Start a Business for Under $500

Do you like organizing cluttered garages? Do you make mouth-watering cakes? Do you love to make jewelry? Are you good at planning special events? If you've been thinking about starting a business as your next career, now could be a great time to turn one of these hobbies into a thriving small business -- even on a bare-bones budget.
Starting a business on the side is a smart way to get your feet wet as an entrepreneur. Look first at the services and goods you already provide for free to friends and family. "The best way to start a business for less than $500 is to figure out how to get paid for what you love to do," says Clyde Anderson, a financial lifestyle coach and CNN contributor in Atlanta. "It's crucial for anyone who's looking to start a business to determine what gifts and talents they already have and to convert them into an actual business."
Here are 7 cool businesses to start on a shoestring.
1. Baker 
Cakes and cupcakes are the highlight of any party, and reality foodie shows such as Cupcake Wars have made baking a popular new business idea. Brooklyn blogger and cupcake expertNichelle Stephens says you can start a cupcake business for $500 or less, as long as you aren't trying to open a storefront. "You spend more time than money when starting a baking business," says Stephens, who shares baking and business tips on her blog. "You need to find a neighborhood where there is a limited number of baked goods available and identify your niche." Once you get your mixer, the next expense is quality baking pans and cooling racks. Use your co-workers as your test market and promote your business in the groups you belong to, especially if you have children. Other parents are a great potential customer base. Keep in mind it's illegal in most jurisdictions to bake and sell food from your home. 
2. Mobile Notary Public
Despite technological advances, documents such as property deeds, wills and loan papers still require an official signature and stamp by a notary. Some banks and real estate agents have a notary license, but the current trend is using notaries who come to your home or business on call. Setting up this kind of business has strict rules: Most states require you to take a course to learn the notary business and pass an exam, and all require a state license. Check with your state for regulations and costs, and visit the National Notary Association for materials and more information. It's important to put out the word to friends, family and co-workers about your new notary business. Set up a professional website with search engine optimization so that your business can be found locally. "Pick a niche," says Dany Victory, owner in Southern California. "I specialize in loan documents, and it's helped me earn referral customers such as realtors and title companies." As a mobile notary, your costs are low and there are fringe benefits: You can drive around, meet interesting people and charge a premium for providing door-to-door service. "My income is higher because I charge travel fees on top of the standard notary charge of $10 per signature," says Victory.
3. Personal Trainer 
Many people's New Year's resolution is to lose weight, and many of these same individuals are looking for professional help to shed those unwanted pounds. If you are a fitness buff or avid runner, you may be able to make a living by teaching others what you've learned. You can be a general fitness instructor or specialize in marathon prep, yoga or Zumba. The first step in launching a fitness business is to become certified as a personal trainer. You also may need some basic equipment such as a portable CD player, exercise ball, stair step and mats. To launch your training business, start by telling your own weight loss story. Don't be afraid to share your before and after pictures on your website and Facebook page. To find clients, try to build relationships at the gym you already attend. Inquire about becoming a trainer on staff to learn the business. Reach out to friends and colleagues who either don't have time to go to a gym or feel embarrassed in a room full of people running on treadmills. Fitness enthusiast John Leber of Paramus, N.J., became a trainer in retirement. Leber studied, took a workshop and an exam, and within months got his personal trainer certification from the National Academy of Sports Medicine(NASM). "I worked for a large fitness chain gym for 18 months, and it was like your first job out of college, but after I left that company, my old clients started calling me for services," says Leber, who is 63." He specializes in working with clients 50+ and with people recovering from injuries. Here's more on how to become a personal trainer.
4. Personal Organizer
Clutter is stressful for everyone, and you can make a living helping people get their homes, offices and lives in order. Professional organizing is a perfect business for people with a knack for neatness and developing systems. You can charge hourly or set half-day and full-day flat rates for your time. Not all clutter is the same, so it's a good idea to choose an area of specialization, such as cleaning out garages, helping people plan for moving or downsizing, or assisting professional women with busy lives. Devise a system for how you will approach new client projects. Some organizers interview prospects; others ask for a tour of the space that needs organizing; some just throw everything on the floor and start from there. Philadelphia-based professional organizer Debbie Lillard, author of Absolutely Organized, wanted to work part time after years as a stay-at-home mom. She launched her business by contacting old friends who were stressed by the disorganization in their lives. She created business cards and flyers and distributed them in grocery stores in affluent neighborhoods. "I wrote a sales letter explaining who might need an organizer and sent it to everyone I knew, which landed me my first clients; from there, it was all word-of-mouth referrals," Lillard says. Within a few months, she also launched a do-it-yourself website. Lillard went on to write two books about getting organized and shared organizational tips during media appearances, which helped her business grow. Collecting before and after pictures and client testimonials are good ways to promote a business as a professional organizer. For people interested in this business, consider joining the National Association of Professional Organizers, which provides education and training for new business owners in the field.
5. Social Media Marketing Assistant 
The social media world is growing, and most business owners don't have time to keep up. You can create a business as a social media marketing assistant or strategist if you have strong writing skills and a working knowledge of the major social media networking sites. Copy editing skills also are in demand for customers with blogs. Prior experience in public relations and marketing can also set you apart from those who just know social media tools. This business involves helping clients develop a social media strategy, build blogs, and set up Facebook Fan Pages, Twitter accounts, LinkedIn profiles and Google+ accounts. lf you know how to set up and maintain WordPress websites (they're free), you can specialize in that service and charge a higher hourly rate. Cathy Larkin of Web Savvy PR in Aston, Pa., shows her small-business clients how to make social media marketing less intimidating. She provides strategies and shortcuts to keep her clients up to date online. "The first thing I did was learn the tools; then I picked a niche for the kind of customers I wanted," Larkin says, "Be willing to work for free at first, just to prove you know what you are doing and get some references." A low-cost way to quickly sharpen your social media skills is to attend a social media conference such as a PodCamp, which are held all over the country. The key to being successful as a social media marketing assistant is keeping your skills updated and making sure you stay on top of the constantly changing features on the social networking sites.
6. Jewelry Designer
People like handmade, one-of-a-kind jewelry, and this hobby is a good choice for a home-based business. Settle on your signature style or specialty -- whether you'll create pieces with bead design or design molds for silver and goldsmithing or stainless-steel items. Then you need to name your business, create samples, produce high-quality photos and start developing marketing materials. Patricia Miller, owner of the Velvet Box in Flint, Mich., got hooked on the craft while helping a friend with her holiday jewelry orders. Miller launched her own business with small orders for bracelets, and then she began doing home shows. Later she created an online shop at, which makes it simple for crafters to display and sell handmade goods. "Ninety-eight percent of my business has come from repeat customers and word-of-mouth referrals," says Miller. Jewelry sellers also should look into setting up booths at craft fairs, flea markets and community events. Try partnering with local art galleries, hospitals and boutiques to sell higher-end pieces in your catalog. Don't forget to wear your own jewelry everywhere you go -- you are your best advertisement.
7. Image Consultant
Are you the person everyone stops and says, "Wow, you look great! Can you go shopping with me?" You are not just a trendsetter; you also may have the skills to be an image consultant or visual branding specialist. "Both women and men need to present their very best to the world. I help people reinvent and update their look," says Tracey Reed, who runs a Philadelphia image consulting firm, Tracey Evelyn Beautiful You. "I do everything from color analysis to make-up lessons and personal shopping." If you want to start a business as an image consultant, you need to have an understanding of color basics, textiles and clothing silhouettes. Reed, who has a master's degree in theater make-up and costume design, suggests taking courses in color theory and retail merchandising to sharpen your skills. She started out in the beauty business as a licensed aesthetician and later expanded her services to include wardrobe and image consulting. Potential clients include professional women too busy to shop, brides-to-be who want makeovers, and men who want to sharpen their images to get ahead at work. Having a personal network is key to building your initial clientele. Set up a blog to share style tips, and then use Facebook and other social media to attract new customers. You also can use your website to post special packages, share testimonials and feature before and after photos of clients. It could be your best sales tool.
All of these are great businesses to start, but keep in mind that you still need a marketing plan and business plan to get your fledgling enterprise on track. Start with a free version of business plan software at to get rolling and later invest in a business plan course at a small-business development center or local community college. Business plans help make sure your budget and costs are something you can measure as your new business grows.

12 Rules for Business Startups

Anyone who has started a business has his or her own rules and guidelines, so I thought I would add to the memo with my own. My "rules" below aren't just for those founding the companies, but for those who are considering going to work for them, as well.
1. Don't start a company unless it's an obsession and something you love.
2. If you have an exit strategy, it's not an obsession.
3. Hire people who you think will love working there.
4. Sales Cure All. Know how your company will make money and how you will actually make sales.
5. Know your core competencies and focus on being great at them. Pay up for people in your core competencies. Get the best. Outside the core competencies, hire people that fit your culture but aren't as expensive to pay.
6. An espresso machine? Are you kidding me? Coffee is for closers. Sodas are free. Lunch is a chance to get out of the office and talk. There are 24 hours in a day, and if people like their jobs, they will find ways to use as much of it as possible to do their jobs.
7. No offices. Open offices keep everyone in tune with what is going on and keep the energy up. If an employee is about privacy, show him or her how to use the lock on the bathroom. There is nothing private in a startup. This is also a good way to keep from hiring executives who cannot operate successfully in a startup. My biggest fear was always hiring someone who wanted to build an empire. If the person demands to fly first class or to bring over a personal secretary, run away. If an exec won't go on sales calls, run away. They are empire builders and will pollute your company.
8. As far as technology, go with what you know. That is always the most inexpensive way. If you know Apple, use it. If you know Vista, ask yourself why, then use it. It's a startup so there are just a few employees. Let people use what they know.

9. Keep the organization flat. If you have managers reporting to managers in a startup, you will fail. Once you get beyond startup, if you have managers reporting to managers, you will create politics.

10. Never buy swag. A sure sign of failure for a startup is when someone sends me logo-embroidered polo shirts. If your people are at shows and in public, it's okay to buy for your own employees, but if you really think people are going to wear your branded polo when they're out and about, you are mistaken and have no idea how to spend your money.
11. Never hire a PR firm. A public relations firm will call or email people in the publications you already read, on the shows you already watch and at the websites you already surf. Those people publish their emails. Whenever you consume any information related to your field, get the email of the person publishing it and send them a message introducing yourself and the company. Their job is to find new stuff. They will welcome hearing from the founder instead of some PR flack. Once you establish communication with that person, make yourself available to answer their questions about the industry and be a source for them. If you are smart, they will use you.
12. Make the job fun for employees. Keep a pulse on the stress levels and accomplishments of your people and reward them. My first company, MicroSolutions, when we had a record sales month, or someone did something special, I would walk around handing out $100 bills to salespeople. At and MicroSolutions, we had a company shot. The Kamikaze. We would take people to a bar every now and then and buy one or ten for everyone. At MicroSolutions, more often than not we had vendors cover the tab. Vendors always love a good party.

Three Ways to Keep Your Customers Coming Back

One of the most common mistakes small-business owners make is to focus so much time on attracting new customers that they skimp on the effort it takes to create loyal customers. That's a mistake, of course, because it's more expensive to get new customers than to retain them. To develop and nurture a relationship with your customers, you have to communicate regularly and, above all, provide consistently over-the-top service.

Here's a look at how three small businesses are keeping the customers they worked so hard to attract:

1. Make a personal connection.
The Betty Brigade, an Ann Arbor, Mich.-based design firm founded in 2003, keeps track of important dates in its clients' lives and reaches out to mark each occasion by using, a low-cost online service. Through the service, company owner Sharon McRill can send automatic emails to some 400 customers at any time, whether it's to wish them a happy birthday, congratulate an anniversary or simply thank them for their loyalty. The service offers templates for the emails, and McRill just provides the email address and the client's name. "This keeps our company in the customers' minds in a positive way," she says.

Why it works: Everyone wants to feel special. "People have a basic human need to be acknowledged and recognized," says Kevin Stirtz, Minneapolis, Minn. based business consultant, who runs a website focused on customer service. He says these specific types of personalized emails show customers you care -- even when you're not trying to sell them something.

2. Be transparent.

What better way to ensure you'll be happy with a product than watching the creators build it in real time? KMGI, a New York-based producer of TV-style ads for the Web, almost doubled its business from existing clients in 2011 by allowing them to monitor the ad design work in real time. The 74-employee company allows customers to see which project tasks are completed, and gauge the cost for the day, week, and month. Company owner Alex Konanykhin says the process helps create transparency and trust -- two key ingredients for retaining customers. Clients also stopped calling the company to ask about the status of their projects. "Their calls used to eat much of our time," he says.

Why it works: Customers want to feel involved with the whole project, not just the beginning and end. "One of the big issues a customer has is that there's too much away time — too much time where the customer feels they don't know what's going on," Stirtz says. Allowing customers to offer feedback on your project or product throughout the process enables you to catch and resolve problems early on.

3. Customize mobile deals.

Dan Epstein turned to technology to keep customers coming back to Eppie's, his restaurant in Charlottesville, Va. He uses Cardagin, a mobile loyalty and customer retention program, to send special offers to customers on their smartphones and reward them with loyalty points. The program fee is $100 per month. Say you have customers who are daily visitors to your store, but they haven't been in for a few days? Epstein can send a personalized deal to woo them back, like a special on their favorite product or a free item upon returning. "Smartphones are so powerful these days that we didn't even consider something like a paper punch card," says Epstein, who opened the restaurant in 2006 and now has 15 people on staff. "Going mobile sets us apart, and helps us keep our customers engaged."

Why it works: "What I really like about that is they're not just sending out a blasted, mass message," Stirtz says. "Knowing the customer's order by heart and using that knowledge to your advantage is smart." Sending a customized deal also shows you're invested in the client and that you know what your customer wants.

Seven Ways to Keep Angry Customers

I recently came across a couple of tip lists for how to deal with angry customers. I found them interesting, because all too often -- confession time --  I find I am that angry customer.
When companies are incompetent, it throws me into a rage. When I have a problem, or a company has done something wrong, and they can't or won't fix it, it makes me insane.
In other words, I am the customer from hell. (Just ask my husband, who designs my website graphics. That's my nickname.) Maybe it has something to do with writing about business for 20 years, but I'm deeply familiar with how a good business should work -- and always disappointed when it doesn't happen.

Though I've had my blow ups, I believe you can salvage a relationship with an angry customer and turn them into a happy one. Here are seven ways to keep angry customers like me from storming out of your real or virtual store, never to return:
  1. Realize my time is valuable. If you're putting me on hold and transferring me three different times, you are losing me. I'm getting madder with each transfer. And that's what happens all too often. As John Tschohl, author of Achieving Excellence Through Customer Service, puts it, solve my problem quickly, or find someone who can. You can only do this if your employees all understand the chain of command and are empowered to solve problems. They should also know who to send problem customers to if it's beyond their scope.
  2. Get real about outsourcing customer service. You think your customers can be helped by people with almost impenetrable accents and limited English skills in foreign countries. But the reality is quite often, we can't.
  3. Actually care. Yes, you're staying calm. But if I don't sense real empathy for my situation, your calmness is only making me crazier. It makes me feel you don't understand that I'm in crisis here, and you need to make it better.
  4. Reach out on Twitter. If you are not monitoring your business name on Twitter, you are losing a big opportunity. I've had companies respond to me immediately about a problem, including a massive website outage that affected hundreds of customers at my host. That is an instant anger defuser. 
  5. Go above and beyond. Once you've made a customer mad, you need to do something to fix the relationship. It's like a spat with your spouse. You need the customer-service equivalent of the nice card or the flowers. 
  6. Don't just file a support ticket. These are the Internet age's slow boats to China. You might get back to me in a day, or a week, or never. While tickets are fine for minor or non-critical problems, they won't work for emergencies. You need another option -- live email chat, Twitter support or something else that moves faster and gives me more confidence that you understand the urgency of my situation.
  7. Fix the broken policies. You can avoid angry customers in the first place if you figure out what's wrong with your process. For example, my husband and I recently opted to have a new shower installed, but canceled instead. It took 45 days and multiple conversations with two different people to get our deposit refunded, even though the company installs showers in a single day. You can bring a whole crew and remodel my home in 24 hours, but your bank can't do a transfer this week? 

10 Hot Export Markets for Small Businesses

After Jeffrey Nash decided to go global with his innovative baby walker -- a harness-like product that keeps tots close while walking in crowds -- he didn't realize how closely he'd be dealing with government officials. Such countries as Canada and South Africa ban traditional baby harnesses, so he had to sell his product to officials first to get permission to promote it to consumers.

To some people, that might sound like too much trouble, but Nash is bullish on exporting. "It's very profitable for us to not close the door on [an export market] because of certain rules and regulations," he says. "You just have to jump in, take it piecemeal and you'll get through it."

Here are 10 hot export markets for small businesses to consider if they are seeking expansion opportunities beyond their home borders. The countries are listed in alphabetical order, and the information is drawn from the U.S. Trade and Development Agency (USTDA), the U.S. Commerce Department's International Trade Administration, the U.S. State Department and target countries in the government's National Export Initiative.

"Brazil has great opportunities in just about any area," says Leila A. Afais, director of export promotion at the USTDA. A world power in agriculture, the country is one of the largest IT markets in the world and is investing heavily in infrastructure development for the 2014 World Cup and 2016 Olympic games. Brazil has the largest population in South America, and its economy grew an estimated 3.11 percent last year. Afais advises companies to double check with local officials to make sure their products are assigned to the proper category because restrictions vary by classification.

Promising markets: Agricultural processing equipment, consumer products, computers and IT products and services.

Over the past 15 years, the third largest South American economy has transitioned from being highly regulated to a free market, with an expanding middle class and estimated 4.9 percent 2011 economic growth. A free trade agreement, signed into law in October 2011, has sparked a flurry of trade missions and a growing focus on finding new ways to do business with U.S. companies.

Promising markets: Security services and equipment, transportation consulting and technology, data processing equipment and services.

India is an emerging market with a big appetite for U.S. goods and services. A young population with a median age of 25, India has a middle class that the U.S. State Department estimates will increase tenfold by 2025. Challenges in this market include high tariffs, multiple languages and cultures, and poor transportation infrastructure.

Promising markets: Education services, industrial textiles, food processing and cold storage equipment, electronics, and clean energy and pollution control equipment.

The largest economy in Southeast Asia and the world's fourth-largest population -- half of which is under age 30 -- Indonesia had estimated economic growth of 8 percent last year. A top-10 market for U.S. agricultural products, the country is a thriving democracy with a trend toward deregulation. However, the regulatory environment remains daunting, and infrastructure inadequacies can make it expensive to do business.

Promising markets: IT products and services, financial and banking services, clean energy and education and professional training.

Part of the North American Free Trade Agreement, Mexico has long been a trading partner with the U.S. and represents the second largest export market for American products. Trade between the two countries averages more than $850 million per day. The U.S. Commerce Department recommends retaining a lawyer before making agreements with Mexican partners because the legal system is different from that in the U.S.
Promising markets: Consumer products, packaging and plastics, tourism and tourism-related services, and housing and construction.

Morocco was the first African country to reach a trade agreement with the U.S. and is becoming an important player in the North African market. This year, its economy is projected to grow 5 percent. Its proximity and relatively low labor costs have made it attractive to European companies, which use it as a hub for their African sales and operations.

Promising markets: Renewable energy, water treatment, building construction and safety and security equipment.

This western Africa country--the continent's most populous--is responsible for 40 percent of all goods imported into the region. It boasted an impressive 2009 GDP growth rate of 6.1 percent and has set the goal of becoming one of the top 20 economies in the world by 2020. Demand for American products is strong, but it's still wise to work with government officials or experienced professionals there because of the crime rate, the potential for fraud, and inadequate energy and transportation infrastructure.

Promising markets: Health-care services and equipment, automotive parts, marine vessels and financial services.

South Africa
South Africa is a broad-based, growing economy that accounted for 31 percent of sub-Saharan Africa's GDP in 2010. The country is an attractive market for many businesses because of its stable banking system, as well as a maturing infrastructure and business-friendly environment.

Promising markets: Transportation consulting and services, franchises in various sectors, and IT consulting and equipment.

U.S. exports to Turkey increased 40 percent between 2009 and 2010, with strong growth expected to continue. A longtime U.S. ally and charter member of the North Atlantic Treaty Organization, Turkey's economy grew an estimated 4.6 percent last year. It is a politically and financially stable country that has applied for membership in the European Union.

Promising markets: Tourism-related products and services and consumer products.

While large growing economies like Brazil and China get the attention, Vietnam continues to grow steadily outside the spotlight--an estimated 5.8 percent last year. But there are a number of business challenges, including an evolving regulatory environment, corruption and insufficient protection of intellectual property rights.

Promising markets: Plastics equipment and machinery, education services, IT hardware and software, franchises and waste water treatment.

Where to Look to Raise Cash For Your Business

A visit to the South rarely leaves you hungry. I'm a Southern girl, so I know of what I write. But on a recent trip to meet with companies at Venture Atlanta, Georgia's largest investor showcase, I found plenty of companies left hungry--for funding. And that's a hunger that a heap of barbecue, fried okra and collard greens--washed down with tea, swaaait or unswaaait--can't satisfy.

"As a region, we're in a great position when it comes to innovation. We have more intriguing companies than capital, however," says Alan Taetle, general partner at Noro-Moseley Partners, one of Atlanta's oldest venture capital firms. "While we're actively working to attract more capital to the region, companies developing a business outside those areas are currently faced with a choice: Grow organically, which generally means slower, or go beyond our region to raise capital."

The situation isn't unique to the South. In markets across the U.S., local funding biases dictate the types of companies most likely to find at-home financial support. So how can entrepreneurs branch out and capture the funding they need when local isn't a viable option?

Look to the crowd.
If you're a dedicated do-it-yourselfer, you might want to explore internet fundraising. Crowdfunding sites such as Kickstarter and IndieGoGo are leading the way for entrepreneurs and businesses of all types to gain financial support from around the globe. (For more on crowdfunding, see this article.) They're powerful tools for publicity-savvy entrepreneurs who seek an established network to promote their companies, and a way to get cash without ties to angel or VC dollars. Remember: The sites charge funding and processing fees that will be deducted from successful capital raises; keep the fees in mind when creating your fundraising goal.

Reach out.
Look to the example of TripLingo, which launched in May 2011 with slightly more than $200,000 in angel funds. Though the company, creator of a foreign-language app, already had a proven audience base when it tried to raise seed funding, it couldn't get any traction in the Atlanta venture scene.

"Atlanta is a great environment for many reasons," says TripLingo CEO Jesse Maddox, "but there's simply not the density nor appetite for early-stage tech investments that exists in hubs like Silicon Valley. We've been able to use our local network to get introductions to West Coast angels and VCs, and those introductions in turn beget more introductions."

There's no shame in asking local funding sources for referrals to colleagues with practices more closely aligned with your company's market and mission. It's also worth developing relationships with other entrepreneurs and startups in your community; they might offer introductions to funding sources (especially if they've been funded recently) and share their experiences with raising capital.

Meet up.
No matter your industry, there's likely a conference with a startup showcase. Some of the biggies include Demo, TechCrunch Disrupt, ad:tech and SXSW Accelerator. But don't sign up without doing a little research--not all conferences will be ideal fits for your company. Check out the ones that cater to your industry to see if they offer a startup showcase or competition. They're a great way to meet investors already interested in funding companies in your industry.

Stick with it.
"If you're doing something interesting and have something to show for it, other entrepreneurs and investors are happy to be helpful and utilize their networks [to make introductions]," Maddox says. "After all, it may be you helping them out next time around."