by April Wilson

Created on: November 15, 2009

It generally takes 3-5 years for a business to become profitable. In that time, most small businesses fail. One of the biggest reasons for failure is simply running out of working capital before the business turns a corner.

Too many people go into a small business venture borrowing and spending way too much money in the first year. Start-up costs aren't the only expenses to think about when starting a business on a shoestring. You'll need to figure in ongoing costs as well. This is why the best business to start on a shoestring is the one you can do from home.

Most home-based businesses have very low overhead. It will also be beneficial to you if you can do the business part time while having another source of work or income so you can pay your bills and fund your business at the same time. There are three categories of business that tend to work really well for those who have little money to invest upfront.

Fortunately based on your skills, talents, interests, and knowledge, you should easily be able to find a business you can start that falls somewhere into one of these categories or bridges some of them.

Service Businesses

A service business normally requires very little in upfront or ongoing costs. Starting out you can work alone with no employees, set up your office in your home, and you don't have a product to manufacture. Your upfront costs are going to be marketing materials, advertising, and whatever tools you need to run the business. i.e. a lawn mower if you wanted to start a lawn mowing service.

Chances are good that you'll already have the tools you'll need for the service you're providing since it's likely to be something you're already good at and therefore have the tools for.

Internet Businesses

An internet-based business is completely portable so you can work out of your home, and without employees. Most of the time you'll start with a website which can range from a few hundred dollars in setup and hosting to a few thousand. Though start-ups would do well to start on the low end of that scale. You can market just about anything on the internet, your imagination is the limit.

Also keep in mind the many ways you can diversify an internet based business. Google ads on your website, other advertising, affiliate links, selling information products like ebooks, and selling hard goods or services.

Writing Businesses

It's common to hear that writers don't make any money, but that's not true. Our world is built now upon the exchange of information. Think about all the writing you encounter on a day to day basis. brochures, magazine articles, forms, surveys, website copy. If you're a talented writer there are many opportunities for you to form a business around your talent. Depending on how you choose to go about this, most of your costs are going to be marketing materials, advertising, and possibly a website.

The most successful writing businesses are diversified. Don't put all your eggs into one basket. Consider all your options and pick a few you are most comfortable with to develop: fiction, nonfiction, articles, freelancing online, websites, copywriting.

Whatever your interest, talent, or knowledge, there is a way to monetize it into a business on a shoestring, you just have to focus on things you can start small, do a little at a time, and start from home for little upfront and ongoing cost. Keep it simple in the beginning and give yourself a chance to grow a business that can thrive. Later, as your business grows, you can consider branching out into other areas and interests with higher start-up costs if you like.

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