Business Knowledge Hub

8 tips to start a business with no money

If you believe in your business idea and you’re prepared to work your socks off to make it happen, lack of capital shouldn’t prevent you from bringing your entrepreneurial vision to fruition. That’s why we’ve compiled our eight hottest tips to help you start your business with no money.

Don’t get us wrong: a generous team of investors, a healthy credit line or an ancient great-grandmother with deep pockets will make launching your business easier — but there are other ways you can get started.

1) Build up savings for expenses

It’s natural to recoil at the prospect of dipping into your savings, but it’s a common practice amongst entrepreneurs.

When you design your business plan, be frank about your realistic expenses and revenue, as well as how long you expect it will take for that revenue to start rolling in. Every business is different, but doing what you can to save up a few months’ worth of living and business expenses will let you devote yourself to your business without immediate financial anxieties.

2) Source funding

A lack of access to funding is one of the main reasons half of new businesses fold within five years. If a shoestring budget is greatly impacting the growth of your business, you might consider looking for funding — and there is a wide array of potential sources.

Apply for a small business loan

A small business loan can be used for almost any purpose, including as a source of working capital, a means of purchasing equipment or a way to fund premises, buy stock and training. You can apply for a small business loan with a bank or online lender.

Friends and family

Remember, you are not requesting charity, and you’re not asking your nearest and dearest to fund some half-cooked harebrained scheme, either.

Show them how much your business means to you and how solid your plan is. Furthermore, encourage their feedback and even practise your sales pitches on them.

When you’re finally ready to launch, see if anyone will help you out with a small loan. We all need to ask for help from time to time, and your friends and family will be proud of what you’re trying to achieve.

Borrowing from friends and family is not always possible, and so you may look for different funding opportunities.

Small business grants

Grants are the most sought-after form of funding because they are non-repayable. They are usually given for a particular purpose or project, such as expansion, employment or property improvements, and can come from local sources as well as regional, national and even continental.

Every small business grant comes with its own set of guidelines and eligibility criteria, and some have lengthy application processes because of the high levels of competition. If you believe in the profitability of your business, however, there’s no reason you shouldn’t be a good candidate.

To help budding entrepreneurs, we’ve compiled a list of over 200 small business grants available across the UK as a starting point to find funding.


Crowdfunding platforms such as Kickstarter have changed the face of raising capital. Members of the public can now easily invest in businesses in exchange for a future buy-in or other rewards.

Now more than ever, budding entrepreneurs can appeal directly to their consumer base, both current and potential, and see their business flourish through the strength of community spirit.

Establish a credit line

A lot of banks and credit institutions offer start-ups a credit line that is a form of borrowing that could help with growth in the early stages of a business. A line of credit is a type of loan that doesn't just give one lump sum of funds in the way a traditional loan does. Like a credit card, you use credit when you need to pay for something that is financially out of reach. Just make sure you keep purchases to a minimum during this time, otherwise you risk becoming bogged down in debt.

Angel investors

Angel investors are high-net-worth individuals who provide capital for start-ups. They are usually amongst the first people external to the company to do so. Unlike venture capitalists and outside firms, angel investors fund businesses from their personal wealth.

They often make excellent mentors, too, as many are former or current entrepreneurs themselves. Just think Peter Jones and his fellow Dragons.

3) Aim to keep your job

This might not be the right option for all new businesses, but keeping your current job could be the right choice if you are looking to start your business initially as a part-time venture.

There’s no escaping the fact that starting a successful business with no money is going to take up a huge chunk of your free time. Even so, along with bolstering your savings, you should nonetheless endeavour to keep your job for the time being.

The fact is, if you’re starting a business with no money, you need a steady source of income in your life. By retaining this stability, you’ll be more secure down the line when you need to take a risk or two with your finances. If your business doesn’t take off as you’d hoped, you’ll still have your job and income to tide you over until you can revitalise your plans.

4) Get feedback

It’s important to get an objective third-party view on your business plan from individuals who know the market well. You can also acquire feedback by trialling your product or service.

Consider running a small-scale pilot amongst your target demographic to see their responses. These insights into what’s working and what you’ve overlooked could prove invaluable in the long run.

5) Consider business incubators and accelerators

If your business plan is solid and ready to go, a business incubator may provide you with funding specifically designed to assist start-ups. Furthermore, some incubators offer shared administrative services and serviced office spaces. Many incubators are sponsored, some by colleges and universities, some by local or regional economic development organisations.

A business accelerator is similar to an incubator in that it can provide you with funding. As the name suggests, though, an accelerator expects a rapid response to its investment. An accelerator is intended for businesses that are more established, compared to an incubator which aims to help businesses at an earlier stage.

Consider a business accelerator only if you’re certain your business is ready to hit the ground running.

6) Understand your market

What makes your business idea unique? What differentiates you from your competitors? How hard would it be for a rival with significantly more capital to simply copy your model and repackage it as their own? Be aware of what regions offer good business opportunities and understand the opportunities in your area. Read our guide on the best business regions to start a business to find out more.

Make sure you identify trends and challenges in the market — then work out how you’ll address them so that the business will become — and remain — profitable.

7) What can you do — and get — for free?

It often comes much more naturally to us to identify obstacles than opportunities. Starting a business with no money is daunting, but take a moment and think: what do I already have right in front of me? What resources are at my fingertips and won’t require me to spend a single penny?

If you need a change of scenery, find a café or library with free Wi-Fi (and ideally a good range of coffees!), and become a regular. If your business idea requires equipment you can’t afford right now, platforms such as Gumtree, Craigslist and Facebook Marketplace allow users to offload unwanted items — which you’ll often be able to pick up for free. Freecycle is a fantastic grassroots non-profit platform where people ‘recycle’ underused possessions by passing them on to those who will value them more.

The web is an oasis of free resources if you take the time to do your research. Sites such as Canva enable you to design your own marketing materials, and a simple Facebook page could be all you need to trade locally for the time being.

Free website builders such as Wix are great places to start if you’re set on having your own online domain. And as for social networking, well — you might just be astounded at the sheer volume of trade you can generate with some savvy social posts.

Networking is an integral part of growing a successful business. The National Enterprise Network and Meetup often hold free creative and business development events.

Furthermore, the British Library Business and IP Centre has an unrivalled wealth of events and resources for start-ups across the UK.

8) Roll up your sleeves

There is no shortcut to success, no matter how persuasively those pop-up ads might try to convince you otherwise.

No matter how brilliant your business plan, it will never amount to anything if you aren’t prepared to sweat, and work hard to make your business idea a reality.

It can be thankless work, but this grit and austerity will help you build up cash reserves. Without capital, you’ll be unable to invest in bigger and better equipment, premises and talent, and you’ll struggle to nurture your business from acorn to oak.

You can create a successful business

The success of your business is not contingent on how much capital you start with. It is contingent on the attitude you adopt from the get-go. You’ve got to be tenacious, hardy and stubborn in the face of adversity. You might not receive your first pay cheque for a while but, nothing will taste sweeter when you do.

Written by Peter Adams

    Published on 04-03-2020

    Updated on 02-04-2020

Peter reports on a number of areas in the personal finance sector, with a particular interest in supporting businesses and individuals in the UK services industry.

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