Bill Ritchie has always had a preoccupation with puzzles -- not the jigsaw type, but the hand-held brain-teasers, puzzles that often look innocent but take a certain mathematical instinct and manual dexterity to decode.

"When I was growing up, we always had puzzles around the house," said Ritchie, 35, who was raised in New Jersey and now lives in Alexandria. "I wouldn't be surprised if you looked under my mother's couch, you'd find pieces of various puzzles. I think I've played with every puzzle there ever was."

Along with his wife, Andrea Barthello, and his best friend, Bill Tabor, Ritchie owns and operates Binary Arts, an Alexandria puzzle company founded in 1984. The company this year will surpass $1 million in sales, Ritchie said.

When Ritchie and Barthello began the business, coming up with puzzles to sell was the easy part. Putting the pieces of a small business together wasn't so easy.

To get products, the couple simply struck a deal with family friend Bill Keister, an engineer, who spent much of his free time designing puzzles.

"When I was 14, I told Mr. Keister that I would someday sell his puzzles," Ritchie said. "It just took me several years to get around to it."

But as far as running a business, "we didn't know what we were getting ourselves into," Barthello said. "In one sense, though, it's good to be innocent, because if you knew all the problems that you'd encounter, you'd never have started."

Ritchie concurred. "We were really naive. We didn't know the rules -- we had to write them."

Among the rules they had to figure out were those involving financing the business, assembling the puzzles and finding buyers.

To start, Ritchie and Barthello had three of Keister's designs and $20,000 in savings. They worked part time from their home while keeping their jobs as managers at Equity Programs Investment Corp., a Falls Church real estate investment firm that later collapsed in a multimillion dollar bankruptcy. The couple said they left the firm in February 1985, shortly before its fall.

The couple were ready to devote full time to their business, but it didn't take long for the $20,000 to run out. To raise more money, they sold 40 percent of the business to a venture capital firm. They found a Maryland factory to make the puzzle pieces.

Ritchie said he and Barthello spent their days sitting on the living room floor, assembling thousands of the games. It wasn't exactly a high-tech manufacturing process.

"When we first started out, we didn't have the right packaging and the puzzles were too labor-intensive," Ritchie said. "We spent all our time putting them together and weren't out selling them."

Of course, they spend some time selling -- Barthello attended toy shows and met with store buyers. They weren't getting many takers, so they began to sell their puzzles from vendor carts in shopping malls. The first year, they sales were nearly nearly $50,000.

Although they were pleased with the results, the couple didn't think they had the right formula yet. First, they turned to solving their manufacturing problem and decided to scrap the three puzzles in favor of a different Keister mind-teaser. It could be made with plastic parts at the same factory, but didn't require as much time for Ritchie and Barthello to assemble.

The game, Spin-Out, has become their biggest seller. The object of the puzzle is to unlock a slide of discs and remove it from a narrow base. This is done by turning the seven discs on the slide sideways (they begin in a vertical position). The challenge is that the discs can only be turned one at a time and only when lined up with the correct space on the base.

They continued to pitch the puzzles to retailers. Eventually, stores including Woodward and Lothrop, Britches Great Outdoors and Beckers began to show interest. The couple parked the pushcarts in 1987.

"That was a turning point for us," Barthello said. "We were able to tap into those couple of stores that start the trends. Now, our job is to tap into those stores in each of the metro areas around the nation."

Dawn McCormack, a buyer for Woodward and Lothrop, said: "People like mind puzzlers -- they're good stress reducers and they sell very well. This year already, I've placed three reorders."

Ritchie and Barthello still thought they had marketing problems. To improve their selling strategies, in 1988 the couple asked friend Bill Tabor, who has a marketing degree from Northwestern University, to join them in the business.

"The weak point in our company was the marketing aspect. We didn't have an expert, and Tabor fills it for us," Barthello said.

"At first, I thought they were crazy," Tabor said. "I had been involved in small businesses before and during college, and there was no way in hell I was going to start a small business. But this company looked liked it was beginning to work."

In the spring of 1988, they expanded their line to include the puzzle Top-Spin, the object of which is to unscramble 20 numbers by sliding them around a track and flipping them in a turnstile.

With Tabor in charge of marketing, accounts have multiplied to more than 2,000 -- from game stores and gift shops to science museums. Even the Museum of Modern Art and the Smithsonian Institution carry the puzzles in their gift catalogues.

This year, the company is selling seven different games, four of them imported and three manufactured locally and assembled at the Binary Arts office in Alexandria by Ritchie, Barthello and Tabor, plus another full-time employee and one part-timer. The puzzles sell for $7 to $15 each.

The pieces seem to be falling into place for the company this year. Their sales surpassed $1 million, Ritchie said, double what the business sold last year.

"I knew we'd make it," Ritchie said. "We were confronted with things we never dreamed of encountering, but it was just a matter of time."