15 online businesses to start with 5k:
- Amazon FBA
- Dropshipping
- Digital marketing
- Affiliate marketing
- Virtual bookkeeping
- Freelancing
- Clothing line
- Online coaching
- Online tutoring
- Virtual assistant services
- Social media management services
- Amazon KDP
- Website development
- Virtual event planning
- Online consulting business
If you have money that you want to invest, starting an online business might be a good idea. Here are some key stats regarding online businesses:
Launching a small business idea with $5000 is a good way to get started in the online space. Not only does this open up a wide variety of opportunities, it also puts you in a position to create a business that’s more established and legitimate, since you’ll be putting up some form of investment. Contrary to popular belief, making money online lies in finding business models that have reasonable startup costs instead of looking for business ideas that require little to no investment.
If you’re an aspiring small business owner that's searching for an online business that has a reasonable startup cost, is highly profitable, and easily sustainable, check out local lead generation. Local lead generation is the process of building and ranking a website using search engine optimization, allowing local businesses and companies to generate leads and potential clients using your website, and making money every time they make a sale.
15 Online Businesses To Start With $5,000
1. Amazon FBA
Amazon FBA, also known as Fulfilled by Amazon, is a service provided by Amazon that allows online sellers to outsource their products from Amazon’s fulfillment centers for every order that is placed. Not only does Amazon eliminate the need to set up the infrastructure needed to store inventory, they also handle customer service, including complaints and refunds.
Cost breakdown:
These are only estimates, since the actual costs of running an Amazon FBA business may vary from business to business. Some sellers might discover a supplier that’s cheaper than most, some could spend less on advertising because they have a product that’s unique and profitable, some could even choose not to use any business tools and software which could save them a lot more.
While this online business idea undeniably offers a lot of potential, it also presents a handful of risks that you must carefully analyze before you decide to fully commit to establishing an Amazon FBA business.
Pros
Amazon is a multi-billion dollar company.
You don’t need to store your products.
Customer service is the least of your concerns.
Cons
The market is extremely saturated.
There is intense competition.
Customer service can be a concern.
2. Dropshipping
One of the cheapest and most profitable businesses you can start is dropshipping. Dropshipping is easy to start and does not require any upfront fees or capital since it focuses on sourcing products from a supplier and directly shipping it to a customer every time an order is placed. Essentially, you serve as a middleman between the supplier and the buyer, which means you sell products without having to touch them at all.
Dropshipping is also one of the fastest businesses to start because you can literally sell products even without purchasing or keeping an inventory. This is especially helpful in maintaining a high profit margin.
Cost breakdown:
Dropshipping not only allows you to sell products without storing any inventory, it could also become a passive source of income once your products are fully established. All you have to do is manage shipping and logistics, while also enjoying other interests outside of work. However, dropshipping also has its fair share of disadvantages you should look into before making any final decisions.
Pros
It’s easy to set up an online store even without an initial investment.
You can work from anytime, anywhere.
You can sell anything, as long as you do not violate any rules or regulations.
Cons
Dropshipping is saturated. There are over a million dropshipper scattered across the globe.
You have no control over your products.
Customer service is almost non-existent.
3. Digital marketing
Digital marketing is a business model that involves promoting or advertising brands on various digital channels and connecting them to the right audiences. These usually include:
- Running search engine ads (Google, Yahoo, Bing) and social media platform ads (Facebook, Twitter, Instagram).
- Creating a monthly marketing campaign.
- Devising a digital marketing business plan.
- Running both paid ads and content marketing strategies using search engine optimization (SEO).
- Identifying consumer patterns and trends and using that data to effectively target the right buyers.
- Analyzing user engagement metrics, website traffic data, conversion rates, and many others.
- Video editing and graphic design.
- Employing SEO best practices, such as keyword research and internal linking of related articles.
You can start a digital marketing business with no skill and a low investment. However, $5000 could ultimately be instrumental in elevating your agency and making it a profitable business.
Cost breakdown:
Digital marketing is one of the most high demand businesses today due to the number of companies and businesses that are on the internet. As of 2023, around 30% of businesses in the US conduct business purely online, while over 70% have at least an online presence. While this might sound promising, reality sets in pretty quickly once you realize that every business has potential drawbacks and repercussions that need to be considered, and digital marketing isn’t any different.
Pros
It’s easy to get started.
Your time is flexible.
You can grow and scale once you close enough clients, since there will always be a demand for digital marketing services.
Cons
It’s risky and unstable, even after you land a potential client.
You’ll be competing relentlessly with hundreds of thousands of digital marketers.
Industry standards are always changing.
4. Affiliate Marketing
Affiliate marketing is an online business that involves promoting the products or services of other businesses and making money every time someone makes a purchase. Essentially, you become an independent advertiser because you promote the products or services of a company without actually working for the company. This is perfect for individuals who are looking to make good money on the side or those who want to completely escape the 9 to 5 workday grind.
Affiliate marketing typically works through the use of affiliate links. An affiliate link is a hyperlink that redirects to a product page or landing page belonging to a company or business. Affiliate marketers typically post affiliate links on their own website or social media platform. Some companies also have a dedicated affiliate program designed for potential affiliate marketers looking to work with them.
Other affiliate marketers also have their own blog where they post articles that contain information about the product or service they’re promoting, as well as the affiliate link that redirects to a product page or landing page.
Affiliate marketing is an easy business to start from home as it requires zero knowledge, experience, and money. However, having $5000 to invest could significantly jumpstart your new business and make it more professional.
Cost breakdown:
Despite the appeal and potential of making a lot of extra money surrounding this business model, affiliate marketing has its own set of pros and cons that should be considered before anything else.
Pros
You can promote as much as you want.
It can become passive if you build a huge network of affiliate links that generate lots of traffic.
You’re not required to work long hours.
Cons
It’s a saturated industry. You either have to compete with thousand of other affiliate marketers or find a company with an affiliate program that isn’t saturated yet.
You can’t scale or expand, since it will always be just a one-trick business model.
It takes time to build a potential customer base.
5. Virtual Bookkeeping
Bookkeeping is the process of recording the financial activities of a business and organizing them in a systematic manner. This includes:
- Managing payroll and salaries.
- Regulating cash flow and the movement of money going in and out.
- Keeping track or accounts and reconciling transactions.
- Reviewing and updating bank statements.
Virtual bookkeeping is a digital service that you can offer to clients all across the globe. Not only does this allow you to work for multiple clients and potentially make more money, it also allows you to work anytime, from anywhere in the world. You could literally go to a coffee shop and work there.
Cost breakdown:
Pros
You can work for multiple clients anytime, anywhere.
It’s a scalable business that you can grow as much as you want.
There is a high demand for virtual bookkeeping.
Cons
You will have to compete with hundreds of thousands of other bookkeepers.
Building client trust can be difficult.
Differences in time zones may pose potential risks and drawbacks, such as lack of communication, minimal updates, and many others.
6. Freelancing
Freelancing is a business model that involves offering services to multiple clients and getting paid for each accomplished task. Freelancer often take on a wide variety of jobs, such as:
- Content marketing / copywriting
- Blogging
- Graphic design
- Web development
- Video editing
- Data entry
As a freelancer, you can work for multiple clients simultaneously, and have the flexibility to set your own schedules and rates. If you really want to start a freelancing business, Freelancer Freedom Blueprint is an option.
Cost breakdown:
Pros
You have complete control over your workload and schedule.
You can work from anywhere, at any given time.
You can set your own rates and demand more.
Cons
It can be difficult to find clients, especially if you’re just starting out.
It can be challenging to manage multiple projects at once.
No benefits or job security unless you have a contract that says otherwise.
7. Clothing line
Starting a clothing line is one of the most popular go to business models most entrepreneurs go for today. It involves sourcing plain shirts or other forms of clothing, designing and creating your own brand, and selling them through an online platform or website. It’s a highly competitive business, but if you have a unique vision and can create designs that stand out, you might just have what it takes to make it in this industry.
Cost breakdown:
Pros
You have the freedom to design and create your own clothing line in any way you want to.
You can potentially earn a high profit margin and eventually just let your clothing line work passively.
You can establish a unique brand and image, which could inevitably put you in a position to compete with large, popular brands.
You can potentially create a loyal customer base.
Cons
It can be a highly competitive business. Not only are you competing with other entrepreneurs, you’re also at the mercy of bigger and more established brands.
The cost of manufacturing can be high and could quickly pile up if inventory turnover is slow.
Marketing and advertising can be expensive, especially since there is a huge volume of competing clothing lines out there.
8. Online coaching
If you are an expert that specializes in a certain field or space, online coaching might be of interest to you. Online coaching is the process of teaching or providing support and guidance in a particular industry or niche. Here are some common coaching topics:
- Health and wellness
- Life and mindset
- Business and finance
- Relationships
- Career growth and development
Cost breakdown:
Pros
You get to work in your own niche or industry.
Your schedule is flexible, allowing you to work from anywhere.
You can turn your expertise into a profitable business.
Coaching is a growing industry with high demand.
Cons
It can be difficult to find clients, especially if you're new to the industry. It can also take time to establish a solid reputation and build a loyal customer base.
You need to continuously improve your skills and knowledge to stay competitive.
It can be challenging to manage multiple clients and their unique needs.
9. Online tutoring
Online tutoring is a teaching method where an instructor provides academic or scholastic assistance to a student, often in a one-on-one setup. Online tutoring encompasses a wide range of academic subjects, such as:
- Mathematics (Algebra, geometry, calculus)
- English (Grammar, spelling, vocabulary)
- Science (Chemistry, physics, biology)
- History (Political, social, economic, and many others)
Cost breakdown:
Pros
You can work from anywhere, at any given time.
You can reach students from all over the globe, not just within your area or country.
Tutoring is a growing industry with high demand, which makes it a scalable business model.
Technology makes it easy and convenient to conduct online classes and tutorials.
Cons
There might be some technical difficulties and challenges from your end or your client’s end. Time zone differences could also be detrimental to finding and securing clients.
Your interaction with your students is limited within the confines of the internet, which might hinder effective communication and collaboration.
The online tutoring industry is fierce and competitive, with over 118,000 online tutors in the US alone.
10. Virtual assistant services
A virtual assistant is an employee that provides support to a business or company by accomplishing day-to-day tasks and other administrative work such as:
- Answering phone calls and emails
- Setting appointments and managing the schedule of the CEO.
- Running the social media accounts of a business.
- Handling data-driven responsibilities such as creating spreadsheets, transferring data from a PDF to a word file, and many others.
Typically, virtual assistants are often outsourced, work from a remote location, and are hired on a part-time basis.
Cost breakdown:
Pros
You have the power to set your own hours and choose where you want to work.
The demand for virtual assistants is on an upward trend, which allows you to scale and grow the business.
You do not need to pay for utilities or overhead costs because everything is online.
There is an opportunity for specialization in a particular niche or space, which inevitably attracts higher paying clients.
Cons
Finding the first client can be very difficult during the first few months, which also makes it challenging to build a reputation.
Managing remote teams can cause a lot of stress and headache.
Time zone differences could potentially lessen your chances of obtaining both employees and customers.
11. Social media management services
Social media management is the process of handling and managing the social media presence of a business or company, usually on platforms such as Facebook, Instagram, and Twitter. A social media manager is typically responsible for the following tasks:
- Developing a monthly marketing campaign that aligns with the company’s brand.
- Publishing posts, images, videos, infographics, and other forms of content.
- Responding to comments, messages, inquiries, and feedback.
- Analyzing user analytics, such as clicks, engagement, and reactions.
- Properly managing ad spend.
- Monitoring industry trends to gather insights and identify opportunities.
Cost breakdown:
Pros
You’re not confined to a regular desk job, which means your time is more flexible.
Social media is an industry that keeps growing exponentially, which makes the demand for social media marketers skyrocket as well.
You have the opportunity to grow your network and collaborate with people from all over the world.
Cons
You will have to compete relentlessly with other social media marketers and find a way to stand out from the rest.
It might be difficult working with clients that live in a different time zone, which could potentially hamper your working relationship.
High pressure comes with the job, especially since you’re expected to grow the online presence of a business or company from scratch.
12. Amazon KDP
Kindle Direct Publishing, also known as KDP or Amazon KDP, is a platform that allows users to self-publish eBooks, paperbacks, and hardcover books and sell them on the Kindle platform for free. Not only does open up more opportunities to aspiring authors and publishers, it also provides entrepreneurs access to Amazon’s massive customer base. Here are the best-selling genres on the KDP platform:
- Romance
- Mystery and thriller
- Science fiction and fantasy
- Non-fiction
- Children’s books
Cost breakdown:
Pros
Amazon has a massive audience worldwide, which means your books can reach potential customers from all over the globe.
The KDP platform makes it very easy for authors and publishers to self-publish books without having to go through traditional publishing procedures.
It can become a significant source of passive income that’ll generate thousands of dollars for you every month.
Cons
You will have to compete with over a million authors that self-publish on Amazon KDP.
Amazon dictates the prices of your publications, which might prevent you from developing pricing strategies.
You’re heavily dependent on the Amazon market, which can be volatile and unstable at times.
13. Website development
Website development, or simply web development, is the process of building, creating, and maintaining a website through the use of web development languages or page builders. Web development encompasses a variety of tasks and responsibilities, such as:
- Formulating the back-end of a website which includes algorithms, logic, functionalities, and use cases.
- Ensuring the interface of the entire website is user-friendly, easy to navigate, and properly designed.
- Checking for any bugs or errors that may disrupt the processes or overall flow of the website.
Cost breakdown:
Pros
The demand for web developers has been growing for the past decade and is not showing signs of slowing down anytime soon. Employment for web developers is projected to increase by 23% between 2021 to 2031.
Being a web developer requires skill and expertise, which is why it is a very lucrative industry where there're huge amounts of money to be made.
You can scale and grow a web development business into a large-scale company.
Cons
You have to keep up with fast-changing trends and technologies, which entails continuous training and education.
As of 2021, there are approximately 25.6 million web developers worldwide. Not only will you be facing intense competition, you’ll also have to find a way to differentiate yourself from everyone else.
Clients often have tight deadlines and hectic schedules in this industry.
14. Virtual event planning
Virtual event planning involves organizing and managing events that take place online, such as webinars, conferences, and virtual trade shows. With many events moving online due to the pandemic, virtual event planning is becoming an increasingly important and in-demand field. As a virtual event planner, your responsibilities may include:
- Coordinating with vendors and speakers
- Managing the schedule of the event
- Promoting the event
- Handling technical aspects such as livestreaming and virtual networking tools.
Cost breakdown:
Pros
As virtual event planner, you’re not required to go out and meet clients or oversee the entirety of an event in person. You can do everything from the comfort of your own home.
You can reach out to both local and international clients due to the digital nature of the business.
Virtual events eliminate travel expenses and accommodation costs, which can be very enticing to potential customers.
Cons
Technical issues will be inevitable and require quick thinking and troubleshooting skills.
Virtual event planning has seen significant growth and exposure in recent years, leading to increased competition in the industry.
Unlike traditional face-to-face events, virtual events may face challenges in maintaining attendee engagement.
15. Online consulting firm
Online consulting is a business model that is focused on providing support and guidance to clients regarding business practices and financial matters. This can range from helping aspiring entrepreneurs start a business, to guiding business owners in properly managing finances. Online consulting firms typically operate through the use of virtual meetings, email, and phone calls, and can be a lucrative business for those with the knowledge and experience needed.
Cost breakdown:
Pros
You can run this business from anywhere, without having to work long hours on a daily basis.
You’re not limited to just a single niche because you can attract business owners and aspiring entrepreneurs across various industries.
You practically need no money to get started. All you need are your skills and expertise when it comes to launching and running a business.
Cons
It can be difficult to establish trust and credibility, which could hinder you from landing clients during the first few months.
You will have to compete with over 900,000 consulting firms in the US alone. A study by IBISWorld shows that there are over 901,751 consulting firms in the United States as of 2023.
Unfortunately, since you will be playing a key role in the success of a business, there might be instances where fingers will be pointed when a venture fails, and you could be caught in the middle of that mess.
Conclusion: Should You Start an Online Business With $5000?
In today’s day and age, you should definitely start an online business, especially if you have $5000 to invest. Unfortunately, finding an online business that’s profitable and sustainable isn’t as easy as some people might think. Not only is there too much competition, almost every product or service has already been saturated as well, making it difficult for aspiring online entrepreneurs to find a business that works.
Why Local Lead Generation Is the Best Online Business
If you’re looking for a successful business model that is proven, isn't saturated and is easily sustainable, look no further than local lead generation. Local lead generation is the process of building a website, ranking it using SEO, allowing local companies to generate leads through your website, and making money for each sale. Think of local lead generation as digital real estate. You don’t even have to maintain it or work long hours to make money, which makes it an excellent source of passive income.
I have sites from 2014 that are still making me over $2000 per month, and I don’t even touch them.
If you’re after finally attaining financial freedom and stability in a world full of uncertainties, local lead generation might be the best business idea for you.
