16 Businesses You Can Start on a Budget in 2025

How to start a business on a budget: a step-by-step guide

Starting a business involves more than just having a great idea—it requires transforming that concept into a legal entity that can operate, generate revenue, and protect your personal interests. While specifics can vary based on your industry and circumstances, there are some basic steps that can help ensure the legal and financial success of your business.

Step 1: Choose a business idea

All successful businesses start by identifying a viable opportunity that matches the owner or operator’s skills, interests, and market demand. Start by considering your personal strengths and experience—service-based businesses often require minimal startup capital because you're monetizing your existing skills and knowledge.

Then, conduct market research on your target audience's needs, common complaints, and willingness to pay for solutions. Use tools like Google Trends, social media monitoring, and competitor analysis to validate your concept before investing significant time or money.

Pay attention to emerging trends that could create a new business opportunity. For example, remote work has increased demand for virtual services, while environmental concerns have created markets for sustainable products and services. Often, successful businesses solve a problem for specific customers, rather than trying to appeal to everyone.

Step 2: Write a business plan

A well-crafted business plan guides your company's development and can also help secure funding and attract partners. Your plan should include the following:

• An executive summary
• Market analysis
• Organizational structure
• Service or product descriptions
• Marketing strategies
• Detailed financial projections for at least three years

Start with a simple one-page business plan if you're feeling overwhelmed. Include your value proposition, target market, key activities, revenue streams, and cost structure. The U.S. Small Business Administration offers free resources, including free business plan templates, that can guide you through this process step-by-step.

Step 3: Consider funding options

While many businesses can start with minimal capital, funding can help accelerate growth and provide a safety net during challenging periods. Luckily, there are options even if you’re cash-strapped.

• Self-funding or bootstrapping remains the most common approach, allowing you to maintain complete control while proving your concept with minimal risk.
• Traditional small business loans from banks and credit unions offer competitive interest rates but require a strong credit score and detailed business plan. SBA loans can be more accessible to new entrepreneurs due to their SBA-backed guarantee.
• Raising money through crowdfunding platforms (Kickstarter, Indiegogo), angel investors, or revenue-based financing is another lower-risk option, but can be competitive and require you to put time and effort into pitching your business.
• Grants work like loans but are typically considered “free money,” meaning they do not need to be paid back. Grants can be highly competitive and are often narrowly focused on specific demographics or sectors. For instance, you may be able to get a grant specific to your state, gender, race or ethnicity, industry, or veteran status.

Each option has different requirements, timelines, and implications for your business ownership. For more detailed guidance on securing funding, review our comprehensive guide on how to get a small business loan.

Step 4: Build your brand and online presence

Your brand identity and online presence are often the first impressions potential customers have of your business. However, before you choose a name and invest in your online presence, make sure your business name is available in your state. Most states won't allow you to register a business under the same name as another existing business in the state. You can also use our business name generator to explore available options.

Once you have a business name, secure it across all relevant platforms—domain names, social media handles, and through trademark protection, if appropriate. Create a professional website that clearly communicates your value proposition, showcases your products or services, and makes it easy for customers to contact you or make purchases.

Basic website builders like WordPress, Squarespace, or Wix make it possible to create professional sites without technical expertise. Ensure your website is mobile-friendly and optimized for search engines. Then, establish your presence on relevant social media platforms. Focus on providing value through helpful content rather than constant sales pitches. 

Step 5: Register your business and choose a legal structure

Your choice of business structure affects your personal liability, tax obligations, ability to raise capital, and operational complexity. Most new businesses choose between sole proprietorships, LLCs, or corporations, each offering different advantages and requirements.

LLCs have become increasingly popular because they provide personal asset protection while maintaining operational flexibility and favorable tax treatment. Unlike corporations, LLCs don't require formal board meetings or extensive paperwork, making them ideal for small businesses and solo entrepreneurs. The process of starting an LLC typically takes just a few days and costs between $50–$500, depending on your state.

Once you've chosen your structure, register your business name, obtain an employer identification number (EIN) from the IRS, and file the necessary formation documents with your state. Each state has different requirements and fees, so research your specific obligations carefully or work with a professional service like LegalZoom to help ensure paperwork is filed correctly and on time.