How to start a small business for under £300

It only takes around £300 to get started with the bare essentials. We’ll prove it by breaking down the initial costs involved in launching a small business. Follow along to find out how you can make it happen for £300 or less.

Choose a business model that doesn’t need much capital

The key to starting on a tight budget is choosing a low-cost business model. These are typically service-based or online, as they rely more on time and skills than equipment, inventory or a physical premises. Here are a few realistic examples:

• Freelance services, including writing, design, marketing, admin, tutoring
• Handmaking crafts, jewellery, and foods
• Dropshipping
• Reselling second-hand goods
• Dog walking, pet sitting
• Virtual admin support for businesses

All these ideas can be run from home with minimal equipment and little upfront inventory.

Set up your business structure

If you’re planning to run the business professionally, register and create a limited company is worth considering. Doing so gives your business its own legal identity and can help with credibility, particularly if you’re working with clients or applying for contracts.

Through company registration platforms like Rapid Formations, you can register your company online in just a few hours for as little as £2.99 plus the Companies House Fee of £50. This means you’ll be listed on the Companies House register with your chosen name, and you can start trading legally as a limited company. You also get access to customer support if you have any questions during the process.

If you don’t want to use your home address on the public register, Rapid Formations also offers a London registered office address service from £39 a year. This helps protect your privacy and makes your business look more professional.

Alternatively, if you wish to operate as a sole trader, you will not need to formally register with Companies House. However, you must register with HMRC and file a Self Assessment tax return each year.

Keep overheads low with free and low-cost tools

Next, make a list of what you need to run the business. If you already have a laptop or smartphone, you’re halfway there. Here are other essentials you can get for free or at a low cost. Don’t forget to explore free trials to test out services and see whether they are worthwhile.

• Domain name, email and website: £1 for the first year with Ionos
• Accounting software: free with Wave
• Design tools: free with Canva or £100 per year for Canva Pro
• Task and project management tools: free with Trello or Notion

You might want to upgrade later, but these free or low-cost tools are more than enough to get you started.

Keep marketing costs low

You don’t need to spend big on ads right away. Focus instead on free and organic ways to get the word out. For example, word of mouth. Tell your friends, family, neighbours, and past colleagues about your business, and they may become some of your first and most loyal customers.

Find new clientele by consistently posting on social media channels like Instagram, TikTok, LinkedIn or wherever your audience spends time. You could also find online communities interested in your niche through Facebook groups, Reddit threads or forums.

You can also use free design templates on Canva to create professional-looking content without hiring a designer. If you do decide to put some money behind your marketing, £30–£50 can go a long way with a Facebook or Instagram advert. There are plenty of YouTube tutorials that can show you how to target your specific audience.

A sample £300 budget

Here’s what a lean but realistic budget might look like:

Company formation (Rapid Formations): £2.99

Companies House fee: £50

Registered office address service: £39.00

Domain name and email: £1.00

Marketing spend: £50.00

Equipment (ring light, tools etc.) or initial inventory: £50.00

Contingency or emergency buffer: £107.01

Total: £300

This budget is based on practical, essential items only, no premium tools or unnecessary extras. It also leaves a good buffer aside for unexpected costs or opportunities.

You don’t need to save a fortune to get started

One of the best things about starting small is that you don’t have to get everything perfect right away. You can test your idea, learn as you go, and improve over time without taking a big financial risk or waiting years to save up thousands.

If things go well, you can reinvest your profits into upgrades like a more advanced website, marketing campaigns, or tools that make your life easier.

Many of today’s successful businesses began as low-cost experiments, run in the owner’s spare time, with borrowed equipment. What made the difference wasn’t money, it was consistency and hard work.