Operating many businesses will definitely increase your workload, but it will also allow you to diversify your revenue, which is very necessary. Additionally, it allows you to continue learning and gain a fresh perspective on business in general.
To start with, running multiple businesses all at once is more common than you probably imagine. 26% of entrepreneurs operate several businesses. Do you really want to own more than one business at a time? Make up your mind and continue reading.
Okay. Now that you have made up your mind on whether you want to juggle multiple startups all at once. Firstly, here are a few tips on how to start multiple businesses and create a legal structure for them.
1. Create Individual LLCs for Each Business.
There is no legal limit to the number of businesses you can start or register, so you can create a new LLC for each venture. The benefit is that each business is safeguarded from the risks of the other ones.
This approach is unquestionably more time-consuming and costly as you’ll have to deal with extra tax forms because each business will be recognized as its own legal entity.
2. File All Your DBAs under One LLC.
The second option is running multiple companies under one LLC by filing a DBA for each company.
NB: DBA stands for “doing business as” and can be filed online and is used in circumstances when a business is operating under a different name.
The advantage of having different DBAs and then incorporating them under a single LLC is that each company has its own name and branding. The registration of only one LLC will save a significant amount of time and money. On the other hand, because they are regarded as a single legal entity, each business assumes the risk and liability of another.
3. Create a Holding Company
The last way to structure multiple businesses is to form separate LLCs for each business and then consolidate them all under one LLC or corporation that acts as a holding company.
In terms of taxes, each firm will submit its own returns; the losses and profits from each will be totaled and reported to the holding company. The benefit of this is that one company’s losses can be used to balance the profits of another.
Each structure has advantages and disadvantages; therefore, it is best to consult a lawyer before determining which legal structure is best for you.
How to Run Multiple Businesses Successfully
Entrepreneurs can run multiple businesses and make a profit by giving each project the attention it requires and searching for methods to maximize resources across companies. Here are some suggestions on how to handle multiple businesses:
1. Choose Projects Wisely.
Before entering into a new venture, ensure that it has the potential to generate a profit and that you have the means to manage it.
If you discover that it will require a significant amount of time and resources to get a possible company concept off the ground, consider if it is beneficial to take on the new project at this time, or whether your existing business ventures will suffer as a result.
Read Also: Winning Consumer Trust: When Launching a New Product
2. Share a Location.
It’s a good idea to share a location if you take on more than one business. Sharing a common space allows you to be active in both ventures on a daily basis and allows you to quickly transition between them.
It will save you time since you will no longer have to commute between two separate business locations. If it is not possible for your businesses to share a space, keep them as near together as possible.
3. Schedule Your Time Properly.
When managing multiple businesses at the same time, organization and time management are very important. When you add a second business to your work schedule, you might discover that your leisure time is soon consumed by additional commitments.
Scheduling your time meticulously will help you guarantee that you set aside enough time each week to dedicate to crucial business projects that require your undivided attention, as well as meetings, appointments, and personal time.
4. Track Your Time.
This goes hand in hand with scheduling, but it’s important to keep track of how you spend your time. There are time tracking apps and browser extensions available to help you keep track of how you spend your time.
Tracking your time is more exact than scheduling since it allows you to see how you spend your workday. You can use the data to determine whether you’re devoting significantly more time to one business than another.
5. Leverage Your Assets.
Leverage assets between your different businesses if feasible to save time and money. Administrative tasks, such as purchasing and payroll, are frequently shared among many organizations.
Marketing and sales functions, for example, might sometimes be dispersed over 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 business alone. That’s why it’s so important to hire the right people to help you grow your businesses.
Bring on people who understand your industry, have skills that fill your knowledge gaps, are passionate about your brands and your mission as well as 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.
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