On a Shoestring

You don't need millions to get your dream off the ground.
Magazine Contributor
10 min read

This story appears in the August 2000 issue of Entrepreneur. Subscribe »

All the hullaballoo about venture capitalists and angel investors slinging money at high-tech companies can be discouraging for prospective entrepreneurs who don't have access to deep pockets. Is it really still possible in today's market to start a viable on a shoestring?

Of course you can! Priscilla Y. Huff, iVillage.com's former resident expert on homebased business and author of several books, including 101 Best Home-Based Businesses for Women (Prima Publishing), says, "I talk to women every day who have started out on a shoestring and are now running all types of successful businesses."

Despite the general impression given by the media, most start-up businesses today are not multimillion-dollar, fast-track tech companies piloted by 25-year-olds. According to the , approximately 898,000 new businesses with 500 or fewer employees were launched last year. Only 2 percent of those were high-tech ventures.

There is really no better time for people with big dreams and tiny savings accounts to start businesses. Affordable , easier access to free and low-cost information about and (of course) the have made it possible for almost anyone to start a business with almost any amount of money.

We've compiled information on the five hottest categories of low-cost start-ups and caught up with those entrepreneurs who actually made the leap with limited start-up capital. Now, set some money aside to launch your new business-and don't be surprised if you have a few dollars to spare.

Convenience Businesses

The ranks of the time-starved are growing faster than you can say "Fetch me a cab." More than 134 million Americans are employed, spending an average of 44 hours a week on the job, and more U.S. women are working outside the home than ever before, according to the Families and Work Institute in New York City. This means the weary are turning to others for help with the tasks of everyday life.

For example, people who need help with planning and making meals present a great opportunity for service-minded entrepreneurs. As disenchantment with tasteless frozen dinners grows, personal chefs are becoming much in demand. For a fee of about $300, personal chefs like Tom and Nadine Manning, the 36- and 33-year-old co-owners, respectively, of Truly Unique Personal Chef Services in Medford, New Jersey, shop for groceries, then go to clients' homes, and use their own equipment to prepare nine or 10 restaurant-quality meals. All clients do is take the meals out of the freezer, heat and enjoy.

The Mannings started their with $2,000 in marketing materials and basic office equipment and now earn yearly sales of more than $90,000.

An estimated 4,000 personal chefs are in business around the country, according to David MacKay, founder of the U.S. Personal Chef Association. While it's not necessary to have worked as a professional chef, it is essential for a personal chef to have excellent cooking skills, lots of energy and a strong desire to please.

B2B Services

As businesses get even more competitive and in-house staffs even more overloaded, companies are seeking support services, like those provided by virtual assistants. These cyberhelpers help with a range of project-related services-everything from handling e-mail and making reservations to desktop publishing and creating and maintaining databases.

Virtual assistants are more than cybersecretaries-they serve clients from the comfort of their own home offices, typically develop long-term relationships with clients and work as partners on projects, according to Stacy Brice, the 38-year-old president of Assist U., a virtual-assistant training program.

The beauty of the is that it's so easy-and inexpensive-to start. All you really need is a phone, a computer with a fast modem, access, a major software program, a printer and a fax machine. Virtual assistants also typically charge between $35 and $70 an hour.

Clothing/Accessories Businesses

Many of the country's most innovative designers got their starts by making inexpensive clothing and accessories for friends and working from home. Granted, there's a lot of sweat equity involved in this type of -hours can be long, clients don't immediately stampede to your door and, at least at first, almost every task you can think of is done by the boss (aka you).

Upscale swimwear designer Malia Mills spent long nights mixing pasta kettles filled with fabric dye in her tiny apartment because she couldn't afford colored cloth. Jewelry designer Dary Reese, president of Dary Reese Co. in North Miami Beach, Florida, sold jewelry she made from tin foil on the streets of New York City before her jewelry and home-accessory business took off. And sportswear designer Elle Hamm, president of Rudwear in Irvine, California, started business by sewing hair scrunchies for friends.

But cash-challenged entrepreneurs who are creative and ambitious will find a huge market for fresh ideas and designs. Kids between 12 and 19, especially girls, have an endless appetite for fun, new fashion and beauty products, which has made the teen market red hot for clothing and accessory designers like 28-year-old Greg Herman. The president of Greg Herman Los Angeles was virtually homeless when he started his handbag company in January 1997. He maxed out his credit cards and got $4,000 from an angel investor to make samples, which he then took to New York City. "I put 40 handbags in rolling suitcases and literally walked up and down the streets, stopping at showrooms," he recalls.

Priscilla Y. Huff knows a number of people who have started their own shoe design and production businesses on a shoestring. In her book, 101 Best Home-Based Businesses for Women, she writes about two friends who shared a love of horseback riding and decided to design and make specialty riding boots; another woman who suffered foot problems now designs shoes for people with disabilities. Yet another woman owns a company that makes new shoes from the recycled parts of old shoes.

Start-up clothing and accessory designers usually use low-cost methods to sell: Web sites, mall carts or kiosks, press releases, personal letters or visits to buyers.

The Kids and Seniors Markets

Some of the fastest-growing businesses with the lowest overhead are devoted to easing the burdens of parenthood. Busy parents rely on entrepreneurs to help them do everything from decorating the nursery to shuttling the kids to soccer practice. And mothers are turning to experts to help them learn about the basics, such as caring for newborns or getting back into shape after the birth.

"The whole country is more child-focused," says Jennifer Basye, author of 101 Extra-Income Opportunities for Women (Prima Publishing). "It's a fabulous field."

At the same time, baby boomers-those born between 1946 and 1964-can't stop the march of time and will soon constitute the largest generation of seniors in history.

Understanding seniors' desire to leave something to their families, personal historians are creating a new but growing industry, unearthing stories clients can pass on to heirs.

Some personal historians work in video, producing everything from raw tape of interviews with elderly family members to full documentaries with voice-overs, music, graphics and on-location shots of old homes and businesses. They can charge anywhere from $5,000 for bound memoirs to more than $60,000 for full-length video documentaries.

For example, 53-year-old Margaret DeAngelis, a retired language-arts teacher, runs Harrisburg, Pennsylvania-based The Story Stream, a homebased that conducts workshops and provides writing and editing services to people interested in preserving their life stories.

"I pull things out of the corner of their mind," says DeAngelis. "I help them figure out where the story is."

High Tech

It's hardly a newsflash that some of the hottest start-ups are in the tech world. What many aspiring entrepreneurs don't realize, however, is you don't need lots of money to get into the field. Computer-repair pro-fessionals, Web designers, tech writers and high-tech PR specialists often work from home using basic office equipment.

When Bob Cesca finally got tired of his regular gigs as a radio announcer and a graphic designer, the Sinking Spring, Pennsylvania, resident, now 29, launched Camp Chaos, a production company specializing in creating animated cartoons. The began simply as a personal Web page in July 1998.

Now readers from around the world click on Cesca's Web page to keep up with cartoons like This Thing Of Ours and Monkey for President.

And business is particularly good. Camp Chaos is grossing $1 million in 2000 already.

Tech the World by Storm

  • Classified ads (create a home page of advertisements that lists a variety of items for sale)
  • Collectors' site
  • Computer bulletin-board service
  • Computer cleaning, repair and maintenance
  • Computer consulting
  • Computer programming
  • Computer tutoring
  • Desktop video-production company (low-cost if you rent equipment)
  • marketing
  • Internet radio station
  • Online research for companies needing specialized research on products, clients and competitors
  • PR for high-tech companies
  • Technical writing
  • Web site design

There's Money in B2B

  • Advertising agency serving a specialized clientele, such as companies targeting the children's market
  • Billing service
  • Bookkeeping service
  • networking organizer (planning power breakfasts and other events for companies that would benefit by networking with each other)
  • Catering
  • Collection agency
  • Copywriting
  • Desktop publishing/editorial services
  • Employee training
  • Event planning
  • Expert-services broking (finding consultants, specialists and experts of any kind for businesses that need them)
  • Grant writing for nonprofit or educational agencies for state or federal money
  • Health-insurance consulting
  • Image consulting
  • Landscape maintenance
  • Medical transcription service
  • Mobile massage
  • Mystery shopping service (giving anonymous assessments of services at retail businesses, movie theaters, etc.)
  • PR specialist
  • Researching
  • Security consulting
  • Sign-making
  • Summarizing journal/magazine articles (for professionals)
  • Translation service
  • Virtual human resources consulting

You'll Be Everyone's Little Helper

  • Cleaning services (commercial/residential carpets, chimneys & windows)
  • Custom catering
  • Fitness trainer
  • Gift-basket business
  • Interior designer/decorator
  • Personal concierge (assists with a wide variety of tasks requested by individual and business clients)
  • Personal shopper
  • Pet day-care center
  • Professional organizer (for everything from paper files to computer files, desktops to filing cabinets, from bookshelves to closets and kitchens)
  • Relocation consultant (works with clients who are moving)
  • Repair services
  • Restaurant delivery service (delivers food fromrestaurants to commercial and residential clients)
  • Reunion planner
  • Wedding consultant/wedding makeup artist

Art for Profit's Sake

  • Beaded rings, necklaces, earrings
  • Hair accessories
  • Handbags
  • Leather crafts (belts, wallets, bags, etc.)
  • Maternity clothing design
  • Metal crafts (jewelry, as well as bowls, tableware, garden ornaments, etc.)
  • Personal-image business (using your computer and scanner to transfer client photos onto T-shirts, mugs, plates, etc.)
  • Selling sewing and jewelry-making supplies online, through mail order, or at a cart or kiosk
  • T-shirts with unique designs and slogans

Rugrats & Elders & Profits, Oh My!

  • Children's photography service
  • Children's regional-resource-guide publishing (also could create regional-resource guides targeted at seniors)
  • Children's sports consulting (sponsors clinics that teach sports skills, offers coaching clinics for new coaches, etc.)
  • Children's entertaining
  • Custom decorating for children's rooms
  • Doula care (attends to the needs of new mothers)
  • Educational consulting (home-schooling help, prospecting colleges and coaching students for college entrance exams)
  • Elder errand service (takes clients to appointments, accompanies them to the supermarket, etc.)
  • Elder care, on-site
  • Event planning
  • Financial-services assistant (helps seniors pay bills, evaluate their financial situations, etc.)
  • Fitness training for new mothers
  • Fitness classes for seniors
  • Geneaologist service (assists people in tracing their family history, both on- and off-line)
  • Infants' and children's swimming instruction
  • Matching service (assists in finding roommates for older people who don't want to live alone)
  • Party-in-a-bag service for kids (everything you need for a child's party in one bag)
  • Post-surgery/recuperative care-giving
  • Round-the-clock nanny service (agency that places child-care workers in homes at any time of day)
  • Special-child daycare

Pamela Rohland, a writer from Bernville, Pennsylvania, is constantly amazed by the ingenuity of low-cost start-ups.

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