Plan your exit strategy

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.

[Read the rest of this article on Entrepreneur.com.]

2 comments April 7th, 2010

Seeking sources who’ve freelanced through crowdsourcing sites like Helium, 99designs, and crowdSPRING

Hello, happy freelancers! I’m writing an article for Entrepreneur.com about the pros, cons, and WTFs of throwing your hat into the crowdsourcing ring on sites like Helium, 99designs, crowdSPRING, iStockphoto, and Threadless – and I’m interested in interviewing freelancers who’ve participated in the design contests, writing contests, or other crowdsourcing cattle calls on one of these sites.

Note: I’m not going to delve into project bidding sites like Elance, oDesk, and Guru in this article, just sites that feature content contests or otherwise require freelancers to create work on spec before money even enters into the equation. So please only respond if you have experience with these on-spec/contest sites.

Any takers? I’d like to hear about your experience trying to land work, clients, or money through these sites, be it good, bad, or downright fugly. I’d prefer to talk to you on the record, but I don’t necessarily have to say which site you’ve used if you’d rather keep that detail quiet and I don’t need your clients’ names. My deadline is Friday, 3/19. If you’d like to be interviewed, leave me a note in the comments or email me. Thanks so much!

1 comment March 14th, 2010

Working solo with your sweetie

For some reason, Girl Scout cookie season has always screamed ”Love is in the air!” to me — way the heck more than Valentine’s Day ever could. (Yes, I have a bit of a Thin Mints issue. What’s it to you?)

In honor of this lovey-dovey-est of seasons, I recently went on something of a writing-about-couples-who-work-together tear  (here, and here). I hadn’t given much thought to whether and when domestic partners in business together should reveal their coupledom to clients — that is, until one of these articles led me to interview spouses Kris Hoots and Steve Thomas, founders of Oneicity, a Seattle-area consulting firm that creates fundraising solutions for non-profit and religious organizations. 

Kris and Steve initially opted to keep their relationship status on the down low until clients and colleagues got to know them better. But once they realized that many of the clients and vendors they worked with were also shacked up, they decided they could afford to be less tight-lipped about their personal partnership. While the couple doesn’t exactly come right out and flaunt their marital status in their company’s marketing materials, they have blogged about it on their business site.

How about you? What’s your take on mixing love with business — and letting your customers in on the nature of the personal relationship you and your partner share? If you and your sweetie are in business together, do you play up your relationship status in your marketing materials and new client meetings? Or do you go out of your way to cloak your personal relationship from customers, vendors, and colleagues? Has your relationship status helped or hurt your business image, or has it not made one bit of difference?

4 comments March 14th, 2010

How to dig out of business debt

Like many entrepreneurs, Adam Levy expected to do well with the music equipment company he started in 2002. Armed with an MBA and pile of money made in the late-nineties technology boom, he invested six figures in his new venture and waited to cash in.

Only things didn’t go as planned.

His business partner, a music industry mastermind, abandoned ship within the first 18 months and the company floundered. Seven years later, Levy still wasn’t making a living wage and was six figures in debt. Out of cash and out of choices, he filed Chapter 7 bankruptcy.

“If I had known then what I know now, I would have just cut my losses, swallowed my ego and moved on,” says Levy, who’s based in Hoboken, N.J. “I didn’t and it almost cost me my marriage.”

Slash Your Budget

Of course, declaring bankruptcy — which experts say should be a last resort — isn’t the only way to stop the bleeding. Reducing your spending should be at the top of your list.

“Getting out of your office space is one big thing I’ve seen people do,” says Dan Olszewski, director of the Weinert Center for Entrepreneurship at the University of Wisconsin School of Business. Same goes for trading in that gas-guzzling delivery truck for a smaller vehicle or selling off that five-figure color copier and learning to love Kinko’s.

[Read the rest of this article -- including resources for negotiating both business and personal debt! -- on Entrepreneur.com.]

Add comment February 25th, 2010

Upcoming events for media folks and freelancers

If we haven’t seen each other yet this year, now’s the time. Join me as I cohost a mediabistro party for Seattle media professionals next week. Not a resident of Washington state? Not to worry. I’m sharing tips during a teleseminar on February 16. All you need is a phone. And finally, I invite you to bid farewell to March with a day chock full of seminars to help you navigate the freelance terrain during these challenging economic times. Event details follow.

Mediabistro cocktail party – Tuesday, February 9
When:
7 to 9 pm
What: Cocktail party for media professionals – freelance, staff, and those between jobs. Admission free; cash bar. I’m cohosting with freelancer Crai Bower.
Where: Grey Gallery & Lounge, 1512 11th Avenue, Seattle
RSVP: On mediabistro’s website

NOTE: The above party could use a volunteer to help the photographer jot down photo captions. Great opportunity for students and new freelancers who want to meet people in the media business. Email me if interested.

“Getting Started as a Freelancer” teleseminar – Tuesday, February 16
When: 9 pm EST
What: I’ll share tips on how to start a freelance career. Come with questions! I’ve got answers.
Where: Your telephone
Registration: IndieBizChicks.com; $10 for the entire IndieBizChicks Feb-March teleseminar series (my session + many others)

The Marketing Conference for Creative Freelancers: Finding and Keeping Work in a Tough Economy - Saturday, March 27
When: 8 am to 5:30 pm
What: In my session “Diversify or Starve! How to Stay Busy in a Tough Freelance Market,” I’ll discuss how to identify markets that are a natural extension of your skills, break into them, and promote yourself like crazy.
Where: Bastyr University, 14500 Juanita Drive NE, Kenmore
Sponsor: Tabby Cat Communications
Registration:
$75 for entire conference; more info here

1 comment February 8th, 2010

How entrepreneurs can recover after failing spectacularly

In 2002, Marty Metro ditched corporate America to sell used moving boxes. Customers flooded his eco-friendly Los Angeles store, and Metro rushed to open three more locations, hopeful he’d soon be franchising the business throughout the country.

Only thing was, Metro couldn’t figure out how to turn a profit.

“The sales weren’t the problem,” he explains. “It was the operational costs. We couldn’t get the boxes, inventory them, store them and sell them in a way that actually made money.”

Three years later, Metro’s green business was still in the red and he was forced to shutter it. Saddled with $300,000 of personal debt, he found himself selling his office furniture on the sidewalk and back on the market for a day job.

While some would be discouraged, Metro doesn’t consider his failed business a waste of time or money. The lessons learned, skills acquired and contacts made have since served him well. So well, in fact, that he raised enough venture capital to re-launch in 2006 as UsedCardboardBoxes.com–a web-based version of his original business.

Like Metro, you may not walk away from a venture with any cash in pocket. But that doesn’t mean you’ll leave empty-handed.

[Read the rest of this article on Entrepreneur.com.]

4 comments February 4th, 2010

5 ways freelancers can channel their inner entrepreneur

So you’ve had enough of your rotten boss or the hideous job market and decided to give freelancing a whirl. Congratulations. But before you settle into your SpongeBob slippers and turn to the day’s project deadlines, ask yourself this: How’s business? Be honest. Are you bringing in enough work? Making enough money to meet your expenses–and your saving goals? Happy with your current client lineup–or frantically nabbing any project within spitting distance for fear it will be your last?

If your freelance business has yet to meet your expectations, don’t fret. With a little strategy and planning, this could be the year you get there. Here’s how.

Track Your Time
Sure, many freelancers get paid by the project, day, week, month, word, session or click. But it’s helpful to do the math and see what your efforts are yielding per hour. This applies to all indie workers, whether you’re a writer, designer, photographer, programmer, bookkeeper, virtual assistant, social media expert or project manager. If you’re scarcely clearing minimum wage for that client you thought was such a coup, Houston, we have a problem.

Happily, the web is rife with free tools you can use to track your time per project. Examples: myHoursSlim Timer and Toggl. If the hours show that you’re grossly underpaid, you have two choices: ask for more money or replace the client with one that actually pays a living wage.

[Read the rest of this article on Entrepreneur.com.]

2 comments February 2nd, 2010

Online class: Dealing with Nightmare Clients

By popular demand, I give you my online class for rookie and veteran freelance writers on how to handle clients from hell:

“Dealing with Nightmare Clients” is a four-week online course – starting Friday, February 5! — sponsored by the Editorial Freelancers Association (EFA). Although I’ll be delivering the lessons right to your inbox, you can follow along from anywhere, at your own pace, even if your own pace means working through the lessons at 3 a.m. on a weekend.

In this class, I’ll discuss how to tame those beastly clients and editors who seem all too happy to stiff you, mess with your deadlines, and contact you at all hours of the night. Specifically, you’ll learn how to:

  • Chase down MIA payments and ensure you don’t get stiffed in the future
  • Handle runaway revisions and keep scope creep at bay
  • Deal with clients who are always late with deliverables
  • Set firmer boundaries with editors, project managers, and creative directors
  • Bolster your contracts with clauses that can help prevent scope creep, deadline changes, and late payments
  • Determine whether a troublesome client relationship is salvageable

Since we can all learn from one another’s trials and tribulations, I’ll devote the last session of the class to answering all your burning questions about any nightmare clients you’ve been dealing with. Additional details about the class:
 
When: Fridays, February 5 – 26 (four online sessions).
Where: Your computer. Each lesson will arrive in your inbox (also accessible via Yahoo Groups on the web), which means you can follow along on your own time.
Cost: Editorial Freelancers Association members $134; nonmembers $159.
Register: On the EFA website.
Questions? Feel free to email me.

Add comment January 13th, 2010

New year, new goals

Feels like I’ve been writing holiday-themed articles for weeks and weeks. (Among my favorites: Survival Jobs You Never Thought You’d Be Thankful For and All I Want for Christmas Is a Layoff.)

With 2009 mercifully in the rearview mirror, I’ve joined the fresh-start bandwagon and have been furiously outlining my freelancing goals for the next 12 months. Not resolutions (habits you want to form or change), but goals (stuff you want to accomplish).

Reason I make this distinction is because while writing about how to stick to your New Year’s resolutions yesterday, I learned that humans are hard-wired to fail miserably if they try to change too many habits at once. So I’ve got one resolution for my freelance career this year: leave part of each Sunday open for work on my personal writing projects (books, essays, stories), something I’m doing with three other freelance writer pals for extra accountability.

As for the other stuff I hope to accomplish this year, I’m calling those goals. In the interest of sharing, I’ll list some of the biggest ones here:

  • Give this site a much-needed facelift
  • Finish proposal for book #3 by spring
  • Pursue more custom publishing work (trade publications and the like)
  • Sell an article or essay to the print edition of a certain beloved national paper

How about you? What do you hope to accomplish in this brave new year?

8 comments January 4th, 2010

Recession ethics for freelancers

Times is tough. Even if you’re drowning in work, chances are you’ve had at least one steady client cut your rates this year, or worse, cut you off altogether.

Yeah, clients come and go during even the most financially prosperous of times. But in a year when work is harder to come by and the competition stiffer, each little setback can feel like a full-on body blow.

Last week, the Associated Press reported that an Illinois man pocketed more than $470,000 in paychecks from a company he never worked for over the course of four-and-a-half years.

That got me wondering: If a freelance client overpaid you this year, what would you do? Before you say, “Return the money, of course,” really think about it. What if you were about to default on your mortgage? Would you still give the money back?

In an older post, I talked about how years ago a client paid me twice the amount I’d invoiced for. I knew it wasn’t a bonus; it was clear the company had made a mistake. And while I desperately needed money then, I couldn’t get behind lying and keeping the cash. (Admittedly, it wasn’t just integrity at the wheel. Fear of being found out and losing my most lucrative gig helped drive home the decision to refund the money.)

The client in question was an independent book publisher, and the overpayment was just by $1,000 or so. But if a deep-pocketed Fortune 500 overpaid me a piddly amount, I’d return the money just the same. 

For freelancers, reputation is everything. You might be able to recover from a botched deadline (just ask my editors). But recovery from blatant disregard for business ethics? Doubtful.

What do you think? Have you ever had to return a stray payment to a client who made an accounting mistake? Or do you fall in the ”Pocket it and play dumb if they call you on it” camp? (No judgment; just curious.)

Related assignments I did on the topic this year:

8 comments November 2nd, 2009

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Hi, my name's Michelle Goodman and I've been freelancing since 1992. I'm author of My So-Called Freelance Life and The Anti 9-to-5 Guide. Read my full bio here.

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