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Starting a Home Business Without Going Into Debt

Follow these cost-saving tips for starting a financially savvy home based business.

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One of the most common obstacles many home business owners face is trying to start a new business on a limited budget. The first few years of a business are usually the hardest financially. You may be leaving a full-time career and a substantial salary to start a new business; or maybe you're a stay-at-home mom looking for additional income as well as a professional outlet to balance your diaper-changing duties. In either case, starting and running a home based business takes money. How much money will depend on you and the type of business you choose to run, but the following tips can definitely help keep costs to a minimum.

  • Do your own market research. Find out who the competition is and if there are enough potential customers in your market to support your business. Also research the competitive price for your product or service. You don't want to price it too low or too high. Find out what similar businesses charge and what they offer for that price.
  • Do some co-op marketing with non-competitive businesses that target the same market you do. For example, a virtual assistant can team up with an accountant to market each other's services in mail-outs, invoices or print ads. This is a great way to double your marketing efforts while splitting your advertising costs.
  • Barter or trade your services for other products or services you need. Associations and organizations are not only great places to network, but they're also great for finding businesses that offer the services and products you need. Just be sure to check with your tax professional so you understand the tax issues involved in bartering and trading.
  • Find another home based working mom to swap babysitting with if you have small children at home. By swapping with another mom, you both can work on your businesses without adding to your child-care costs.
  • If you hire sales help, pay by commission only so you only spend money if you make money. This way, a salesperson can increase your sales without adding any upfront fees or salaries.
  • Ask for referrals. What better way to save marketing and advertising dollars than using word-of-mouth? When you have a satisfied customer, don't be afraid to ask for a testimonial or if they know others who may need your product or service. People like to help others, especially new businesses trying to succeed. Another great way to encourage referrals is to offer a discount or a special offer for any customers who are referred to you.

Rebecca White, owner ofHeal Yourself Talk Radio and The Health Podcasting Directory based in Sylvania, Ohio, offers some additional money-saving tips:

  • Look for web hosting companies that offer web design discounts when you purchase hosting services from them. 
  • Set aside an advertising budget each month. Find websites that are in your niche market, and advertise with them for at least three months to test your response.  Even if you can only invest $5 a month, a well placed $5 ad is better than sporadically spending $5 here and there.
  • Write articles in your area of expertise and submit them to websites catering to your target market. You can also submit your articles to article directories. 
  • Host online chats to show your expertise. The hottest chat rooms around now combine audio and text, allowing you to talk to those in the room using your computer microphone.

Sue Anderson, training and development consultant and owner ofChange Happens in Pleasanton, California, offers her money-saving tips:

  • Design your own business cards and letterhead by using free templates you can find online, like those found on
  • Only buy office equipment you really need, not what you want. That can come later.
  • Create your own website. You can buy professional templates online that won't sacrifice your image. After you get established, you can then have your site designed by a professional if you wish to enhance your image.
  • Before you purchase anything, research products and services online and shop for the best price. There are several sites that offer price comparisons, such as Yahoo! Shopping.

These money-saving ideas should help with your budget, but new business owners also need plenty of drive and determination to succeed. It takes time to develop and grow a business, so be patient and give it all you've got.

Written By

Lesley Spencer Pyle is the founder and president of and , and she is the author of The Work-at-Home Workbook: Your Step-by-Step Guide on Selecting and Starting the Perfect Home Business for You. Pyle has been working from home for more than 13 years.