Can You Build an Internet Business on a Shoe-String Budget?

Absolutely.  It is important to be aware that building a business falls under the time-money trade off paradigm as with anything in life. 

If you have little or no money, you will spend much more time advertising/ building your internet business than you would if you can afford paid advertising.

Fortunately, in recent years, it has become much easier to build a business on a shoestring budget.  There has been an explosion of advertising sites, many of which offer ways to earn free advertising. There are traffic exchanges, safelists and text ad exchanges, just to name a few.  you have the ability to earn advertising for your internet business, product or service by clicking on/viewing other people's ads.

And that list doesn't even include free classified sites.  All of these methods do work but you must be diligent and consistent in your efforts.  Earning advertising or posting ads on a classified site is rather time consuming, but there is no
risk of a failed ad campaign (except the time you spent) and it gives you the opportunity to learn more about effective advertising methods simply by paying attention to what other people are doing.

Another thing to consider that will save you lot of time and money in the long run is tracking the hits of each method of advertising you are using. You can do this by using special links that link-tracker services will provide you. You should be able to find a number of free tracking options by doing a quick google search for "hit tracking" or "link tracking".

When you do upgrade to paid advertising you will already know which ads work best so you can save a little bit of money on testing.

If you are determined to make your efforts pay off, you will find a way to make it work.  Just don't get discouraged by the rate of your progress at the beginning. 

You will naturally be learning a lot when you start building your business on a shoe string budget and that knowledge is valuable in and of itself. Eventually, consistent daily action will yield results.