How to Start an Online Business on a Shoestring Budget

order to savings
Rather-Be-Shopping's Kyle James
Rather-Be-Shopping's Kyle James

It was December 2000 and I was a pharmaceutical rep in a hotel room 300 miles from home. I was doing some Christmas shopping online when I saw it. The little box titled “Enter Coupon Code” that would change my career path forever. I had never heard of a coupon code before, and after some research, I discovered there were very few quality websites that listed and organized coupons to online retailers. The idea for was born and eventually became my full-time job in 2003.

Fill a need

I found a need and attempted to fill it. I knew that a website dedicated to finding and listing coupon codes would be well received as the idea of online shopping, and the convenience it provided, was really starting to gain traction. The main thing I had going for me was a lack of early competition. If there were already 129 websites listing and organizing online coupons it would have been foolish to build a coupon site. Before you drop a dollar into a new online business idea you need to determine if there is a need. Without it, everything else is going to fail. Conduct consumer surveys, ask friends, talk to other business owners, determine barriers to entry and startup costs, and examine all competition.

Don’t quit your day job

I was in no position to just quit my job and develop full-time, so I would work on the site at night and on weekends. Starting an online business affords you this luxury. If I was developing a brick & mortar business, moonlighting would have proven very difficult. I developed my business with an original Pentium computer, 50 GB hard drive, and a dial-up connection. I was determined to not overextend myself financially and go into debt.


Learn from the mistakes of others

Do you remember Back in 2001, when I was developing Rather-Be-Shopping, they served as a great example of what not to do when starting an online business. If you are not familiar, they had the business model of delivering groceries to your home after you placed an order from their website. Setting the logistics of such a venture aside, they made legendarily horrible business decisions like the purchase of 115 Herman Miller Aeron chairs at $800 a pop, and a $1 billion contract with Bechtel to build warehouses in their service areas. They spent money like it was growing on trees, all before they made a single cent of profit. To nobody’s surprises, they went bankrupt in 2001.

I used their bad choices to help me make good choices. I made the decision early on that I would develop this business from a make-shift home office, use the computer equipment I already had, and develop the website myself with the help of an HTML book bought from Barnes & Noble and some great free online resources. Since I already had a good job, I was in no hurry to build my online venture and wanted to make sure I did it frugally. 

Passion really helps

Once the website was built and coupons were added, I sat back and waited for the traffic. And I waited. And I waited. I quickly learned that you can have the most useful website or storefront in the world but it doesn’t mean squat if you can’t get people to walk in the virtual doors for the first time. I almost threw the towel in several times, and if it wasn’t for my eternal optimism and passion for my business idea, I surely would have. The word “passion” gets thrown around a lot these days but it really is a key ingredient for success. This is especially true when it comes to starting a blog or website.

Let’s take the example of a hunting enthusiast who wants to start a blog reviewing products, telling hunting stories, and offering tips and helpful advice. First of all, you probably already have a certain level of expertise and your passion for hunting is going to show in your writing and keep fellow enthusiasts coming back to read what you have to say. Plus, you will be much less likely to burn out if you enjoy what you write about. You can then make money by sending your visitors to websites that actually sell the products that you are reviewing. For those of you unfamiliar with this type of business model, it is called affiliate marketing and is how I generate income on my website. In my example, sites like or Bass Pro, would pay you a referral fee on any sales generated through your links. To learn more about affiliate marketing, check out, it will answer all your questions and is a great free resource.

Note: also earns much of its income from affiliate income (when readers purchase a product / service that we have recommended here, we earn a commission.

By staying consistent with great content, networking with similar blogs, and doing it in a personal way that helps you connect with your visitors, you will start to build a loyal following. Once I figured this out back in 2003, started to get visitors and slowly gained a loyal user base and started to grow through word-of-mouth advertising. I did this all for free and didn’t pay a cent in advertising until 2007.

The opportunities for starting an online business are really incredible as the Internet has leveled the playing field and greatly reduced barriers to entry. If you have an idea for starting a website or a blog, and it fills a need, there is no better time than now to start your venture. Who knows, you might be giving your 2 week notice and going at it full-time sooner than you think.

Kyle James owns and operates which specializes in handpicked and verified online coupon codes to over 800 stores. Popular retailers include Best Buy, The Home Depot, and Lands The site has helped consumers save over a million dollars with online coupons since inception.

 If you have interest in starting a blog or a helpful website like Kyle did, you can get hosting at (typically $3-8/mo with their services).

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  1. I think this will be incredibly helpful for people considering working for themselves, it can be a very daunting prospect!

  2. Such an important point to not quit your day job until you’re absolutely ready! I think too many people start a small business and launch into it full time before they are actually ready.

    Take it slow, take it easy, and when the timing is right, usually your friends and family will let you know. ;)

    Thanks for the great post!

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