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How to Start a Low Investment Business: Complete Details

Khushboo Priya

| Updated: Jun 07, 2019 | Category: Business Registrations, Partnership Firm, Startup

Low Investment Business

Almost everybody wants to be the owner of their own business, but not everybody has the required capital to start one. Therefore, in such conditions, a Low Investment Business is recommendable for people who want to start with a little money.

India is a country where the start-up is brimming and attracting a number of young entrepreneurs toward itself. Furthermore, the present government has started start-up India campaigns to encourage people to starting their own business.

But the biggest trouble lies in choosing the best business form which could be started with a low investment. But don’t worry; we will help you to figure out the best suitable business form, so that you can start your business with a small budget. Let’s get started-

Which business entity could be started as a Low Investment business?

There are several business entities in India, out of which only a few of them could be started with a low investment. Business structures in India are as follows:

  1. Private Limited Company
  2. Public Limited Company
  3. Limited Liability Partnership (LLP)
  4. One Person Company (OPC)

All these business forms are registered with the Ministry of Corporate Affairs (MCA). Besides, the companies are regulated by the Companies Act, 2013. However, an LLP is regulated by the Limited Liability Partnership Act, 2008.

Furthermore, these entities require a specific paid-up capital and authorised capital to start a business. Besides, there are a lot of compliances these companies need to follow. Therefore, starting your business as any of the one from above could be a little costly.

Low Investment Business

Additional business entities

  1. Sole Proprietorship
  2. Partnership Firm

These business entities don’t require any kind of registration; and hence, the cost of registration and compliance are no issues. One can start his/her business as a sole proprietorship or partnership firm with very little capital.

Even among the above two, the partnership firm is more recommendable as you can divide the cost and work between the two. This will reduce both the burden of money as well as work pressure.

Therefore, in this blog, we will focus mainly on the Partnership Firm registration and how one can start a low investment business while choosing this business form.

What is Partnership Firm Registration, and why is it recommended for low investment business?

Partnership firm registration is the process of incorporating your business under the Indian Partnership Act, 1932.

The registration of a partnership firm is not mandatory. However, it is always recommendable by the experts so that you can avail several benefits provided under the Act.

The process of starting a partnership firm is quite simple and can be started with a minimum of two people. These people are known as partners.

Reasons why Partnership Firm Registration is advisable for low investment business

There are various reasons why choosing a business entity such as a partnership firm could be in a budget. Some of them are as follows:

  • No registration cost involved

Unlike other business entities where registration is mandatory, there’s no registration obligation for partnership firms. Since partnership firm registration isn’t compulsory, therefore, if anybody wants, he/she can skip the registration process and save the money required for the same.

  • No paid-up capital needed

There are some business forms where paid-up capital of a specific amount is essential to hold, or you can’t register your business. But, the same isn’t true for the partnership firm. You can start the firm with whatever paid-up capital you have. Even you can start it with a zero paid-up amount.

  • Authorised capital isn’t a requirement

The authorised capital is one of the compulsions that every business entity has to show to the concerned governing authority for the registration purpose. Some of them require Rs 1 lakh whereas other requires Rs. 10 lakh of authorised capital to begin the business.

But, again, partnership firms are free from such following such regulations. They can start with any or even zero authorised capital.

  • Compliance cost is quite low

Since the compliance requirement of partnership firms are comparatively lower than other entities; therefore, the compliance cost is also low. Hence, one can save a tremendous amount of money by registering their business as a partnership firm.

Other benefits of Partnership Firms for start-ups

Apart from the above-described reasons, there are a few more reasons to compel you to start your business as a partnership firm. Let’s find out what they are-

  • Minimum of two persons: A minimum of two persons are required to form a partnership firm. However, it totally depends on the individuals/partners how many individuals they are willing to work with.
  • Shared duties and responsibilities: Works and responsibilities of each partner are shared as agreed. Every partner has his/her own specific duty to perform and which is mandatory. Hence, the burden of work is also low among both/all of them.
  • Easy to form: As there are minimum legal formalities, less documentation, etc. in the registration process, therefore, partnership firms are easy to form.
  • No annual returns:Unlike other business structures, partnership firms are free from filing annual returns such as MGT-7, AOC-4, etc.
  • Better management: Since all the partners are active and take interests in everyday business affairs, therefore, it becomes easy to manage the business operations.

10 low investment business ideas for start-ups or small towns in India

Low Investment Business Ideas

We are well aware that the living standards of small towns in India are not pretty impressive. People are struggling with job opportunities. Therefore, starting a business is the only solution.

Each city is different and has a specific characteristic. Hence, the requirements too, are quite different. Here, we have enlisted the 10 low investment business opportunities to help start-ups to grow and flourish even in the small town:

  • Pre Schools

Pre-schools could be one of the best options with a one-time investment on educative and safety material. A good and innovative pre-school will surely attract working parents with its way of teaching. But you need to ensure that you give undivided and equal attention to each child.

  • Food Truck Business

The most significant benefit of starting a food truck business is that it is movable. Besides, you can provide varieties of unique cuisines at a fair price to attract customers. You can move it according to your ideal time at ideal locations.

For example- in the day time, you can take your food truck and park outside the school in the afternoon or evening. Offices are also an excellent option.

Hence, a Food Truck is a perfect small budget or low investment business as you don’t need to invest much.

  • Laundry Services

If you start the laundry services with a partner, then it won’t cost you much. In the beginning, you need to attract customers with quality services at cheaper rates. But once you have started it, you will easily recover the set-up amount in a short time.

  • House Cleaning Services

House cleaning services such as UrbanClap and Haptik are doing well in big cities. But small towns are yet to discover this. Nowadays, people are running short of time and hence, they don’t get much time for cleaning and cooking. Therefore, starting such services may not demand much money and could prove beneficial.

  • Ice Cream Parlours

Whatever season it is, ice creams always stay in demand. A little ice cream parlour could be an ideal low investment business. The parlour will require a little space, basic equipment, low staffing, etc. which makes it a perfect small investment idea. All you need to do is to discover what’s not in the market, what the public wants and where you can sell it in a large quantity. Cinema-theatres, parks, popular food joints, etc. are great places to start the ice-cream parlour.

  • Bookshops + Café

Although this idea hasn’t been much implemented in small towns, metro cities are found to love the combination of the bookshop and café. Therefore, if you’re willing to start a business with low investment, then you can surely opt for this.

  • Gyms or Fitness Centres

Gyms or Fitness Centres are nowadays a need for the youth as well as for age group people. Especially in cities such as Delhi, Mumbai, Bengaluru, etc. people are more inclined towards joining the fitness centre to remain fit. Even the trend has shifted to small towns as well, and people are making better profits from this business.

Fitness centres demand a one-time heavy investment but you can start it with your partner and share the investment required.

  • Internet Services

Internet is ruling the world, and hence, today, no city or town can survive without it. Even people in villages are also using making use of the internet by using smart phone, etc. Hence, starting a venture which provides internet services could be another best option for low investment business.

  • Tourism

Well, this option is best suited for those who either live in India’s old cities/towns or at places where there is enough article and ancient sculptures, architectures, etc. to attract tourist. Hence, opting for Tourism at such places could be a better idea. It will prove profitable along with low investment, but it demands good knowledge and time.

  • Trash Management

No, don’t contract your brows. Trash management is a need of the hour for many cities and towns. Segregation of waste at the base level is extremely important to better waste management. Further, it will also the starter help to create a good profit.

Therefore, if you are interested in starting such a venture, then you can team up with local authorities to maximise revenue and minimise effort.

Final Takeaway

Undoubtedly, starting a business of own could be an intelligent decision for anybody. But it’s quite imperative to consider the budget in which a person can start the business.

Therefore, a low investment business is always recommended for start-ups with a limited capital. If they choose business entities such as partnership firm registration, then the difficulty in company formation would be quite low.

From the above decision, it is concluded that partnership firms can be started with just a little capital. Hence, it can be considered as a low investment business. In case you have any query or doubts regarding the same, feel free to contact us or leave a comment below.

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Khushboo Priya

Khushboo Priya is an experienced Legal content writer with a prodigious proof-reading and research & development skill.

Business Plan Consultant


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