Do you want to start your own small business, but are stymied because you don’t have tens of thousands of dollars to invest? But the truth is there are a number of in-demand small businesses you can start that won’t break the bank.
Here are five small businesses that will cost less than $20,000 to get off the ground:
Small businesses you can start for under $20K
1. Children’s enrichment services
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As school budgets continue to be slashed, the beleaguered public school system can no longer offer many of the free student services it once offered. There’s huge opportunity to be had for small businesses catering to parents who will pay anything to give their kids the academic edge.
Tutoring services are in high demand, and some of the top ones bring in nearly $1 million a year. You can start your own tutoring service with just a few thousand dollars. Your biggest cost is marketing; it’s important to market your services directly to parents. Word-of-mouth is a prime driver of this business, so spread the word through local school systems and parent-teacher organizations. For added incentive, offer discounts to those customers who refer other parents to your business.
It might pay to specialize, targeting specific subjects or grades. There’s a big demand for SAT tutors at the high school level. Tutoring revenues are expected to grow in the 5-7% range next year.
2. Senior transition services
Sometimes referred to as “senior relocation” services, this is a hot business that’s sure to get hotter as the massive baby boomer generation continues to retire. This business provides services to senior citizens and their family members, all revolving around helping seniors move to a new home or into a senior care facility.
Some of the services include finding a new living situation for the senior (often involving research on assisted living facilities), packing up their existing home, selling or otherwise disposing of unwanted personal items, setting up the new home, and more.
Your customers could be as close as your neighbors, but also you can approach “family advisors” such as attorneys who specialize in senior issues, financial planners, and clergy members.
Again, the startup costs here are low, and mostly involve marketing expenditures. You’re likely to log a lot of miles on your vehicle, however, so make sure it’s in good working order.
3. Green consultant
Helping people go green is big business—$18 billion big. Green consultants generally specialize in helping either private individuals or business go green.
If you choose to target consumers, remember that people are still thinking with their wallets. They are interested in making their homes more energy-efficient because of the promised money savings, so make that a central part of your sales pitch.
Many small and midsized businesses are interested in going green as well, but often don’t have the internal know-how or infrastructure to do so. Many companies are looking for affordable green packaging solutions, in many cases because consumers are demanding it.
There are a lot of government incentives out there, so both consumers and businesses are motivated to get greener.
4. Translation services
The demand for translation services is booming. Business owners in this field saw revenues rise more than 18% in the last year. The primary market for translation services today is the federal government, health care professionals, and businesses interested in importing and exporting.
You don’t need to be multilingual as you’ll be hiring translators and managing their work. In the beginning, hiring independent contractors rather than employees will save you a lot of money.
5. Mobile food service
Food on wheels has become a huge business in the last few years, and this is hardly your father’s roach coach. These days, we’re talking gourmet goodies like creme brulee, Kobe beef burgers, Korean barbeque, or even good old comfort food staples like cupcakes and grilled cheese. The trend is so big that many big food franchisors are now dispatching their own food trucks.
The key to a low-cost startup is getting a used vehicle that you can fix up. (One Seattle-based entrepreneur rehabbed a used Airstream.) Your other costs—marketing (mostly done on social networks like Twitter) and labor—are almost non-existent, unless you launch with a fleet.
Don’t overlook good, old-fashioned food carts either, which you can purchase used for around $2,000. In the right venue, you can really clean up with these. I know one entrepreneur who makes about $200,000 a year selling cotton candy from a cart.
Yes, there are small businesses you can start for under $20K
There are plenty of low-cost ways to start your own small business. I’ll be featuring more of them in future columns, so stay tuned.
FAQs about starting a business with $20K
Below we have summarized the most important questions and answers on the subject.
What types of businesses can I start with $20K?
- Children’s tutoring and educational services
- Senior transition services
- Green consultant
- Translation services
- Mobile food service
- Which businesses are easy to start?
The easiest and cheapest businesses to open are ones with low startup costs that don’t require a high upfront investment in equipment or real estate. Online businesses, consulting businesses, and food cart-type businesses are easy to get started in without a large initial outlay of money.
