Are you looking for low-cost business ideas with high profit margins?
If you're reading this, chances are, that's what brought you here, so I'll get right into it.
Coming up with profitable business ideas isn't necessarily the problem for most budding entrepreneurs.
However, the outrageous startup costs can prevent you from owning a business, even with a great idea.
Think about it.
Before you can get your business up and running, you will need to consider things like rent, hiring employees, equipment, licenses, and website hosting fees, to mention but a few.
Worse still, small business loans are difficult to secure, especially for startups.
Despite these challenges, you can start your own business without leaving a hole in your budget.
To help, I've compiled a list of 27 low-cost business ideas that you can pursue.
These are great business ideas with the potential to rake in massive profits.
The best part?
All of them require very little capital to start and will allow you to showcase your entrepreneurial skills while saving your sanity.
Let's take the plunge.
First things first, though.
What Are the Best Low-cost Business Ideas with High Profit Margins?
Sure, there are many profitable business ideas you can grow with just a small upfront investment.
Still, the best low-cost business idea should meet the following criteria.
It should allow you to get started without the need to buy expensive equipment, lots of stock, or rent an office.
It should be a business idea that you can scale over time. One that grows with you. Put differently, you only need to put in the hard work, reinvest and expand the business as profits start to trickle in.
It should offer a swift transition to your current hustle. For instance, you can have specific skills or assets that can enable you to start your business. Thus, you don't require training or hiring outside assistance to launch.
You can start your low-cost business as a part-time job or side hustle if you're employed. That way, you'll have your regular income and can go full-time when things start to look up.
That said, here's my roundup of the best ideas with high-profit margins.
After several years of growing this blog from scratch and turning it into a profitable business, here's my honest opinion.
Blogging can be incredibly fun and a lucrative business idea.
It is pretty easy to generate an extra $500 to $2,000 per month with a blog in your first year. And then, in years two, three, four, and five, you can increase your revenue significantly.
According to Glassdoor, the average blogger's salary is well over $32,800 per year. In fact, I know full-time bloggers making over $200,000 per month working 20 to 30 hours per week!
But, how much do you need to start a blog?
How do blogs make money?
While blogging is a low-cost business idea, how much you can generate with your blog depends on the amount of traffic you're getting and your monetization method. Some of the ways you can make money online via blogging include:
- Direct display ads
- Google Adsense
- Brand partnerships
- Paid content promotion
- Book deals and more.
2. Affiliate Marketing
Did you know that 81 percent of brands have an affiliate program?
And, because it requires little to no upfront costs, affiliate marketing business is one of the best online business ideas if you're on a tight budget.
According to PayScale, the average annual affiliate passive income is $51,217 per year. The top 10% of affiliate marketers take home around $71,000 per year, while the bottom 10% rake in $37,000.
How does affiliate marketing work?
The affiliate marketing business involves referring to a product or service by sharing it on your blog, website, social media, or podcast.
You'll then earn a commission each time your target audience buys the product or service via a unique link in your recommendation. Other ways to promote affiliate programs include content marketing and display ads (such as display banners).
While commissions payouts can vary from one program to another, I suggest looking into high ticket income affiliate programs with automated recurring commissions.
Speaking of high ticket affiliate programs, be sure to check out my collection of 37 affiliate programs you can promote for generous commissions.
3. Selling Online Courses
Online learning is the in-thing these days. With the eLearning market projected to exceed $300 billion by 2025, selling online courses is an incredible way to launch your own business without burning through your wallet.
The best part is that anybody can create and sell online courses. All you need is enough knowledge on a specific topic and the ability to speak about it with passion.
Keep in mind that having expert knowledge means that you have better-than-average information. Still, you don't need to have traditional credentials.
Also, you can create course content by repurposing your existing content like:
Reusing your already existing content enables you to reduce the production cost while increasing your ROI.
Some of the upfront costs you're likely to incur to create online courses include editing software and, of course, your time.
Many online courses cost anywhere from $5 to $2,000. While you can sell your first online course for $50 to $200, you can increase the value (and the price) over time by offering bonus materials and using upsells.
4. Amazon FBA
Amazon FBA is a low-cost business idea that will have you generating profits without having to worry about things like storing, shipping, or handling your inventory.
As a new Amazon seller, you can pull in $100 per month in profits at 10% margins. While this is nothing to scoff at, you'll be taking home $1,200 in passive income per year.
Of course, most sellers generate much higher margins. Nearly 52 percent of sellers report margins between 16 to 50 percent which translates to about $2,000 to $6,000 per year. If you maintain a 30$ profit margin for your Amazon FBA business and aim for a minimum of $5,000 per month in sales, you can make $18,000 annually without breaking a sweat!
So, how does Amazon FBA work? Here's how:
Start by identifying the product you want to sell.
Create a free Amazon seller account.
Create your listing and choose "Fulfilled by Amazon."
Ship your merchandise in bulk via the Amazon fulfillment center.
Amazon will ship the product to the respective customer when you make a sale. It'll also handle any returns and customer care.
Amazon will pay you every two weeks, deducting handling and storage fees.
While Amazon is one of the best low-cost business ideas with high profit margins, taking an Amazon FBA online course is an excellent strategy to gain an edge.
Dropshipping is a great business idea if you're looking for a low-risk business model that enables you to sell merchandise to your target customers without incurring the same costs a wholesaler would.
Thanks to these lower costs, dropshipping is a profitable business idea that allows you to break even than most business models.
How does dropshipping work?
Well, dropshipping, its core, is an order fulfillment model that doesn't require you to stock inventory. Instead, you'll have your own online store, and when you sell a product, you'll pass on the sales order to a third-party supplier who then handles the shipping.
The average dropshipping profit margin is 15 to 20 percent. The margin can vary significantly depending on your niche and the average cost of your goods. To make some good money, try to aim for a 20% or higher profit margin.
You can also use tools like Sellvia to help increase your customer retention and satisfaction rates.
Check out my Alidropship review to discover how you can leverage the platform for your dropshipping business.
Even though the income varies from one dropshipper to another, committed Amazon dropshippers make $1,000 to $50,000 per month.
According to Edison Research, 78 percent of Americans are now familiar with podcasting; that's nearly 222 million people! The adoption is similarly widespread worldwide, with over 400 million people listening to podcasts every month.
Contrary to what you may think, you don't need to be a technical person to become a podcaster. You don't even require a lot of money.
Podcasting is one of the most lucrative businesses if you can get the following basics right:s
Identify a theme. Choose a theme you're passionate about and one that you can comfortably make new episodes a couple of years from now.
Determine your podcast's goal.
Identify the "why" behind your podcast.
Determine your target audience.
Identify things that'll make your podcast stand out. One of the best ways to stand out is to niche down.
How do podcasts make money?
Well, there are several ways you can make money as a podcaster, including:
Selling complementary products
While podcasting is one of the most profitable business ideas if you don't have a huge upfront capital, having a large listener base is crucial to how much money you can make. So, choose a topic that can allow you to attract a large listener base.
Just to give you an estimate of how much you can make as a podcaster, if your podcast has about 10,000 downloads per episode, you can potentially make $500 to $900 in affiliate sales.
According to Forbes, Joe Rogan, one of the most successful podcasters, is estimated to make over $30 million per year.
7. Freelance Jobs
When it comes to freelancing, there are several different types of work. Normally, the more technical a field is, the more you can earn as a freelancer in that profession.
The average hourly rate and annual salary for high demand freelancing jobs are as follows according to CNBC:
Writers - On average, you can charge between $30 to $40 per hour as a freelance writer, taking home about $42,000 per year.
Editors - On average, freelance editors make $25 to $35 per hour, with an annual salary of about $40,000.
Online marketers - You can earn $50 per hour as a freelance digital marketer or a Search Engine Optimization specialist with a yearly salary of about $100,000.
Transcribers - Freelance transcribers earn $2o to $25 per hour with an annual salary of around $32,000.
Data analysts - A freelance data analyst makes $55 to $65 per hour, translating to $100,000 per year.
Other high demand freelance jobs include:
While freelance jobs are some of the most profitable businesses, earnings may vary depending on:
Your reviews and proven deliverables
Education and training
The primary reason freelancing jobs fit under low-cost business ideas is that all you need, in most cases, is a laptop (or desktop) and a stable internet connection to get started.
Some of the best online platforms for freelance jobs include Upwork and Fiverr.
8. Social Media Management
Social media has evolved into an affordable, efficient and crucial marketing strategy for big and small businesses.
And, because many businesses are struggling to keep up with multiple messages across their social media accounts, they're hiring experts to take care of things.
Starting a social media management company is a good business idea if tweeting, sharing, and pinning are your cup of coffee.
Just like a virtual assistant, you can offer several services as a social media manager, including:
Developing a social media marketing strategy
Setting up social media accounts
Uploading content and images on your client's social media accounts
Increasing the number of your client's followers, and more.
According to PayScale, a social media manager takes home about $$52,326, averaging $35,000 to $80,000 per year.
While you might have difficulty charging top dollar as a startup, the testimonials and referrals that you earn along the way can get you there in the end.
9. Event Planning
Do you have excellent people skills? Are you good at multitasking and a team leader who can keep everyone on track?
Starting an event planning business can be a lucrative venture to earn money if you have these qualities.
To run a successful business as an event planner, your passion for organizing gigs must be incredible. As an event planner, you'll be in charge of orchestrating events for your clients. Specific duties include creating pricing proposals, scoping out venues, coordinating with the main players at the upcoming gig, including speakers, caterers, and vendors.
While you can do a little bit of everything, you can choose to specialize. You can, for instance, start a wedding planning business or go into corporate meetings, product launches, private parties, or business conventions.
Irrespective of which industry you choose, event planning is a rewarding small business and an exciting career choice.
Most event planners charge an average of $16 per hour, averaging $33,000 per year. Still, how much you can make depends on the number of gigs you plan per year, your clientele, and event type.
10. Personal Training Business
Personal training is a multi-billion business. According to IbisWorld, personal trainers grossed over $12 billion in revenue over the last five years, marking a 5.4 percent annual growth rate.
And, with people getting more and more health-conscious, becoming a personal trainer remains one of the best low-cost business ideas with high profit margins that you can go after.
Still, like other small business ideas in this list, you must have what it takes to operate a successful training business.
A good personal trainer must have the appropriate certification, the enthusiasm to train clients, and be a good communicator.
On top of that, you need to be a source of motivation for your client and be patient enough to see your customers through the training process.
The startup costs of this business are relatively low. You'll only need your own website and a robust social media presence.
The best part is you don't have to conduct one-on-one training sessions. You can leverage platforms like Zoom or Skype. You can also consider starting a YouTube channel as a way of generating some passive income with your training videos.
As an entry-level trainer, you can make $25 per hour and scale that up to $100 per hour as you gain the experience.
11. Dog Walking
Dog walking is one of the most profitable small businesses anyone can start without investing a dime, literally!
As the name suggests, this business involves walking dogs, typically around your neighborhood.
Even though you don't need a lot of money to get started, you can easily make $2,000 per month as a part-time dog walker. Full-time dog walkers make an average of $3,500 per month, working five days a week.
It gets even better.
You can combine your dog walking business with pet sitting.
A pet sitting business involves looking after your client's pets while they're away. Key responsibilities include providing food and water, administering medicine, grooming, and providing companionship to the pets.
According to the Bureau of Labor Statistics, pet sitters make an average of $24,990 per year.
To be a good dog walker/pet sitter, you need to be comfortable around animals, possess good communication skills, be responsible and physically fit.
12. Publishing eBooks and Selling on Amazon
Self-publishing on Amazon is one of the best business ideas if you're a creative or an expert who'd like to showcase your art and knowledge to the world.
Apart from being one of the most viable home business ideas, self-publishing on Amazon is super easy.
What do you need to get started? All you require is the passion for exploring topics and covering them in an in-depth and unique way that others haven't. Lucrative topics include recipes, business advice, health and fitness, parenting tips, children's stories, and travel guides.
You get to keep up to 40 to 60 percent of the market price for every book you sell, while Amazon keeps the rest.
The thing I like about self-publishing on Amazon is that you continue earning royalties for a lifetime as long your books sell. Plus, you can update your books and upload changes anytime.
Top self-published Amazon authors make as much as $10,000 per month.
13. Car Wash Business
Landing a spot in my low-cost business ideas roundup is a car wash business.
In fact, this is a great small business idea for anyone who can afford a few hundred dollars. I'm talking about a level one, mobile car wash service.
To make this a successful business idea, you'll need to get the right equipment, most of which is less than $100. Some of the must-haves include:
Sponges - $10
A water supply (monthly cost is $20+)
Signage - $75
Soap - $20
Promotional Flyers - $50
Industrial Wet/Dry Vacuum - $100
Buckets - $10 each
Window Squeegees - $10 each
Chamois - $10 each
Shade Cover - $150
The average rate for a simple hand car wash is $5 to $7. For customers who'd like to self-wash their cars, you can charge them $2 to $3 for a 15 minutes use of your washing equipment.
Suppose you wash 10 to 15 cars a day; you can easily make $70 to $100 daily or an equivalent of $3,000 per month. Now, that's a profitable small business right there!
14. Consulting Business
Do you have expert-level knowledge in a specific industry? Are you, for instance, an expert in the fund-raising field? Or, have you worked in public relations, marketing, or sales for years, and can benefit small business owners with your knowledge?
If so, launching a consulting business can be a profitable idea to pursue.
To run a successful business as a consultant and, by extension, win customers, you need to do more than just teach.
You'll need to perfect the art of sharing your techniques and principles to leave your clients better equipped.
If you're articulate, patient, and a great communicator, you've got this one in the bag.
To get started, you need a website and a solid marketing strategy. You can operate your consultancy firm as a purely online business, delivering services via platforms like Zoom, Google Meet, Teams, and so on to keep the operating costs as low as possible.
Also, you can package your skills into an online course and sell it on platforms like Udemy.
Consultancy happens to be a highly profitable business depending on your industry, with entry-level consultants making $$65,000 to $75,000 per year.
15. Social Media Influencer
Influencer marketing is gaining traction and investment now more than ever before. Consider the stats below:
19 percent of marketers spend $1,000 to $10,000 per year on influencer marketing campaigns while 18% spend anywhere between $100,000 to $500,000 per year. Up to 7% of companies plan to invest over $1,000,000 in influencer marketers.
These figures show that big and small businesses leverage influencer marketing.
How can you get a piece of this cake?
Well, you can become an influencer if you have at least 1,000 followers or subscribers. And, you don't need to invest in anything; simply leverage your popularity and reach to create a profitable business online.
Some ways you can make money as a social media influencer include:
Becoming a brand ambassador
Selling digital products
Hosting webinars on social media platforms
Running sponsored social media posts
You can make a few hundred dollars per month as an entry-level influencer and millions of dollars if you evolve to a top influencer.
According to Vox, micro-influencers, people with (10,000 to 50,000 followers) generate $40,000 to $100,000 per year, making social media influencing one of the most lucrative low-cost business ideas.
16. eCommerce Reseller
Online reselling is one of the unique business ideas you go after if you want to start a profitable online business without bending your budget.
You can leverage marketplaces like Amazon and eBay to reach your target customers. Or you can opt for smaller services offering more niche products like Depop for second clothing. If you're looking for even more low-cost business ideas, you can go local with the Facebook marketplace in your area.
You can also decide to buy and resell affordable used items on online marketplaces. Or, you can buy goods in bulk and resell them on your own online store.
Other equally profitable online business ideas include buying used furniture and flipping for resale or selling your own wares on platforms like Etsy.
The beauty of becoming an online reseller is that it doesn't cost a penny to set up shop. You only pay fees when your items sell.
17. Digital Marketing Services
With the rise of online businesses, starting a digital marketing agency is one of the best business ideas and one that won't cost you an arm and a leg.
While you may need to have skills like search engine optimization, link-building, marketing, and so on, you can sign up for an online course to acquire the skills you need to get started.
If you're cash-strapped, you may consider checking out free and credible resources like HubSpot to learn the basics of digital marketing.
How much can you make with a digital agency?
Your revenue as a digital marketing startup primarily depends on the services you're offering, experience and clientele.
As a starter, you can make $1,000 to $3,000 per month. As you gain experience and win more clients, you can generate upwards of $15,000 in profits per month. Big digital marketing agencies rake in over $500,000 per year.
18. Online Tutoring
Are you a teacher? An expert on a specific topic? Are you passionate about sharing your knowledge and earning money while you're at it? If that's you, online tutoring is one of the several low-cost business ideas with high profit margins you may consider looking into.
And, with thousands of students looking for access to quality online learning experiences, it is pretty easy to land your first batch of clients.
One of the best places to start your search for clients is your local Facebook groups or platforms like eTutorWorld. Simply create an account, fill in your details with your area of expertise, and start engaging students who'd benefit from your knowledge.
You can also combine your online tutoring services with a test prep business. For the latter, you'll help your students prepare for exams by offering educational materials and learning tools to increase their performance on standardized tests.
According to Preply, the average rate for online tutors is $18.30. Still, the rate could be as high as $40 per hour based on the subject of study.
19. Personal Chef
If you love all things culinary, a personal chef career can be one of the best business ideas and potentially lucrative ventures for you.
This type of small business has very low startup costs considering that in most cases, you can use the kitchen supplies and equipment provided by your client.
On top of that, it's a gig with significantly low overheads. Typically, you can reimburse anything you buy for the client through your fees.
So all you require is transportation, a few cooking utensils, and a marketing budget.
And, if you don't have the money for marketing, you can grow your business through referrals and word-of-mouth advertising.
Like all successful businesses, you must have a unique market approach. So, even before looking for your first client, decide what area you want to specialize in. For instance, you may choose to deal exclusively with corporate parties and retreats. Or, you can become a vegan chef. Better yet, you can be a personal chef and own catering business on the side.
The more specialized you are, the easier you can charge premium rates.
While your earnings may vary depending on your location and level of experience, you can make an average of $43,000 per year, according to PayScale.
20. Bookkeeping Services
The most profitable small businesses maintain a seamless accounting and booking system. Because most of these firms outsource their bookkeeping needs, launching a startup as a bookkeeper can be one of the most rewarding low-cost business ideas with high profit margins.
A small accounting business offers various services, including managing accounts receivable, reconciliation, accounts payable, income tax preparation, reporting, and more.
I'd recommend becoming a specialist in one area of business finances to increase your marketability.
You can make an average of $41 per hour offering booking services. That's an equivalent of $82,000 per year working full-time.
You may consider offering your services online to keep the expenses low and increase your profit margin. You only need to have a portfolio of your past work and possibly a few reviews from happy clients.
21. House Sitting Business
House sitting remains one of the most novel business ideas, yet it doesn't cost much to get started.
Even though many homeowners need house sitters to feed and take care of their pets, collect mail, reset alarms, they may also want their homes to appear occupied as a strategy to ward off intruders.
Still, most homeowners may not request you to stay on their premises but instead visit their homes once or twice per day. Perhaps this explains why many house sitters do the job on a part-time basis.
Industry insiders say many homeowners prefer house sitters aged 40 and above. The assumption is that people in this age group are more responsible and reputable.
The amount of money you can make as a house sitter largely depends on whether you can make daily visits, the tasks assigned to you, and your geographical location.
Payment ranges from $25 to $50 per day. Of course, you can charge more if you do to pet sitting as part of the job.
22. Beauty Business
The total annual beauty industry spending will exceed $716 billion by 2025.
With such mouth-watering figures, venturing into beauty can be profitable and fulfilling, especially if you are passionate about helping people look their best.
The beauty industry is vast, with lots of opportunities. Some promising business ideas in the beauty industry include:
Becoming a freelance hair or makeup artist
Opening a salon
Reselling beauty products
Becoming a nail or lash technician
Starting a beauty blog
Selling homemade beauty products
While revenue may vary depending on what you do, beauty is one of the most profitable business ideas, especially if you can get the marketing part right. A salon, for instance, can generate an average of $70,000 in revenue per year.
23. Photo Editing Business
Did you know that you don't have to be a photographer to start a photo editing business? In fact, photo editors seldomly take pictures.
If you know everything there's to know about photography; you can start a service that helps brands enhance their customer's visual experience.
As a photo editor, your job is to conceive visuals for your clients. Essentially, this implies hashing out ideas about what photos can be used to complement the text they'll accompany.
Other services you can offer your customers include selecting, editing, positioning, negotiating fees, and rights to photos.
Photo editing fits right into the category of low-cost business ideas with high profit margins because apart from a deep-rooted passion for photography, you only need a few typically inexpensive things to get started, like photo editing software.
Top earning photo editors make at least $1,200 per week.
24. Tour Guide Business
Do you live in an area with frequent travelers? Do you love interacting with new people from around the world and have an in-depth knowledge of your locality?
If so, becoming a local tour guide can be one of the best business ideas for you.
How is this a low-cost business idea, you ask? Well, you only need a cheerful demeanor to win your first client.
Another way to go about it is to launch a travel website that offers hotel booking services in your area and beyond.
Generally, tour guides make between $50 and $100 per day. This amount may vary depending on location, type of tour, and your experience.
Successful business ideas don't have to exhaust your savings. If you own a property or have an extra room that you aren't using, you can turn it into an Airbnb as a way of generating income.
A fully booked Airbnb rental can be more profitable than renting the same property to a long-term tenant primarily because this business model allows you to charge more on a nightly model.
In Seattle, for instance, an apartment goes for $2,197 per month on average, translating to $24,000 per year.
On the flip side, the average daily charge for an Airbnb in the same city is about $157. With an occupancy rate of 77 percent occupancy and 270 nights bookings per year, you can make over $40,500 annually, $16,000 more than the traditional renting.
26. Wedding Photography Business
Do you find yourself snapping photos to add to your Instagram feed? Are you the to-go-to photographers at family gatherings?
If you're passionate about taking pictures, you can turn your interest and talent into a money-making venture by starting a photography business for weddings.
To make good money as a wedding planner, you need to create a solid business plan and a simple business structure. For instance, if you want to rake in $50,000 and are targeting to book 26 weddings a year, then you'll need to charge about $2,000 per year.
The more precise your business structure and goals are, the quicker you can break even.
27. Virtual Assistant
As I wrap up my roundup of low-cost business ideas with high profit margins, let's look at one more small business idea; virtual assistant services.
As the name suggests, a virtual assistant (VA) is a remote administrative assistant. A VA typically works from home, carrying out tasks a secretary or an admin assistant would do in an office.
Some tasks you can perform as a VA include:
Writing social media campaigns
Handling simple correspondence
Before starting a virtual assistant job, determine your ideal client's type of services you want to offer. Will you specialize in a specific task or focus and a broad niche like the real estate market? Then set your prices depending on your offer.
VA is an online business that can potentially bring in $2,000 to $10,000 per month based on your services.
Tips to Help You Start a Successful Business Without Exhausting Your Savings
Conduct Enough Research
As you've seen, you don't have to break the bank to start some of the most profitable small businesses.
Still, the best small business ideas require much work to actualize. So, before you jump in, make sure that you do the groundwork to determine whether your idea is worth pursuing in the first place.
The last thing you want is to start a business only to discover that the dynamics of keeping it up and running are more complex than you'd initially anticipated. If you're not sure about the business you want to start, it is always a good idea to take an online course to help you learn the ropes.
Consider Pursuing Online Business Ideas
Don't get me wrong; there's nothing wrong with going after brick-and-mortar small business ideas. However, these business types come with extra overheads like rent, utility bills, and on and on.
You're better off with an online-based venture when starting with little capital. The initial costs are relatively low with an online business since you can work from home.
In most cases, all you need is a website to reach out to your target customers, which explains why small businesses should consider having a solid online presence.
Offer Great Service
Starting your own business is one thing. However, keeping it afloat is entirely different.
To run a successful small business, you should make customer satisfaction your number one priority. Remember, as a startup you want to retain every customer who buys from you. It turns out one of the most effective ways to close return business is to provide stellar customer service.
Record and Track Everything
Sure, it might be a low-cost business, but that doesn't mean you shouldn't keep tabs on what's happening.
So make sure that you're always aware of the financial status of your business. Track crucial metrics like website traffic, conversion rate, and cart abandonment. Also, as your business grows, you can use asset management software to track your company's assets. After all, that's what well-run and profitable businesses do.
Owning a business comes with a whole lot of tasks. This is particularly true for low-cost businesses since you'll be doing most of the legwork yourself.
You should therefore remain organized from the get-go. So, consider investing in a project management tool to help you stay on top of things.
The Next Step
Now that you know the best business ideas you can pursue if you don't have a lot of startup capital, the next logical step is to go after what works for you and your situation.
And, as I've said, all successful small business ideas require your unwavering commitment and hard work so be ready to grind.
To your success!