Starting a business doesn’t have to mean draining your savings or taking out a big loan. In fact, many successful small businesses in the UK begin with less than £1,000, and often much less.
In 2023, more than 800,000 new businesses were registered with Companies House. Most of these weren’t startups with big investment behind them. They were individuals setting out on their own. Freelancers, side hustlers, tradespeople and professionals working from home with a laptop and a plan.
This guide is for anyone ready to do the same: to start something real with limited funds. Whether you’re a graphic designer, tutor, cleaner, consultant or delivery driver, there are ways to start small, and still start well.
The lowest-cost businesses are usually based on offering a service. You’re using your skills and time, rather than buying stock or renting space.
Here are some ideas that work particularly well when funds are tight:
If you have experience in a particular field, you may be able to offer it independently. Common examples include:
You can start with a basic portfolio, a LinkedIn profile, and a way to get paid — no expensive software or team required.
This could be one-to-one tutoring in a school subject, coaching in a professional skill, or creative teaching such as music or crafts. You don’t need to rent a room. A laptop and a video call will do.
Tutors in the UK can earn between £20 and £50 per hour, with rates varying based on subject, experience, and location, as reported by various tutoring agencies.
You might already have knowledge that others would pay to learn from. Some people turn that into ebooks, templates, courses or paid newsletters. Others sell digital products like planners, website themes or illustrations.
You can sell these via platforms like Payhip, or directly using a payment app like Xiva.
There’s still strong demand for real-world, hands-on work. Think:
These businesses don’t require a shopfront. Many people build a client base through local Facebook groups or recommendations.
The key is to spend very little, test quickly, and improve as you go. Here’s how to do that in practice.
You don’t need an office. Use your living room, kitchen table, or shared workspace.
You don’t need fancy branding. You can offer a professional service with a basic profile and a clear offer.
You don’t need to spend £300 on a website. Try Carrd, Notion, or even a well-written Google Doc if it gets the job done.
These are free to start with and scale as you grow.
Avoid sending your bank details over WhatsApp or waiting weeks for invoices to be paid. Tools like Xiva let you take card payments instantly through QR codes or links. No setup costs, no monthly fees.
This matters, because early cash flow helps you stay afloat while you build. A few fast payments can cover your business insurance, equipment or marketing costs, and keep you motivated to keep going.
There are legitimate funding options for new businesses in the UK. Some offer cash. Others offer training, mentoring or support.
If you do need to raise some money, say, for a specific piece of equipment or an early investment, there are options available. One of the most accessible is the government-backed Start Up Loans scheme. You can borrow between £500 and £25,000 at a fixed 6% interest rate, and it also includes free mentoring and help with your business plan. It’s open to anyone in the UK aged 18+ with a viable business idea.
If you're 18 to 30, unemployed or working part-time, you could get free business mentoring, access to workshops, and even small grants.
King’s Trust Enterprise Programme
Many councils offer small business grants or startup competitions. Search "[your council] business grants" or use your regional Local Enterprise Partnership Growth Hub to see what’s available near you.
It’s easy to feel overwhelmed by the admin, but the essentials are fairly straightforward.
Most sole traders can register for free via HMRC. You’ll just need to file a Self Assessment each year.
If you want to register a limited company, it costs £12 via Companies House. This gives you limited liability, but comes with more admin.
It depends on your activity, but common types include:
You can compare quotes using business insurance comparison tools or speak to a local broker to find the right cover.
Or, for a fast and jargon-free option, check out our partner PolicyBee — they offer tailored cover for sole traders and small businesses like cleaners, tutors, online sellers, and developers.
👉 Get a quote through our link and get £10 cashback if you buy a policy.
If you’re a sole trader, you’re not legally required to open a separate business account, but it’s usually a good idea. Keeping your personal and business finances separate helps with:
Even if you’re just starting out, setting up a separate account from day one can save a lot of stress later. And as your business grows, it’ll become essential.
When you’re starting out, getting paid quickly and clearly is one of the most important things.
Xiva was built for that.
You don’t need a card machine, and you don’t need to wait for a customer to log into their online banking. With Xiva, you can:
And for UK domestic cards, Xiva charges just 0.99% per transaction, lower than most alternatives.
Whether you’re invoicing a client, getting paid on the spot, or collecting a deposit in advance, Xiva makes sure you don’t have to chase payments or explain the process.
Starting a small business in the UK with little money isn’t about getting everything right from day one. It’s about getting one thing right: your first offer, your first client, your first payment.
From there, you learn, adjust, and grow. You add structure. You upgrade your tools. You build a name.
Don’t wait until your website is perfect. Don’t wait until your business plan is finished. If you’re ready to offer something of value, you’re ready to start.
And when you’re ready to get paid, clearly, quickly, and professionally, we’re here to help.
Start your business and payments journey with Xiva.
