4 Ways To Turn Future Stimulus Checks into Funds To Launch a Small Business

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Despite what you might have seen on your socials, there aren’t any new stimulus checks coming this year. But if you missed out on a stimulus check during the COVID-19 pandemic, you could be eligible for payment now.

The IRS announced that it’s going to send out stimulus checks to the estimated one million Americans who qualified for the 2021 Recovery Rebate Credit but never claimed it. The sum total of these payments will be about $2.4 billion, but the maximum any one individual will receive is $1,400.

You could also be eligible for this check if you didn’t file a 2021 tax return. However, you must file your taxes by Apr. 15, 2025 to claim this credit and any other refund due. Anyone who’s eligible for this payment should receive the funds in their bank account or via snail mail as soon as the end of January.

If you qualify and you end up getting a stimulus check, you could use it to launch a small business. Here are some ways to do just that.

Register Your Business as an LLC

The cost of registering a small business as an LLC varies by location, but it doesn’t have to be much. And you can use your stimulus check to cover the fee.

Here’s an estimate of what it costs to start an LLC in several states:

• North Carolina: $125
• New York: $200
• Washington: $200
• Vermont: $125

This fee is essentially the cost of receiving a certificate of formation for your business. You may also have to spend some money on other fees. For example, these are common fees to starting an LLC in Washington:

• Up to $125 annually for a registered agent
• $60 annual fee for the annual report
• One-time fee of $90 for the state business license application
• Variable annual fees for city business license and specialty business license renewals
• $5 trade name (DBA) fee (if applicable)
• Taxes (variable)

Some aspects of setting up an LLC — like getting an Employer Identification Number (EIN) — don’t cost any money or come with a nominal one-time fee.

Pay For Branding and a Platform

Every good business starts with an idea, but you’ll also need to build a recognizable brand.

The good news is this doesn’t have to be expensive. If you have some graphic design skills, you could do most of this on your own. Otherwise, you may want to head over to a platform like Fiverr and pay a professional artist to do your logo and other graphics. It’s Fiverr, but you can expect to pay closer to $20 to $200 for this service.

You’ll also need a platform from which to operate, build your audience and make some sales. You could keep things simple — and cheap — and start by setting up shop on Etsy, Shopify or a similar site. Or you could pay for your own website and domain.

A simple website for a small business can cost anywhere from $100 to $500 to build. The domain itself can cost around $15 annually, while web hosting starts at about $8 a month.

The more you can do yourself here, the less you’ll need to spend.

Purchase Supplies

Depending on the type of business you’re creating, you might need to spend money on supplies. In all likelihood, this alone will go beyond your stimulus check — even if more than one person in your household gets the $1,400 and pools their funds together.

But you can keep your initial costs fairly low.

Say, for example, you want to start an Etsy shop selling prints of your artwork. You can always purchase the supplies you need upfront — things like a printer, toner and the right kind of printing paper. Or you can purchase based on the sales you make. Both will cut into your profits, but the second option puts less stress on your budget.

As you start building your small business and turning more of a profit, you can always purchase more supplies upfront. It’s entirely up to your comfort level and preferences.

Pay for Marketing

Marketing costs alone can eat up your entire stimulus check, and then some. But you’re just starting out, so it’s okay to start small.

According to Salesforce, here are some general rules of thumb to follow when it comes to small businesses and marketing costs:

• Service-based business-to-consumer (B2C) businesses tend to spend about 15% of their budgets on marketing
• Product-based B2C businesses spend around 17% of their budgets on marketing
• Both service- and product-based B2B businesses spend about 11% of their budgets on marketing

If you only have $1,400, this means you should spend no more than $154 (11%) to $238 (17%) of your money on marketing. This might not seem like much, but it’s a start.

And if you can DIY some of that marketing, or you have a partner or two to help you out, you could achieve quite a lot.

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