Sweet and Low

You can start for less than $10K. Here are 10 hot businesses that won't break the bank.
Magazine Contributor
15+ min read

This story appears in the August 2000 issue of . Subscribe »

It sounds like a great idea: starting your own , being your own boss, charting your own , coming to work in bright red high-tops whenever you feel like it. In spite of all the talk lately about multimillion-dollar deals, it is still possible to start a business for less than the cost of a new car, even a cheap one. For the price of 285 movie tickets, 200 pizzas, one good mountain bike or a spring break trip to , you can hang out your "I'm the boss" shingle and get started. In fact, all the entrepreneurs spotlighted here started up for less than $10,000-in some cases, a lot less-and you can, too.

10 Hot Businesses to start for less than $10K

1.High-Tech PR

2.Accessory Design

3.Web Site Consultant

4.Internet Radio Broadcaster

5.Image Consultant

6.Carts & Kiosks

7.Virtual HR

8.E-Zine Publisher

9.Parent & Kid Tech

10.Personal Concierge

1. High-Tech PR

"Right now, [anyone] could get rich," says Tony Greene, senior vice president of account services with Sterling Hager Inc., a Watertown, Massachusetts, public relations and marketing firm. He's referring to the booming demand for public relations agencies that cater to high-tech clients.

While you should have some knowledge of cutting-edge to be effective in this field, your itself doesn't necessarily need to be highly sophisticated at start-up. In fact, Dennis Chominsky, 28, and his partner, Jason Miletsky, 28, started PFS New Media Inc. in Wayne, New Jersey, under humble circumstances: While working as a bartender, Chominsky started a production company in his garage, and Miletsky toiled as a waiter while running a PR firm out of a one-room home office. In 1996, the two decided to join forces and target the high-tech market, later adding a third partner, 34-year-old Deirdre Breakenridge. They brought in $3.5 million last year.

With growth of the high-tech industries running at an astounding 300 to 400 percent a year, clients will find you, Greene assures entrepreneurs. In fact, his firm turns away business because it already is operating at capacity. Beginners can get the word out about their services by contacting industry associations and advertising their Web sites.

The PFS partners do offer a few caveats, namely, the proclivity of high-tech clients to offer payment in stock options rather than cash. Proceed with caution when choosing your clients, and make sure you have plenty of stamina. "The biggest challenge," Chominsky concludes, "is that everything changes so quickly. To keep up with our clients, we need to be two steps ahead of other public relations firms."

The basics: a high-powered PC, software that lists media contacts (such as Bacon's MediaSource Software, 800-621-0561), a copier, a solid postage processor for bulk mailing, a few phone lines, a fax machine, business cards and letterhead.

Total cost: $4,500

What they spent: Chominsky and Miletsky started their separate businesses for about $3,000 each and needed little additional equipment when they merged. They worked full-time jobs after the merger, then slowly built from that base.

For details: Public Relations Society of America, (212) 995-2230, www.prsa.org

2. Accessory Design

Anita Ko was 22 and jobless the day she walked into a Los Angeles fabric store and found herself smitten with a bolt of '70s vintage upholstery fabric-the kind once used to line the interiors of RVs. "I thought it would make a cute handbag," recalls Ko, whose house had just been robbed, leaving her purseless. Determined not to let a limited budget stand in the way of her overwhelming need to accessorize, Ko bought the retro upholstery fabric for a little less than $100 and whipped up a few handbags for herself and her eager friends.

When Ko realized she might be on to something, she made a few designs and took them to a sample-maker. A friend who was a clothing rep showed the samples to local boutique owners, who liked the funky, retro designs and fabrics. Almost before she realized it, Ko, who has no formal design experience, was in with Los Angeles-based Trash Bags.

This is not the usual course of events for young designers, acknowledges Barbara Bundy, vice president of education at the Fashion Institute of Design and Merchandising in Los Angeles. Most of them have some formal training and have worked for established designers, at least for a while. But, in the end, most entrepreneurs need a unique idea and an endless supply of emotional fortitude to make it as an independent designer. For Ko, launching Trash Bags was remarkably easy. "I got a lot of immediate orders so soon," she says, "I thought getting business came naturally to everyone."

The relative ease of that first year, in 1997, in which Ko and her team of contract workers turned out 1,000 handbags a month from a warehouse and earned $200,000, made the second-year growing pains a bit harder to bear, Ko admits. Moving out of the warehouse and into her own downtown Los Angeles studio, juggling new expenses, and continuing to expand the business took a toll on her nerves. "I busted my butt. I cried. I bled," recalls Ko, now older and wiser at 25. "I wanted to quit a million times."

Those who buy her $65 to $165 handbags-great retailers like Macy's and Bloomingdale's and celebrities like Claudia Schiffer and Cameron Diaz-are glad she didn't. Now that the business is earning more than $300,000 and Ko is experienced, she's proud she toughed it out. Says Ko, "My life has changed because of this business."

The basics: fabric, a pattern, a sewing machine and other related sewing tools, a business phone line, a standard PC, a printer, basic software, and access. Marketing expenses will cost about $2,000.

Total cost: $5,000

What she spent: Ko initially spent $2,500 for fabric, the production of her first samples, showroom fees and travel expenses. She did most of her early marketing by word-of-mouth and visiting local boutiques.

For details: Fashion Institute of Design and Merchandising, (213) 624-1200, www.fidm.com

3. Web Site Consultant

T. Renee Wilson was only 19 and working as an intern at AT&T when she dreamed up a consulting company that could meet her clients' every technical need, from research to implementation (including Web site design and development of CD-ROMs and DVDs) to eventual follow-up. The was not to stay a dream for long, however. Wilson started and ran Communications Management Group Inc. (CMG) for six months before letting her parents in on her secret. "I had classes all day [at two Georgia universities], and I worked all night," says the 25-year-old Atlanta entrepreneur. "I remember sleeping for the first time in two days while waiting for my [business cards and brochures] to be printed at Kinko's."

Her determination was boundless: She networked; she cold-called; she did free presentations. People assumed she was in her early 30s when she was just 22-and it helped land clients. Word spread among major corporations that Wilson's firm delivered on its promises, and despite CMG's relatively small size, the big fish bit. "We don't take no for an answer," Wilson says, perhaps unnecessarily. "No is just a second chance to make a better impression."

"It's harder today for a small shop to get large clients," says Andrew Q. Kraft, executive director of the Association for Professionals in Los Angeles. "There is a growing number of established companies, and it's no longer enough for a company to be able to do the technical work. They need someone who can work with clients."

CMG does that and more. "We do a lot of clean-up work and repair," says Wilson, who brings in $5 million a year and projects $95 million for 2000, thanks to the e-commerce addition. "We ask clients not only what they want now, but where they'll be in six months."

CMG now has over 100 employees working in offices nationwide. Wilson's best advice for young entrepreneurs? Do what you say you're going to do.

The basics: a computer with at least 8GB hard-drive space, a 17-inch monitor and a minimum 350MHz processor with a graphics accelerator ($1,500 to $2,000). Add a scanner, a laser printer, graphics software, a Web management tool, file-transfer software, a digital camera and space for your Web site. Toss in a handbook on HTML, XML and Javascripting.

Total cost: $3,500 to $4,500

What she spent: Wilson already had most of the equipment she needed, and she created her own marketing materials. She spent $3,000 on office space, furniture and phone lines.

For details: Association for Internet Professionals, (877) AIP-0800, www.association.org

4. Internet Radio Broadcaster

Decades ago, before merger mania and the homogenization of America's radio stations, disk jockeys were the cowboys of the airwaves, playing and saying what appealed to them and their listeners. The era of indie radio is now resurfacing, thanks to the .

A new breed of radio renegades is broadcasting to computer users, free of FCC regulations because, so far, there aren't any. "Anyone can do it," says Lynne Margolis, associate editor of RadioDigest.com Inc., of starting an Internet radio station.

Jon Buck, 28, got hooked on Internet radio after listening to a pirate station in London. He linked up with Mark "Frosty" McNeill, 24, who gained experience with Internet radio at the University of Southern California in Los Angeles. The partners launched dublab.com LLC from Los Angeles in September 1999.

The biggest challenge for Net radio entrepreneurs is standing apart from the buzz. Fast-growing will likely give Internet radio a boost in the near future. Dublab.com operates on the lean side, publicizing the station through word-of-mouth and e-mail. Sales are generated from sponsorships and e-commerce. Buck predicts the will earn more than half a million during its first year. "[Sales] aren't as important as establishing our brand name and usership," he says. "Money doesn't matter as much as who has the best game plan and the most perseverance."

The basics: a standard PC and software, a Web site, broadband transmission capability (cost: $1,000 a month to support 1,000 listeners) and RealAudio (downloadable at www.realaudio.com) or similar software.

Total cost: $5,500 to $6,000

What they spent: Buck and McNeill pooled $25,000 for basic gear, a few months' rent and staff.

For details: Association for Internet Professionals, (877) AIP-0800, www.association.org

5. Image Consultant

A booming and the need for a competitive edge are contributing to the demand for professional image consultants, according to Elaine Stoltz, a consultant in Fort Worth, Texas. "Now that [people are] educated about what image consulting is, [they] realize they could use our services," she says.

Corporate clients are turning to certified image consultants like 34-year-old Michelle Damiano, owner of Impressions in State College, Pennsylvania, for help in presenting a powerful image. Damiano assists clients with everything from marketing materials to etiquette, but her specialty is trade show advising. "There are high-tech companies whose trade show booths look like they were put together by the Brady Bunch. That sends an inconsistent message," says Damiano, who launched her business full time in 1997. Before venturing out on her own, however, she worked (for free) with several New York City image consultants who proved to be invaluable mentors.

Working with two subcontractors, Damiano lands clients by attending trade shows, conducting workshops and advertising in business publications. Her annual sales in the past three years have grown from $20,000 to nearly $80,000.

Damiano's biggest challenge is helping her clients present a consistent professional image. "Image consulting is not rocket science," she says, "or I wouldn't be doing it. On the other hand, if it all were all just common sense, everyone would be doing it."

The basics: a standard PC and software, a business phone line, a fax machine, and e-mail. Marketing the business costs up to $2,000.

Total cost: $4,000 to $4,500

What she spent: Damiano spent less than $3,000 to start the business because she worked from home and had most of the basic equipment.

For details: Association of Image Consultants International, (800) 383-8831, www.aici.org

6. Carts & Kiosks

She calls herself an accidental tourist in the land of . But even though she had no previous experience, 33-year-old Alexis Abramson's success is hardly a random event. Combining her compassion for seniors with a growing demand for products to help them live independently, she has created a thriving business.

In 1995, Abramson, who holds a master's degree in gerontology, knew she wanted to make a difference in the lives of older Americans. "I felt as if they had been put out to pasture," says the owner of Atlanta-based Mature Mart Inc. "I wanted to take away the negativity surrounding them."

With a $2,000 loan from family members, she launched a Web site selling products geared toward seniors. It logged 40,000 hits in the first month. The following year, around the Christmas holiday season, Abramson tested a kiosk in a nearby mall, and it sold out five times before Christmas Eve. "It told us what we wanted to know about price points and who our customers are," Abramson says. "Actually, we saw that everyone wanted the stuff."

The kiosks helped fund Mature Mart's growing Web site, which features more than 20,000 items. Point-of-purchase displays appear in grocery stores, and products are sold on QVC and through the company's catalog. Sales are increasing 500 percent every six months, and franchise requests are pouring in. As good as it is, Abramson, who employs 15 and outsources to 125 others, is ensuring it will get even better by spending $20,000 on a site facelift.

Like Abramson, many entrepreneurs find carts and kiosks are a low-cost way to launch a retail business or to supplement an existing business. Patricia Norins, publisher of Specialty Retail Report, a publication focusing on carts and kiosks, says they're particularly good start-ups for young entrepreneurs due to the low investment required and their ability to thrive even during economic downturns.

Abramson says she's driven by her commitment to older citizens. "I keep doing this," she says, "because with every new product I offer, another senior becomes independent."

The basics: a cart (buy your own for about $3,000 or rent one from a mall), a cash register, $1,000 for initial advertising and $4,000 in inventory.

Total cost: more than $7,100

What she spent: Abramson's start-up inventory and first month's rent at a mall cost less than $5,000.

For details:Specialty Retail Report (800) 936-6297, www.specialtyretail.com

7. Virtual HR

When Ian Delisle and his partner, David Tanguray, were employed by a start-up that was rapidly going bankrupt, they spent hours job-hunting on the . They found the task to be frustrating because the job sites were scattered everywhere.

Rather than wait for the inevitable sinking of their employer, the men, now both 27, started a client application that would allow job seekers to do a metasearch of the online help-wanted ads. "We were just aiming to do this as a sideline, a weekend job that we could do while working at regular day jobs," Tanguay says.

In 1997, they launched Wanted Technologies from the kitchen of Tanguay's two-bedroom apartment in Quebec. A year later, they had developed the first job metasearch tool, Wanted Jobs 98, which allowed users to query more than 40 job sites, accessing 2.5 million jobs throughout North America.

The start-up made its money from advertisements for human-resources-oriented sites; much of the marketing was done using free services. Now much more than a weekend gig, the company employs 20 people in its Quebec and Los Angeles offices. They received their first infusion of , $500,000, in early 1999 and, at the end of last year, scored a round of $3 million. Sales are projected at $1 million for this year.

The virtual HR industry is broadly defined; it can mean anything from creating job-search or training companies like Wanted Technologies to acting as a cyber-HR department for companies wanting to outsource those tasks.

Nevertheless, the opportunities for entrepreneurs are great because, at this point, they're ahead of the curve. Says Tanguay, who advises people to find a unique position and to start small but grow quickly by building partnerships: "You can't do it alone."

The basics: a high-powered PC, a Web site, a few phone lines, a fax machine, cards and letterhead.

Total cost: $5,000

What they spent: Tanguay and Delisle used $5,000-half of it borrowed from a bank-to set up the business at home.

For details: Society for Human Resource Management, (703) 548-3440, www.shrm.org

8. E-Zine Publisher

An e-zine publisher is like "one tiny star in a universe," according to Steve Outing, CEO of Content Exchange LLC, a digital marketplace for online publishers. Outing contends that the stars that will shine the brightest-and the ones that will make money-are the publications that cater to a niche market.

With the 1999 launch of their e-zine, Jade, Audrey Panichakoon, 30, and Ellen Hwang, 30, caused the online skies to glow a bit brighter. Hwang, an editor, and Panichakoon, an information architect for an company, wanted to read a magazine targeted to Gen X Asian American women with professional careers, but the pickings were slim. The partners conducted a survey and found that others were looking for the same thing-a publication focusing on relationships, fashion, beauty and personal experiences.

The first issue of Jade was e-mailed to 1,200 readers, but by the beginning of this year, the number of readers leaped to 5,000 per issue, some as far away as Singapore and Japan. Sales are generated by advertising and e-commerce.

The partners say the benefits of launching an e-zine rather than a traditional magazine are obvious: shorter production times, lower costs (no office and no staff) and quick feedback from readers. "We use laptops, so having a concrete office isn't necessary," Hwang explains.

After one year, the is breaking even. And they soon hope to pen a business plan, find investors and more advertisers, then devote themselves to running Jade full time.

The basics: a standard PC or a laptop, a printer, basic software, a Web site, a database of target subscribers' e-mail addresses, and a P.O. Box.

Total cost: $3,000 to $4,000

What they spent: Hwang and Panichakoon invested $1,000 on incorporation, an ISP, a P.O. Box and miscellaneous extras. They developed the Web site and got the e-mail list for free, and they already owned all the other equipment.

For details: Content Exchange, (303) 543-7810, www.content-exchange.com

9. Parent and Kid Tech

In the old days, families gathered around their TV sets for entertainment and news. Now it seems the computer has become the focal point for parents and kids alike-and there's a demand for interactive sites designed for both older and younger generations.

Melisa Cowden's got it all covered. The 35-year-old mother of four launched her new parent-oriented site, coolparents.com, for less than a vacation at Disneyworld, and her next project is the development of a site just for children called coolkids.com. Coolparents.com, launched in June, features helpful ideas on parenting, links to parenting sites, a message board for parents to get advice on everything from potty training to mealtime ideas, motivational stories, and ideas for games and crafts they can do with the youngins.

In the future, this busy Austin, Texas, Sunday school teacher and aerobics instructor, who also owns kid-oriented littleloveletters.com LLC (parent company to the other two), plans to add a review of children's movies by volunteer parents, inexpensive birthday party ideas, a link for single parents and tips on child-proofing the home.

While Cowden, who earns revenues through paid advertisements and sales of littleloveletters Napkin Notes, has learned a great deal about the world, she says her example is also giving her three daughters and a son a valuable lesson in . "From watching me, they can see how hard it is," she says.

The basics: a computer with at least 8GB hard-drive space, a 17-inch monitor and a minimum 350MHz processor with a graphics accelerator ($1,500 to $2,000). Add a scanner, a laser printer, graphics software, a Web management tool, file-transfer software, a digital camera and space for your own Web site. Toss in a handbook on HTML, XML and Javascripting.

Total cost: $3,500 to $4,500

What she spent: about $1,500. Cowden already owned most of the equipment necessary because she operates another Web business, and she was able to design the new site herself. The start-up funds were used for additional software, programming, consulting fees, new business stationery and other basic office expenses.

For details: Association of Professionals, (877) AIP-0800, www.association.org

10. Personal Concierge

If you're resourceful, energetic and you love people-really love them-there are millions of time-starved Americans willing to pay you to fulfill their needs and whims. A growing battalion of personal concierges is springing up to do everything from planning romantic weekend retreats to locating a plumber at inconvenient times.

While harried individuals are finding a need for personal concierges, even more corporations are hiring them to help ease busy employees' loads. The services performed by personal concierges before landing corporate clients often include grocery shopping, taking pets to the vet and ironing. Many work from home and gain larger clients as they pick up experience.

As a personal , it's essential to be a good online researcher, because many client requests can be fulfilled by performing a Web search. Concierges must also be efficient and committed to providing great customer service-even if someone asks you to plan a birthday party for their cat.

The basics: a basic computer, access, a phone line, a fax machine, business cards and letterhead.

Total cost: $3,000

What they spend: Make sure you don't squander all your start-up capital on unnecessary business consulting fees. Even with basic office equipment and a limited budget for extras, you can build a growing business. Market yourself through personal letters, networking and word-of-mouth.

For details: The National Concierge Association, (312) 782-6710, www.conciergeassoc.org

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