8 Best Businesses to Start With Little Money in 2025 + Tax Tips

The best business to start with little money typically involves leveraging the skills and experience you already have to provide a service. There are many service-based businesses, especially in today’s digital age, that you can start quickly and with very little starting capital.

In this article, we’ll explore the factors that make a business easy to start with little money, and we’ll give you some low-cost business ideas. Moreover, we’ll show you how to launch it successfully and tackle the associated tax responsibilities.

Key Takeaways

• The best businesses to start with little money are usually service-based with low overhead and no inventory.
• Some of the best businesses that satisfy these criteria include freelance writing, graphic design, online tutoring, social media management, and affiliate marketing.
• To launch a business successfully, start small and scale gradually, reinvest your earnings, automate repetitive tasks, and practice good record-keeping.
• When running a business, you’re responsible for self-employment taxes, and you can take advantage of tax deductions, especially in your first year.

What Makes a Business Easy to Start With Little Money?

Businesses that are easy to start with little money often don’t involve big investments in physical items or inventory. They allow you to use the skills you already possess without having to take on more debt.

Here are some of the most common characteristics of the best businesses that are easy to start with little money:

• Low overhead. A good business to start with little money is one that doesn’t require big commercial offices, storage spaces, or expensive utilities. It’s the one you can start with the space and tools you already have.

• Little to no inventory. Being able to leverage the skills you already have to provide services allows you to start with minimal upfront investment. You should avoid selling physical products that you’d have to purchase first.

• Flexible and scalable. A good business model is one that lets you start alone and with a single client, but has the potential to expand down the road.

• Skill-focused. Since you don’t have a lot of capital to invest in your business, your primary asset is your skill (e.g., writing, designing, marketing).

• Can be operated from home. If you can work from home, you don’t need to pay rent for office space. Therefore, you have no expenses associated with maintaining another location.

• Online model. Having a digital business allows you to tap into the global market and reach a vast number of clients without having a physical location or storefront. Online marketing can also be cheap and effective, e.g., organic channels like social media.

8 Best Businesses to Start With Little Money in 2025

According to the U.S. Chamber of Commerce, 78% of small business owners use their own funds to kick off. Let’s see what you can start and succeed in without having to invest all of your savings.

#1. Freelance Writing

Freelance writing involves creating written content for businesses and individuals. The types of content can vary significantly, ranging from blog posts and website copies to emails, social media content, and scripts for videos.

This is one of the best businesses you can start with no money, as all you need is a computer and an internet connection. If you have some starting capital, you can invest $100–$200 in a portfolio website, a domain, and specialized software.

Income potential varies based on skill, experience, and niche. However, the majority of freelance writers earn between $42,500 and $54,500 annually, charging their services through writer invoices.

#2. Social Media Management

Social media managers handle accounts for their clients on various platforms. Their job involves creating posts, scheduling content, responding to comments, and engaging with the audience to help brands and professionals grow a following.

This is a growing profession with many opportunities. A recent survey from the SBE Council revealed that 91% of small businesses market or sell across more than one channel. Social media and business websites lead the way as the most frequently used platforms, while instant messaging apps and in-person events round out the mix.

It’s another line of work where you can start with zero dollars. However, if you have between $100 and $200 to spend, you can purchase design software, scheduling apps, and automation tools that can help you be more productive. Income potential ranges between $25 and $40+ per hour.

#3. Graphic Design

Graphic designers create aesthetic and engaging visual content for businesses. They can design logos, web pages, brand kits, posts for social media, visuals for ads, ebook pages and covers, and more.

A typical cost of starting this business is in the range of $100–$300. This amount should cover your design software, portfolio site, and domain. However, the costs can be higher if you need specialized equipment, such as a drawing tablet. As for the graphic design invoicing, these professionals charge $27 per hour on average. However, this increases depending on the individual skills and project requirements.

#4. Online Tutoring

Online tutoring allows you to leverage existing knowledge and expertise to teach students across the world. It’s a growing profession due to a global shift toward remote learning and online upskilling. As a result, there are teachers for every topic you can think of, ranging from math and science to music and language.

Startup costs for this type of business are extremely low, as all you need is a computer, an internet connection, and a webcam. Any additional funds can be spent on teaching materials and online communication platform subscriptions (e.g., Zoom Pro).

Online tutor salaries range from $25,500 to $46,500 annually, with most earning around $36,000. Of course, this depends on the experience, subject expertise, and workload.

#5. Affiliate Marketing

Affiliate marketing is based on earning a commission when promoting products or services from other companies. This is typically done by sharing unique links in your blog posts, social media content, YouTube videos, or email newsletter.

This business model has a low startup cost that ranges between $50 and $200. Most of that goes to your website and hosting, while marketing can be done for free via social media platforms.

Affiliate marketing has the potential for high income, though it often takes longer to start earning than other business models. With commissions often ranging 5% to 30%, expect to earn anywhere from a few dollars per month to a couple of thousand.

#6. Virtual Assistant Services

Virtual assistants (VAs) provide remote support to their clients. Their job typically involves performing administrative, technical, and creative tasks that encompass anything from scheduling social media posts and uploading website content to managing emails and keeping records.

You can become a virtual assistant with no upfront investments, as long as you have a computer with an internet connection. Depending on your niche, you may need to purchase specialized software or undergo paid training, which can typically be done for under $500.

The annual income of virtual assistants is in the range of $42,000–$67,000, depending on the skills and the tasks performed.

#7. Pet Sitting and Dog Walking

Pet sitting and dog walking are some of the best businesses to start with little money for animal lovers. They involve taking dogs for daily walks, caring for pets when their owners are away, and transporting pets.

Startup costs for pet sitters and dog walkers can be around $500 for small-scale, home-based operations. This should cover basic supplies, insurance, a website, and a booking system.

These professionals can expect a median annual salary of $32,500, with the amount depending on the rates in their location.

#8. Handyman Services

Handyman services encompass various repairs and maintenance. These can range from doing minor plumbing and electrical work to painting and assembling furniture or rendering services like general repairs in houses and apartments.

Starting costs will vary depending on the tools you already own, but often range between $1,000 and $5,000. This should cover the cost of basic sets of professional tools, a reliable vehicle, required insurance, and entry-level marketing.

Handyman income depends on the type of work and experience. Currently, according to Glassdoor, the median annual salary is $59,000.

How to Launch a Low-Cost Business Successfully

To launch a low-cost business successfully, you need to be focused and strategic with your efforts.

Here are the key aspects to consider:

• Start small and scale gradually. Instead of trying to do everything for everyone at once, focus on one service and take on the number of clients that you can handle. Then, scale and expand slowly as you become more proficient.

• Reinvest your earnings. In the early stages, reinvesting a large portion of your earnings can help you improve the speed and quality of your work. Plus, you should spend more on marketing to get more customers.

• Automate administrative tasks. Use technology to leverage repetitive tasks (e.g., invoice automation) and free up valuable time to grow your business and increase your revenue.

• Stay organized with records and taxes. Keep meticulous records of all income and expenses from day one. Make sure to use a separate bank account for your business so that you can stay on top of your finances and ensure accurate tax filing.

Tax Responsibilities When Starting a Low-Cost Business

Now that we’ve explored some of the best small business ideas for beginners, let’s learn more about your tax responsibilities to help you avoid making common errors that can cost you.

Self-Employment Taxes 101

Self-employment taxes (which also include freelance and side hustle taxes) require more effort than taxes associated with traditional employment. In essence, you must file a federal tax return if you make more than $400 in net self-employment income.

These taxes consist of Social Security and Medicare taxes, which you’re paying in full, since there’s no employer to cover half of the cost. As a result, the total self-employment tax rate is 15.3%, which stems from 12.4% for Social Security and 2.9% for Medicare.

Moreover, since taxes aren’t withheld from your paycheck, you are typically required to pay quarterly estimated taxes in April, June, September, and January.

Tracking Business Income from Day One

Tracking business income from the day you start operating is critical to ensure tax compliance, file a correct tax return, and avoid penalties.

If a single client pays you more than $600 in a year, they’ll send both you and the IRS a Form 1099-NEC. However, you must keep all client payment records, as you need to report all income, even if it comes without a Form 1099.

Apart from 1099 income tracking, monitoring your revenue and expenses gives you an accurate picture of your business’s financial health.

Tax Deductions You Can Claim as a Beginner

As a beginner starting a business, you can claim various tax deductions to lower your final tax bill and keep more of your earnings, which is invaluable for startups.

Common tax deductions include:

• Home office deductions include a portion of mortgage interest, insurance, utilities, and repairs.

• Equipment and software, including the cost of a computer and subscriptions.

• Business mileage, if you’re using a personal vehicle for business purposes.

• Startup costs tax write-offs, since the IRS allows you to deduct up to $5,000 in your first year of business.

• Advertising and marketing expenses, including website hosting, online ads, and business cards.

How Paystub.org Helps You Manage Your New Business Income

At Paystub.org, we developed several feature-packed tools that you can use to generate essential business and tax documentation.

If you’ve only started your business, you’ll likely use our:

• Invoice generator to bill clients and optimize your cash flow.
• Form 1099 generator to document payments to subcontractors, in case you expand your operations.

Once your business grows and you start hiring employees, you’ll need:

• Pay stub generator
• Form W-2 generator

Final Thoughts

The best business to start with little money will depend on your skills and present circumstances. In general, you should look for a service-based line of work that requires no inventory and can be done from home.

Keep in mind that you’ll be responsible for self-employment taxes, which means diligently tracking your income and expenses. Lastly, make sure to deposit estimated quarterly payments to comply with the IRS rules and avoid a hefty tax bill at the end of the year.

Best Businesses to Start With Little Money FAQs

#1. What is the easiest business to start with little money?

The easiest businesses to start with little money are typically service-based businesses that you can do from home with minimal funds needed to start. Some examples include freelance writing, virtual assistance, graphic design, and pet sitting.

#2. Is $5000 enough to start a business?

Yes, $5000 is enough to start a business, especially if you’re providing a service and working online. The exact type of business will depend on your skills and experience, but that amount of money can usually help you cover the essential startup costs until you start generating revenue.

#3. Do I need to pay taxes if I make less than $600?

Yes, you need to pay taxes, even if you make less than $600. The tax filing threshold for net earnings from self-employment (e.g., side hustles and freelancing) is $400 in a year. The $600 figure represents the amount after which a client needs to issue you a Form 1099.

#4. Can I deduct startup costs on my taxes?

Yes, you can deduct startup costs on your taxes in the amount of up to $5,000 in the first year of doing business. However, if you spend more than $55,000 to start your business, you’ll amortize your costs over several years instead.