Small business ideas: 50 low-cost ideas and how to test yours

Three questions before you pick

A list of ideas is useless if the idea doesn't fit you. Answer these first:

1. What do people already ask you for? Fixing laptops, baking, homework help, filling in forms. What friends ask you to do for free is an early sign of demand.
2. How many hours a week do you really have? Five dependable hours beat twenty hypothetical ones.
3. How much could you lose without hurting your household? That's your maximum starting budget. No more.

The start-up costs below are indicative: rough orders of magnitude estimated by our editors for starting small (basic equipment, first marketing materials), in US dollars, excluding a vehicle, premises, and any computer or phone you already own. Prices vary widely by country and city, so get your own quotes.

Services for households

Food

Food is where the rules bite hardest. In the US, "cottage food" laws that let you sell some low-risk foods made at home are set state by state, so check with your state or county health department first. In England, Wales and Northern Ireland, you must register a food business with your local authority at least 28 days before you start trading.

Trades and repairs

Licensing for trades is local. In the US, electrical and plumbing work usually requires a state or local license. In the UK, under the Gas Safety (Installation and Use) Regulations 1998, businesses doing gas work within their scope must be on the Gas Safe Register. Look this up before you advertise.

Online work

Reselling

Selling your own old things is not a business. Buying things to resell is. In the UK, platforms report sellers who sell at least 30 items or earn roughly £1,700 (about €2,000) a year to HMRC. HMRC stresses this isn't a new tax, but people who buy goods to resell for profit may need to register for Self Assessment. In the US, payment apps and marketplaces only have to file a Form 1099-K when a seller's payments exceed $20,000 and 200 transactions in a year, but business income is taxable whether or not you get one.

Teaching and coaching

Events and creative work

Test your idea before you spend

Most ideas fail for lack of customers, not lack of a logo. Testing means finding out whether people will pay, as early and as cheaply as you can.

Step 2 is where most people go wrong. In The Mom Test (2013), Rob Fitzpatrick advises asking people about their lives and what they actually spend, not about your idea, because people will praise your idea to be nice. Step 4 borrows the core of Eric Ries's The Lean Startup (2011): test a minimal version with real customers before building the rest.

A worked example. Maya offers clothing alterations as a side hustle. First month: 12 jobs at $20, so $240. She spends $25 on thread and supplies. That leaves $215 for 10 hours of work, or $21.50 an hour, before tax. In the US, self-employment tax (15.3%) applies once net earnings from self-employment reach $400 in a year, and income tax comes on top, so she sets part of each payment aside. That per-hour figure is what she decides on: raise prices, work faster, or change the offer.

Registering: the basics in the US and UK

United States. The Small Business Administration explains that you're automatically a sole proprietor if you do business activities without registering as another kind of business. It's simple, but there's no legal separation: you're personally liable for the business's debts. The SBA describes it as a good option for low-risk businesses and for testing an idea. Other points:

• EIN: a sole proprietor with no employees (and no excise or pension plan returns) doesn't need an Employer Identification Number and can use their Social Security number. If you want one, the IRS issues it free online; never pay a website for it.
• Taxes: business profit goes on Schedule C of your Form 1040. Self-employment tax is 15.3% (12.4% Social Security, 2.9% Medicare) and applies once your net self-employment earnings reach $400 a year.
• Name and licenses: trading under a name other than your own may require a "doing business as" (DBA) registration, and many activities need state or local licenses or permits.

United Kingdom. GOV.UK says you can start trading straight away as a sole trader. You must register for Self Assessment if you earn more than £1,000 from self-employment in a tax year (6 April to 5 April), and tell HMRC by 5 October after the end of that tax year. You must keep records from day one, and register for VAT if your taxable turnover goes over £90,000 in 12 months.

Elsewhere. Check your national tax authority and business registry. In France, for example, the micro-entreprise regime is registered free of charge on the official one-stop portal.

What the survival data says

Read these numbers carefully. The BLS counts establishments (individual business locations), and after ten years, 34.7% of those opened in the year to March 2015 were still operating in March 2025. The ONS figure covers businesses registered for VAT or PAYE, so it leaves out many very small sole traders. France's statistics office, INSEE, did track the smallest businesses: only 28% of micro-entrepreneurs registered in 2018 were still active five years later, but of those who actually started trading within two years, 39% were. For traditional French companies, INSEE linked better survival to more money at launch, more experience in the trade, and having employees from the start.

The message isn't "don't start". These figures count closures of every kind, not only failures: INSEE found that 11% of founders of traditional French companies planned a limited-duration activity from the start. A side hustle that pays for three years has done its job. The message is: start small, test first, and keep your costs where losing them won't hurt.

Frequently asked questions

What's the best side hustle to start with no money?

A service based on a skill you already have: tutoring, pet sitting, cleaning, copywriting, tech help. You need no stock, and your first customers can come from people you know. The cost is your time, so track your hourly result from the start.

Do I need an LLC to start a small business?

Not to start. In the US you can operate as a sole proprietor without forming an entity, and the SBA suggests it suits low-risk businesses and testing an idea. The trade-off is personal liability. If your activity carries real risk (working in people's homes, food, physical services), talk to an accountant or attorney about an LLC and insurance.

Do I have to pay tax on a side hustle?

Usually, yes, once you pass certain thresholds. In the UK, you must register for Self Assessment above £1,000 of self-employment income in a tax year. In the US, self-employment tax applies once net earnings reach $400 a year, and all business income is reportable for income tax.

How much can a small side business make?

There's no reliable average that would apply to you, because it depends entirely on your price, your hours and your market. Work it out for your idea: price × realistic jobs per month − costs, divided by hours. If the answer is too low, fix the price before chasing more customers.

In short

A good small business starts from a skill people already pay for, is tested with a minimal offer paid in advance, and gets registered properly as soon as money comes in regularly. The survival data is a reason to start small and count everything, not a reason to never start. First step: this week, pick one idea, write the offer in one sentence, and ask five people who might buy it how they handle the problem today. Then read how to write an invoice and how to separate personal and business records.

Sources

• U.S. Bureau of Labor Statistics, Business Employment Dynamics, "Table 7. Survival of private sector establishments by opening year" (data to March 2025): bls.gov/bdm/us_age_naics_00_table7.txt.
• Office for National Statistics, "Business demography, UK: 2024", released 20 November 2025: ons.gov.uk.
• INSEE, "Micro‑entrepreneurs immatriculés en 2018 : moins de trois sur dix encore actifs cinq ans après", Insee Première no. 2069, September 2025: insee.fr/fr/statistiques/8634000; and "Entreprises créées en 2018 : 69 % sont encore actives cinq ans après leur création", Insee Première no. 2070, September 2025: insee.fr/fr/statistiques/8634190.
• U.S. Small Business Administration, "Choose a business structure" and "Register your business": sba.gov.
• IRS, "Sole proprietorships"; "Self-employment tax (Social Security and Medicare taxes)"; "Get an employer identification number"; Form SS-4 & EIN FAQs: irs.gov.
• IRS, "IRS issues FAQs on Form 1099-K threshold under the One, Big, Beautiful Bill; dollar limit reverts to $20,000", October 2025: irs.gov.
• GOV.UK, "Set up as a sole trader", "Check how to register for Self Assessment" and "Register for VAT: when to register": gov.uk/set-up-sole-trader.
• GOV.UK / Food Standards Agency, "Food business registration", last updated 25 June 2026: gov.uk/food-business-registration.
• Health and Safety Executive, "Gas Safe Register" (Gas Safety (Installation and Use) Regulations 1998): hse.gov.uk.
• HM Revenue & Customs, "No tax changes for online sellers" (digital platform reporting): gov.uk.
• Rob Fitzpatrick, The Mom Test, 2013; Eric Ries, The Lean Startup, Crown Business, 2011.

Also available in Français.