How To: Launch a Startup with No Debt Published in Business Wire

Savvy strategies can keep a young business lean and profitable

Alexa Raad, co-founder

Company: Architelos, marketing and software consultancy, with headquarters in Leesburg, Va.
Startup philosophy: Keep overhead low, hire the best people and don’t spend more than you earn.
Launched: 2011
Proof it worked: Grossed more than $1 million its first year and an additional $1 million in the first six months of 2012 with zero debt

Before this, I was the CEO of .ORG [Internet registry for public-interest groups], where I’d nurtured a lot of great contacts. I knew I wanted to build a company with people whom I liked working with and our clients would like working with. Not just people who were excellent at what they did, but people I’d want to have over for dinner on a Sunday night and to build a future with. To get the best people, you have to look beyond a 20-mile radius of your office. You have to look globally. Today we have partners all over the world: Ireland, California, Toronto and Washington, D.C.

Thankfully, the global economy makes this arrangement possible—and affordable. Each partner has an equity stake in the business, which eliminates the need for salaries and benefits. We all eat what we kill. This model is also very profitable. Since each partner has an excellent track record and reputation, we spend little on marketing.

Our overhead is low: No office space or salaries are required at this point, and we rely on free web-based services such as Skype, Google Docs and Dropbox. Just five years ago this wouldn’t have been possible because the infrastructure wasn’t there. Our only startup expenses were legal fees to incorporate, a website and logo—all very affordable. Our biggest expense is travel to all of our clients.

Our strategy has been to focus first on consulting contracts, and then we will build on software projects. The latter requires some overhead for engineers and product development, while consulting does not have that overhead. In our first six months, we landed $1 million in contracts. That gave us funds to really get started, and now we’re on our way.

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