Gracious Hosts

What: Complete web hosting service for online businesses
Who: Dan Koziak and Paul Williamson of Gazungle
Where: Nashua, New Hampshire
When: Started in 2004
Startup Costs: $1,850

Paul Williamson was freelancing for a company in web development when he suggested they collaborate to form a one-stop e-commerce shop. But the project was pulled in too many directions, so Williamson and fellow freelancer Dan Koziak branched out on their own.

The pair set up a VoIP network, hosting server, high-end multimedia computer--which they built after merging their resources--and workstations in Koziak's living room for less than $2,000.

Though Williamson, 40, says a lot of the business was started on credit, their greatest asset has been time. Enthusiastic to have their own business and help others achieve similar dreams, they worked upwards of 14 hours a day for the first few months, developing their site while scouring the internet and other sources for leads.

Many of their previous clients signed up for Gazungle services, and as soon as the pair started to earn money, they invested it back into building the business. "Word-of-mouth has been our strongest [advantage]," says Koziak, 29. Nearly half of Gazungle's new business is generated from recommendations by its current client base.

With a ton of web development knowledge between them, Koziak and Williamson have been able to keep their employee roster at two, hiring subcontractors to fill in the gaps when needed. "We're seeing everything come together for 2007," says Williamson, who expects sales to reach $1 million.

This article was originally published in the March 2007 print edition of Entrepreneur with the headline: Gracious Hosts .