Skip to Main content

Starting a Business with no Capital

December 16, 2019

As an advisor, I see many businesses of all shapes and sizes. Typically, when I meet with a startup venture the main topic of discussion is financing. 

There are many great ideas out there that could offer up a quality of service that some and many of us could enjoy. However, like many ideas, it takes not only an innovative and well thought out plan but some capital as well. There are however ways to reach your goal of one day owning your own business. This may mean taking your idea and reverse engineering your path to success. Many entrepreneurs share a similar trait, which is dreaming big. Yet everything we now know as being a market disruptor and leader in their market once started incredibly small. I do not have to name those companies but I am sure you can think of a few that started in someone’s home or garage.

Starting a very small business requires a lot less capital than if you decided to open up that major retail storefront you are dreaming about. Finding funding for it also becomes a lot more achievable as well. The first source of funding I always ask a client when we are talking about capital is his or her own income. This can come in the form of savings or even assets that can be turned into cash. Second, we talk about borrowing money from family and friends. Not everyone is excited about this idea but in some cases borrowing money from family and friends is a lot more secure because you will not incur interest or late fees as you would with a normal financial institution. On one occasion, I met a young couple that wanted to start flipping homes in the local market. They started by creating a three-year savings goal to put that money down on the small property to flip. The cost of materials were put on a personal loan with a local hardware store. A few years later, they are now flipping bigger homes and using the profit from the sales to fund more purchases.

Selling online can also be a great way to lower your initial capital investment because you will not incur the same type of costs that brick and mortar stores typically have to deal with. However, this does mean you have to become familiar and comfortable with using a computer and the internet for that matter. Some sites offer a print on demand service where you can upload premade a design to print on merchandise that you can then list on an e-commerce site. The print on demand company handles the printing, packaging, and shipping of your product for a percentage of the sale.

Some small businesses, however, require a bit more financial investment to get started. I see this often in the food industry. Yet there is a creative way to get started with little capital as well. A few clients have launched catering businesses as their initial way of saving money to eventually open a food truck or small restaurant. Yes, it takes patience, hard work, and time but it also allows them to learn valuable lessons in the food industry such as the costs of goods, customer service, consistency in quality, and pricing.

 “Business Tips” was written by Alejandro Castañon, Certified Business Advisor of Angelo State University’s Small Business Development Center.  For more information on the topic of this article or the services of the ASU · SBDC, contact her at