When people think of startups they think of companies that raise a lot of money to get started. While many startups raise money during pre-seed and seed rounds of funding, you can start a business today with less than $10k. We’re going to take you through the process of starting your first company with less than $10k.
We’ll cover how to start the company and register your LLC, provide some ideas, and even show you how to maximize a marketing budget.
When you’re starting a business with less than $10k, it’s important to know what you’re doing. Following the right steps of starting a business will help you avoid costly mistakes. We’ll take you through all of the steps necessary to start a business with less than $10k.
According to the United States Small Business Association (SBA), there are ten steps you need to follow to start your business. We list these steps below.
Following these ten steps will help you start a business. If you’re having trouble with any of the steps, use a service like ZenBusiness or LegalZoom. These services will help you get your paperwork in order, register the startup, and even provide registered agents.
First and foremost, it’s important to understand the types of companies that you can start for less than $10k. While several businesses cost $50 to $100 thousand to start, this doesn’t always have to be the case. Below we list five examples of businesses to start with less than $10k.
One of the most common businesses to start with less than $10k is an online store. The online retail space grew by more than $4 trillion in 2019 and continues to see rapid growth. In fact, the industry grew by more than 20% during the Covid-19 pandemic. With fewer people shopping at brick-and-mortar stores, online businesses have never been more profitable.
Online stores also give you freedom and cost less than $1,000 to start. You’ll have to spend a little money on website design and hosting but from there it’s up to you. Feel free to explore your options and sell anything from t-shirts to children’s toys.
Affiliate marketing is another great example of a business to start with less than $10k. Similar to an online store, you only have to pay for website design and website hosting.
However, affiliate marketing is different because you don’t need to sell anything directly. Instead, the goal of your website is to drive traffic to places like Amazon for a commission. The commission rate for most affiliate programs is between two and five percent.
Getting started with affiliate marketing is challenging but possible in 2022. Also, make sure you leverage social media and email lists to drive more traffic.
Flipping is one of the more unique businesses to start with less than $10k. A flipping business focuses on purchasing items at a low cost and selling them at a high cost. Typically, flippers sell items on online marketplaces like eBay, Etsy, and Facebook Marketplace.
To start a Flipping company, all you need is some capital, a niche, and items to buy. Finding items is challenging but one of the most rewarding ways to stock your inventory is to visit local yard sales. Still, feel free to take any route you want with a flipping business and sell as little or as much as you like.
Social media management is one of the fastest-growing industries in the world – not just in the United States. The reason for this growth is the growth of social media platforms and online brands.
For example, Facebook has more than 4 billion active users. Furthermore, LinkedIn reported more than 300 active users per month in 2022. These users include people, businesses, and influencer brands. Companies don’t always have the resources to manage their profiles and most entrepreneurs don’t know how to drive engagement. This is where you come in.
To manage a social media company you only need a few inexpensive tools. You’ll have to invest in a good computer and smartphone, which cost around $2,500 combined. From there, we recommend investing in graphic design applications like Canva to save you time. Resources like Canva cost less than $20 monthly.
Keep in mind that scaling is subjective and depends on your goals. While these business ideas cost less than $10k to start, you can expand once they become profitable. For example, you can use crowdfunding during the seed round of funding to hire more staff and expand your operations.
Starting a business for less than 10k is possible for almost anyone. This is because most people who are starting a business can raise $10,000 in capital. Ultimately, how fast you raise that capital depends on where you look.
We’ll take you through the best funding methods to raise $10k for your new business. We list these methods below.
Angel investors are another great way to get funding for new small businesses. An angel investor is someone who invests in startups with their money. Unlike venture capitalists, angel investors will invest in small startups during the seed rounds of funding. In fact, some angel investors will invest in the pre-seed rounds of funding.
That said, connecting with investors is never easy. Fortunately, AngelMatch solves this problem by connecting you with thousands of reputable angel investors. Even an investment of $5,000 is enough to take your small business to the next level.
Crowdfunding is one of the most common methods that startups use to raise funding. However, many small businesses avoid crowdfunding simply because they don’t know how to use it properly. While many types of crowdfunding exist, the best two options for small businesses are donation-based crowdfunding and reward-based crowdfunding.
Donation-based crowdfunding is excellent for small businesses because none of the money needs to be paid back. Plus, donations vary in size and some might be bigger than others. It’s best to raise donations from friends and family but platforms like GoFundMe make it easy to find people willing to donate.
Reward-based crowdfunding is the best way for small businesses to raise capital during the pre-seed round of funding. This is because you offer rewards for investors that aren’t shares in the company. So, if someone wants to support your new business they can invest and receive memorabilia like a t-shirt.
Another option you have to start a business with less than $10k is to apply for small business loans. To apply, you’ll need good credit and a valid business plan. Securing a $10k loan is easier than securing one for $100k, so you shouldn’t have too much trouble.
What makes a small business loan advantageous is that you don’t have to worry about giving someone shares or the company. Instead, you simply pay the loan back.
Depending on who you are, $10,000 is a little bit of money or a lot of money. While starting a business with $10k is more affordable than starting one for $100k, funding is still important. It’s for this reason that we always suggest pre-seed and seed-round funding.
Even if it’s a small company, the right angel investor will help you expand and reach new heights you never thought were possible. The good news is that AngelMatch offers a database of some of the best angel investors and venture capitalists around. Explore our database today to see if AngelMatch is the best way for you to connect with investors.
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