Building a physical business is a monumental task. Online, it is the same, but not as difficult as building a brick-and-mortar store.
What if I tell you that there are small capital online businesses—so small that some require less than $200 to launch?
The burning question is: how much do you EXACTLY need? The easiest cop-out answer is, it depends.
Today, I will share with you several business ideas that have been proven to work over the years. These are business ideas with low investment and high profit. Along with these business ideas, I will include your start-up cost, and what tools you need to get the ball rolling.
Let us get started!
1. Build a Dropshipping Store
The first on our list of online businesses with small capital is called dropshipping.
Dropshipping is a business model where you sell physical goods to your customers. The thing is, you do not have to buy inventory.
The way dropshipping works is shown below:
- You build an online store
- You sell someone else’s products with a profit
- Customer orders the product from your store
- You order and pay the product from your supplier
- The supplier sends the item to your customer
There are three main parties involved here—you, the supplier, and the customer.
To build a dropshipping store, you need a website that has an e-commerce functionality. You can do this with WordPress, Shopify, BigCommerce, and many other web-building tools.
The second thing you need is a supplier.
All in all, you have two primary costs:
- Supplier software
There are many dropshippers who use AliExpress or Alibaba to find products to sell. What they do is they manually copy and paste the photos from those sites to their online store, or use a plug-in to make things easier.
My issue with this is that AliExpress and Alibaba are both marketplaces in China. All of the manufacturers and suppliers here are physically located in China.
If you are from the US, and your customer is from the US, you will have to buy that product from China. And how long will your customer wait for the shipment to arrive?
While both AliExpress and Alibaba are free to use, all your suppliers are from China. I would rather use a supplier directory tool like Spocket, Dropified, or SaleHoo to find dropship suppliers.
These three companies have a directory where you can choose the location of your supplier. If you want a supplier from the UK, you can choose only products that come from the UK.
Another benefit of using a dropship supplier directory is that the suppliers pass through a vetting process. What this means is that the quality of their products are guaranteed, and their performance is also guaranteed.
As mentioned earlier, you need to invest in two tools before you can start dropshipping.
- Website store
- Supplier directory
The costs vary per provider, but I will provide the most commonly used.
For the website provider, you can use Shopify, BigCommerce, or WordPress. Now, each of these three has different pricing plans, so I would only recommend the plan that will allow you to build a functional online store.
- WordPress e-Commerce Plan – $42 per month; billed annually = $505
- Basic Shopify Plan – $29 per month; billed monthly; cancel any time
- Standard BigCommerce Plan – $29.95 per month; billed monthly; cancel any time
In this case, we can go for Shopify or BigCommerce, as you only need to shell out $30 for you to start your business.
The second tool you need is a dropship supplier. There are three that I can recommend. These are Spocket, Dropified, and SaleHoo.
- Spocket Starter Plan – $9 per month; billed per month; can be integrated into Shopify and WordPress
- Dropified – $47 per month; billed monthly; can be integrated to WordPress and Shopify
- SaleHoo – $67 per year or $127 for life; can be integrated with WordPress and Shopify
The clear winners here are Shopify and Spocket. If you have more budget, you can choose SaleHoo as it costs $5.58 per month, but the $67 annual membership fee is charged once only.
TOTAL COST TO START DROPSHIPPING
Here are your upfront costs per combination:
OPTION 1: Shopify + Spocket = $29 + 9 = $38 per month; billed monthly
OPTION 2: Shopify + SaleHoo – $29 + 67 = $96
Apart from these two, I wouldn’t recommend spending on ads when you are starting out. You have to focus on creating content on your Shopify blog, and then drive traffic to your website via social media. The most promising sources of traffic are Instagram, Facebook, and Pinterest.
- SaleHoo Review: A Quick Overview of the Program
- Spocket Review: An In-Depth Look at the Spocket Dropshipping Supplier Tool
2. Small Capital Online Businesses: Get Into Affiliate Marketing
What is affiliate marketing?
Affiliate marketing is a business model where you, the affiliate marketer, will promote someone else’s products, and then you will receive a commission if a sale was made from your promotions.
Here is how it works:
- You sign up for an affiliate account
- You receive a link for that product
- You promote that product and convince your leads to buy from your link
- If they buy, you receive a commission
How is it different from dropshipping? In affiliate marketing, you do not build an online store. A blog is enough.
For example, you may be an affiliate marketer for Amazon. In this case, what you need to do is to review Amazon products. At the bottom of your review, you can paste your Amazon link. If a customer clicks that and buys, you get a commission.
In dropshipping, the customer will make the payment in your store. It is your responsibility to make sure that the product was delivered. You have to answer customer responses. And you need to process returns.
You do not do all that with affiliate marketing. As an affiliate marketer, your job is to market and to promote. You can do this in many ways, but we will focus on the things that you need to get started.
To start an affiliate marketing business, you need a traffic channel and an affiliate program. The affiliate program is your registration to a company who will pay you a commission on every sale you make for their product. It is always free to join.
Let us take a look at the traffic channel. This is the place where you will do your marketing.
- Blog – free or paid
- YouTube – free
- Social media – free or paid
Let us discuss them one by one. We will no longer discuss social media as it is free to post photos and affiliate links here, unless if you want to pay for ads. If you decide to pay for ads, the rate will vary per channel, and according to your budget.
YouTube is free, but you need some serious skills in creating videos. While you can record videos with your smartphone, you will still need a video editing software. An amateur video is not likely to produce good results.
Three products you can look into are:
- Camtasia – $249 one-time fee
- ViddyOze – $77 one-time fee
- Active Presenter – $199 one-time fee
Camtasia and Active Presenter are both best used if you are going to do a screencast. A screencast is a recording where you show what is happening on your computer screen, and also show your face on a small square box at the corner of the screen.
ViddyOze, however, is a 3D animation tool. It is best used for videos where you are presenting a story.
Your choice will depend on what you want to do. If you are planning to do videos of tutorials, then Camtasia and Active Presenter are your best options.
What I use is Active Presenter, as I do tutorials. It is also cheaper than Camtasia, and I find it much easier to use.
If you want to learn more about these three, you can go to their websites below:
If you go this route, you will need a blog site. While there are dozens of blog providers out there, I would strongly recommend WordPress. This website runs on it.
WordPress hosts 75,000,000 websites. That is right, 75 million. It is one of the safest web builders, and it has the biggest number of plug-ins that you can use later should you decide to monetize your blog.
Here are three of the most popular blogging platforms in the world and the costs:
- WordPress Premium Account – $8 per month; billed annually
- Blogger – free
- Wix Personal – $8.50 per month; billed annually
The winner here is WordPress. While Blogger is free, it is owned by Google and Google will ban your website if they like it. Google also has a history of abandoning projects that are supposed to make Blogger better.
Wix, at this price, has a lot of limitations. You will only get 2GB bandwidth, 3GB of storage, and a free domain for one year.
With WordPress, you will get 13GB of storage, dozens of free themes, SSL Certificate, recurring payments, SEO tools, and advertising income.
TOTAL COST TO START AFFILIATE MARKETING
- YouTube – $199 one-time fee for Active Presenter video recorder and editor software
- Blogging with WordPress Premium Account – $96 per year
3. Write eBooks and Sell Them
Now, one lucrative business that will eventually become a source of passive income for you is writing eBooks and selling them online. It is completely up to you if you want to write fiction or non-fiction, but it is far easier to write non-fiction.
The cost of writing an eBook is entirely free if you do it yourself. But before you can sell it, you need to convert into an eBook format or EPS. Plus, you have to create your book cover.
Here are the costs of creating an eBook:
- Write eBooks and Sell ThemeBook – free if you write it yourself
- Cover – free if you know how to do it
- Formatting – free if you know how to do it
To create free covers without buying Adobe Photoshop, you can use open-source software like GIMP or Inkscape.
To format the book, you can register to Smashwords and format the book from there.
On the flip side, you are going to have to spend money to create the entire eBook if you do not know how to do these three things, or if you do not want to do them.
To write an eBook, you need a copywriter. It will cost you at least $100 per book. Good writers charge $1,000 per book.
You can find these writers in online freelance marketplaces, like Fiverr. The better the writer, the higher the cost.
For eBook cover and formatting, you can also go to Fiverr to get these services. The cover will cost at least $15, and the formatting at least $10.
If you are interested in this approach, you can go to Fiverr’s home page below, register for an account, and buy the services.
The other option is to invest money on software that is going to write the eBook for you. One such tool is Sqribble.
With Sqribble, you can do the following things:
- Write the eBook from the software’s database of PLR books
- Create content from website URLs of your choice
- Create cover photos from templates; just change the name of the author and the book title
- Format the eBook in EPS or other file types to fit different devices
Sqribble is not free. You need to spend money. The upside is that it will allow you to create more than a hundred eBooks in no time. You can even use it to create eBooks that can use as a free giveaway.
TOTAL COST TO START EBOOK BUSINESS
- Option 1: Free if you do it all
- Option 2: At least $250 per book if you pay for the services
- Option 3: $67 one-time payment for Sqribble
If you do option 1, you keep all the profits. If you do option 2 and you sell an eBook for $20, you need to sell 13 copies before you earn profits.
If you go by option three, you only need to sell four copies to get back your investment of $67, and then all the eBooks you write and sell will be your profit.
Learn How to Explode Your Traffic
4. Create Digital Courses and Teach People
The last online business ideas for beginners is a digital course. You do not have to be an expert to get started with this. Surely, there is something in your life that you are good at. It can be cooking, drawing, painting, music, or anything.
In this business, you will record instructional videos and teach people something that will either improve their lives or their skills.
Here are some samples just so I can give you ideas:
- Software use
- Data analytics
- Web building
- Sales techniques
As you can see, there are so many niches out there that you can choose from. Find your passion and create a course. All you need to do is to create a plan, draft a script, and then start recording.
There are only two things you need to start this business:
- Recorder and video editor
- Online course platform
We already discussed the possible software you can use for making videos. For an online course platform, you can use Teachable.
Teachable is a website where you can upload your courses. It will not be accessible to anyone unless the person registers and pays for your course.
Registration in Teachable is not free. The basic plan costs $29 per month, and this is paid annually. You can easily get a return on your investment if you make a good course.
The Teachable Basic Plan has the following features:
- No limitation on the number of students
- A transaction fee of 5% per course sale
- Instant payout to your account
- You can have up to two users
- Training on how to create courses
- You can create and offer coupon codes
- You can drip the content, which means it is not all accessible at one time
- You can invite affiliate marketers to promote your product; give them a commission if they make a sale
- Has an email marketing feature
TOTAL COST TO START DIGITAL COURSES
- Active Presenter – $199 one-time fee
- Teachable – $348 one-year fee
The internet is a place that rewards those who are patient. Nothing here can make you money as quickly as you could in the physical world.
While there are those who succeed in their first month, suffice it to say that successful online businesses usually turn a profit after a year, and only after a year of hard work.
So, what’s it gonna be?
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