April 7th, 2010
When Vanessa Troyer and Chris Farentinos launched MailBoxes4Less.com in 2000, they didn’t give much thought to how they’d exit the online mailbox distribution company.
All that changed in 2006. Recognizing the huge growth potential in manufacturing high-end mailboxes for builders and retailers, the Los Angeles couple decided to channel all their efforts into a second business, Architectural Mailboxes. This meant selling the highly profitable MailBoxes4Less.com to free up the necessary funds.
It wasn’t a scenario most entrepreneurs envision when they think about exit strategies.
“No one was sick,” says Troyer, 45. ‘We didn’t want to retire. Investors weren’t saying ‘I’m done.’ There was no reason to sell the business.”
But sell the couple did, garnering more than $1 million for the venture they’d founded eight years earlier with just $25,000.
It was the right move: Today Architectural Mailboxes continues to grow, with products in every Lowe’s store in the nation and more than half of Home Depot’s locations. Amazon carries 140 of the company’s products. And, Troyer says, the business is on track to grow by 38 percent by the end of 2011.
Hoping to follow in Troyer and Farentinos’ footsteps? Experts say the best way to ensure you leave your company when and how you want–with money in hand–is to start plotting your exit strategy now, even if you’re still developing the business plan. Sadly, study after study shows that a majority of entrepreneurs have no exit strategy whatsoever in place.
If this sounds familiar, don’t fret. You’re about to get a crash course in preparing for two of the most common ways to successfully exit a business: turning the reins over to a relative and selling the company.