10 Low Cost Businesses To Start In A Developing Country
The best way to start making money in a developing country is to start a business for two reasons. One, there isn't anything much to do anyway; and two, starting a business in that environment is way easier than anywhere else. That's because all you have to do is make a stupid simple business for the most basic needs of your people. And to help you out even more, here are 10 low-cost businesses that we consider a great place to start for any aspiring entrepreneur. Welcome to alux.com, the place where future billionaires come to get inspired.
Number one: Local transportation services. Okay, so we'll start off with this one because it's one of the most basic but profitable business ideas out there. During our recent trip to Uganda, we met a longtime Aluxor who actually runs a local transportation business. Her name's Fiona, and she is the embodiment of the entrepreneurial spirit. Fiona has multiple businesses, and all of them are easy and straightforward, which is why they work. One of them is a local transportation business where she buys cheap cars and rents them out to individual drivers.
So why is it simple? Because you can start with one car, or motorcycle, one bike or rickshaw, one boat—whatever your most common method of transportation is. It's straightforward because everyone's got a need to be places. It's a great way to create an additional and passive source of income. And what's so cool about it is it can be scaled at any time if the demand increases. Some important things to mention here are, first, depending on the place you live in, you can pick a different vehicle to satisfy the demand in your market. For example, in India, it might be a good idea to rent auto rickshaws, while in African countries, scooters might be a better pick. Secondly, you don't have to pay a lot of money for the vehicle; a secondhand scooter or a car will do as long as it's in good shape and safe to drive. Whatever the case, a small investment is required. But if you've got some pocket money on the side and don't know what to do with it, starting a local transportation business could be a great idea.
Number two: Recycling businesses. One man's trash is another man's treasure. Did you know there is a business in Kenya that uses plastic waste in order to create building blocks, roofing tiles, drainage gutters, and even manhole covers? And the cost of production is 25% cheaper than concrete. As people change the collective mentality regarding the safety of the environment, there's an increasing demand for businesses that can creatively turn trash into gold. Binish Desai, an entrepreneur from India dubbed the "Recycle Man," has managed to turn discarded face masks, industrial paper, and gum waste into paving bricks.
You might have to get your hands dirty, but if there's demand and money to be made, who cares, right? The point is, there's a lot of waste that's waiting around to be picked up and sorted by someone willing to make some money. In some cases, you can even pick this plastic out for free. What you basically need is to sort this trash out, find the best recipe on the market, buy or build a press yourself, and scale the operations based on demand. Now, some may say you need a hefty budget in order to start things out, but if you research the internet enough, you'll find you actually don't. While it's true you might need to invest some money in the beginning in order to kick things off, most folks build their presses for just a few thousand dollars or simply rent them. Binish Desai made it to Forbes 30 under 30 with this business plan, so who says you can't be the next one to make it?
Number three: Distribution businesses. Since population density is much higher in developing countries, you could successfully start a distribution business there. Fast-moving consumer goods, food products, personal care products, chemicals, fresh fruits, and vegetables—they're among the most profitable items that people trade on the market. Starting a distribution business could be a wise decision for first-generation entrepreneurs. That's because this type of venture allows you to start a business with much less risk and financial investment. Besides that, many developing countries may have less competition in the distribution industry, which can make it easier for a new business to gain a foothold in the market.
Developing countries often have a high demand for goods, including basic necessities and consumer products, and this demand increases in remote areas where people have to walk miles in order to reach a shop or a food deposit. A distribution company can fulfill this demand by providing a dependable and efficient method of delivering goods to customers. If you know one owner of a local store or supermarket, ask them if they're interested in working with you on providing this service. That could be a really great starting point.
Number four: Cash crop farming. Agriculture is the most important sector in the majority of third-world countries, and growing cash crops generates more income than any other farming activity. Many developing countries have a high demand for cash crops like coffee, cocoa, and cotton because of their daily use in every household. If you own a piece of land that can be used to grow these basic crops, and specialize in making it profitable, selling those to local producers can turn out to be a great source of income. If you don't own one, maybe buy a piece of land with a few friends. And we're not even discussing the potential exports here because that's a lot more complicated, but it's definitely something to consider. Just remember to start small, test the market, and see what demand and profit margins are like for each product.
Number five: Mobile phone repair. Pretty much everybody owns a smartphone in 2023, and in developing countries, most of them, unlike iPhones, are easy to repair. Where there's a high demand for a service, there's also an opportunity to make money. Most people prefer fixing their old devices because it's simply cheaper than buying a new one. If you can specialize in that and capitalize on this idea by offering reliable services in your community, you'll have no problem making an honest buck.
Additionally, if you've got some pocket money on the side, you could even consider buying broken phones, laptops, or devices, fixing them up, and selling them for a profit to people who can't afford new ones. But before you do that, make sure to research your market properly; you don't want to get crushed by players who are exploiting this niche.
Number six: Water delivery. If there's one thing that people lack in poor countries, it's access to clean water. In some cases, people from remote communities have to walk entire miles in order to reach a place that can provide them with a source of fresh water. But what if there was someone who could bring that water to them instead? Now, if you're already living in a community where this is an issue, you can capitalize on that and make an honest living out of it.
According to the World Health Organization, nearly one quarter of sub-Saharan Africans don't have access to safe drinking water, and many of them have limited access to water for basic sanitation and hygiene. So the demand is quite high. But you don't have to wait for an NGO to come up and dig wells; you can do it yourself, and maybe with that transportation business, you could use it to distribute that water within your community.
Number seven: Handicrafts. Now, if you've got a creative mind and enjoy working at home, you could consider starting a crafts business. Starting a business from home requires very little capital investment, and it's a great way to leverage your passion for a certain niche. Now, what's cool about this is that often, products made by crafters are unique, and people fall in love with that.
Starting from basic bracelets to jewelry and unique decorative items, you could leverage your creativity in order to create high-quality items with basic materials. In this case, the only cost of production you need to take care of are the materials, which you can buy from a local shop or order at a very cheap price from the internet. What's important to mention here is that handicrafts businesses will do well in tourist areas, especially, because tourists love to buy homemade and unique trinkets they can take back home to offer up as gifts to their friends and family. And if those trinkets also have certain cultural values, that's also a plus because people love to take home a little piece of the place they visit.
In any case, starting a handicraft business is one of the safest ways to start a business in a poor economy because of the low cost of production.
Number eight: Home cleaning services. Here's a simple but effective strategy: start by using the products you're already using to clean your own house. When you start getting profits and you want to expand, then begin buying more specialized equipment. You could also expand this by offering window cleaning services for businesses, though this might require some additional investment and maybe a ladder or two.
If you learn the skills, you could even offer pool cleaning or aquarium maintenance services, but keep that in mind for later. Pressure washing is also pretty big, and if you're able to identify and target businesses that require those services, you'll have no trouble constantly finding new clients.
Number nine: Street food stalls. Asia is notorious for its street food industry, and many tourists are dying to visit and explore its diversity. The key factor here is to be unique and come up with a recipe and brand that stands out from the rest of the stalls. Besides the demand generated by tourists, street food is a popular and convenient option for many locals, and it's frequently in high demand.
Street food stalls typically have low overhead costs as they don't require a lot of space or expensive equipment, and this means you can start your business with a low initial investment which is more than ideal because street food is typically sold at a low price point. You could make a profit even with a low sales volume. You could also keep costs under control by sourcing ingredients at reasonable prices from local suppliers. Just make sure you meet all sanitary and health requirements, and your recipes are offering customers a positive experience.
Number ten: Opening up a barber shop. Look, there's always going to be a demand for hair care and barbering services, whether you're a barber yourself offering services at home, or you want to expand to a different property and set up a barber shop. This is a great business idea when it comes to dealing with competition and standing out.
Creating a culture or a brand around your shop can help you to scale and establish a clientele. The better and more professional your services are, the higher the likelihood the client is going to return. Focus on this aspect and you'll go big in no time.
And that's it for today! Luxor, which low-cost business mentioned in this video appears to be the most interesting to you? Drop your answers in the comments below. If you're living in a developing country, make sure to share with us what you would add to this list. We're so curious to know how many Aluxers are business owners and what sectors they're actively participating in.
And if this video does well, we're going to make another and more advanced version for those of you who've already got a pile of cash sitting on the side, so stay tuned for that. If you found this video insightful, don't forget to tip us with a like for the YouTube algorithm. And as always, thanks for watching. If you're hungry for more, check out this video next!