Keen to set up your own business, but have reservations about the potential costs? The good news is that you don’t have to have the luxury of a big starting budget to join the 4.3 million self-employed workers in the UK.
One of the advantages of being an entrepreneur today is the wealth of free and low-cost tools which can help you launch and run your business. Whether you want to set up an online store in minutes, boost your brand by offering gift cards, take contactless payments with a portable card reader, or simply want to set up an online business account, you can make it happen with no fuss.
And, thanks to online marketplaces and social media platforms, it’s easier than ever to get on customers’ radars and promote your products or services without spending any money at all.
To inspire you further, we’ve put together this guide to some of the top business ideas with low investment requirements. It’s a diverse list, so whether you want to learn more about how to make money from home or like the thought of a job which gets you out and about, there’s plenty to consider.
We’ll also cover how to recognise the small business ideas with low overheads which best suit your circumstances, and the steps you should follow to make the idea a reality.
Top 25 business ideas with low investment and high profit
There’s quite a few low investment business ideas you can read about here, and some will be more aligned with your interests and expertise than others. To make it easier to browse the ideas, we’ve arranged them into five main categories.
Just tap the sections that you like the sound of to jump straight to the business ideas.
1. Creative businesses
There are plenty of creative ways to make money which don’t require much in the way of upfront investment.
As long as you have the imagination and the skills, and you make savvy use of online tools and websites, you can generate an income doing something you love. Let’s look at five ways to do it.
Create content on Substack
Making money from creative writing used to mean submitting your work to agents and editors, in the hope of gaining their approval and being published. Now, thanks to Substack, you can skip straight to the publishing part and potentially monetise your writing without anyone else being involved.
Your Substack page is your creative playground – you can put up blogs, articles and other kinds of content, talk with your followers, and make money by putting some or all of your content behind a paywall.
There are a few keys to success on the platform. First, you should focus on a niche. This could be anything, as long as you care about it and have insightful things to say. It might be health and lifestyle tips, cookery writing, your take on military history, or expert commentary on the tech world.
Second, you should make your content completely free to start with, as this will help accelerate your followership. Once you’ve established yourself as a Substacker, you can choose to provide premium content for paying subscribers.
The minimum monthly amount subscribers can pay you on Substack is $5. This is also the amount most Substackers charge, although it’s worth noting that those working in the crypto and finance categories tend to charge more – often $10 or more.
Sell handcrafted items
Online marketplace sites like Folksy, Etsy and Art in the Heart have made it easier than ever for artisan crafters to sell artworks, jewellery and homeware items to people keen for an alternative to mass-produced items.
You can keep overheads low by shopping around online for raw materials on sites like The Bead Shop and The Curious Gem. Such sites let you pick out everything from silver chains to gemstones that meet your business budget.
Remember that bold, unique designs are more likely to draw attention in what is a very competitive market. So don’t be afraid to follow your personal aesthetic passions and occupy a niche.
Remember too that you can promote your products on other platforms. Nice photos on sites like Instagram and Twitter can help draw people to your pages on sites like Etsy and Folksy.
You may also choose to create an online store of your own, which can help you stand apart from the sellers on marketplace sites, and thereby cement your brand in people’s minds.
Sell foodie treats by mail
You don’t have to splash the cash on a café, restaurant or food truck to generate an income from food. In fact, you can turn cooking into one of your hobbies that make money if you sell your delicious creations online.
This doesn’t need to be as costly as you might initially think. Cheap but attractive packaging, including jars and colourful cardboard boxes, can be bought in bulk online. Cheap, custom-designed labels and stickers can also be ordered online.
Selling the right products will also help you keep costs low. Consider, for example, how some businesses sell different kinds of gourmet popcorn online.
The ingredients here aren’t expensive – think popcorn kernels, cheese powder, salter caramel, and the like – but the product itself is positioned as a premium treat and sold at a high profit margin.
Hot sauces, unique pickles, and jams with quirky flavours are all possible avenues to explore. Just be sure to promote your wares heavily on social media, perhaps providing free samples to foodie influencers.
There are certain legal requirements for starting a small business in food delivery. Full details are provided by the Food Standards Agency.
Create an affiliate marketing site
Any list of business ideas with low investment and high profit has to include affiliate marketing. That’s because you can get started armed only with a laptop and your imagination.
Almost any kind of writing can be turned into a springboard for revenue generation. You might write a daily blog on, say, gardening or DIY or making music. Or, you might take things further with a site that reviews different products in a particular category.
Promote your site on X (formerly Twitter), Instagram and LinkedIn, engage with readers, forge links with other blogs – all of this can help make your site more prominent on search engine rankings.
Once you’ve gained a following, you can embed your articles with links to products related to your writing. You’ll then be paid a commission when people click through and/or make purchases through your links.
With affiliate marketplaces like Amazon Associates taking the hassle out of making affiliate partnerships, there’s every reason to get stuck in.
Sell your photography
If you have an interest in photography, and perhaps already have a high-quality camera, you may be able to sell your snaps to a global audience. And no technical qualifications in photography will be required.
Long-established stock photo sites like Getty Images and Shutterstock actively take on new content creators, showcasing imagery to a diverse array of customers.
If your photos are accepted, you may well find them being licensed by major corporations, media companies and advertising agencies for their campaigns.
You don’t necessarily have to spend money travelling to exotic locales for your photos. Taking creative photos of places and people close to you can yield lucrative results, providing you show flair and invention. You may even find yourself commissioned to take specific photos to order.
It can help to promote both your work and your thoughts on photography through social media – for example, posting your latest images on Instagram, and writing blogs on photography on LinkedIn.
2. Professional services
Numerous small business ideas with low overheads involve providing services for other businesses. Providing you have the expertise, a computer, an internet connection and some key software, you can generate an income from home, or anywhere else you enjoy working.
Let’s consider some of the top low cost business ideas in this category.
Become a social media consultant
Social media is a valuable marketing tool for virtually every kind of business, large and small. Yet, many businesses simply don’t have the resources – whether in terms of staff or know-how – to make proper use of platforms like Facebook, Instagram and X (Twitter).
This opens up business opportunities for freelance consultants, who can oversee social media accounts and ensure their clients are staying on the radar of their potential customers.
You won’t need any sophisticated or expensive software to work as a social media consultant. But you will need real experience of using the different platforms effectively, and feel comfortable tracking how your posts are performing using analytics tools.
As a consultant, your responsibilities may include:
Devising long-term social media campaigns
Implementing upload schedules through social media management platforms like Loomly and Hootsuite
Writing the social media posts
Engaging directly with people who reply to posts
You can get your start as a social media consultant by advertising your services on sites like Fiverr and Upwork. Prior to pitching for clients, it can help to have your own, active social media accounts, to demonstrate your proficiency with different platforms.
Be a virtual assistant
As a virtual assistant, you’ll effectively be a personal assistant who works at a different physical location from your clients. That might be your sofa, your kitchen table, a local café, even a beach if you happen to be travelling as a digital nomad.
You’ll have a diverse range of responsibilities, depending on what your clients require. You might be asked to:
Write and reply to business emails
Manage diaries
Make travel arrangements
Manage documents on cloud platforms like Dropbox
Delegate tasks to your client’s employees
While this is a low capital business idea, it’s also a highly demanding job, requiring great attention to detail, an ability to multitask, and keep a calm head under pressure.
It can be ideal for anyone who’s worked as an in-house PA or office manager, but who’d now prefer to work for themselves as a freelancer.
Launch a concierge business
No two days will be the same as a freelance concierge. You might be researching restaurants for a client’s important family gathering one moment, and curating a holiday for another client the next.
As with being a virtual assistant, you’ll need certain core skills like being able to juggle different tasks, being a problem solver, and feeling comfortable interacting with all kinds of people.
However, you’ll also need to forge partnerships with venues like cocktail bars and members’ clubs in order to ensure your clients get exclusive access to high-end experiences. Providing this “VIP” service is often a requirement for successful concierge businesses.
Being a social animal who enjoys mingling, going to networking events and making connections is fundamental to being a concierge. You’ll also need to have a suitably sleek business website that embodies the kind of lifestyle you want to provide for clients.
Don’t forget to use social media to exemplify this lifestyle. You may want to post photos and videos of Michelin-starred dishes, exquisite cocktails, and high-end shopping venues, to position yourself as a convenient conduit to these luxuries.
Become an event planner
In terms of necessary skills and experience, there’s a considerable overlap between being a concierge and an event planner. However, the latter is ideally suited to those who enjoy taking on larger projects, and who have particularly strong managerial prowess.
Unlike some other low investment business ideas UK entrepreneurs can set up with little experience, you’ll ideally have a track record of organising corporate parties, baby showers, product launches, and other such functions before setting up shop as an events planner.
Having the right connections with exhibition spaces, clubs, catering companies, and other organisations, and being able to negotiate the best deals on behalf of clients, is essential to being a successful events planner.
It’s also important to keep track of the various payments you’ll make to the venues, service staff, caterers, and others. This is where having an online business account you can access easily, on the go, can make life a lot easier.
Become a graphic designer
As a freelance graphic designer, you might be tasked with creating marketing materials, logos, book layouts, and websites for your clients.
However, successfully establishing yourself as a freelance graphic designer doesn’t just require having a creative imagination, and being a dab hand at software tools like InDesign and Photoshop.
Just as importantly, you’ll need to keep up with the most in-demand visual trends, so your designs are relevant to contemporary audiences. You should ideally be aware of how tastes have evolved when it comes to everything from website layouts to social media memes.
It almost goes without saying your business website needs to be visually arresting, really demonstrating your design skills. Be sure to also showcase personal artistic projects on Instagram, which can really help encourage new clients to approach you with one-off or ongoing projects.
Get into copywriting
Copywriting ranks highly among smart business ideas with low investment requirements. After all, there are no elaborate overheads, and you’ll be generating your income through words alone.
There’s also widespread demand for copywriters, reflecting how crucial written content now is for companies that want to stand out online. You may be commissioned to write:
Web copy
Search engine optimised blogs
Product descriptions
Social media posts
Ghostwritten thought leadership articles for CEOs/senior execs
Being versatile is key to being a successful copywriter, especially to start with. Once you’ve landed some clients, perhaps through marketplace sites like PeoplePerHour and Fiverr, you might then start to specialise in specific subjects.
3. Ecommerce businesses
When you think “business ideas with low investment”, ecommerce may not be a category that springs immediately to mind. After all, the process of purchasing stock and setting up a professional-looking retail site can seem like an expensive slog.
But the truth is, you can set up a free online store in moments, and you don’t necessarily need to buy any stock at all. Let’s look at some of the top ecommerce business ideas with low investment and high profit.
Open a dropshipping store
Dropshipping is a way of selling items online without ever having to buy or stockpile the items themselves. Every order that comes into your online store is passed onto third-party suppliers, and they send the items directly to your customers.
Established dropshipping affiliate networks like Worldwide Brands and SaleHoo can connect you with third-party suppliers you can trust.
The fact that they will handle storage and delivery will radically bring down your overheads, since you’ll simply focus on creating a nice online store and publicising your retail brand on social media sites.
Your main challenge is to stand out from the online noise. Occupying a highly specific niche can work better than trying to sell all kinds of items. Don’t be afraid to really drill down into a specific category – say, fruit-themed kids’ clothing, or novelty watches, or comic book paraphernalia.
Keep track of trends and talking points by keeping a close eye on social media, and you can also utilise tools like Google Trends and Facebook Ads to monitor the market and promote your store.
Sell print-on-demand products
The print-on-demand ecommerce model can be thought of as dropshipping with a creative twist. Again, third-party suppliers take care of sending products to your customers, but the products in question are created to order, to your design specifications.
Sites like Printful and Printify make it very straightforward. You simply select which types of products you want to feature on your online store – say, clothing, crockery, or wall art. Then, just upload the designs which you’d like to feature on the products.
Creating your very own fashion line, or branded homeware products, can be immensely satisfying. And, by posting high-quality photos on sites like Instagram, you can carve out your own space in the online retail world.
If you lack the design skills to create the imagery yourself, that’s not a problem. You can always contact cost-effective freelance designers from sites like Fiverr and Upwork, and commission them to make your ideas a reality.
Sell online courses
Confident of your knowledge and professional expertise in certain subjects? You can monetise your know-how by selling courses online.
Getting a paying audience for your courses is the main challenge here, but there are sites that specialise in doing exactly this. Notable examples like Skillshare and Udemy allow you to upload your courses and engage with a global audience of people looking to learn.
Courses are made up of videos and other downloadable resourses, and you can teach almost any subject, from web development to music creation to content writing to martial arts.
The main overhead here will be purchasing equipment for making high quality videos. However, taking the time to shop around tech sites online should yield bargain deals for audiovisual equipment.
Then, it’ll be down to you to craft in-depth courses, communicate your knowledge in a warm and approachable way, and to promote yourself on sites like X (Twitter) and LinkedIn.
Become an online tutor
Online tutoring means selling your time rather than a product such as a pre-recorded course, so it’s arguably not ecommerce in the traditional sense. But, semantics aside, it certainly ranks among the top low investment business ideas UK-wide.
The most well-known form of online tutoring involves helping schoolkids with their courses, and there are several platforms like MyTutor and Tutorful which can connect you with parents and guardians. Formal teaching qualifications aren’t required, though the platforms will have their own enrolment requirements for tutors.
It’s also possible to provide online tutoring for adults. A site like Superprof allows you to pass on knowledge in a whole host of subjects, directly via webcam.
Since no complicated equipment is required, and you don’t have to spend time editing videos, this can be a quick, cost-effective way to make some extra money. If you’re looking for side hustle ideas you can fit around your life, this is one worth exploring.
4. In-person services
Prefer small business ideas which involve working directly with customers in person? There are plenty of options which don’t require a big starting budget, and which are ideally suited to anyone who enjoys meeting new people.
Work as a private chef
As a private or freelance chef, your main expenses will be the cost of essential kit like your whites and chef’s knives, and the cost of travel. Beyond that, your overheads will be next to nothing, which is why this deserves a place on our list of low investment business ideas.
Generally speaking, you’ll need to have some professional kitchen experience in order to gain clients as a private chef. This can be the foundation to work as a jobbing chef-for-hire, with clients paying you to cook at weddings, birthdays, corporate events, or even fancy dinner parties.
You can build up a reputation by using a platform like Yhangry, which is an online marketplace where chefs can post their profiles, showcase their menus and get hired for gigs. If this goes well, you may then choose to really plant a flag in the culinary landscape by launching your own website.
You can also seek out longer term clients who will hire you to cook exclusively for them. This may involve moving into their property, or travelling on their private yacht, and being in charge of menu planning and ingredient sourcing as well as cooking.
Work as a domestic cleaner
It’s estimated that a third of British households now hire cleaners, so this is certainly a thriving market to explore. It’s also got a low financial barrier to entry, with basic equipment like a mop, vacuum cleaner, brushes, sponges, soaps and disinfectants all being highly affordable.
As with many low capital business ideas UK wide, you can get your foot in the door by advertising on sites like TaskRabbit and Airtasker, though it’s fair to say that domestic cleaning is a highly competitive field.
That’s why it can be worth making an extra effort to stand out from the crowd. Create your own domestic cleaner business website, perhaps hiring a freelance designer to create an eye-catching logo and fun, colourful aesthetic.
You can post videos on cleaning tips on Instagram and TikTok, maybe putting a playful, irreverent spin on things, and soundtracking it with royalty-free tracks from a stock music site.
These flourishes can really help attract attention and make you come across as a “proper business” rather than just another face on TaskRabbit.
One expense to factor in is public liability insurance, which will cover you in the event of any damage relating to your cleaning work. Shopping around online should uncover cost-effective insurance policies to meet a tight budget.
Be a window cleaner
Window cleaning can be a viable solution if you’re considering how to make extra money, or even looking for a new full-time job. The window cleaning market is actually worth in the region of £300 million in the UK, so there’s serious income to be made if you’re motivated and physically fit.
Initial overheads will include purchasing essential kit like squeegees, telescopic water-fed poles and water purifiers. Not to mention houses, brushes, and the requisite chemicals for leaving windows sparkling clean.
Beyond that, your main running cost will be transport. As with domestic cleaning, you can get hired through online platforms like TaskRabbit, although many window cleaners also like to go door-to-door in particular neighborhoods to introduce their services.
Offering the most convenient possible cleaning service can help win customers, and one way to do this is carry a portable card reader. This means people can hire you on the spot without having to worry about having cash to hand.
Look after pets
Pet sitting is generally regarded as more of a side hustle than the basis of a full-time business. And it’s certainly a nice idea to explore if you love animals and are thinking of how to make money on the side.
Pet sitting platforms like Rover allow you to create profiles where you talk about yourself, your experience with pets, and the kinds of services you’re able to provide. This can turn into a fun way to generate extra income in your spare hours or days, and may involve:
Walking dogs
Looking after pets in your home
Looking after pets overnight
Drop-ins at clients’ homes to feed and look after pets
That said, you can also take things further by setting up your own fully-fledged pet sitting business. By creating a business website and promoting yourself on social media, you can potentially secure recurring clients in your geographical location.
Just bear in mind that you will have to explore pet sitter insurance options to cover a number of possible scenarios, such as vet fees in the event of injury to pets, and the cost of any damage which pets may cause to property.
Be a handyperson
You don’t necessarily need to be formally qualified to carry out home repairs and other odd jobs for paying customers. If you’re naturally a dab hand with painting, tiling, woodwork and all-round DIY tasks, that can be enough for you to start a business as a handyperson.
That being said, if your starting budget can stretch to it, you can also choose to upskill by completing courses, such as those approved by City & Guilds.
Your overheads as a handyperson don’t have to be large. Take the time to scour suppliers online for the best deals on things like hand tools, electrical equipment like drills and sanders, ladders, and protective gear like steel-capped boots.
You’ll also need to earmark a bit of your budget for public liability insurance, since any kind of DIY work runs the risk of damage being done to property.
Provide tailoring services
These days, many people simply don’t have the time or skills to make alterations to clothes. What’s more, fashionistas will often want to have existing clothes re-jigged and re-formatted to give them a new lease of life.
This is where you can come in as a purveyor of tailoring and alterations services. You can keep overheads as low as possible by working from home, and simply relying on basic equipment like a sewing machine, needles and threads.
The most important “tool” you need is free, and that’s your own talent. So, if you’re confident in your ability to embroider patterns, swap jacket linings, adjust the fit of dresses, and lengthen or shorten trousers, this can be among the most satisfying small business ideas with low overheads.
Some groundwork will be required for attracting customers. A pretty website is a must, while some of your handiwork can be showcased on social media platforms.
You might even want to create some videos showing how you work, perhaps putting a spin on things for viral appeal. How about ASMR videos of you sewing on buttons or altering skirts? This kind of lateral thinking can make all the difference when it comes to drawing attention to your business.
5. Transportation businesses
Have access to a vehicle, and enjoy hitting the road? You might want to turn your attention to businesses involving the transportation of people or goods.
The major advantage of these kinds of jobs is you can get started very quickly, and make money right from the off. Let’s consider some of the main subcategories.
Become a courier
Companies like Gophr and CitySprint specialise in getting important items from A to B right across the country. They pay an army of couriers to make these deliveries around the clock, and are actively taking on new freelancers all the time.
As a self-employed courier, you call the shots on when you can work, making this a great business idea if you have a primary career you’d like to maintain.
You can become a courier if you have your own car, van, motorbike or simple bicycle, and getting into the industry is straightforward. In fact, you can apply online with courier companies in a matter of minutes.
Of course, there will be certain onboarding requirements. For example, if you intend to make deliveries in a motorised vehicle, you’ll need to show you have a full, clean driving licence and the relevant insurance policies. But once you check those few boxes, you’ll be all set to make deliveries and make money.
Be a rideshare driver
If you have a car, and like the idea of heading out and meeting new people, being a rideshare driver should perhaps be on your shortlist of low investment business ideas.
By signing up to drive for a company such as Uber, you will have the freedom to work the hours that suit you – whether that’s early mornings, mid-afternoons, or late at night.
And, unlike with other business ideas, you won’t have to worry about creating a website or promoting yourself online. Simply activate the app and be alerted to people who need rides.
There are some legal requirements for becoming a rideshare driver. These include having a UK driver licence and a private hire licence. Londoners will have to apply to Transport for London (TfL) for a private hire licence, while drivers in other parts of the country will have to apply to their local councils.
You’ll be expected to undergo a Disclose and Barring Service (DBS) check, and a medical assessment. Your vehicle must also meet the requirements of the rideshare company. Uber, for example, will require a four-door car or minivan with no cosmetic damage.
Deliver food
Working as a food delivery driver for the likes of Deliveroo, Just Eat and Uber Eats can technically be a primary source of income if you’re willing to work very long hours. However, it’s more commonly seen as a side gig – a way to bring in a second income after you’ve clocked off from your main job.
It certainly has its plus points as a side hustle business. For one thing, you can get started rapidly, without having to implement a website or marketing campaign. For another, you’ll generate income right away.
What you will need is a mode of transportation, whether that’s a car, a scooter or a bike. You’ll also need food delivery insurance and regular motor insurance if you’re driving a motorised vehicle.
Within this category, you also have the option of being a dedicated driver for specific companies like Pizza Hut. This can bring added benefits such as being given the delivery vehicle, but you will technically be an employee rather than self-employed.
It’s worth bearing in mind that Just Eat, Uber Eats and Deliveroo drivers can also make extra money thanks to tips. You’ll be entitled to 100% of all tips which customers see fit to provide.
Launch a removals business
Recent research conducted by SumUp found that removals companies are among the most in-demand local businesses in Britain. This is also a fairly easy market to enter, as long as you’re physically fit enough to lug furniture around, and have a suitable vehicle such as a large van.
Other than the cost of fuel and motor insurance, you’ll also need to factor in public liability insurance, given the obvious risk of damage to property during removals jobs. Goods in transit insurance, which covers items being transported, will be another cost.
But other than these essential overheads, running a removals business shouldn’t rack up many expenses. You can advertise services on marketplace sites, and/or create your own dedicated business website.
Once you’ve been operating for a while, you can also apply to join the British Association of Removers. This trade association goes back more than a century, and being a member will make your business look even more credible, which can help attract more customers.
3 benefits of business ideas with low investment requirements
Other than the obvious advantage of being cheaper to launch and coming with less financial risk, low capital business ideas come with some other significant perks.
1. They can be launched more quickly
Low investment business ideas tend to be more simple to set up by their very nature, which means they typically take less time to launch.
You won’t have to go through the rigmarole of renting business premises, interviewing and hiring employees, or organising the storage of any products you’re selling. Instead, you’ll often be able to put the gears into motion entirely online, and be trading in no time.
2. There’s more leeway for experimenting
Small business ideas with low overheads give you more space to experiment and finesse your products and services through trial and error, without feeling the pressure to generate income and cover your startup costs.
You might want to switch up the products you’re selling through a dropshipping store, alter what kind of content you post on social media, or even completely pivot your business towards a different kind or product or service. Any such changes won’t feel so radical or risky, since you won’t have invested a lot of money into the business.
3. They are more likely to go the distance
Research shows that a simple lack of financing is one of the main reasons startups fail. That’s because many businesses require their founders to carry on ploughing money in to cover the mounting costs of rent, product inventories and elaborate equipment while revenues take time to build up.
Business ideas with low investment requirements won’t have this potential vulnerability, and will be more likely to stay afloat even in those difficult initial weeks and months.
How to launch a low investment business
Feeling fired up to start your very own business? Let’s consider some of the pivotal steps you need to take in order to work for yourself.
1. Decide on the right business idea
It doesn’t matter whether you’re looking for a total career change or are weighing up ideas for second income generation. Either way, you have to pick an idea that’s just right for you. Here are the questions you should ask yourself when brainstorming.
Does this idea truly excite me?
Let’s face it, launching and running any business is a slog. Chances are you’ll have to work long hours to start with, giving up your precious free time to both make money and overcome any logistical challenges.
Overcoming hurdles and working evenings and weekends won’t feel like a chore if you have a genuine enthusiasm for the business. On the other hand, if you don’t feel this gut-level interest in what you’re doing, you’re likely to want to give up rather than persevere to the point of success.
So, be sure to narrow your focus to low investment business ideas which you have a personal, subjective passion for.
Does the idea match my skill set?
Having the necessary skills to bring a business idea to life means you won’t have to pay for any extra training, which is a crucial consideration if you have a limited budget to play with.
Another advantage is that you’ll be able to get things started more quickly if you don’t have to spend weeks or months gaining new qualifications. You may also simply feel more confident launching a business founded on your longstanding skills and professional expertise, as opposed to entering an industry as a relative novice.
Do I have the equipment already?
Another factor that will keep costs down from the outset is already having the kit your business requires. For example, if you’re already a keen photographer with a high-quality camera, you can become a freelance photographer selling images online without paying for any extra equipment.
Similarly, if you don’t have a large pot of money to invest, but you happen to have a car, then you may promote being a rideshare driver to the top of the list of potential business ideas.
2. Carry out market research
Market research isn’t necessary for certain job types, such as being a food delivery or rideshare driver. But entrepreneurs launching other kinds of businesses may need to make time for market research in the run up to launch – and beyond.
If you’re new to working for yourself, you may be wondering how to do market research for small business enterprises. The good news is you should be able to get the most important information online. You’ll want to:
Investigate other businesses in your field
Some diligent browsing online should give you valuable insights into rival businesses. Your first port of call may be your favourite search engine, which can reveal the websites of the most successful businesses in your chosen sector.
This is valuable whether you want to create, say, an animal-themed fashion line using the print-on-demand model, or want to provide professional services as a writer or graphic designer.
Alternatively, you may have to browse online platforms and marketplaces specific to your sector. For example, if you’re looking to create superhero-themed stationary like postcards and greetings cards, you should carefully look at what current examples are on sites like Etsy and Folksy. This will give you an insight into what kinds of products are selling well, and how to price a product in this category.
Listen to the market
Both search engines and social media platforms can let you listen in on what your potential customers want from businesses in your chosen sector.
Use Google Trends to see what kinds of search terms are being used in relation to your sector
Read Google and Trustpilot reviews of rival businesses to see where they’re winning praise, and where they’re falling short.
Follow hashtags related to your sector on sites like Instagram and X (formerly Twitter) to see what kinds of products and services people are excited about
3. Decide on your business structure
Every business must be run according to the rules of a specific legal structure. There are three main ones which most entrepreneurs adopt.
Sole trader
This is the most straightforward legal structure, with the least amount of paperwork required. That’s because, as a sole trader you effectively are your business.
Your official responsibilities as far as the government is concerned are limited to registering with HMRC, submitting your annual tax returns and paying whatever income tax is owed.
The simplicity of the sole trader structure is appealing to many entrepreneurs who just want to get on with running their business. But there are some potential drawbacks to the structure to be aware of.
One is that there’s no legal separation between you and your business, so you’ll be personally liable for any losses or debts that are incurred. The other is that some companies won’t do business with sole traders – this can be an important consideration if you’re intending to provide professional services for larger clients.
Partnership
This is much like the sole trader structure, except that more than one person will be running the business. So it can be a good option if you’re going into business with one or more friends.
Each of you will have to submit your own tax returns, but a designated partner must also submit a tax return for the partnership itself. As with being a sole trader, all partners will be liable for losses and debts incurred by the business.
Limited company
Setting up a limited company is a great choice if you want extra financial security, because it will legally separate you and your business, and you won’t be personally liable for any business debts.
What’s more, limited companies are often regarded as more prestigious or credible, especially in the eyes of corporate clients. So, depending on your line of work, being a limited company may be important in order to “keep up appearances”.
This is the most complex of the three main business structures, involving more official steps. Your business must be registered with Companies House, you’ll have to pay Corporation Tax on business profits, and there are other regulations regarding business practices that must be met.
4. Write a business plan
Before you go ahead and get the ball rolling on your business, you may want to sit down and write out a detailed business plan. Doing this can help clarify your ideas and give you a reference point you can return to as the business gets underway.
Wondering how to write a business plan? It’s just a matter of firing up a Word document, or simply getting a pen and notepad, and recording all the salient details in a methodical way.
You’ll want to ensure it contains:
A general summary of the business idea
A summary of your findings on the business sector and its existing businesses
Details of your starting budget and what you will spend it on
A look ahead at projected revenues and overheads
Details of your marketing strategies, including your thoughts on how to use social media for small business success
FAQs
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