Smart Tips for Owning Multiple Businesses and Making Them Profitable
Owning multiple businesses can pose a challenge for entrepreneurs, but there are strategies you can employ to successfully juggle multiple businesses and make them all successful. Owners of multiple startups have to be incredibly organized and manage their time wisely, so that all their businesses get the attention they need. Hiring the right people for all your different companies can help you manage the workload and leverage the expertise of others.
These topics offer useful advice on successfully owning multiple businesses:
How to Legally Structure Multiple Businesses
If you’re a business owner starting a second venture, you’ll need to decide on the best way to legally structure your businesses. Small business owners should choose one of the following approaches to structuring multiple businesses:
1. Create Separate LLCs or Corporations
You can create separate LLCs or corporations for each of your businesses, because there’s no limit to how many a person can form. The biggest advantage to this approach is that each business won’t have to assume the risk of the others; they’ll all be legally and financially protected from one another. The biggest disadvantage is that it costs more money (in the case of corporations, it can be a significant cost) and it requires a great deal of time-consuming paperwork to register the businesses separately.
2. Create Multiple DBAs Under One LLC or Corporation
Your next option is to form one corporation or LLC and then set up separate DBAs for each additional business. DBA stands for “Doing Business As” and means each separate company can do business under a different name. The advantage of this method is that every business can have a separate identity with unique branding, but you can save money and time on paperwork by only registering and paying fees for the one LLC or corporation. The disadvantage of this approach is that the separate businesses aren’t protected from one another, so a lawsuit brought against one company could affect all your businesses.
3. Create Businesses Under a Holding Company
The final option for legally structuring multiple businesses is to create separate LLCs or corporations for each business and place them all under a holding company. This is the most common approach among businesses that are looking to be acquired. This approach can be complex and expensive. It will also affect your taxes. It’s best to consult an accountant or a lawyer before going this route with your multiple businesses, to see if it’s the right option for you.
How to Run Multiple Businesses Successfully
Entrepreneurs can run multiple businesses and turn a profit by giving each project the attention it needs and looking for ways to maximize resources between the different companies. Here are some helpful tips on how to manage more than one business:
1. Choose Projects Wisely
Before taking on a new business, make sure it has the potential to turn a profit and you have the resources to manage it. If, in analyzing a potential business idea you discover that it will take a great deal of time and resources to get it off the ground, evaluate whether it’s worthwhile to undertake the new project at this time, or whether your other business ventures will suffer too much as a result.
2. Share a Location
When you take on more than one business, it’s a smart idea to share a location if possible. Sharing a common space allows you to be involved with both ventures on a daily basis and helps you easily switch back and forth between the two. It will save you time, since you won’t have to constantly commute between two separate business locations. If it isn’t possible for your businesses to share a space, at least try to keep them as close to one another as possible.
3. Schedule Your Days
Organization and time management are key when juggling multiple businesses at once. When you add a second business to your work mix, you might find that your free time gets swallowed up by other obligations much more quickly. Scheduling your time in detail can help you ensure you set aside enough time each week to devote to important work projects that deserve your full attention, along with meetings, appointments and personal time. Scheduling can help you divide your time appropriately between your different businesses.
4. Track Your Time
This goes hand in hand with scheduling, but it’s helpful to track how you actually spend your time. There are time tracking apps and browser extensions you can use to record how you spend your time. Tracking your time is more precise than scheduling because it gives you insight into how you actually spend your work day. You can use the data to see whether you’re spending considerably more time on one business than another. Time-tracking data also helps you become more efficient. For example, you might find that you’re spending a large chunk of the week in meetings. You might be able to reevaluate the meetings you attend and see if you can delegate the task to other employees, freeing up your time.
5. Leverage Your Assets
If it’s possible, leverage assets between your separate businesses to save time and money. Administrative tasks can often be shared between multiple companies, including purchasing and payroll. Even functions like marketing and sales can sometimes be spread across multiple businesses, especially if they complement one another.
6. Create Reports Regularly
It’s important to understand how your businesses are performing, both on their own and in relation to one another. Create regular reports, including financial statements like your balance sheet, income statement and cash flow statement. Analyze and compare reports to see where you can become more efficient. See how each company is performing and, if necessary, allocate more time to a business that requires more support to grow.
7. Hire the Right People
If you’re spreading your time across multiple companies, you probably can’t manage every aspect of your businesses alone. That’s why it’s so important to hire the right people to help you grow your businesses. Bring on people who meet the following requirements:
- They understand your industry
- They have skills that fill your knowledge gaps
- They’re passionate about your brands and your mission
- They demonstrate a willingness to grow with the company
8. Learn from Past Mistakes
One of the great benefits of starting a second business is that you bring valuable wisdom from your earlier startup experiences. When developing a business plan for a new venture, be sure to analyze the challenges you faced in previous businesses and build into your business plan strategies for dealing with those issues.
9. Prioritize Work-Life Balance
For the owners of startup companies — and especially multiple startups — the threat of burnout is real. To keep yourself fresh, productive and motivated, it’s important to maintain a good work-life balance. Balancing your personal and work time will keep you healthier and happier, which is good for you and good for your businesses.