5k to start a business

[Onyoupop]

If you had 5k to start a business what would you do?

I've received a small inheritance and as much as I'm tempted to blow it on a holiday I'd like to use it to start a business that will hopefully improve our life for the better...I just don't know what!!

What kind of business do you have the experience and passion to start? If you have to ask other people what sort of business to start, I will be honest and say, I don't think you should be starting a business. You really need skills, experience, a known market and existing contacts to be successful.

Dh started a business with probably £2000 that now probably has a turnover of close to £1 million a year. It was developing and selling a kitchen tool, to be as vague as possible. But he had a degree in business, already had the technical skills to design and build the initial items, a business plan, a source and costs for raw materials, etc. And it was something he really loved doing and was passionate about.

You can do things you love without working for yourself though. I don't think it's the route to go down unless you are really committed to doing the thing you are proposing to do. You don't get a lot of free time running a business. Or paid time off. Or sick leave. Or a workplace pension. Or any of the other protections of employment. So it's not for the faint of heart.

Is there work you would really love to do? Something you had a passion for that you never followed through on? I'd actually use that money to start towards retraining in whatever it would take to do that thing you love, then think later if it's something you could do self-employed working for yourself once you know you are good at it. That's not to put you off, but just to say focus on what you really enjoy and where your talents are.

I agree with the pp. I was self-employed all my life, two different businesses, but both of them were things I was over-the-top passionate about and really believed in. I poured myself into them and also paid for ongoing professional development, I never stinted on paying back into the work itself.
Looking back at it I'm honestly amazed that I scraped through so many years! Retired now. But the focus was on wanting to do the things, not on making the money if you see what I mean. If it had been making money there were better ways I could have gone about my life.

Be really careful as you research this - you will find hundreds of places telling you about a faulous way to start your own business which are actually thinly disguised pyramid schemes or other exploitatative arrangements designed with the sole purpose of relieving you of your inheritance money, and you will not get back what you put in. There are very very few genuine opportunities that aren't scams.

With £5,000 I would either spend it on doing a qualification that would give me some specialist skills which I would then be able to use as a freelancer, or I would treat the £5k as a small stake in a bigger plan and come up with a business plan for something that needed startup costs of at least £25k and would borrow the remaining £20k with a loan from a source which will critically evaluate my business plan and would only lend me the money if their specialists thought it was a good bet and likely to turn a good profit.

In general a business is lucky if it makes a return of 10% of its investment costs each year so there's a size of business where you are effectivelu getting a lot less than minimum wage because the amount you get back is tiny compared to the hours you put in. A lot of the options at a £5k initial startup costs will never be more than a hobby thing you do for fun with the money being unimportant and I wouldn't want to spend my time like that personally.

it will be £5k down the tubes OP if you have zero skill / experience / passion in it already