What’s the biggest barrier to starting a business? Different people have different reasons. Time constraints, procrastination, lack of confidence, lack of business experience, fear of failure, running a business solo, loss of medical insurance and lack of work-life balance. For the majority though, funding is the biggest impediment.
The good news? With the ubiquity of the Internet and steady growth of ecommerce (currently 20 percent of all retail sales), barriers for entry have never been lower. There are dozens of business ideas requiring little capital that you could run right from within your home. Success is never guaranteed in any business but low cost ideas mean less pain if, in the worst case, the business fails to take off.
We’ll take a look at two of the more straightforward low cost home business ideas.
Making Videos on YouTube
The most visited website on earth only behind Google.com and hitting the scales at about 2.5 billion users, YouTube is a behemoth that has been the launching pad of numerous entrepreneurs.
What makes YouTube such a powerful tool for a low cost home business? First, starting a channel is free. Second, you do not need sophisticated, costly cameras to create good quality videos. Smartphones have come a long way and rapidly replaced digital cameras over the last ten or so years. As long as you have a decent Internet connection and an average smartphone, you can record fairly impressive videos.
Third, the availability of free, easy-to-use video editing apps that help you polish your recordings as well as insert text/graphical elements into your video post-recording.
There are multiple ways to earn money on YouTube.
YouTube Partner Program
The YouTube Partner Program (YPP) pays qualified creators per video ad view. There are requirements for your channel to be eligible for the YPP program. For example, having a Google AdSense account, at least 1,000 subscribers, at least 4,000 hours of views over the preceding 12 months and adhering to YouTube’s community guidelines.
How much you earn per ad view depends on, among other factors, your location, your niche as well as channel and video category.
Sell Own Products
You can sell your own products through your YouTube channel. For example, if your videos are about how to create WordPress websites, you could sell your own website development services or courses.
By consistently posting relevant and engaging content, you build an audience that holds in high regard your opinion on matters around your area of expertise. In effect, you become an industry influencer.
While YPP pays you for displaying a third party’s ads within your videos, influencer marketing means working with advertisers directly. They pay you for incorporating their product mentions and ads within your videos.
Subscribing to your channel is free. You could however create a channel membership program where people pay a subscription to be members. With that, they access content that regular subscribers do not.
Alternatives to YouTube
A golden rule of business is income diversification – never to put all your eggs in one basket. YouTube may be by far the largest video sharing platform but it is not the only one. Worse, it is an increasingly crowded market where creating content that stands out can be difficult. Have a plan to create channels on leading YouTube alternatives such as Vimeo, Dailymotion, Muvi, Uscreen and Wistia.
Running an Ecommerce Business
The Internet has brought unprecedented convenience to the shopping experience. No more having to leave your house to buy stuff. Instead, you can shop for and purchase items right from your computer or smartphone. For a home-based entrepreneur, this shift online signals opportunity. With an ecommerce store, you eliminate the large costs you would otherwise incur setting up a physical shop.
There are different types of ecommerce business models you could run from home. We take a look at two.
In dropshipping, you act as a third party seller by creating your own ecommerce website, populating it with images/descriptions of the products you are selling, setting your prices and providing a means for customers to place orders. The supplier in turn handles the warehouse picking, packaging, shipper selection and oversees the logistics end-to-end.
Your role is limited to the low cost, less arduous but nevertheless crucial processes of Internet marketing, website administration and customer service. You are also responsible for evaluating different ecommerce website platforms to determine which is best for you. As a dropshipper you hold no inventory, do not need warehouse space and have no use of a shop.
To be a successful dropshipper, work with an established and reliable supplier. Failing to execute on orders due to supplier failure will gradually tarnish your reputation and signal the start of the end for the business.
With affiliate marketing, the supplier provides you with a unique link that you share with your audience. When someone clicks on and buys through that link, you earn a commission. Affiliate marketing is similar to dropshipping in multiple ways. You do not hold any inventory, do not need to own a physical store and it is the supplier’s responsibility to ship the product.
A key difference is that with affiliate marketing, you do not set product pricing. Instead, you earn a commission from each sale. An affiliate marketer does not worry about customer service or order returns – that remains in the supplier’s domain.
Affiliate marketers do not necessarily have to have their own website. Many run their trade exclusively on social media platforms such as Instagram. Of course, having a website gives you more control and allows useful insights on prospect and buyer behavior.
The business ideas covered here have good growth prospects but do not require you to break the bank to set up. If you are a first-time entrepreneur, it's prudent that you seek out business ideas that do not require large amounts of cash to start. By opting for a business with low startup cost, you will be less stressed by the financial losses that may result if the business does not work out.