways To Make Money Online."
Unless you already have a base of eager customers (a good idea), your service start-up's biggest expense may well be marketing--printing brochures, placing ads in local newspapers or even setting up a blog. Offering free initial consultation meetings is a good way to get people talking too. In smaller markets, getting on friendly terms with the competition also can be good for business. (If one piano teacher has too many students, she might sluice the spillover to you.) For more on getting good bang for you marketing buck, see "Twelve Innovative Marketing Techniques."
Whatever you do, remember to be patient. "If you're looking to get rich quick, forget about it," says Richard Stim, co-author of Whoops! I'm in Business: A Crash Course in Business Basics with Lisa Guerin. "Instead, try to make a profit, enjoy what you're doing and make it something that can keep going and going."
Interior Design
The $275 billion home-improvement market will take a hit in an economic downturn. Still, if homeowners can't afford to upgrade to bigger digs, at least they might look to spruce up what they already have. To call yourself a certified interior designer, you'll need a degree (in 25 states), a bit of work experience and a passing mark on a $720 qualifying exam administered by the National Council for Interior Design Qualification. You'll also need books of wallpaper, paint and carpet samples, which can cost anywhere from $35 to $250 (for each book); an accounting program, such as DesignManager, to manage finances; and perhaps additional software to help you work on 3-D interior diagrams. (Microspot Interiors Professional for Mac runs about $250.
Event Planner
The $122 billion meeting-and-events industry needs plenty of planners, many of whom can bring home $80,000 a year, according to Meeting Professionals International. Start-up costs will cover a computer, phone and Internet access, business cards, a camera and a filing system for materials from vendors. You'll want a creative-looking Web site too, which might run a couple grand. Some planners may also want to buy "event insurance"--just in case a snowstorm keeps revelers at home, leaving you stuck with the ballroom bill.
Home Landscaping
Landscapers who do things like plant shrubs and build irrigation systems and patios need a license to get started, perhaps a few hundred dollars. New tools can cost a pretty penny, but you can buy them used for around $1,000 to $2,000, and plan to spend another $2,000 to $3,000 on a truck to cart them around. You might also want to fork over $1,000 to $1,500 for basic liability insurance, in case anyone trips over that sprinkler you just installed.
SAT Tutoring
Competition to get into college has never been more intense, so there's a hungry market for this service. Expect to spend $500 to $1,000 on advertising, be it on newspaper ads or fliers in local schools. (Certification isn't necessary, but it makes for great marketing; it costs $45 to be certified as a professional tutor through the National Tutoring Association.) You'll also want to buy the test-prep book your students might be using: The big three test-prep publishers--Kaplan, Princeton Review and Barron's--all offer guides for around $20 to $30
Yoga Instruction
To stretch your stuff in the $3 billion yoga market, you need studio time. Consider leasing space by the hour from a local recreation center or church. Props like yoga mats and blankets will cost you around $1,200 for 20 students, the average yoga class size, but most equipment suppliers offer bulk discounts (check out HuggerMugger.com, YogaProps.com or Gaiam.com).
As for marketing, says Danielle Price, founder of StudiYo in Scottsdale, Ariz., investing in a big, electric "yoga" sign (for $1,500) and renting a studio on a high-traffic street did more for her business than any brochure could. Personal-liability insurance--a must--costs around $200 from the Fitness and Wellness Insurance Agency, a yogi favorite. Insuring your space (which most leases require) might run around $800 per year.
Computer Troubleshooting and Repair
You can sell yourself as a technician with a good handle on computers (think Best Buy's Geek Squad). No licenses are needed, most of the work is on-site (no office necessary) and most of the training comes on the job.
Child Care
In all but three states, you'll need a child-care license, which can cost up to $100. Every child-care institution must have someone on the premises who is certified in First Aid and CPR; you can get certified in both for about $50, though the figure varies by region, says the Red Cross. Some states require extra training for people working with children--another $40 to $100. You'll also have to childproof your house, which might involve fencing off stairwells and buying locks for cabinets with poisonous cleaning products. Business-liability insurance (in case a parent sues because Little Tommy whacked his head on a doorknob) will cost about $450 a year, says Thomco Insurance, which specializes in home child-care insurance. Finally, you'll probably want to buy a few highchairs and some toys too.
Writing Software
Tech manufacturers are creating simple partnerships with software developers, making it easy to get your applications out there. Example: Coders can register with Apple's (nasdaq: AAPL - news - people ) iPhone developer program for $99 and keep 70% of the revenue generated from their apps. (Word of warning: Many Web-based applications--ring tones and such--are free, so only the most innovative programs can command a decent price.)
You can build applications in any operating environment, be it Mac, Windows or a free, open-source platform, says Gavi Narra, chief executive of Object Graph, which writes mobile-app software. Other useful open-source coding tools include Drupal and MySQL; for graphics, consider Adobe's (nasdaq: ADBE - news - people ) Photoshop (about $500). The best part about selling directly to Apple instead of to consumers, says Narra: no payment-processing fees.
Consulting
Consultants give guidance to companies looking for help with everything from marketing to environmental remediation. Many can easily work from home when they're not with clients on site, and most charge on a per-project basis rather than by the hour. Two big challenges: marketing and pricing your services. (For more on the first, check out "Twelve Innovative Marketing Techniques"; for more on pricing, try "How To Figure Out Your Daily Rate.")
Public Relations
A good public relations firm can charge clients $15,000 a month. Got your attention? All you need to get started is a phone, a computer, business cards, some story-sense and a well-oiled jaw. Unless you already know who's who in the media, you may need a Bacon's Media Directory (now owned by Cision), which runs around $600.
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