So you’ve started one small business, but now you’ve been bitten by the bug. You have hundreds of other ideas, and you’re sure some of them could be successful. But is it a good idea to run more than one small business at the same time? Plenty of people do it, but it isn’t for everyone. Some people are comfortable expanding one business and nurturing it full-time. But others love the thrill of starting from the ground up, and perhaps selling a business once it’s fully grown. If you’re thinking about running several businesses at once, you should first think about how much you can handle. Once you’ve determined how much you can juggle at the same time, you’ll need to read up on how to manage running everything without dropping the ball. Before you start setting up five more businesses, consider some of these reasons to run multiple companies and best practices to help you do it successfully.
Why Start More Than One Business?
Investors know all too well that diversifying your portfolio is the key to successful investing. But business owners can increase their chance of success by create a diverse portfolio too by setting up several businesses. Instead of focusing on one income stream that could begin to dry up at any moment, you can reduce the risk of being left high and dry by having a number of backup plans. Once you’ve run one business and learned from doing so, you’ll have more knowledge and experience to put into your next venture. Many people run two, three or even more businesses at the same time and find great success with them.
If you’ve loved running your first business, the idea of a second venture could be very exciting to you. You might already have a customer base that could cross over into your new business idea. But even if you don’t, you now have the contacts, knowledge and possibly money that you didn’t have when you launched your first startup. Your new business or businesses could even help to grow your original company. They could bring in more money and increase awareness of each company and you as an entrepreneur.
How Diverse Should Your Products Be?
Although you may have a diverse range of ideas, it’s a good idea to launch businesses that share similar target markets. By doing this, you can create cross-marketing campaigns to interest customers of each company in your other offerings. For example, as you begin to build mailing lists, you can use your newsletters to promote all your products across the different lists. Using the customer base of your existing company is an excellent way to begin gaining traction for your new one. Mention to your clients that if they like your current product, they’ll probably like your new one too. You can even offer incentives for clients from your first business to engage with the new one.
However, you can also use the reputation you’ve built to promote products that might not be so closely related. For example, you can look at the site on branding by the founders of Barefoot Wine. Branding might not seem to have a lot to do with wine, but the brand’s reputation as a successful business gives them clout as an authority in their new venture.
If you decide to open a chain of related activities, sharing similar target markets, each one can feed into the other. For example, you might have a produce business supplying restaurants. Then you could have another company that sells professional kitchen equipment. Maybe your third company offers products made from the food from your first one, and a fourth business offers restaurant linens. Your businesses can link together, creating and fulfilling needs for each other, and your clients can find everything they require from one parent company. If you want to expand the brand of your first enterprise, creating related businesses is a fantastic way to go about it.
How to Stay Organized
Once you’ve got more than one business up and running, staying on top of everything is going to be difficult. But if you love what you do, you should be able to keep yourself organized and enjoy doing it. Remember that no matter how you arrange things, you’re still going to have a lot of work on your plate, with several companies to watch over. But you can make sure it doesn’t all run away from you by creating a daily schedule for how much time you should dedicate to each business. In addition, don’t forget to look at what you need to do on a weekly, monthly and yearly basis too, to grow your businesses and keep them all running smoothly. Of course, you don’t have to do everything on your own. It’s a good idea to ensure that you’re confident with delegating tasks to appropriate employees so that you have time for other things.
Make Sure Your Accounts Are in Order
If you’re going to run more than one company, don’t forget to be stringent with keeping your accounts up to date. It’s important to separate your income and outgoings for each venture and ensure that you’re complying with the law where taxes are concerned. In some cases, you might be running everything under one parent company, but you should decide on the structure of your business set up.
Even with a schedule in place, it can be hard keeping good time when you’re juggling several things at once. Everyone has to find their preferred methods for working well, but there are lots of things you can try. Some entrepreneurs like to keep an entirely uncluttered office, ridding their desk of any folders or pieces of paper. Creating goals can help you to stay on track too, so you know where you need to be at the end of each week for each of your businesses. And of course, you can pass the less important tasks on to other people so that you can focus as much of your energy as possible on other things.