How to Start a Business with Limited Funds

by A Manly Guest Contributor on February 18, 2010 · 53 comments

in Money & Career

Editor’s note: This is a guest post from Joel Ohman.

From early adventure seekers trekking through the Wild West to strike it rich to modern day Web 2.0 startup founders, there is something almost inherently manly about the urge to start a business and especially to start a business with next to nothing in your pocket. Yes, it’s perfectly fine to work for “the man” and never even peek your head outside of your cubicle, but I would venture that we all have heard that little voice inside tell us at least once in our lives to “Grow a little hair on your chest! You should be ‘the man’ – you’re better than your boss,” right? Before you think that you need to drain your bank account, beg your family and friends for seed money, or rob a bank to make your dreams of starting your own business a reality, let’s take a look at some different practical tips for starting a business even with limited financial resources.

Legalese & Logos: Skip It!

Probably the biggest hang up for many aspiring entrepreneurs is that they get so caught up with “normal” business startup things like incorporating/forming an LLC, deciding on a company name, choosing a logo, renting an office, purchasing business insurance, etc. that they waste all of their precious startup capital and time setting up a creature that looks just like a business, but the animal has no life because they didn’t devote any time to the primary business model. Would you rather have a feisty, angry, ornery, and growing bear cub or a stuffed grizzly bear posed stationary by the fireplace?

If you have a limited budget, please do yourself a favor and commit to building out the primary business model instead of spending all of your time doing taxidermy to make your business look like its large and in charge. This may sound like heresy as “normal” business startup things are indeed important things to consider, but when you’re just starting out with a very limited budget–skip it!

Forget about spending valuable time and money trying to decide whether you should form your business as an LLC, C Corporation, S Corporation, LLC Envelope, Partnership, etc. and just start working on your business immediately. There are many reasons why forming a business entity is a smart idea, but there is certainly no formal requirement for you to do so. You can simply start your business 30 seconds from now; in the absence of any kind of formal business entity, it will just be labeled a sole proprietorship for tax purposes.

The same also goes for renting office space, designing business cards, taking out an ad in the yellow pages, etc. Countless new entrepreneurs have wasted cash by the bucketful by paying money for all of the stuff that “normal” businesses do without even bothering to consider if any of those options have a positive ROI for their business.

Do you want to rent office space so that you will feel better about explaining your new business venture to friends and family? (Wow, he must be doing well!) If you can accomplish the same things for a lot less money with a home office then why not do it? Throw out all of your preconceived notions about what a business “should” look like to people and concentrate on the primary functions of your business in the beginning.

Accountants will spend weeks getting their accounting system set up just right, graphic designers will spend weeks on designing the perfect logo, computer programmers will spend weeks coding and endlessly tweaking their website, etc. Just STOP! Ignore all of the periphery and concentrate on only doing the primary focus of your business model so that you can get money in the door and test out the soundness of your business idea for as little start up cash as possible.

Choose Your Niche Carefully

If you are looking for some unbridled optimism and a big rainbow coated, sparkly, you-can-do-anything speech about your new business idea, then look elsewhere because you ain’t gonna find it here. There are certain constraints that a lack of money will place on the types of businesses that you will be able to start, BUT all that means is that you will have to really focus on the kinds of niches that will make sense for your limited budget.

Any type of business that is heavily capital intensive is probably a no-go. If your business requires a large factory, lots of expensive equipment, and a large labor force right from the get-go then you should probably head back to the drawing board for a different business idea. However, the great thing about starting a business in 2010 is that for less than it costs to buy a new Blu-Ray player, you can have all of the startup money you need to start a number of top notch business ideas – especially businesses that are online based.

In years past, if you didn’t have money to pay for office space right smack dab on Main Street, or in more recent years, if you didn’t have money to buy a load of advertising in the Yellow Pages, then you were flat out of luck because you may have had a small business but none of your customers were ever going to even find out about you. The beauty of starting a business today is that within minutes of setting up your own website or blog you can be interacting with potential customers and selling your products or services online to people all over the world. Which brings us to the next very important point: it’s going take a lot of hard work.

No Money? You Better Be Able to Work Hard

You can start a very successful business without having a lot of startup money. You can start a very successful business without being a super hard worker. You can be successful without having one of those things but not both. With the exception of the ultra-skillful, natural born geniuses, if you want your business to be a success and you don’t have a lot of start up cash, then it is absolutely essential that you have a very strong work ethic (Free Hint of the Day: if you have to ask yourself right now if you deserve to fall into the genius category then the answer is that you don’t ).

It won’t always be easy to lift yourself up by your own bootstraps and soldier on even when you feel as if you are not seeing results as quickly as you would like, but power through “The Dip”and you might just be surprised at how rich the vein of gold is that you strike.

Namby pamby’s who whine because they just got home from working a 10 hour day at the office for their “day job” and would rather watch American Idol than work on their startup business will likely fail. Don’t be that namby pamby.

Practical Options for Getting Off the Ground

If have a limited budget, are already convinced that you are in the right business niche, and you know that you are committed to working long hard hours on your business, then here are some practical options that you should consider exploring as you move forward with your startup idea:

“Double Up” – This is a sound risk management strategy and is efficient as a very economical business startup option as well. “Doubling Up” simply means that if you’re already working at a “J-O-B” (as many entrepreneurs and would be entrepreneurs call the idea of working for someone else) then continue to work in your job but tack on the extra career of starting your business on the side. Yes, your family time, recreation time, personal time, and maybe even personal hygiene time will suffer the consequences, but the two enormous advantages to starting a business with the “Double Up” strategy is that you have a steady stream of income flowing in from your day job, and you get the opportunity to test out your business idea in a risk efficient way to see if it’s a winner.

“Partner Up” – If you have a good business idea and no money, then a great business partner for you could potentially be someone with a lot of money and an interest in starting (or just financing) a new business. How do you find these types of people you say? If your new business idea is in the same industry as your current career then you may already have some existing contacts that have the funds, the desire, and even more importantly, the know-how to evaluate your business idea and potentially even offer more than just financial help. If you do not have any existing contacts in your industry, then barring a rich uncle that you are on good terms with, your best bet is likely to seek out an audience with local angel investor clubs, other local business people, or the big boys from the venture capital firms.

“Charge Up” – If you ask very successful entrepreneurs how they financed the beginnings of their businesses, the majority will tell you that they used personal credit cards and not a more traditional source of “big business” funds like a bank loan, angel investment, or venture capital cash infusion. In fact, according to the Kauffman Foundation, the percentage of one person startups that used credit cards to finance their new business was 60.8%. Am I saying that using a credit card to finance your business startup costs is a smart idea? For most people the answer is a resounding “No.” However, almost every Fortune 500 company uses some sort of debt to leverage and accelerate their growth, and if your business model is sound, and your startup’s ROI is high enough, then maybe a low interest rate credit cardcould be an option to consider as a last resort source of seed money.

Top 10 Money Saving Business Startup Action Items

  1. If you absolutely must form a business entity right away, then use as they offer free basic document filing to form your LLC or corporation (but you will have to pay any fees due to the state).
  2. Apply for an Employer Identification Number (EIN) yourself in just a few minutes using the IRS EIN online application (, CPA’s, and others charge upwards of $100 to do what you could do in 5 minutes).
  3. Pass on buying expensive accounting software and opt to use QuickBooks Online(starts at $9.95/month), FreshBooks (basic account is free), or GnuCash (open source and 100% free) instead.>
  4. Read the 25 rules for choosing a domain name and then buy a cheap domain name at GoDaddy(do a Google search for “GoDaddy coupon code” right before you buy).
  5. If you have left your job and are currently paying for COBRA health insurance then shop around and compare some of the various individual health insurance providers to see if you can find a cheaper plan (COBRA is usually quite pricey compared to an individual health plan purchased on the open market).
  6. If your business requires a logo right away, then make your own logo at at $69) or hold a logo design competition at
  7. If you need to accept credit cards then try PayPal or Google Checkout instead of paying for a pricier merchant account.
  8. Get 250 free business cards at Vista Print.
  9. Get reliable shared web hosting with a free one click installation of WordPress at (plans start at $4.95/month).
  10. Get free conference calling at

Taking the Plunge

If you are waiting for the stars to align, the winning lottery ticket to fall into your lap, or others to create your destiny for you, then you will likely end up 25 years from now in the same place as you are right now. There are always a thousand and one different reasons that can flood through your mind and tell you to just play it safe and ignore that entrepreneurial urge inside of you to start your own business. Don’t let a lack of money be one of those reasons.

About the Author: Joel Ohman is a Certified Financial Planner™ with an entrepreneurial bent. He owns 4 companies and is currently working on a number of different web related projects including consumer comparison websites for credit cards and car insurance.

{ 51 comments… read them below or add one }

1 Nate @ Practical Manliness February 18, 2010 at 12:46 am

Thanks for the great post!

For website hosting, I would recommend BlueHost ( ). I have used them for all my websites, and their service is great!

I have to admit, however, I have heard lots of good things about HostGator as well.

I am looking forward to using some of the free resources you mentioned here!

2 Dennis Beatty February 18, 2010 at 1:17 am

As a professional graphic designer, I can tell you that logoyes and 99designs can be some of the worst things you could do for your company. Even on a budget.

While it may seem unimportant and can be foregone until revenue is a sure thing, you should never get a logo done in a place like that. It may seem completely trivial, but a logo is your company. You want your logo to represent who your company is and what you plan to do with it, and you don’t want to change it too drastically after you’re already extremely established or you lose recognition. If you can’t afford to get one done professionally right away, make your own simple logo, but get one done by someone who knows what they’re doing as soon as you possibly can.

3 Jonny | February 18, 2010 at 4:03 am

Very well written, helpful post am I can confirm that almost all the suggestions you put forward work as I used them when starting my own business

4 Steve February 18, 2010 at 6:59 am

This is the best how to start a business post I can think of. It throws all the crap out the window and tells it like a man. The most important thing is for you to get out there and see if you can sell your idea, will people pay you for your product. Once you have cash flow, then you can worry about everything else. Oh yeah, don’t use 99designs or any other quick crap like that. It’s a bunch of kids with photoshop that don’t know anything about design principles. They churn out meaningless crap like it’s the dot com bubble again. Be smart and you’ll succeed. Pay attention, fix and learn from your mistakes and the mistakes of others, and keep moving forward. Be a manly man! Being a worry wart put me behind several years. I finally got hypnotized so I don’t worry about anything, damn the torpedoes, and I’m doing better than I ever have.

5 DJ Wetzel February 18, 2010 at 8:07 am

I have nothing but good things to say about also. They have never failed me and many of my friends recommend them as well. Another great website for getting quick access to creating an LLC or Corporation is

6 Ryan February 18, 2010 at 8:33 am

Great article. I am in the process of putting together a business plan and have some tips as well.

As for the legalese, I would just cut straight to it and become an LLC- it has all of the advantages and hardly any of the disadvantages.

Also, prepare a business plan. I feel is something any business needs, ESPECIALLY if you eventually want to look for funding.

When you prepare your business plan, question every single sentence you put in the plan. Ask yourself if this is an assumption, educated guess or something with concrete data behind it? A business based on assumptions will surely fail. Data is king when starting a business, whether it is your own personal research or studies done by official institutions. Customers and investors aren’t gonna care that you think that this idea is awesome- they hear that dozens of times every day. Having some experience in the field helps when it comes to making guesses and opinions, but do not base your business on it.

Exhaustively research the industry you want to enter AND your competitors. I can say from personal experience, that there is nothing scarier than searching your competition. But it is something you have to do. Not only will it tell you immediately how novel your idea is, but it will also shed light on possible niche markets that the “big boys” have overlooked, or do poorly.

SWOT Analysis- basically a quad chart that lists your strengths (easy), weaknesses (requires objective look at ones self), opportunities (again, easy) and threats (scary). This will show you where your plan, and where your talents are deficient so you can get smart, whether it be through self education or bringing someone on who specializes in that.

Public speaking and preparing a presentation! If you aren’t good at, you had better get good, REAL fast. Whether it is talking to investors or putting a Powerpoint together that effectively and concisely describes your idea are worth their weight in gold. You would be suprised how many people struggle with public speaking or presentation making. I am getting my Executive MBA and some of the awkwardness I see is amazing.

7 Eric Granata February 18, 2010 at 8:56 am

It’s good to see posts like this here. Allow me to throw some thoughts out:

- is awesome. Period.
- If you’re receiving payments via PayPal, keep track of your PayPal fees and write them off at the end of the year as a cost of doing business.
- It’s incredibly easy to make income with no overhead. I hustle shirts through a popular print-on-demand company on the web. I’ve been doing it for about 7 years and in my best months receive a $400 check for doing nothing other than designing a shirt every once and a while and putting it online. No marketing, no website.
- Companies like Etsy, Zazzle, ImageKind and e-Junkie make it easy and cheap to begin making income from your hobbies. Maybe a business is in one of your hobby’s fututure?
- Read The Art of The Start by Guy Kawasaki. It’s golden.

8 Robert February 18, 2010 at 9:06 am

I have to disagree about forming a business…

If your going to do something as more than a hobby, you want to form an LLC simply for the liability protection. Taxes are hardly the worst part of it.

9 Michael February 18, 2010 at 9:23 am

Funny how the logo people say “scrimp on everything, but not the logo. And the legal folks say “scrimp on everything but incorporating”. We’re all adverse to the risks we are familiar with. :-)

Now as a web developer…

I love BlueHost and have been with them happily since 2003, but if you’re just starting up your business (and you’re not doing something that requires web programming) do yourself a favor and just get a Blogspot blog.

1) It’s free.
2) It’s stupidly simple to use.
3) The templates aren’t that original, but they don’t look bad and you can theme it yourself when you get some time (or pay someone if needed).
4) If you really must have your own domain name immediately, you can do that
5) Blogs are great for search engine optimization (Blogspot will be better than most roll-your-owns) and it gives you a way to interact wtih your customers and post updates.
6) No upgrades to worry about, ever

Google Sites isn’t a terrible option either.

10 Brett February 18, 2010 at 9:40 am

I couldn’t agree more with this, though there is one very important thing you forgot: Planning! Most small businesses fail because they assume that they’ll open their doors and cash will just flow in or because they spend all their time setting up the technical aspects of their business and not enough time having a clear vision of what service they are going to offer their customers.

The best mantra I can give is: Structure follows Strategy. You have to have a very clear idea what you plan to do, how you plan to do it, and why your customers will select you over your competition (you have competition – everyone does. If you don’t think you do, then you haven’t answered the what or the how). Take the time to plan out the general ideas of the business – including a reasonable growth rate.

Be sure you can afford to keep running the business during those initial months where you don’t see much profitability. Most small businesses fail during the first year because most businesses don’t make any money the first year and the owners didn’t have a plan to finance the business until it became profitable in years 2 or 3 (or 5). Its easier if you still have your day job but be sure that you can take the initial losses necessary to build a cliental.

11 Stephen Clay McGehee February 18, 2010 at 9:45 am

First a little background. I started up a software business in 1995, and it is still going strong. It has allowed me to work for myself, and work from home all that time. It has provided a very comfortable living for my family and the opportunity to pursue things I never would have been able to do if I worked for someone else.

Every business start-up is different, so my own experience won’t necessarily apply to yours. Here are some lessons that I learned:

• Most business plans are based on little more than guesses. Oh, the financial formulas are there and the spreadsheet looks cool, but it’s really just based on guesses and wishful thinking. I took a class in small business at the local community college, and then I tried to apply that to my own business idea. I finally just trashed the whole thing. Without good SOLID data, you’re really just flying by the seat of your pants – but thinking that you’ve got accurate instruments to guide you. Forget it – if you’re really flying by the seat of your pants, then do so all the way. If you’ve got a good idea that you know will work, then just do it. There was a poster at a place I used to work that says it well: “There comes a point in every project when it’s time to shoot the engineers and begin production.”

• Don’t assume you need an extensive background in what you’re doing. I was working as a software tester and saw a Microsoft box on my boss’s bookshelf. It was a free student edition version of what at that time was a new programming language. I asked him about it and he said “take it home and play around with it if you want – we’re not going to be using it here.” I bought a CD course on programming, learned to write software, and then wrote a program that helps political campaigns create and file their required financial disclosure reports with the state. I had taken programming classes many years earlier, but that was when we sat in front of a punch card machine and PCs weren’t even dreamed of.

• Start small and stay small unless there is a real advantage to getting big. I made the decision early on to remain a one-man shop. Once you start adding employees or partners, things get complicated really quickly. The one-man road certainly has its disadvantages, but they are a lot simpler to overcome.

• Keep things simple. My business is now 15 years old, and is now incorporated, but for a number of years I ran it as a sole proprietorship. I did all the accounting on Quicken (just the basic personal program) and a separate bank account. No office – I used a spare bedroom.

• I started out building my business while working a J-O-B, and that worked great. There comes a time though, when you have to cut the strings. My boss came in and said that we would all need to start working a lot of overtime. I told him I can’t – I have a timetable that I have to meet or lose a whole year’s worth of business. He said, “It’s your choice – make up your mind.” He was lining up interviews to replace me within a few minutes. That was a scary moment, but a great relief at the same time. Know when to cut yourself loose. (By the way, we parted on great terms and ended up helping each other out on different projects over the years.)

• Keep your expenses low and stay out of debt. I was able to carry on when others might have had to fold just because I could live on very little income. With no debt, I didn’t have to cut corners to pay immediate bills. You can live on cheese and crackers for a while if you need to.

• Understand that you might fail a time or two before you find what works. I made several failed attempts at starting a business before I finally found the right combination. Keep coming back – it’s worth it.

• Don’t let yourself get too filled with pride when things work out well. Your success is a blessing from God – give Him the credit and the glory.

12 Daniel February 18, 2010 at 10:05 am

I think the article has the right overall feel to it, but the laissez-faire attitude to the risk of doing business as anything other than a separate legal entity worried me. I originally wrote a reply that I thought balanced my criticism with politeness, but after having googled the author’s name and reviewing his LinkedIn profile (which seems to match the information in the article), I learned he has an MBA (as do I), and could just not let this oversight go uncommented.

Joel, if you are going to be writing something like this article, it might be wise to re-think your recommendation that people disregard a very valuable risk management tool for the sake of maybe an hour’s work and a couple hundred dollars, or however much it costs in the USA these days. Surely the delay of a month or even two to save extra cash for this is trivial.

I know the article is about starting a business on limited funds, but I think you need to reconsider the contents and perhaps offer clarification, or do a re-write. I honestly don’t intend for this to appear mean-spirited – it certainly isn’t – but given your qualifications and the resultant possibility of people following your recommendations without further analysis, I just think you need to be a bit more careful of what goes into your article.

Nevertheless, you’ve provided ideas which are fundamentally good, which will hopefully inspire the future business man to develop the foundations of his empire. Oh, and 100 points for mentioning Seth Godin’s book, “The Dip.” :-)

With that out of the way, here’s my little contribution:

There’s also a far better method of financing: pre-sales. Before designing logos, before setting up your home office the way you want it, and before doing almost anything else, go get sales for your product/service even before it exists. You might hear some rumours about it being illegal, but it’s done all the time, and those rumours probably come from couch-potato know-it-alls. Write up a sales contract with appropriate weasel clauses (clauses that allow you to get out of the contract without penalty for a multitude of reasons, like not being able to deliver, etc.)

If you can’t sell it for the life of you, the business is not likely to succeed with a product/service that can’t be sold. If you can sell before it’s made, do it, finance the production only, deliver (make sure you can deliver or refund if you can’t), and keep the profit. Richard Branson started by advertising records for sale by mail. People sent money to him, he’d buy the records at wholesale prices and mail them to his customers, keeping the difference between his sales price and the wholesale price he paid. Could you get someone to pay you first, so you can pay for the purchase/production of what they want, ship it to them, and keep the remainder?

13 neandrothal February 18, 2010 at 10:53 am

Outright is another online business accounting service. It’s a lot like Mint, calculates estimated taxes, is compatible with FreshBooks, and it’s free!

14 Charlie February 18, 2010 at 11:01 am

I started with a simple PC repair business. That grew into a small IT consulting shop. That morphed into a web design, web app development, and marketing (SEO & SMM) company. Now I own an indie game development company (which has really been my dream since the start). I haven’t worked for any other man in years. It’s hard work, you really have to be something of a workaholic in order to be a successful entrepreneur, but the accomplishment and freedom to do things your way are more than worth it. Also, be prepared to go in a circuitous route to get into the kind of business you want to be in.

15 Artie February 18, 2010 at 11:07 am

I’ll second the concern about logos. Not only will you get some terrible work out of places like logoyes and 99designs, most designers consider this kind of work immoral. It’s called “spec work” and is greatly frowned upon (see The main problem is that you’re asking people to do work and then not paying them for it. Imagine if I went to a series of chefs and said, “okay, I don’t have much money, so why don’t you all make me a meal and I’ll only pay for the one I finish”. Instead, you should look at the previous work of the designer and choose to work with one who can do the work you like at the price you can afford.

16 Charlie February 18, 2010 at 11:13 am

Oh, yeah, and I forgot to mention that I started all of this with about $25. I didn’t get a business entity formed until I was already making about 65K a year from my business. So, yes, I agree with the author. Wait until you’re actually generating revenue to do all the legal stuff.

A decent attorney and accountant can help you get everything in order and keep you out of trouble with the IRS. Don’t use these online companies. Nothing beats a real human whose office you can go to and get more done in person in one afternoon than exchanging e-mails with some website’s tech support people for 3 months.

Also, and this is very important, don’t worry about degrees or any of that. Some of the greatest success stories in American history either didn’t have degrees or started and then dropped out (Bill Gates & Steve Jobs come to mind) and many of the more recent success stories were begun before the founders actually finished school (Google, Facebook). If you know what you’re doing, just do it. That being said, never stop educating yourself on the topic of business and the industry you aim to be in. I’m completely self-educated and never went to a single day of college and I’m quite successful. Often, I’m astounded by the lack of knowledge and understanding in some of the business majors and CS majors I interview for my company. Nothing – and I mean absolutely nothing – beats jumping into life and living it. No piece of paper, no accolade, no trophy. Just get in there and start doing whatever it is you want to do.

17 Jason February 18, 2010 at 11:31 am

“The main problem is that you’re asking people to do work and then not paying them for it..”

That’s weak. Is it wrong for freelance writers to write stuff, submit it to magazines and have it rejected? What about novelists who write books, send them to publishers, but never get them published? What about cartoonists? And artists that create lots of works of art but only sell a few pieces of them? It’s not immoral or unethical it’s just what you have to accept if you want to have a creative job.

18 Joshua Thomas Zytkiewicz February 18, 2010 at 11:37 am

Shop around for accounting software. I bought Quickbooks Pro 2010 at Sam’s Club for only $84. A lot less than the retail of $199, and even less than Quickbooks online ($119/year).

19 Ibrahim | February 18, 2010 at 11:59 am

Great advice here. I’ve spent hundreds of hours building my web ventures, mainly because I didn’t have the capital to have someone do it for me. Your tips here help a lot, and my next venture, will have a better chance of becoming the next GQ/Elle because of it!

20 Torrey February 18, 2010 at 12:34 pm

I am a huge advocate for bootstrapping a business. It has a lot of advantages. Of course, first being that you are not pressured to make horrible business decisions by soaring debt payments. Secondly it makes you become more resourcesful. Most of the most creative ideas are born out of resourcefulness.

21 Joel Ohman February 18, 2010 at 1:41 pm

Thanks for the feedback and just wanted to clarify that I definitely always recommend using a business structure like an LLC for a business but my recommendation above is for those who have very limited funds.

In the situation of very limited funds my general advice would be that it is a better use of those limited funds to start “doing business” and test the concept first as a sole proprietor as opposed to forming an LLC and then not having any money left to do anything.

Ideally, you are exactly right in that it is always best to form a business entity like an LLC or otherwise right away before conducting business but given the constraint of very limited funds then my recommendation above to delay forming the entity is a solid option for many (especially given that the time spent as a sole proprietor should be less than a year and then they would hopefully have the cash flow to be able to form the LLC or incorporate – IMO spending just the first 6-12 months as a sole proprietor and then converting to a formal business entity is relatively low risk but you are correct in that there are certainly potential liability issues involved and IF the money is there then forming an LLC from day 1 is a smart choice). Thanks!

22 Mr Miyagi February 18, 2010 at 3:10 pm

I have had my own business designing websites the past 4 yrs and have so much work coming in I have not had any time in designing my own.

23 Louis Rosas-Guyon February 18, 2010 at 4:57 pm

You briefly touched on reducing technology expenses. For a complete review of ways to eliminate tech costs, download the free ebook “Nearly Free IT” from It teaches plenty of ways to cut technology costs without skimping on quality tools. Check it out!

24 Tanner@ Art of Citizenship February 18, 2010 at 5:02 pm

The free wordpress hosting is great if you don’t have a lot of html or css know how. At the same time, that coding is still available to tweak as you get more proficient. I’ve used wordpress for my own website and will be setting up the site for my wife’s business as well. I definitely recommend it to someone who wants a decent looking site without the cash to pay a developer.

25 Mark February 18, 2010 at 6:08 pm

Not bad advice, but I recommend/second the above recommendation to avoid debt. Start your business small and on a cash basis. Whether you decide to put things on a charge card or land an SBA loan you are now a slave to the lender, and back where you started from, working for someone else. Except this time they have no equity stake in your company, they are not interested in your success, only in getting paid. And in many cases you are still personally liable for the debt if the business fails.

26 Kevin ( February 18, 2010 at 6:12 pm

Blogging is a good way to start a new business. But there’s only one problem–there’s very little money in it when you start. Heck, there’s no guarantee you’ll ever make any money. But the start-up cost are very low.

27 Paul Singh February 18, 2010 at 6:29 pm

It seems like there’s a lot of discussion revolving around the administrative stuff — logos, incorporations, etc.

Before any of that is relevant, you need to start by solving a particular problem for someone you know (and then try to use the same solution to solve the same problem for even more people). That’s how it all starts.

I started SnailPad ( as a joke about four months ago. Today we’re pushing a couple thousand pieces of mail each month and it all (accidentally) started because I happened to solve one person’s acute pain — she had to mail out newsletters and absolutely hated it.

28 Zach February 18, 2010 at 6:49 pm

Thank you, thank you, thank you for this post! It’s exactly what I needed to hear. I’m trying to get a business of my own started with 0 budget, and just evenings to work on it. It’s really hard, but I keep thinking that it’ll eventually be worth the pain.

One thing though – please, if you’re trying to start a business with little to no money, do NOT resort to credit cards. This is EXTREMELY dangerous advice! Just start small – when the money starts to roll in, ramp up what you’re doing. But please don’t go into credit card debt.

29 Graham Hutson February 18, 2010 at 8:03 pm

Great post, and good timing on my part. I’m using the ‘doubling up’ method and with the speed things are going, it’ll be that way until I retire!

30 Anton February 18, 2010 at 9:09 pm

All I can say for starting up a new a business is to read Tim Ferriss book 4 hour work week.
It have helped me a lot with great marketing advice as well as business ideas

31 Mike D February 18, 2010 at 10:15 pm

I started working as a freelance writer a few years ago. I started my business for practically nothing. But, if I may mention, VistaPrint offers 250 free business cards.(You do have to pay shipping though).

32 Damian February 18, 2010 at 10:26 pm

I can’t agree more with the other graphic designers who have posted opposition to using spec work for logos and other design work.

I could give my own reasons why, but this should provide an ample list of reasons why the practice should be discouraged:

33 Artie February 19, 2010 at 12:24 am

“That’s weak. Is it wrong for freelance writers to write stuff, submit it to magazines and have it rejected? What about novelists who write books, send them to publishers, but never get them published? What about cartoonists? And artists that create lots of works of art but only sell a few pieces of them? It’s not immoral or unethical it’s just what you have to accept if you want to have a creative job.”

The difference is that a novelist can send the rejected work to the next publisher. Same with freelance writers. Same with cartoonists. Artists can submit the same work to a different gallery. Not so with a designer who designed a logo for a specific client. I think my comparison to a chef is pretty valid, the work is consumed (whether they use it or not) by that non-paying client. However, shopping around is great, but look at their previous work rather than ask them to solve your problem for you without paying for it.

Like Damian mentioned, spec work is kinda’ a big deal in my profession.

Specifically, I’d try to find someone with as much experience as you can afford. You’ll also want to look for folks who recognize the reality of a logo (does it look good big and small, will it reproduce well in just black and white, does it stand out from the crowd, is it “timeless” (i/e does it look like it should be on MTV (in which case, you’ll have to pay to have it redesigned when it looks dated in 3 years)) and, preferably, folks who have a working relationship with a local printer so you can ensure high quality execution when you go to have letterhead printed up, etc. Dedicated designers will frequently make “press checks” where they go to the print shop while the piece is on press to make sure the first few copies look good. You should ask about that. However, in our digital age, this is becoming less and less common.

While I like keeping things local, I will second the recommendation for VistaPrint and add that I’ve been impressed by’s photo books and Great quality for low cost.

34 Jason February 19, 2010 at 1:59 am

Your comparison to the chef is weak because if a diner does not like his dish, he can send it back for another or refuse to pay for it. Just like spec work. The chef spent his time making the dish but if the diner doesn’t like it, then, yes, he’s wasted his time. That’s how it goes.

The best comparison is really to advertising. Companies have several ad agencies come up with a campaign, and they pitch it to the company. But the company only chooses one campaign. The ad agencies that lose the commission are out of luck-they just spent their time on a campaign that won’t be used.

The website Damian referred to, which is filled with a list of truly weak arguements against spec work, say that this is different because ad agencies have a chance at a million dollar pay off if they’re chosen. But the pay out is commesurate with the effort; an ad agency can spend a couple of months getting a campaign pitch together and involve a whole team of people. And unless I’m mistaken, logos take a few weeks at the very most and are done by one person. So each ends up losing an amount of money commesurate with the effort put in. This argument also fails on a simple rhetorical basis. If something is immoral and unethical, it is not suddenly not so, because there’s a larger sum of money up for grabs. It’s either unethical or it isn’t.

It’s really the same with all businesses. A car company can spend millions and millions of dollars on a new car and it could bomb and they could lose money on it. That’s the way it goes. That’s business. Creative types always try to hide behind special considerations for their work. It doesn’t matter if a graphic designer has a great portfolio, I won’t know if they can do what I want until they show me my logo. And people shouldn’t be expected to pay for something they don’t like.

Graphic designers can fight spec work all they want, but it’s here to stay. It’s like music companies trying to stop the tide of pirating. You have to find a new way to do business and survive. You can’t just wish it away.

35 Starting A Business February 19, 2010 at 7:06 am

Hi I just came across your blog! I found it really interesting and informative!!

36 BCD Local February 19, 2010 at 10:10 am

This is a great article for new business start ups. So many people spend so much time and money on setting up companies, renting premises taking on staff etc. Just get on with running your business and making money. This is why, in my opinion, so many businessses fail in their first year.

37 Core February 19, 2010 at 12:57 pm

You know, this is a great article. Its informative and to the point. Yet, has enough detail to make everything tie together. (at least for myself)

It reminds me of a problem I was working on the other day, I was installing a commercial grade door closer on a door, and I was looking at the diagram, and trying to figure things out. Well long story short, I just said “I’ll hold off on the guide and just put it up and go from there” and once I did that, I gained a whole new perspective on the situation and while the directions were informative, it really took me just acting and working for me to grasp what I had to do to install the door closer.

I had to fiddle with it a bit, because sitting back and just reading was not enough.

Anyways, I plan on starting up a small business within the next 6-12 months. It depends on me of course. This article helped a lot.

38 Gunnar Langemark February 19, 2010 at 2:23 pm

When do you have a business?
When you have an LLC?
When you have a LOGO?
No to both

You have a business when you have a customer!
Find yourself a customer for your product or service – and go on from there.
Selling REALLY is everything
And I’m a lousy salesman…

39 Bernt February 19, 2010 at 4:34 pm

Another great site for finding graphic design, legal, or other help is Basically you submit whatever you need as a project, along with what you can pay, and their online community of professionals ‘bids’ on your job. It’s a great way of getting very targeted help – like if you have a specific legal need or web design project or whatever that you can’t do yourself.

40 Corve DaCosta February 21, 2010 at 12:02 pm

Great tips……I want to start a business but have no funds right now.

41 Ian February 21, 2010 at 11:14 pm

Don’t use Vista Print. At least from what I’ve seen they always print their logo on the back of the free business cards. Nothing screams cheap like having another companies logo on the back of your business card. Business cards aren’t that expensive… just do it right from the beginning.

42 Artie February 22, 2010 at 12:13 am

Jason, advertising agencies do not pitch entire campaigns without being paid a dime. They do respond to to RFPs (requests for proposals), but these are usually no more than boilerplate portfolios with an afternoon’s worth of ideas tossed in. If companies want to see more, they’ll provide a smallish stipend to a handful of agencies to pitch more detailed ideas.

Logo design, if done in the traditional sense (and, in my mind, the right way) is way more than just font and symbol, it’s about helping a client realize their identity. Getting to the root of what their business is. A deep dive like this is worth doing, but not early on. Back in the day that I worked for design firms and advertising agencies, I encouraged clients who were starting out to just throw something that approximated a logo together themselves. Then, once they had momentum, come talk to us so we can help with what their full corporate identity.

Also, just because you’ve hired a designer to do a logo, doesn’t mean you’re stuck with what they come up with. A “kill fee” should be negotiated up front, where if the design just isn’t working out, you can get out of the deal for a minimal payment for work done. Note, needing to terminate a job like this is extremely rare.

43 Dan February 22, 2010 at 6:21 pm

Nice collection of ideas!!

I started my own (along with my wife) photography business about 7 months ago with about $250 (most went to LLC filing and delivery license). Just thought I would add a few thoughts to the pot:

As far as marketing goes, use as many free resources as you can find! In the photography niche, there are hundreds of bridal websites out there that will post free ads for you (of course, they want you to upgrade your ads for a fee, but you can just say no)! They’re pretty simple, but it’s a start. Post a free listing on (just be prepared to say “no” a lot to their follow-up sales calls). And the biggest for us so far has been FACEBOOK!! Start your own page on Facebook, and invite your friends and relatives to become fans! You can send out invitations to visit your page, advertise specials and discounts, and it’s a great way to start getting the word out, and all at ZERO cost!!!

The other thing I would mention is start preparing EARLY for your taxes. Keep track of ALL your mileage (this can really add up), and other expenses and write them off! After logging all your expenses, you might find you actually took a loss (on paper), but end up with a nice deposit in your account!

I also use Intuit Billing Manager for all my estimates, invoices, and receipts too. It’s free and looks pretty decent! It’s great to be able to keep all your customer’s info, purchase history, and receipts in one place, FREE!

And lastly, FIND YOUR NICHE! Resign yourself to the fact that your business is not for everybody, but it IS for SOMEBODY (hopefully lots of somebodies). Find what makes you unique to those somebodies, and market it! For me, it’s quality images for brides that can’t afford $6k for their wedding. My overhead is low, and my prices reflect it!

Great article! Best of luck to starting your “dream”!

44 Glendon Cameron February 24, 2010 at 9:35 pm

Okay my mouth is wide open!

This is how I started my last five businesses! I think if you have a good ideal you can just build on it, you can always inc the business, but you can’t always grow the business as lean as possible.

The leaner the business the greater the profits, just ask Walmart!

Why waste money on office space if it is not absolutely essential to the business! The business I talk about in my blog got started in my garage and organically grew from a $1350.00 dollar investment to a business that was doing 800K all from organic funding. It can be done!

Many jewels of wisdom here I like it I like it a lot!

45 Jon March 1, 2010 at 11:11 pm

IAAL, but not yours, and not giving legal advice, just general business advice:

Whatever the merits of a website (and there are a few) for a one-man LLC, I cannot stress the following strongly enough: getting other people involved (even a family member) should mean talking to a lawyer before you start working together.

You have some wiggle room when you’re single that you lose when you others are involved. “Partnering up,” like marriage, can make your risk profile far more unpredictable. I’ve seen “partners” who thought it was obvious how the profits (or losses) would be split, and people who thought it was clear that you could “double up.” Alas, it was not clear or obvious to the other party. And the legal default rule (which gets applied when there is no agreement) can be something entirely different than either partner would want.

So for heaven’s sake, when it comes to partnering up, don’t leap without looking.

46 Tyler Logan March 3, 2010 at 3:06 am

Nice post and great collection of information. I will run a business someday – a self employed life is a life for me. Always nice to read posts like this and get the passion flowing.

47 Patrick "thumbs" Payne March 5, 2010 at 7:58 pm

GREAAAAAAAAAAAAAAAAATE SITE!!! I got started n my lawn and household services company with just a 20″ mower and an electric weedeater in the summer of 1991. It was a joke. Being just a know it all kid, I pounded on doors, one by one, trying to spread the word that I had arrived. One old gal from the complete opposite side of town hired me. Then another, just a few doors down the road, did same. Then another. I now own a 36″ and a 42″ comercial mowers plus all the other fun stuff that most landscapers got. About six years into the journey, I lopped off four of my fingers out of being too cocky (It’ll never happen to me). It was then that I GOT MY ENTIRE COLLEGE EDUCATION, Psychology, Math, English, THE WORKS. I’m more remembered in ANY context, my engineering skills are A-1 never better. My sense of balance will never be sharper. When you ain’t got–you gotta get. People ask about what happened, I come back at them with, “THE BEST EVENT OF MY LIFE”, they always look at me like I’m some kind of masochist. Otherwise, things are kool.

48 Guerrilla Billionaire April 19, 2010 at 8:17 pm

Don’t forget the manliest of men in all business. The captains of capitalism. The buccaneers of business. I refer to billionaires, of course. I developed a fascination with them around the ripe old age of ten by reading business magazines instead of comic books. James Ling “The Merger King” was my superhero. He collected companies like others collected baseball cards. One can learn a great deal about business from these men. Read their biographies but avoid the current wimpy tech billionaires. They’re a bore compared to Kirk Kerkorian, Carlos Slim, and Ted Turner.

Thank me later.

49 maximilian youell May 14, 2010 at 12:58 pm

Very informative as well as motivating. Im currently working on a business in my spare time from the Army. The problem I run into the most is finances, because my job just supports my family. I dont have any business experience or knowledge just the motivation to do it. I joined the army right out of high school, and after my first tour in Iraq I began to develop a brand that was inspired by my job in the service.

Im hoping with these tips I can start making some good progress, I created a facebook page and Im up to 300 fans already so its a start to get the name out there, gotta love free advertisement.
Does anyone know of any sites where I can order t-shirts and hats in bulk, or any reall good printing businesse?. The first thing my brand “LOWKEY” is starting out with is clothing, and I figured that would be the most inexpensive way to begin.

50 jstamo03 October 5, 2013 at 4:53 am

Great tips……I want to start a business but have no funds right now.

51 Toni February 11, 2014 at 10:22 am

WOW just what I was searching for. Came here by searching for money & career

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