From the May 2005 issue of Startups

If you've ever thought homebased entrepreneurs were part-time hobbyists with lightweight incomes, or that young entrepreneurs were slackers unaccustomed to big-time responsibility, you're in for an eye-opener. These seven entrepreneurs all started their multimillion-dollar businesses at home when they were under the age of 40. Whether they're working with Fortune 100 companies or getting their products placed on the pages of InStyle, these business owners are living proof that you don't have to operate out of an impressive storefront or be Donald Trump's age to make it in the big leagues.

Marissa Shipman, 31

Company name: Shipman Associates
Location: San Francisco
2004 sales: $2 million
Description: Manufacturer of TheBalm line of cosmetics

Kitchen concoction: This TV-industry veteran didn't know anything about cosmetics when she decided to start creating her own line of lip balm in her kitchen. But after meeting a woman in the cosmetics industry who was completely passionate about her job, Shipman's spark was lit. She concocted lip-plumping glosses with names like Berry My Treasure and Pepper My Mint in 2000 and started pitching her product to stores in 2001.

Big names: It wasn't connections that got her foot in the door, notes Shipman: "When I started, I didn't know anybody in the cosmetics industry." It was good, old-fashioned pavement pounding that got her into major stores like Fred Segal, Henri Bendel and Sephora. Moreover, when stars like Cher purchased the product and TheBalm got a mention in InStyle magazine in 2001 and Cosmopolitan magazine this year, Shipman's place in the fashion and beauty lexicon was cemented.

Homegrown: "I love working from home," says Shipman, who is still homebased. But her home has had to change a few times as her business skyrocketed. "I started getting all these black-and-blue marks" from running into all the boxes in her one-bedroom apartment, she says. At press time, she'd outgrown three apartments and was looking for a new home base for herself and her nine employees.

A family affair: Shipman has even recruited her family to help run the company-though they're all the way across the country. Both her dad, in Greenwich, Connecticut, and her sister in Philadelphia work out of their homes to help build TheBalm brand. Says Shipman, "We're calling and e-mailing constantly."

A call to action: Loving her business as she does, Shipman is full of encouragement for other entrepreneurs. "People always have these great ideas, but they don't do [anything] with them," she says. "If you have something you think could work, do it on a small scale and see."--Nichole L. Torres

Joe Bushey, 30

Company name: POS World Inc.
Location: Atlanta
Estimated 2004 sales: $10.8 million
Description: Point-of-sale online retailer

You've got mail: This IT manager for a concessions management company loved working in the POS field, but was so burnt out by the intense work hours that his doctor recommended a career change. One day, while reading a catalog with reseller pricing for receipt printers, cash drawers, bar-code scanners and other POS items, Bushey realized that not only was the markup outrageous, but also that there was nowhere to purchase POS hardware online. His vision: to create an online marketplace offering fair pricing on these items to the end user. "I wanted to be the Dell of POS," says Bushey.

Home economics: "I didn't have a dime to spare," says Bushey, who continued at his full-time job while starting POS World in 1999 in his off time at home. "It was a virtually no-cost startup." Early on, he focused on establishing vendor relationships and developing a website. His brother Jim moved into his apartment to handle website maintenance.

Image-conscious: One investment--a high-end Nortel phone system with voice mail--presented a professional image to callers, even though Bushey was handling calls for every department. It seemed to work--in 2001, when the Los Alamos National Laboratory's hard drives containing sensitive material went missing, they contacted POS World for recommendations on item-tracking technology. "I realized then we really had a presence," says Bushey, who moved to an office and hired his first nonfamily employees in 2000.

Big business: Most customers do business through POSWorld.com, but they can also visit the office or call in. Customers include many Fortune 100 companies, the Federal Reserve Board, Lockheed Martin and the U.S. court system. POS World is expanding into auto ID, warehouse operations and the biomedical field, and will partner with Microsoft to sell retail-management software in combination with the company's hardware.--April Y. Pennington

Sports Charms and Advertising

Jennifer Gonzales, 36, and John Gonzales, 33

Company name: Procharms Inc.
Location: Sacramento, California
Estimated 2004 sales: $2.5 million
Description: Sports charm wholesaler

Courting period: When Jennifer Gonzales' husband, John, gave her an Italian charm bracelet for Valentine's Day in 2002, Jennifer--a huge Sacramento Kings fan--searched in vain for a Kings charm before deciding to create one herself. Jennifer visited the Team Store at Arco Arena (home of the Kings) to ask about licensing, and a helpful employee called Kings' co-owner Gavin Maloof and let Jennifer leave a message. She was stunned when Maloof returned her call and directed her to someone at Arco, eventually leading to a $7,000 order.

Sports nut: After talking to local jewelry-makers and suppliers and doing many hours of online research, Jennifer found a company that could manufacture the charms and was a licensee for Major League Baseball, the NBA, NFL, NHL and professional players associations. Jennifer recruited her first rep--a charm-store business owner--and collected a 20 percent deposit from interested charm retailers. The deposit, in addition to maxed-out credit cards, paid for ProCharms'first shipment.

Domestic charm: Jennifer and John set up a work space in their living room and placed shelves on the wall for the charms. "Everyone who knew us thought we were crazy," says Jennifer. But in addition to the advantage of keeping costs low, operating from home also allowed the mother of three to stay close to her children throughout the workday, with the eventual assistance of a nanny. After four months, they moved into a small office and began hiring employees. John handles ordering, inventory and product development, while Jennifer oversees everything as president.

Team spirit: ProCharms now sells to charm retailers, e-tailers and approximately 20 professional sports teams/venues. The company has also done very well expanding into the collegiate sports market, counting 65 college bookstores as customers. New products include a silver-toned, Tiffany-style heart bracelet; cell phone charms; and leather cuff bracelets, all with team logos.--A.Y.P.

Donnovan Andrews, 31, and Stephen Smyk, 35

Company name: Performance Bridge Advertising
Location: New York City
2004 sales: $5.2 million
Description: Full-service marketing and advertising agency

The ad men: With a background in advertising, Andrews and Smyk were eager to start out on their own. Never underestimating the power of a phone call, Andrews called American Express Publishing to pitch their servicesin 2002--focusing on their online marketing services. After being shuffled around a bit, he finally hit the right contact and got a meeting. "Out of that came a strong relationship," says Andrews.

Cost connection: Keeping overhead down on their startup was paramount. "Within the advertising industry, you never know--you can go from zero to hero overnight, and any agency can do the reverse," says Andrews. "So we started out from home and built slowly and were really conservative until we got to the point where we had excess capital." With their success, Andrews and Smyk were able to move into an office space four months after they started and now have offices in Binghamton, New York, and New York City.

Home style: Allocating time to take care of personal business and deal with professional responsibilities was key for these entrepreneurs. "If you're [homebased], you have to program yourself so that once that alarm goes off in the morning, you'll allocate yourself a certain amount of time to maintain your personal responsibilities, and then switch over completely to your professional role," says Andrews. "The challenge is that you're dabbling back and forth between your personal and professional life."

Human capital: Andrews had started a few nonprofit companies in the past, and both he and Smyk make charitable giving a priority. "If we build this company from Day One so [contributing to nonprofits] is part of our culture, and [view] everything we do as an organization in terms of giving back, as we grow, the members of our company will grow with that." A particular pet cause is The TORCH (Together Our Resources Can Help) Program, an organization that helps underprivileged New York City-area high school students find internships.--N.L.T.

Jeff Nodelman, 35

Company name: Noodlesoup Productions Inc.
Location: New York City
2004 sales: $4.2 million
Description: Animation studio

Disney days: After five successful years as an animator for The Walt Disney Company, Nodelman wanted to try other things. A job as an art director at an advertising firm followed, where he also got a year and a half of experience directing commercials. In 2001, he branched out on his own. Says Nodelman, "I figured I knew enough or was stupid enough to give it a shot."

Diverging interests: Knowing he could animate for ads, TV and film, Nodelman focused on marketing his skills as a good storyteller with ani-mation to crack all those markets. The strategy worked--Noodlesouphas produced animation for various media, including Cartoon Network's The Venture Brothers, as well as for two Miramax films and the Broadway production of the Tony-award winning musical Avenue Q. Cartoon shows for Cartoon Network, Disney and Nickelodeon are in development, along with plans to create a comic book.

Drawing talent: In the early days, Nodelman would communicate with a network of animating freelancers mostly via e-mail and meetings at each other's homes in both New Jersey and New York. The challenge, he found, was working with Los Angeles-based clients from his home, so he and his crew came up with a way to e-mail and post smaller-size files of their work. One of their technical successes was creating a 60-second Flash animation to send to a potential Los Angeles client--the whole file was no bigger than a Word document. "The fact that we're not in L.A. really shouldn't be that big of a deal, because here we are, sending stuff, and clients can see it quicker than if we were [there]," he says.

All or nothing: Nodelman mortgaged his house, sold his cars and, he admits, "took out more credit cards than anyone should ever touch in his life." Thankfully, he, along with the five animators he recruited from his Disney gig, scored two big accounts right off the bat--General Mills and Warner Bros. Entertainment.--N.L.T.