New York, I Love You, the followup to last year's critically acclaimed Paris, je t'aime, was shot over 36 days using 40 actors, including 20 stars like Scarlett Johansson, Orlando Bloom, and Natalie Portman. It didn't have just one director but a whole roster of A-list names from around the world—some of whom don't even speak English.

"It was like coordinating a logistical monster," says Celine Rattray, one-third of indie powerhouse Plum Pictures, sitting in the company's offices on a rainy evening before the final day of shooting. "Such a domino effect—no one could be moved in the schedule. This will make regular movies seem easy."

For Plum Pictures, a "regular movie" is a high-quality film made for $2 million or less, a paltry sum at a time when the average Hollywood release takes more than $100 million to make and market. Plum's ability to make smart, appealing movies on the cheap has made it a force to be reckoned with. At the 2007 Sundance Film Festival, Harvey Weinstein, co-chairman of the Weinstein Company, stayed up negotiating until six in the morning for worldwide-distribution rights to the Plum-produced Grace Is Gone, taking it home for double the film's $2 million budget. At this year's Tribeca Film Festival, which ends May 4, Plum is premiering three films, Trucker, Bart Got A Room, and Life in Flight, each made for approximately $2 million.

Needless to say, it's not easy to make a good movie on a tiny budget. But advances in technology—film-editing software such as iMovie and Final Cut Pro and digital video cameras—have enabled the rise of more independent production companies like Plum. Still, cheap software does not a watchable movie make.

The first rule of producing a good film for less is to select a story that you, your actors, and your crew will be passionate enough about to work for low or deferred pay. (Sometimes that pay may be deferred for months or years.) The three women who run Plum went at least a year without paying themselves while working on the films Dedication and Grace Is Gone. "We have made many of our films without taking up-front fees, just back-end," says Rattray.

And it's all about the script. The tighter and more polished it is, the fewer changes will be needed—and the less money you waste shooting scenes that won't make it into the final cut. Even cutting four pages of a script can save around $50,000. "We become better at editing before shooting," says Daniela Taplin Lundberg, another partner at Plum. "When you're shooting a 25-day schedule, you have to hone your script down to the bare bones."

Arianna Bocco, vice president of acquisitions and production for IFC Films, an independent-film distribution and production company based in New York, says the best way to make a low-budget film is to focus on a character-driven narrative, versus grand situations and schemes and big location switches. The box-office hit and now cult classic Napoleon Dynamite, about a quirky high-school kid who takes on his school, required only $400,000 to make while I Am Legend, the apocalyptic thriller starring Will Smith, had a budget of $150 million. Similarly, the love story Once, which won an Oscar for best song, was made for $150,000. In contrast, last year's romantic hit Atonement saw the light of day for $30 million. The indie-movie Winter Passing, in which Will Ferrell played a dramatic part, had a budget of $3.5 million, but his next turn in a drama was the Columbia Pictures production Stranger Than Fiction, which was shot for $38 million.

When production time rolls around, know what you can do without in order to save your project hundreds of thousands of dollars: trailers for stars, fewer Teamsters as location managers, first- and business-class airline tickets for talent, your own salary, entourages, personal stylists, bodyguards, and assistants—even catering is negotiable for some filmmakers. In a typical star-powered Hollywood production, costs can include $500,000 for an actor's personal travel, or "jet allowance," and $1 million or more for a star's full entourage.

"You can skimp on any part of your budget, with the exception of food," says filmmaker Byrd McDonald, whose The Auteur, a sendup of the porn industry, has distributors buzzing in Tribeca this week.

Even working on a total budget of less than $500,000, McDonald still provided organic and locally grown catered food for his actors and crew. "You can't have 12-hour days with people eating sandwiches," he says. "We made sure there were creature comforts. [But] nobody had a trailer. Get in your own car if you need a place to disappear to."

McDonald also saved money by hiring actors under a new Screen Actors Guild policy that allows producers of films being shot for less than $200,000 to pay union actors lower wages.

Depending on where your money is coming from, you may need to keep track of every expense, down to the last cup of coffee. Jeremy Newberger of Ironbound Films spent five years with his two co-producers, Seth Kramer and Daniel Miller, making a documentary, The Linguists. They had $1.5 million from the National Science Foundation which Miller kept pristine track of in an Excel spreadsheet. "He would ask us a month later, 'Did one of you buy coffee at the airport in New Delhi?' And we'd have to remember if we had coffee."

"When you try to cut corners and hire cheap people, sometimes it does not exactly work out," says first-time filmmaker Abigail Carpenter, who was sued by two crew members she fired for negligence while working on her short film God's Beach. Carpenter managed to make up for the loss by raising money by setting up her film as a 501(c)3 so investors could write off their donations.

"Indie filmmaking, it's like a hustle," says Galt Niederhoffer, the third partner in the Plum Pictures trio, who, to raise money to make a film, has done everything from meeting with mobsters to placing ads in the Wall Street Journal. Part of that hustle, says Niederhoffer, includes offering walk-on roles to the investors' children or giving their kids some other job or internship on the production.

But in the end, keeping costs low promises a greater return on investment, she says. "We're making money for them—a 30 percent return, better than the market—because we keep our budgets so low and make these movies for very little."