I've been down this road before and I agree with everything said here. Just to clarify something, I think mseebach meant that you should charge $20/month for yourself - and have the company pay for the Slicehost account. The smallest slice on SH is $20/mo so if you don't do that you won't be getting any compensation.
No, I meant charge $20 for everything from the client, and host them all on the same slice. A 256 vps easily hosts 10s of low traffic sites. Local business usually means mostly static, and on the scale of dozens of visits a week.
