After building one successful business, some entrepreneurs can’t settle. When owning more than one business, overseeing all of them is a lot to juggle — but it can be done. It is being done successfully by many serial entrepreneurs today. Just like managing one business, managing multiple requires the right strategies to achieve your goals. Here’s a roundup of 6 tips from experts sharing advice to entrepreneurs managing more than one business.
1. Hire Great Leaders
An obvious challenge to owning multiple businesses is getting overwhelmed by having too much to do. Sometimes you might feel your attention is needed everywhere at once as you try to stay on top of operations, solve problems and prevent future problems from arising. If this sounds like you, then you’ve not yet found the right leaders for your multiple businesses. It’s much better to hire executive-level leaders who can put their expertise and energy into running the show for you.
One business leader with plenty of experience owning multiple businesses is Neil Patel — a marketing expert with his own digital marketing agency and is the co-founder of 3 software companies. Here’s what Neil Patel told Forbes magazine when asked how entrepreneurs can manage multiple businesses:
“If you run all your tasks through a delegation matrix, you may discover you’re left with very little to do. What does this mean? Have you delegated too much? No indeed. Instead you’ve unlocked the secret of master entrepreneurship. You’ve freed yourself of administrative minutiae and can take your business to extraordinary new heights.”
When choosing a qualified candidate for leading a company, look for strong initiative and a desire to demonstrate their talent and hone skills within your company. Be available to communicate instruction, but give your leaders the space to carry out operations on their own. Whenever possible, give your employees opportunities to gain knowledge and enhance their skill sets.
2. Always Spend Less Than You Make
Maybe back when you started your first company you threw in all your chips. When you’re managing multiple businesses, you have more to lose. The name of the game is no longer spending everything in your possession in order to be a risk-taker in business. Don’t assume that when one of your businesses is doing well that you can afford to overspend in another business. In managing multiple businesses, you need strong boundaries, as it’s important to keep each company’s budget sacrosanct.
Jeff Haden, who has ghostwritten more than 50 books on the behalf of top business leaders around the world, says you should “always spend less than you make.” He recommends using free or cheap solutions and strategies for growth in each of your businesses to keep overhead costs low.
“There’s nothing wrong with taking equity investment, investing for the future, even losing money for a few years. But your plan has to get you back to that simple equation of making more than you spend,” Haden said to blogger Ryan Robinson.
3. Share Equity
It’s very difficult to succeed at owning multiple businesses without imparting some equity. Acquiring equity financing from venture capitalists lets you invest in faster growth and leverage the vast professional networks of experienced partners. Plus, with equity financing, your businesses can build a credit history that improves your chances of qualifying for a venture debt loan or small business loan for additional financing in the future.
Steve Rayson is the co-founder of 4 different businesses, and he advises entrepreneurs to “avoid being a single founder.”
“I have always started companies with more than one founder. It means there is someone to share the load, to reflect and to support each other,” Rayson said to Robinson.
This will increase your chance of success because you can pool your resources, connections, networks, experience and expertise. Each person has a stake in the company, which means each is motivated to put their full effort into its success. That said, rather than limit you, imparting equity can help your business expand to something much larger and more successful than it would otherwise be.
4. Prioritize the Business That Can Grow the Fastest
There are a number of reasons that might tempt you to devote more time on ventures in their earlier stages, but this can sabotage the success of your other companies when they’re in critical growth phases. If your fastest-growing business requires your leadership, spend most of your time growing it until you can hire an experienced executive to handle the day-to-day with the structure you put in place.
You’d rather have 1 wildly successful business than 4 mediocre companies, so you should prioritize the business that is performing best to ensure you’re fully capitalizing on every opportunity. Plus, you can always have your strongest business acquire a venture of yours if you want quick funding.
Richard Branson, founder of Virgin Records, Virgin Airlines and other businesses, has another reason you can benefit from prioritizing a single business at a time.
“Once you have mastered these skills at one of your businesses, you’ll have an easier time applying them at the other,” Branson said to Entrepreneur. The business titan suggests, “You might consider taking a more strategic approach: You could work one business in the short term and keep the other up your sleeve. When you look at the two businesses, is there one that could become a success faster? Or could you use the success of one to launch the other?”
When owning multiple businesses, keep a big picture perspective of their businesses as a whole portfolio in order to see more opportunities for growth and make the best decisions possible.
5. Make Each Business Its Own Corporation or LLC
If any of your businesses involve retail sales, lending money or buying and leasing property or equipment, legal risk and liability are of great concern. Nellie Akalp is the CEO and co-founder of CorpNet.com, which helps business owners with their business’s registration. According to an article by Akalp, it’s much safer to register each of your businesses as its own separate entity, whether an LLC or corporation. That way, if any legal issues were to arise in one business, it wouldn’t affect your other companies.
“The main advantage of this approach is that it isolates the risk to each individual business,” Akalp writes for Entrepreneur. “In particular, real estate investors often form an LLC for each property in order to shield each investment. If Property A is sued, you won’t be risking any of the assets belonging to Property B or Property C.”
While some owners of multiple businesses decide to create a holding business that acquires all their other companies, this can actually get complicated fast if any legal or tax issues arise within any of the businesses. While there’s more paperwork involved in registering each business as a separate entity, there’s a lot less damage control because problems in one business don’t spill over to another.
6. Only Stick to Businesses You Thrive At and Love
Billionaire entrepreneur and investor Mark Cuban says entrepreneurs should only do things they love and are good at, according to his quote on Robinson’s blog. In Mark’s words:
“What I always ask people is, (1) is it something you love to do and (2) is this something you’re good at?”
That said, if you’re feeling overwhelmed with owning multiple businesses and you aren’t enjoying yourself, consider selling the businesses where your enthusiasm has waned. Then, pour the new funding into the businesses you are passionate about, or start another company around one of your interests.
Owning Multiple Businesses with Success
Succeeding in owning multiple businesses takes a considerable set of skills that you can’t acquire overnight. That said, having success in one business can make it easier for you to succeed in owning multiple businesses because you can apply lessons learned from the first. From a legal standpoint, experts agree it’s in your best interest to incorporate each of your businesses as separate entities. Still, if one of your businesses ever struggles financially, one of your wealthier companies can always acquire it to minimize losses.