Believe it or not, it’s possible to start a business with $1000 or less. And before you say “you need money to make money,” think that many entrepreneurs started with nothing. What’s stopping you from running your business?
Definitely not money.
Anybody can start a business right now. The tricky part is making it profitable:
- Some entrepreneurs manage to start a business for $0 and grow it to +$4K per month
- Others put down $10,000+ and still can’t break even years later
So if you’re asking “can I start this business with this money?” you’re making the wrong question. While money improves your success chances, there are more relevant factors to worry about:
- How skilled you are compared to the competition
- How much you reinvest in your business
- What business model you choose
If you have $1000 and nothing else, this guide will show you how to turn it into a working business.
- Should You Start A Business With $1000?
- A. Internet Businesses
- B. Innovation
- C. Intentional Iteration
- Recommended Models
- Before You Start a Business…
Should You Start A Business With $1000?
If you didn’t know you can start with only $1000, you’re not alone. Not too long ago, it would cost $5,000-$20,000 to start a real business. We’re talking of an office, products, logistics, marketing, and a lot of unexpected expenses.
What’s the cost of starting one right now? As little as $0, depending on the model. Today is the best time ever to start a business.
Or is it?
All business is about is supply and demand. It’s about solving a market need: what people want to buy [demand] that others aren’t offering [supply].
If anybody can do business for $1000, that supply increase will reduce the demand. Which leads to lower profit margins or no sales whatsoever. It’s almost second nature to think that ‘free’ businesses are easier when the reality is the opposite.
Yet, there are sellers who started with $1000 in a saturated market and profited. How?
There are three resources every entrepreneur can use to grow a business: time, money, and skill. That’s how. But can you make it happen?
Only if you’re really committed. The problem is this:
When starting with $1000, you have to put more time and skill. But most people want passive income streams, so they underestimate how much time they need to put at first. You have to compensate for this with better skills.
If you’re starting your first business, you don’t have that skill level. You either need to spend more time, save more money, or improve your skills.
The goal is to use what you have (time. skills, or both), so you can save more money and reinvest. This is known as a cash flow business, and it’s the best strategy when starting with $1000.
Why cashflow businesses?
- Fast profits: As soon as you finish building the business and launch some products, you may get sales the same first week.
- No capital needed: You barely need any money when the product/service depends on your time/skills
The only bad thing about these models is their limited scalability. Once they hit $50K-$200K per month, they plateau and gradually lose revenue over the years. So while it has limited potential, it’s more than enough for starters.
In specific, cashflow businesses fall into three categories: Internet businesses, innovation, and intentional iteration.
A. Internet Businesses
It’s no secret that online businesses have high potential. Almost for free, you can sell limitless digital products to literally the entire planet. For such a market, there are always opportunities for all entrepreneurs.
While most companies have some online presence these days, digital businesses involve virtual goods and services. These have no production cost besides time and skill.
What you sell will depend on your Internet business model:
#1 Content-Based and Advertising
This is the attention economy. Your goal is to get as many engaged people as possible, which could be a Youtube channel, a podcast, or a blog.
You achieve this by uploading helpful content, whether it’s education, entertainment, or both. When you upload regularly, people start coming back and your credibility improves. Along with search optimization, content increases your channel’s traffic.
Once you have enough people, bigger companies will offer to advertise on your platform. Google Adsense, for example, automatically pays you based on your website stats. Ad revenue will depend on your audience type (e.g., people seeking financial advice have more purchasing power than kids looking for funny cat videos).
The secret to fast traffic is engagement:
While it takes time to take off the ground, it pays off to work on your traffic. Not only you get credibility. You also get social capital.
#2 Branding/Social Media Marketing
While there are many options out there, people don’t necessarily go to the best one or the cheapest. Instead, they choose the best out of who they know:
Sales Conversions = Offer x Trust
How customers perceive your company is what we call a brand. When people buy from you, that’s what they expect to get. This selling proposition could be the price, fast customer support, product quality, company size, a person, or money-back guarantee.
Since brands are people’s perceptions, you can’t build a brand without interacting with them. Social media shows companies how others see them and what people want. When you adapt your content to this data, your business grows.
Social media marketing is a B2B model. You’re looking for businesses that want to improve their online presence but don’t have the time to build their following. Here’s what you could offer:
- Run an SEO check on their social media content
- Adapt existing content to the different platforms
- Use your larger following to promote small businesses
- Create curated, interactive content
- Answer questions on comments
Subscriptions generate consistent income when people have a reason to stay. It’s easily the most preferred by entrepreneurs and most convenient for customers.
For example, subscriptions like Amazon Prime reward habitual buyers. Because the money you save on shipping is more than the subscription price. While profits are lower, Amazon gets more organic sales (and thus market relevance).
Subscriptions have polarized opinions. While some feel overcharged for paying every month, others like the idea of paying-per-use. You can cancel anytime (the trick is, first-time clients are more likely to buy again).
Subscriptions may involve:
- Exclusive content
- Access to software
- Expanded features (known as the freemium model)
- Access to better deals (e.g., save money on shipping with Amazon Prime)
- Access to services (e.g., consulting)
Brokers bring buyers and sellers together by making transactions better. The selling point could be speed, cost, or security (escrow services). Every time both parties exchange money, you earn a commission.
You don’t need to invent the next Paypal. Brokering is about creating marketplaces. Whatever people trade, you earn for providing the platform.
When you don’t have the money to build a software company, the best alternative is lead generation.
#5 Lead Generation
In layman’s terms, a lead is anyone interested in buying a product. Interest means they did something to move forward in your sales funnel, whether it’s clicking an ad, visiting the website, commenting, scheduling a call, or giving their email.
Leads are valuable to companies because the person is more likely to be receptive when the business presents an offer. It’s a person who knows about the company and trusts it (due to reviews, media updates, and other credibility markers).
Lead generation is a B2B model where you find leads for other companies. Some strategies include:
- Direct Outreach: You go to a directory website, gather contact data, and email companies that might need some service.
- Lead Platform: You own a platform where business owners can meet each other
- Media Q&As: You answer people’s questions where the solution could be a business product
Traditionally, you want to get someone’s email in exchange for something valuable:
- Free consultation/strategy call
- Ultimate how-to guide / mini-course
- List of lead gen. sources
- Must-haves checklist
- Calculators / tests
After you build that contact list, you sell it to your client company.
Simple concept: you make money every time someone buys your product.
It all starts with finding a product. You research with software until you find a niche with high demand and acceptable competition. You then look for areas of improvement, check profitability, and search for manufacturers.
From here, the process is different for every store:
- If you sell on Amazon/eBay, you’ll order the inventory first and market it later
- If you dropship with Shopify or your own website, you promote first and order later
Even e-commerce is feasible for $1000 if you drop ship because customers are paying you first. But since the entry barrier is lower, you’ll need more skill and market research.
This is the traditional business model. People have a problem, you find a solution, and then distribute it as a product. You make money because:
- People are willing to pay to solve that need (not always the case)
- There are few competitors solving the problem
- You have found a way to sell the product above the production cost
These days, you can go to any of these categories and find product opportunities:
- Home & Kitchen
- Patio, Lawn, & Garden
- Sports & Outdoors
- Arts & Crafts
- Tools & Home Improvement
- Office Products
- Beauty & Personal Care
- Industrial & Scientific
But is $1000 enough to prototype new products? Excluding marketing, you might need $3,000 or more If you’re selling services, however, this investment could be $300 or less.
If you choose this road, consider the big three niches: money, health, relationships. If you narrow down on any of these, you’ll likely find constant, high market demand.
Selling a service involves trading your time and skills. When you turn it into a business, what you get is an agency (aka intentional iteration).
C. Intentional Iteration
Intentional iteration applies to any business with scale limitations. When there are limited gains in an investment, your goal is to repeat it as many times as possible.
For example, real estate has no scale. If you want to create a real estate business, you’d need to buy dozens of properties. You create scale through repetition.
Another example is local businesses. You can only get so many customers (and employees) from your area. Rather than expanding the local, it’s more effective to open another one.
Also, intentional iteration works for digital businesses too. When you’re selling a service, you might automate the marketing, but someone still needs to work with those clients. Assuming everything else is right, your number of trained employees dictates how much money you can make.
And yes, it’s possible to replicate all these cases with $1000 and an online business:
- E-commerce could work like real estate. You find a profitable product to sell for years, then look for another one.
- Agencies work well for freelancers. If you know how to work, you just find someone else to do it, teach them, and give a commission.
We know it can be hard to choose your first business, especially when $1000 is all you have. That’s why we’ve handpicked two models recommended for you.
This doesn’t mean we, nor anybody, should decide for you. Take it as suggestions, compare them with other ideas you have, and choose whichever makes more sense to you.
If you have no clue where to start, these are the models you should think of first:
Knowing the risk of starting a business, you might want to avoid risking your capital on product creation. Instead, you can invest it in a digital business where you help people achieve results (typically about money, health, or relationships).
Why subscriptions? Three reasons:
- It takes almost no time and money to create a digital product or service
- It’s beginner-friendly. You put extra effort to give your first clients the best price and results, they then talk well about you, and that credibility allows you to charge, say, $50 per month
- It’s easy to sell. Subscriptions have low entry cost, but that first ‘sale’ could turn people into habitual customers
Biggest benefit: you earn passive income every month.
Biggest problem: your members may not stay for long. Here’s how to fix it:
a. My ‘clients’ cancel using the 1st-month refund guarantee
On your sales page, require people to do the work to qualify for the refund. So if you’re offering a course, the person should have watched enough minutes, complete the exercises, or pass a test.
This way, they can’t just take advantage and leave. Although in practice, it’s better to refund stubborn people to avoid bad reviews.
b. My members don’t subscribe for long enough
Add to your subscription something people will always need. While there’s no problem with service subscriptions, with products, you can try these:
- Partner with platforms to get a member discount
- Offer 1+ years of mentorship/1-on-1 consulting calls
- Offer monthly updates & Q&As with other members
How to start immediately:
- Pick a niche between health, money, and relationships (others aren’t as profitable but still work)
- Browse social media channels and websites to choose a smaller niche (e.g., Keto diet for boxing)
- Read people’s comments until you find a problem that’s common, hard to solve, and worth paying to solve. Or something already selling well that you can improve
As a freelancer/employee, agencies are the best transition to business. You’re basically looking for more clients while recruiting freelancers who can deliver (maybe better than you, who knows?)
It teaches you to think like a business owner, pitching, recruiting, communicating. You’re selling results, not work.
Once you get those clients, finding freelancers is even easier:
a. Hire them directly by posting the job on freelance platforms [agency]
b. Hire indirectly by buying gigs from them [drop-servicing]
Biggest Benefit: You can make semi-passive income with no skills (if drop-servicing)
Biggest Problem: Many clients prefer freelancers over agencies. Here’s how to sell yours:
- Don’t just build one-skill teams. Hire freelancers based on the final result your client wants. If their website needs a coder, writer, funnel builder, designer, and photographer, and you bundle all those services, you’re more convenient for them.
- Be specific while offering those services. A marketing agency for seafood restaurants in L.A. sells better than a generic one. When your ideal client finds your agency, they already know you’ve worked with clients like them.
- Pitch your services directly. When promoting in a platform like Upwork, the client has to pay commissions both to the platform and the agency owner. If you message the client’s website directly, you’re more likely to be received.
- Respond to objections. You’re better than independent freelancers because, as the manager, you spend all your time talking to clients. When it comes to hiring, you’re better too. One freelancer simply couldn’t master all that.
How to start immediately:
- Browse some gigs on Fiverr to get an idea of how freelancers charge
- Go to another platform (e.g., Upwork, PPH…) to find your clients. You can also find their websites on directories (Clutch, Capterra). Find out their rates
- Repeat until your client offer is higher than freelancers’ offers
Before You Start a Business…
Can you start with $1000? Absolutely. Is it recommended? Almost never. Beginners may find more challenges than if they saved up more.
For example, beginners start with no research skills. So while it may take “45 days to make passive income online,” it may take weeks to find the right niche. But once you have the skill, it takes a few hours.
Another reason for delays is outsourcing limitations. Having $1000 means you do everything yourself, which takes time to get right.
While $1K isn’t enough to achieve massive success, it’s more than enough to start a business. As soon as you’re making money, reinvest profits to accelerate your growth.
And please, don’t worry much about passive income. It’s more profitable to grow your business first, even if that means active work. After the numbers settle, then you automate.
Keep reinvesting, and before you know it, you’ll be making $100s while you sleep.
What if I Have Less Than $1000?
While you may not produce a product, you may still have enough money for business tools:
- As a digital entrepreneur, it costs <$300 to acquire research tools, build a website, and sales funnels
- As an agency owner, $1000 is more than enough to outsource client work
- As a photographer, your equipment price could range from $200 to $1000
Whether you have $1000 or $10, your best bet is probably a cash flow business. You won’t get far unless you immediately start making money that you can reinvest. So while it’s free to start a blog, a Youtube Channel, or a podcast, that won’t be as fast as other models.
If you have $0, all you need is to learn a valuable skill and build your business around it. If you can get clients and keep them happy, nothing stops you from hiring others to work for you.
It’s possible to profit $5K per month from a cash-flow business with <$1000, even $0. The question is: how can you stand out with such a low entry barrier? You can imagine how hard it is, especially as your first business.
That’s why you might want to save up instead. But if you’re still going this road, here’s a winning strategy:
- Niche down to lower competition
- Choose high-ticket products to be less reliant on conversion rates
- Find out the customer lifetime value and spend that amount on acquisition
What if I Have Way More Than $1000?
If you had, say, $10.000+, you can fund almost any business model. You could start a traditional company selling a product to a customer base. Or you could use it to speed up a cash-flow business.
Whether you earned $10,000 or have +$100K to invest, the strategy is the same: reinvest into one business model.
Just because you have $10K and it costs $1k to start a business, that doesn’t mean you should start ten. It’s faster to grow one first and then add another one. You reduce risk as you put more resources into one project.
- Outsource one-time tasks (photography, design, funnels…)
- Advertise to better understand who your audience is
- Drive paid traffic to your website
The more money you have, though, the easy it is to waste it. It’s better to invest in the business based on the feedback you get:
- Use free tools to start your business (or invest <$1000)
- Give enough time to find out if there’s potential growth
- If you’ve already started earning your first dollars, it may be time to reinvest.
If it’s not working, it’s worth investing either in training/research or another business with a stronger market need.
Can I Earn Good Passive Income for $1000?
Passive income comes from leverage. The simplest way to do it is:
a. Having more money (e.g., living off interest)
b. Having more traffic/users/followers (which takes time)
c. Borrowing money or traffic somewhere else
Can you make thousands per month passively with $1000? You can. A viable method could be dropshipping or content-based websites. But is it worth it?
Dropshipping has low entry barriers. If anybody can compete with you for $1000, your business success won’t last long. And content can take months before advertisers want to pay for your traffic.
It’s not recommended. Instead, it would be faster to make more money (with an active business or a job) and fund your passive income stream that way.