Speak to the founder of an innovative start-up and he/she is likely to grumble about reluctance of banks to lend them funds to fulfil their dreams.
Complaints about the alleged conservatism of Australian investors are common, too, with many looking wistfully at the cash-drenched US market.
However, there are plenty of businesses that can be started with a minimal amount of money and advancements in technology together with flexible working patterns mean start-ups can increasingly launch on a shoestring.
Nick Reade, GM of small business banking at ANZ, says: “You don’t always need a huge loan to become a small business owner.
“There are ways to set up your business so that initial set-up costs are low, such as mobile or home-based businesses that wouldn’t require an office space.
“Using variable costs rather than fixed costs, such as an internet-based company that does not hold stock, can help meet consumer demand without taking on the costs associated with storing the supply.
“But it’s important to have a robust cash flow forecast if you are running that lean as well as identifying any capacity, delivery issues and supply arrangements that may arise.”
Sinclair Taylor, head of financial education at Westpac, says: “The up-front costs of starting up can be small – around $400 to $1,000 to register the business and start from home.
“There are plenty of eBay champions now, typically mums at home. There are ways to do it and if you only need $10,000 banks won’t want to secure a residential property against this. In fact most people will do that through savings rather than loans.”
If you have $10,000 or less to invest these are the types of start-ups you should be looking at:
1. Web or software developer
Developing software or designing stunning, interactive websites used to be the domain of well-resourced, large companies. No longer.
“Most people in this industry already have a computer and sometimes finding a desk is the only thing you need,” says a spokesman for the Australian Web Industry Association.
“You can quite easily work from home initially, which helps with costs. Most small business software can be bought with monthly license fees, so just set aside that money per month out of your estimated income.”
Assuming an hourly rate of $100, you can quickly recover the modest initial investment if all other aspects of your business – expertise, customer acquisition and retention – are firing.
Developing apps and games for smartphones is another fast-growth, low-cost sector. According to technology site TechCrunch the average app development costs $6,453.
Photography is an area that many people dabble in as a sideline. Trawl through offices across Australia and you’re sure to unearth someone who takes wedding pictures or portraits in their spare time.
Setting up such a venture full-time requires a bit more investment but you can keep overheads low once you’ve got equipment and a decent website up and running.
A word of warning however – educational and material costs can mount up. Getting off the ground may be cheap but drawing in business may require further funding.
Ian McKenzie, chair of the Australian Institute of Professional Photography Commercial group, says: “Although it appears from the outside that anyone with a $2,000 camera can become a professional, the reality is that without completing a degree or diploma course one is unlikely to be employable.
“Such a full time course runs over six semesters at an approximate cost of $8,500 per semester, with equipment costs being at least $6,000 and with material costs over the course being approximately $6,000.”
3. Wedding planning
There are more than 100,000 weddings in Australia each year at an average cost of $30,000.
Time-poor couples are increasingly likely to turn to a wedding planner to arrange their big day.
Aside from a few thousand dollars for ads in the plethora of wedding-focused magazine titles, as well as a website and business cards, it will cost you next to nothing to get up and running.
Whether you have the skills and patience to organise the delivery of multi-tiered cakes and arrange seating plans for warring family factions is another matter entirely.
4. Online retailer
Gerry Harvey may hate it but the online retail industry is going in only one direction – upwards.
According to Forrester Research, eCommerce will be worth $36.8 billion by 2013, up from $27 billion in 2010, with 87% of purchases made from Australian sites.
“In our world $10,000 is a lot of money to start with,” says Mick Liubinskas, co-founder of Pollenizer, which provides seed funding to tech start-ups.
“You can get a PayPal button, WordPress site and Google adword for about $1,000. You can get an off-the-shelf eCommerce solution and if you want a customised design it will cost you anything from $500 to $5,000.
“However you’ll need a lot more after launch for marketing and customer acquisition. Spreets (which was recently sold to Yahoo!7 for $40 million) cost less than $10,000 start up but they had to work very hard to get it to where it is now.”
If launching your own website selling t-shirts stacked in your spare room isn’t for you how about doing exactly the same thing via eBay?
The online auction giant recently revealed that in 2010 the top 2,000 sellers on eBay.com.au had an annual turnover starting at more than $120,000, with the top seller drawing in more than $12.6million. With either mode of online retail, judging correct stock levels and cashflow are critical.
5. Landscape gardening
According to a report by IBISWorld last year landscaping businesses are set to blossom in the coming years, with endless home improvement TV shows convincing consumers they need perfectly manicured lawns.
Demand is there and it’s a sector that’s cheap to start-up in. If you have a rake and a wheelbarrow you’re pretty much there.
Julie Edmonds, executive officer of Landscape Industries Association Victoria, says: “It’s very simple to get started as a landscape gardener. You just need a vehicle, tools and pay for some basic licensing fees and insurance, and you’re away.
“It’s becoming more important now for businesses to have a website, even it is basic and just has the contact details.
“Sole traders aren’t part of Work Cover so may be good to get income protection insurance. That costs a little over $300 per year to be covered for $400 per week.”
Public liability insurance costs a further $400 a year and insurance for tools will set you back about $300.