How to start a service business on a tight budget in 2025?

Wondering how to start a service business, but don’t have a lot of money to get things going? You’re in the right place.

Unlike businesses focused on physical products, a service-based business thrives on providing intangible value through specialized skills or expertise.

With modern technology and the ability to work remotely (a skill that’s been put to the test during COVID-19), you can start many types of service businesses on a limited budget. As long as you’re in a business that doesn’t require much equipment besides a phone and computer with internet access, even $500 can go a long way.

In this guide, we will walk you through the basics of what a service business entails, why you might consider starting one, and the steps to get your new business off the ground. Let's go!

What is a service business?

A service business is a type of business that offers intangible products, which means it delivers expertise, labor, or convenience rather than physical goods.

The core of a successful service business is providing value through know-how, skills, or time to meet the needs of its potential clients or customers. Services can range from landscaping and cleaning services to professional services like consulting and financial services.

Why start a service business?

Starting a service business can be highly appealing for several reasons:

1. Low Startup Costs

Many service business ideas require minimal initial investment compared to businesses centered on physical products since there's no need for inventory or manufacturing.

2. Flexibility

Service businesses often allow for remote work and offer the flexibility to operate either part-time or full-time, making them ideal for small business owners looking to balance other commitments. For aspiring entrepreneurs preferring to work from home or are just starting out, a service business provides a lower commitment of resources.

3. Utilization of specialized skills

If you possess a unique skill set or expertise, a service business allows you to capitalize on that knowledge to earn a living.

4. High demand

There is often a consistent demand for quality services, providing a steady stream of new customers and potential clients.

Types of service businesses you can start

Service businesses cover a wide range of industries and specialties. Depending on your knowledge, niche, expertise and budget, you can consider the following types of businesses to start:

Types of services business requiring zero or small budgets

Professional Services: Consulting (business, marketing, financial), legal services
Creative Services: Freelance writing, website design, graphic design, SEO optimization
Educational Services: Tutoring, test preparation, online courses
Healthcare Services: Health coaching, care services
Personal Services: Personal training, beauty services, life coaching, dog walking

Types of service business requiring a startup budget

Given the need for equipment, these service business will require more budget to start.

Home Services: Landscaping, cleaning services, pest control, home maintenance, pool cleaning
Technology Services: IT support, software development, cybersecurity
Creative Services: Videography, photography

Keep in mind that some of these service businesses will require licensing, so be sure you have that in place and check the costs before diving in.

What do you need to start a service business?

In many cases, here's all you need to get your service business off the ground.

A business plan.
A computer and internet connection.
A domain name and a website.
Some business cards.
A functional workspace.

Note: Price estimates are on-target at the time of this writing but, of course, are subject to change.

1. A business plan

Even if you’re planning a side hustle, it’s a good idea to come up with a business plan. This is your roadmap to guide decision-making for both short-term and future profitability.

2. A computer

If you're reading this on your laptop, you can skip this step.

If you don’t have a computer, let's talk about what you need. First of all, consider buying a laptop, because when you’re figuring out how to start a service business, there’s no telling where you’ll end up working on a day-to-day basis so you’ll want the option of working remotely.

No matter what service business you’re getting into, you need a computer that offers internet access and a full, fast keyboard. This is why I don’t recommend an iPad and a Bluetooth keyboard. I've tried functioning this way, and it's very slow going.

Instead, I recommend getting a new Chromebook, which is perfect for writing and internet surfing.

There are several different levels of Chromebook, from an underpowered model for less than $200 (don't get that one) to a high-end model for around $1,000. The average Chromebook models cost between $250 and $350. Let’s set aside $300 for ours.

Pro tip: If you’re going into graphic design, I don't recommend working on a computer that costs less than $500. It just won’t be powerful enough. You can try to buy a used laptop for around $500, but it's likely to be too outdated and slow. You’ll need to set aside some extra dough for a better laptop or desktop computer, depending on your needs.

How to start a service business on a tight budget

3. A domain name and a website

A website is a must, and the first step is buying a domain name for your business.

You can get a .com domain name for less than $20 from GoDaddy. You might have better luck getting a short domain that really represents the service you’re offering if you consider one of the new domain extensions — there are hundreds to choose from, including .consulting, .design, and .services.

Try it now — type in your business to see if the domain is available

If you’re looking for a fast and easy do-it-yourself website-building option, check out GoDaddy’s Websites + Marketing. You can choose a template that fits your business and than just customize it for your use.

Websites + Marketing also comes with built-in marketing tools like SEO, email marketing, Google My Business integrations, and social media — so you can get a headstart on growing your new service business after you get your website live.

As you’re building your site, make sure to include plenty of information about what you do and how you do it. Once it’s live, start blogging on a regular basis to help establish your expertise as well as boost your search engine rankings.

Pro tip: It’s a smart idea to create an email address with your domain name so you look more professional.

4. Business cards

Don't go nuts and buy 1,000 of the fanciest cards you can find. Just get basic cards from a place like MOO or Vistaprint. These sites offer big discounts from time to time, so sign up for their emails and keep an eye out.

When you’re ready to buy, simply upload your logo and fill out your contact information, and then you can buy 100 business cards for about $30, depending on the quality. Reorder as needed.

If you need imagery for your cards, places like Pixabay offer royalty-free clip art and photos.

5. A functional workspace

If you have home internet and a quiet place to sit, you're all set. Your WiFi is already an expense you likely have, so it doesn't count toward our budget.

If you think you’ll need to work without WiFi for a period of time, use either Google Drive offline or install OpenOffice on your laptop. This will let you work without internet access, and when you get back online, you can sync all of your documents, check your emails and be on your way.

How to start a service business: a step-by-step guide

Step 1: Identify your niche

Begin by conducting market research to identify a niche where you have expertise and where there is demand. Analyze the service industry, understand what potential customers need, and explore how you can differentiate your service provider offerings.

Step 2: Develop a business plan

Create a comprehensive business plan outlining your business model, objectives, target market, marketing strategy, financial projections, and operational plans. A solid plan will guide your entrepreneurship journey.

Step 3: Choose a business structure and Register

Select a suitable business structure (e.g., sole proprietorship, LLC, corporation) and register your business name with the appropriate government bodies. Ensure you comply with local licensing and permit requirements and consider business insurance for protection.

Step 4: Set up finances

Open a business bank account and set up bookkeeping processes to track cash flow, income, and expenses. Consider working with an accountant to help manage finances, tax obligations, and explore business loans if necessary.

Step 5: Define your services and pricing

Clearly define the type of service business you will run, along with pricing strategies. Consider factors such as time, expertise, and market rates when setting your prices, and be open to adjusting as you gain more insights.

Step 6: Build a brand and online presence

Develop a brand identity, including a logo and business cards. Create a professional website and establish an online presence on social media platforms like LinkedIn to reach your target audience.

Step 7: Implement marketing strategies

Implement a marketing strategy to reach potential customers using online advertising, networking, word-of-mouth referrals, and SEO optimization to improve search engine visibility.

Step 8: Deliver excellent service

Focus on delivering high-quality service to build a loyal customer base. Customer satisfaction is crucial for repeat business and positive word-of-mouth referrals.

Step 9: Gather feedback and implement improvements

Continuously seek feedback from clients to improve your services. Adapt to changing market demands, automate processes where possible, and refine your offerings based on client needs.

Tips to increase productivity on a budget for your service business

Here’s how to start a service business and cut even more cash from your budget.

Research productivity software

Google Drive is free, and you’ll be able to create word documents, spreadsheets, slide decks, and more. OpenOffice is an open-source competitor to Microsoft's suite. Microsoft Office does require some investment but has a variety of useful products, so this is something to consider when your business gets off the ground.

If you have a Mac, you can get their office productivity suite — Pages, Numbers, and Keynote — for free.

Skip letterhead

Create a simple icon or logo and paste it into the headers of all word documents you send to clients. (Tip: Google Doc lets you export files as either word documents or PDFs.) And there you have it — letterhead!

Get an online bookkeeping service

A service like Freshbooks can help you keep track of your finances and send invoices on the cheap.

Pro tip: Don't make invoices on a word processor or spreadsheet. It looks amateurish.

Use the full Google Suite

Schedule meetings with Google Calendar, store photos on Google Photos, and post your videos on YouTube. They're all free, part of the Google family, and if you have Gmail, you have access to all of them already.