Starting Small

10e20 LLC

Startup costs: $425
Following a stint for a web development company run into the ground by its founders, Chris Winfield swore he'd never do anything involving the internet again. But he couldn't help himself after being hired by a recording studio to handle business development. He saw their need for a website and soon became well-versed in search engine optimization (SEO). Winfield, 28, was so successful in getting the site to the top of search engines that the company had to remove the studio's phone number from the site to stop the flood of calls.

Winfield, who was ready for a change, had kept in touch with a former co-worker, Danielle Lanzillo, 28, the former head of production for the web development company. In 2002, Lanzillo and Winfield decided to leave their jobs and go into business together, co-founding search engine marketing and web development firm 10e20 LLC in New York City. With just $425, the partners paid someone to handle the LLC filing, and inked an agreement with a hosting company to host their website and their clients' for a low rate.

Working from home, Winfield already had high-speed internet access and unlimited phone minutes on his landline. "We now have clients in every state and six countries around the world, and [we've] only met about five to 10 of our 350 clients face to face," says Winfield. "Because of the nature of the business, there's no need to have a lavish office." Their first client was a referral from the recording studio, but 10e20's specialization in SEO helped their site, www.10e20.com, attract so much business that they never did any cold calling.

The co-founders cut costs by doing as much work as possible themselves. They hired freelancers, communicating with some solely through IM. And by providing their services as bartering chips, Lanzillo and Winfield received a server from a web host company in exchange for a complete redesign of the company's website. They were able to strike up similar deals for accounting and legal services. Rather than hire a secretary for $28,000 a year, they used an answering service instead. Winfield even wrote their script, ensuring 10e20 would sound professional. Even though the partners added two employees five months into business, Winfield's apartment accommodated them with the help of inexpensive dividers purchased on eBay, and a refurbished small-business phone system to help with the busy phone lines.

Six months into business, Winfield found an office in New York through Craigslist, an online community. "I worked an unreal deal on rent by dealing directly with the owner of our building--rather than a broker--saving us a lot in fees," he says. Scouring the internet for local deals, Winfield also found a company that was closing its doors and got a bargain on desks, chairs and other office items.

10e20 has found success by targeting small to midsize businesses and extending beyond web development into open-source programming. A second location opened in downtown West Palm Beach, Florida, this past September. The company, with 2005 sales projected to reach $6 million, is also looking to expand to the West Coast.