Five ideas to start a profitable business with Rs 5000 investment

Many businesses require small investments and then self-fund their growth. All that is required is identifying the market and starting small to avoid unsold inventory. Here are five ideas with under Rs 5000 investment that have worked for entrepreneurs

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Five ideas to start a profitable business with Rs 5000 investment

Five ideas to start a profitable business with Rs 5000 investment

India is the hub of entrepreneurship. From small towns to glittering metros, there is no dearth of entrepreneurial success stories resulting from spotting an opportunity early and working to turn it into a reality. Often, businesses require investment and that’s the Achilles Heel for most entrepreneurs.

However, many businesses require small investments and then the revenues fund growth. All that is required is to identify the market beforehand and start small to ensure you don’t end up with losses or unsold inventory. If you are clear about your target buyer segment and how to reach them with your products (both online and offline), half the battle is won.

Here are five low-investment profitable businesses along with stories of entrepreneurs who turned these ideas into successful enterprises:

1. Mushroom Farming  

With a high demand and low production, cultivating mushrooms is one of the most profitable entrepreneurship ideas. It requires extremely low investment, gives quick returns and the business can be expanded rapidly.

It can be started with an investment of Rs 500. All you need is a dark corner in your house or garage or a mud hut near your house to cultivate mushrooms and their spawns (seeds).

The rate of oyster spawn (seeds) is Rs120 per kg and you can mix these seeds with wheat straw and create 10 bags of oyster mushrooms. The wheat straw is boiled and cooled and mushroom seeds are mixed into it. This mixture can be filled into 10 plastic bags. After 45 days, the production will be around 30 kg of oyster mushrooms.

shankar meena at Jeevan mushroom
Shankar Meena, founder of Jeevan Mushroom

At a wholesale market rate of around Rs 350 per kg, the income will be over Rs10,000 with an investment of under Rs500. You can put up more mushroom bags if you can invest more.

An investment of Rs 5000 will yield 300 kg of mushrooms and an income of Rs 1 lakh. 

There are many success stories in mushroom farming. Odisha’s Santosh Mishra began his mushroom business with a Rs 39 investment and is now setting up a Rs 2 crore food processing plant. Similarly, Jaipur’s Shankar Meena, who dropped out of his MBA, started from his garage and now earns Rs13 lakh per month from the sale of mushrooms.

2. Making cloth bags

With rising levels of plastic pollution, more and more people are ditching plastic for reusable cotton bags which do not harm the environment. Many entrepreneurs are also exporting cloth bags due to the rising demand from overseas.

The fabric for making cotton cloth sells for as low as Rs 200 per kg in wholesale markets. Cutting it into required shapes and stitching together the pieces does not take too long. If stitching isn’t your cup of tea, it can be outsourced to local tailors who charge nominally on a per-piece basis. The first point of sale can be your local grocery stores, stationary outlets and other shops.

The business is rapidly scaleable and good quality can help you rope in corporate clients who mostly execute bulk deals. Madurai-based couple Krishnan Subramanian and his wife Gowri Gopinath quit their corporate jobs to make cloth bags and cut plastic pollution.

Gowri Gopinath and Krishnan Subramanian, founders, YellowBag Foundation

Their YellowBag Foundation has crossed Rs 3 crore in revenues and also empowers women by providing them with livelihood opportunities.

3. Handcrafted home décor

There is a rapidly growing market for handcrafted items for home décor and utility purposes. One of the factors making handcrafted items popular is the option to customise products by talking directly to the entrepreneur.

And there is a wide range of options to sell them – from your local stores to online marketplaces, there is no dearth of platforms where entrepreneurs can place their products.

Pooja Kanth began her entrepreneurial journey by investing Rs 5,000 to source macramé threads and other items. She sold her first product for Rs 150 on Amazon and now clocks sales of Rs30 lakh annually. Similarly, Deepika Velmurugan began by painting kolam designs on old wooden items at her home and now has buyers across the world.

Pooja Kanth set up her eponymous handicrafts business in 2015
Pooja Kanth with her macrame product

Also Read: How Deepika Velmurugan set up a successful business by taking Kolam from doorstep to drawing room

4. Vermicomposting

 Across the world, there is a rising demand for organic foods grown without chemicals and pesticides. Farmers are shifting to organic farming because organic crops fetch higher market rates, rejuvenate the soil and reduce irrigation requirements on the farm.

One of the key ingredients of organic farming is vermicompost, made by adding earthworms to organic waste, primarily cow dung. In the vermicomposting process, earthworms convert organic waste into manure rich in nutrients like nitrogen, potassium and phosphorus and help in healthy plant growth.

Assam’s Kanika Talukdar, widowed at 27 years of age, invested Rs 500 to make vermicompost and sold 80kg of it in the first attempt. Today, she earns Rs3.5 lakh per month from vermicomposting.

Abdul Ahad Lone at his vermicompost unit in Anantnag, Kashmir
Abdul Ahad Lone at his vermicompost unit

Similarly, Kashmir’s organic farmer Abdul Ahad Lone sells 5,000 kg of vermicompost daily, earning Rs50,000 every day by selling vermicompost. He is still unable to meet the demand from farmers in the Anantnag district.

5. Pickle-making

As people move away from their homes for work and studies, they miss the pickles made by their mothers and grandmothers. Since it’s not convenient to ferry oil-rich pickles in large batches frequently, and the consumption is almost daily, most people prefer to buy them locally or order online.

Kashmir’s Sabira Mattoo: Pickling her way to success through home business
Pickle packaging at Sabira Mattoo's unit. 

The investment is low in this business. One can start with local vegetables, some spices and oils and place the products on the shelves of local grocery stores or even put up stalls outside stores to familiarize buyer with their products.

Kashmir’s Sabira Mattoo began by putting pictures of her pickles on social media and now sells them across the country online. She employs 25 more women and is expanding her product range. Vasudha Bhogaraju’s mother started a home business of making pickles and now, Vasudha has turned it into a Rs 2-crore enterprise shipping pickles globally.

Here’s Vasudha's story: How this daughter turned her mother's pickle home business into a Rs 2 crore enterprise

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