Low-cost business ideas for entrepreneurs

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While the word “startup” has come to be associated most often with technology fields and locations like Silicon Valley or major-city business hubs, the reality is most startups begin with a single entrepreneur working out of the home — and there are many low-cost business ideas out there that could put almost anyone on the road to profits and success.

According to the most recent U.S. Census Bureau data, there are 23 million businesses run by solo entrepreneurs in this country. Of these businesses, 30,000 generate over $1 million a year; 200,000 have revenue of more than $500,000; and 400,000 rake in at least $250,000 annually. While this is the high end of the spectrum, these numbers show that home-based businesses can do very well. All told, these solo enterprises are generating over $1 trillion a year.

William Bostic Jr, the Census Bureau’s associate director for economic programs, explains that such businesses run the gamut from real estate agents to physicians to bloggers, and that some of them represent primary sources of income, such as construction, while others are side jobs such as babysitting or tutoring.

In recent years, the highest growth for solo entrepreneur businesses has come in real estate, transportation and warehousing. Home businesses in real estate generate about $240 billion in income per year. However, some of the other top home-based startups include machinery repairing; promoting or administering religious activities; grantmaking; advocacy; and providing services such as personal care, death care, photofinishing, temporary parking and dating.

Like any business, a successful home-based business still requires a strong business plan, smart leadership and marketable products or services, but there are some other unique aspects of running a home-based business that are critical.

Once you move past well-established sectors like real estate and construction, the real strength in starting a home-based business is focusing on creating a product that solves problems with which the entrepreneur has experience. An example of this is EasyLunchboxes, a million-dollar company started by a mother trying to find an easier way to pack lunches for her kids.

It is also crucial to have expertise in a niche market and to set up an online store for products and services. Over the last decade, for example, designers such as Melissa Schmechel, owner of Darling Design, got out on the forefront of the convergence of technology and consumer demand to provide services traditionally offered through big advertising agencies, but just as easily accessible through the web. By offering professional-quality services at a lower cost, many of these types of businesses have become very successful.