From Benjamin Franklin to Jeff Bezos, ambitious American entrepreneurs have built successful businesses by finding an underserved market niche and keeping expenses as low as possible. Seira Flores used that formula to build a profitable business selling leggings on Amazon.com and then sold her five-year-old Satina Clothing brand for several million dollars when she was only 34.
Her advice for others seeking to emulate her success: “Build to exit.” By that, she means, from day one, think about key elements that will make your business attractive to potential buyers: profit, revenue growth, well-kept financial accounts, and written agreements with suppliers to extend existing terms to any acquirer.
“Your business needs to be clean, your supply chain relations need to be clean,” she says. “Your systems and processes need to be turnkey, so you can hand the business over to a buyer in a day.”
That’s what Flores did late last year when she sold Satina Clothing to Perch, one of a growing number of firms that raise venture capital to acquire small brands. In many cases, Perch buys companies like Satina that mainly sell on Amazon marketplaces and use Fulfillment by Amazon to warehouse their merchandise and handle fulfillment. By outsourcing those tasks to Amazon, those brands minimize their spending on warehouses, which the Amazon aggregators don’t want, and on personnel.
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