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People tend to assume that you need huge amounts of money to start a business.

At a pitching event a week or so ago, where a prize of £5,000 ($8,520) was up for grabs, I overheard a journalist say: “What’s the point? What can you do with five thousand pounds?”

Depending on the business, the owner, and how wisely they spend their cash, evidently quite a lot. In fact, many successful entrepreneurs started out with a lot less.

Spend on stock

Five years ago, three entrepreneurs with a passion for fun costumes came up with the concept of Morphsuits, a range of branded spandex skin-tight garments, which cover the entire body.

A total investment of just £3,000 ($5,100) was used to start the business, with £1000 provided by each founder, and two thirds of the total startup capital spent on stock by the Edinburgh-based startup.

With no money left for professional marketing and PR to promote the business, Morphsuits was launched through Facebook, at a time when few brands were going the social media marketing route, which generated a good start and Morphsuits was 100% self funded for the first year.

“We needed product and somewhere to sell it, so we made a website for £600 ($1,020). It was a cheap way to test the concept, which was one of the many great things about Morphsuits versus other businesses who need massive investment up front,” says co-founder Gregor Lawson .

The company now generates £11 million ($18.7 million) in sales annually.

Read More: http://www.forbes.com/sites/alisoncoleman/2014/06/30/shoestring-start-ups-why-size-doesnt-matter-when-you-can-beg-borrow-and-budget/

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