How much does it cost to start a company? Everyone has read the magazine articles about the newest millionaire who started his business with $5 and a roll of duct tape. It makes for good airplane reading. But in reality the amount of money you need to start a business highly depends on what type of business you are looking to build.

Service-based Businesses: $0. All you need is a dress shirt and maybe a printer. If you want to start a consulting business, a concierge business, a logo design or web development business, a housecleaning, staffing, accounting, or legal practice business, all you need to do is be qualified to start selling your services. You will probably also need a computer.

Web Business: $1000 – $20,000. The cost of creating a website or web-based business will continue to drop as developers create cheaper and cheaper applications that enable you to start selling something. You can develop a personal brand and an online shopping cart for around $1,000 – $2,000. You can start a networking site like facebook or linkedin for around $5k – $10k. You can even begin selling web-based software for $20k – $50k; if you find a strong niche. And prices will continue to fall.

Storefront Business: $40k – $200k. Franchises, Cafes, and Retail Outlets are a more concrete type of start-up (compared to web businesses or R&D operations). I know some people that started the right type of franchise; and expanded to dozens of locations in 2-3 years- if their finances look good.

Real Estate: $50k – $1m. Buying and selling real estate; and renting that space to tenants- is an accessible way to start a business and earn passive income, without needing to reinvent the wheel. Real Estate is a proven tactic for passive income and occasionally a way to double your money in less than a year.

Software and IT: $50k – $20m. Software, IT, Science, Medicine- these industries demand large-scale innovation; and now you start running into venture capitalists that will invest $30 million in your company; and expect your company to earn over $300 million within 10 years. At this stage; you better have an all-star team, idea, financial projections; and hopefully revenues.

Finance: I have some friends who are starting hedge funds; and I have no idea how much this costs or how they do it. Many finance start-ups are just service-based start-ups; like accounting of financial planning. But hedge funds, banks, stock brokerage firms- I have a feeling you need some real financial muscle.

All things said; there are thousands of multi-million-dollar companies you can start now for less than $5k. At least, that’s my philosophy.