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Low-cost ideas of UK small businesses

Want to start your own small business but lack capital?

Creating and launching a low-cost start up business on a shoestring is possible – we’ve gathered together 35 of the best low-cost small business ideas to help you get started.

If you think that starting a business demands a bulging savings account or rich relatives then think again.

Starting a business on a budget taps directly into the entrepreneurial spirit that can make your new business a great success.

A huge number of companies have started with nothing more than an idea, determination and a clear vision of success.

Successful businesses have started operations from garages or spare rooms including Amazon with Jeff Bezos selling books from his garage, and Disney which began when Walt Disney started creating animations in his uncle’s garage.

Starting a business is hard work but armed with a brilliant idea, creative thinking and determination, anyone can make a business succeed – regardless of the starting budget.

To help we’ve collected together some of the best small business ideas and some essential tips to make the most of starting a business without investing a fortune.


Making business finance work for you

Starting a business doesn’t come with a set of instructions.

We know that understanding the many different types of financial product in the marketplace can be difficult.

Our Making business finance work for you guide is designed to help you make an informed choice about accessing the right type of finance for you and your business.

Download your free copy


How to succeed in starting a business on a budget

Brilliant cheap business ideas are one thing but if you’ve got to keep the lights on and meet repayments it can be daunting trying to launch a business without much investment.

While a decent amount of investment can help a business get off the ground it’s no substitute for careful planning and creative thinking.

Here are some tips that apply to anyone starting a business from scratch.

  • Work from home – it sounds obvious but turning a spare room or garage into a workshop or office immediately saves on overheads, rent and commuting costs. Check that you can legally run the business you want from home and remember that some costs can be charged as expenses against your business profits.


  • Keep costs low – resist the temptation to incur costs wherever possible. Reuse old equipment such as laptops and computers, buy second-hand office furniture and source office supplies from cheaper online stores. Avoid signing up for any long-term contracts and push hard for discounts when sourcing new suppliers.


  • Discounts rule – discounts are the lifeblood of new business so negotiate deals that discount bulk purchases or recognise that you’re a new customer who will return and spend more. Seek out trial services for online services such as bookkeeping and use free cloud storage to back-up files and free online software such as Google Docs to save buying expensive office software.


  • Set up online – an online business is the most cost-effective business you can run. Using social media and a cheap website that’s highly optimised for the product and audience you’re selling to it’s possible to set up an online store for less than £50 per month with all the whistles and bells, including payments and credit card processing.


  • Avoid inventory – while you may carry some inventory smart businesses keep inventory (and therefore expenses) as lean as possible, only creating inventory when a customer orders a product. Look for suppliers who ship directly to customers thus saving on distribution and warehousing costs.


  • Do it yourself – low-cost start ups mean you’re going to have to multi-task as a marketer, stock controller, receptionist, accountant, packer and administrator. Try to carry out as many tasks as possible but look to hire specialist help on a per project basis to keep overheads low.


If you’re willing to work hard, scavenge resources, and do what it takes to get a business off the ground then you’re halfway there.

If you still need inspiration we have highlighted some low cost and cheap business ideas you can start easily and without much capital.

Creative businesses on a budget

Business ideas: craft and handicrafts, creative consultant, jewellery making, interior design

Have a creative streak or handy at hobby crafts?

Capitalise on your creative skills by turning a hobby into a full-time business.

The great news is you can start small and work the hours you want while continuing in a full-time job.

Making jewellery or craft products can have low costs and you can sell them at fairs or school fetes and even car boot sales, getting valuable feedback.

Online stores such as eBay or Etsy provide global sales platforms for craft businesses.


Low cost ‘people business’ ideas

Business ideas: childminding, dog walking, pet grooming, mobile hair dressing, tutoring

Looking after people’s pets or walking dogs while people are at work can turn spare time into a profitable venture – and give you exercise to boot.

If you love animals then pet grooming or minding services are in high demand and you don’t need much initial outlay.

Advertise in local newspapers and on community message boards in supermarkets.

If you’ve specialist skills – such as maths or language skills – then tutoring is rewarding and well paid.


‘Physical business’ ideas on the cheap

Business ideas: loft and home clearing, garden clearing, handyman, furniture assembly, removals

If you’re more physically minded make the most of your ability to lift and carry by helping people with the jobs they hate.

From clearing gardens and lofts to providing handyman services, helping people with tasks that they don’t fancy doing is a good way to get started in a business.

New services such as TaskRabbit match repair and handyman services to people wanting to pay for general DIY help so can be a good place to start.


Low cost online business ideas

Business ideas: blogging, SEO specialist, web design, web development, copywriter, online coaching, ebay store, Amazon Marketplace reseller

Online businesses have two main selling points: they’re cheap business ideas to set up and they reach massive numbers of customers.

Creating a professional website, registering a domain name, and setting up your own online store can be done for around £50.

Alternative ideas include offering your services to help others create websites, creating content for websites or using sites such as Amazon Marketplace to resell products you buy cheaply and sell on with a profit margin.


Get involved with new businesses

Business ideas: Uber driver, Airbnb host, driveway renting, rent your car

The internet is revolutionising how ordinary people can become hoteliers, car rental services and even taxi services – all without spending a fortune.

Services such as Uber let you become a taxi driver (you just need a car and smartphone), while services such as Airbnb allow you to rent out a room in your home – or your entire home.

It’s possible to rent out your driveway for around £10 per day through sites such as JustPark, while if you don’t use your car you can rent it out to others through services such as easyCar Club.


‘Sell your produce’ business ideas

Business ideas: market stall holder, street food, pop-up catering, car boot sales

Sell direct to local audiences through food and local markets.

It can take time to secure a market stall, and there’s a cost, but you’re guaranteed footfall and lots of trade from shoppers.

Failing that, setting up a street food stall or even buying cheap products and reselling via car boot sales will get you into the reselling trade cheaply.

Start Up Loans backed business Utta Nutta founded by Katie Sargent, like many others, started by trading at markets as it’s a great way to test the appetite for your product and get feedback.

‘Sell-at-home’ business ideas

Business ideas: Avon and personal grooming sales, home products sales, Neal’s Yard Remedies, Jamie At Home, UpStyler

If you’re confident with people, able to sell, and willing to host parties at venues or in your home then why not look to a new wave of sell-at-home products and services.

While the likes of Avon are still going strong, new business such as Jamie At Home, which sells kitchen products such as mixing bowls and rolling pins, and UpStyler, which specialises in affordable but elegant fashion, are making a splash in homes around the country.

There are joining costs – usually around £100 – but consultants earn around 20-25% commission on all products sold.


Learn with Start Up Loans and help get your business off the ground

Thinking of starting a business? Check out our free online courses in partnership with the Open University on being an entrepreneur.

Our free  Learn with Start Up Loans courses opens in new window include:

Plus free courses on finance and accounting, project management, and leadership.


Reference to any organisation, business and event on this page does not constitute an endorsement or recommendation from the British Business Bank or the UK Government. Whilst we make reasonable efforts to keep the information on this page up to date, we do not guarantee or warrant (implied or otherwise) that it is current, accurate or complete. The information is intended for general information purposes only and does not take into account your personal situation, nor does it constitute legal, financial, tax or other professional advice. You should always consider whether the information is applicable to your particular circumstances and, where appropriate, seek professional or specialist advice or support.


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