Starting A Business With Pocket Change

change jar

I started saving my pocket change in October of ’06. More precisely, I saved change and one dollar bills from my personal allowance. It began as a challenge more than anything else: I simply wanted to see if I could do it. To my surprise I was able to consistently save 25% of my allowance every month, or about $100. After six months it’s become an easy habit, something I don’t even think about except once a month when I count up the loot. Last night, my total was $111.50.

The money originally had no purpose. I bought some Christmas gifts and a few treats for myself, but the bulk of it sat there waiting for me to decide how to use it.

At the beginning of this year, the climate at my current job started to change. Two of our owners left and rumors started to fly. Bear in mind, I’ve been caught by the tech bubble, I’ve been downsized more than once, and I’m currently working for a small software company about to go through its third buyout in as many years. I’m gun-shy, times are tough, and I’m getting tired of placing my welfare in the hands of others. I decided was time to take the plunge and start a venture of my own.

The problem is that almost all new businesses fail within the first couple of years. While I don’t mind failing, I have issues with losing boat-loads of cash in the process. As a result, I decided to fund my little corner of the business market with my pocket change. Trust me, it’s not nearly as impossible as it sounds.

First of all, start saving your change if you don’t already do so. Things will add up much faster if you also save one dollar bills, but that’s a personal preference. Open a separate savings or checking account where you will deposit this money. It doesn’t have to be a business account: a second personal checking account is enough to prevent the “co-mingling of funds” the IRS talks so much about. Work with your current bank or check out a local credit union to see where you can get a no-fee checking account. Remember, we’re trying to do this with pocket change, so every little fee adds up. Mark every deposit as a “personal loan” when you enter it in your register, because that is exactly what it is: you loaning personal money to your future business.

Set a minimum for yourself and don’t actually start anything until you’ve reached that minimum in your new account. Chances are good it will take several months for you to reach that starting point, which is exactly what you want. Take this time to research the requirements and regulations for businesses in your city, county, and state. For example, I found out:

  • My city requires a license for any business located in the city OR any business located outside of the city that does business in the city
  • My county does not require any type of business license unless one is in a recognized and licensed profession
  • My state requires a retail license for businesses or individuals involved in the sale of goods

All of this is exceptionally helpful when trying to decide exactly what type of business to start. In my situation, I could avoid any licensing fees by having a business located outside of city limits that dealt only in services provided to clients also located outside of city limits. Since my house is inside city limits, I had to find an address outside of city limits that I could use.

Once you know the regulations, take your time brainstorming business ideas and keep in mind whether you want to focus on offering a service or selling goods. Think of things you enjoy doing, but make sure you are able to do them well. Consider ideas that involve equipment you already own, or could rent without buying until business picks up. Once you have a lengthy list of possibilities, start researching the competition in your area. Chances are good that your top five ideas are markets that are already saturated, like photography, web-design, car detailing, gopher services, etc. Don’t let that discourage you: use that as a spring board to think of new ideas.

For instance, it turns out there are several metric tons worth of photographers and web-designers in my area, and they’re all as good as me if not better. Depressing, right? Well, the one thing they have in common (other than being better than me) is that they all need a place online to host their work. In fact, lots of individuals and businesses around here need a nice, clean, reliable place to host their websites. Even I was looking for this very kind of service.

In many circles, this is known as a light bulb moment. You’ll know it when you have one.

Now that you’ve got an idea of what kind of business you’re going to start, flesh it out while you continue to save towards your starting goal. Things like a name, logo ideas, services you’ll offer, etc. The more thinking you put into things now, the easier things will be down the road. Research the market, research competitors, and most importantly research possible clients.

In my area, the city posts a spreadsheet online detailing all the business licenses that were issued that week. Using this list, I can immediately see if the government views a business as being outside of city limits, and therefore one of my potential clients. Check for such available resources in your area. Talk to friends, family, colleagues, and local business owners about your upcoming business. All of them could be potential customers or business partners.

Part II discusses start-up tactics and resources for when you finally have meet your goal amount.

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13 Responses to Starting A Business With Pocket Change

  1. Henry @ Binary Dollar says:

    I like online businesses because the startup costs are relatively low. What I struggle with is coming up with a plan and executing it. I can come up with plans. I can take actions. But not both at the same time.

  2. Tina Parcell says:

    You’re right, Henry, the start-up costs for online businesses are usually pretty low. Interestingly, this is also the case for the exact opposite type of business: one that is extremely focused on a small local market and clients or customers you already know. In both cases, you really can get started for next to nothing and still look like a very reputible organization.

    From what I’ve seen with business start-ups (and I am including myself in this!) so many people come up with what seems like an amazing idea and jump in feet first without taking the time to research, plan, or gather feedback from others.

    Without a good plan, your actions will be disconnected and not be reaching towards a specific goal. Without actions, even the most well thoughtout plan will do nothing but flounder. The key is to find a balance of both planning and action.

    That’s what I like about the idea of saving change in order to start a business: you force yourself to take some time in the beginning while you’re saving up some money. This time is what you need to research your idea, your market, and most importantly to create an action plan of exactly what steps to wake when you get started.

  3. Henry @ Binary Dollar says:

    Can you recommend any books for finance matters in regards to small business? I’m terrible at accounting and I’m not sure of the tax implications of starting a company.

  4. Tina Parcell says:


    Part three in this series will talk about some software and electronic resources that will be helpful to a new business, and that will include some items specifically geared towards helping you keep track of income and expenses.

    As for a specific book, I would recommend taking a look at your local library’s financial or small business section. Spend an afternoon reading through a variety of books to get a good start on the process, and you can always buy the books you find most helpful in a bookstore later on.

    Good Luck!

  5. Henry @ Binary Dollar says:

    Thanks Tina! Looking forward to part 3!

  6. Majic says:

    I think a $100 dollar online business competition would be great for addressing the kind of things that Henry has problems with. A friendly competition that gives you an added motivation, and a little extra publicity from people on the web to get you started.
    Almost everyone has $100 to spare – people could even take part in teams if they were short.

  7. Tina Parcell says:

    Majic, I think that is a really cool idea! I’m not quite sure how the logistics of it would work, but I can imagine it offering several different areas for members/participants to discuss their experiences, makes suggestions to each other, and maybe even find new clients and/or business partners.

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  11. Tina Parcell says:


    I don’t know if you’re still subscribed to comments for this artcile, but if you are I wanted to let you know that Part 3 of the series was just posted.

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  13. Henry @ Binary Dollar says:

    I am very much subscribed still. Thanks Tina!

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