Elon Musk is a prominent example of a CEO who is known for owning multiple businesses: Tesla and SpaceX and the Boring Company.
Running multiple businesses like this at the same time is often a dream for serial entrepreneurs, especially if they can find a way to capitalize on the strengths of each business in a way that overlaps and complements the others.
But what is the right way to handle multiple businesses? How can entrepreneurs handle the competing pressures and challenges to make sure their entire operation succeeds?
Here are a few key insights to help entrepreneurs manage the challenges of owning multiple small businesses.
It sounds simple, but it’s crucially important: if you are running multiple businesses, it’s easy to get pulled in too many directions at once. You will need to ruthlessly organize your operations to maximize each day.
Use project management tools and productivity platforms to organize your team and keep track of projects. Sit down with a white board or write down on paper what you want to get done each day, each week or each month: set short-term and long-term goals for each business.
Control Your Schedule
Entrepreneurs are the busiest people on earth, and this is especially true for those who are running multiple businesses. Use time-tracking tools to keep tabs on how you spend your time. Hire a personal assistant or virtual assistant to help you book your schedule, manage your calendar and serve as gatekeeper to keep you out of unnecessary meetings and time-wasting conference calls. Break down your day into 15-minute chunks and make sure you’re getting the most out of every interaction.
Also be sure to create blocks of downtime in your daily schedule when you can focus on big-picture thinking — strategy, product development, organizational design, ideation and brainstorming — without being interrupted. Make time to work on your businesses, not just in your businesses.
Delegate to Your Team
You can’t expect to control every daily detail of how things are done. Delegate responsibilities to your trusted leadership team, and hire more executives if you don’t already have a good team in place.
You need people who can be trusted to make the right decisions and act in the best interests of the company — people who are talented and dedicated and better at their area of expertise than you are. Ideally, if you hire the right executives, you can do more of what you do best every day and delegate the rest.
For example, if you’re great at product development or marketing, make sure you hire someone for your executive team who understands accounting and can serve as your CFO.
Plan Your Business Structure
When owning multiple businesses, there are a few ways to set up your business structure to maximize your personal protection from legal liability. Depending on which state you reside in, you might be able to set up a Series LLC to have each separate business set up as its own separate entity, but still connected under one “umbrella” organization.
Or you can have multiple businesses operating as separate DBA (Doing Business As) names under the same LLC. Or you can set up a separate LLC or Corporation for each of your multiple businesses. This can, however, add to the cost and complexity of starting a business and might not be the best choice for every situation.
Also, be prepared to change your business structure over time as your multiple businesses evolve. The choice of business entity or structure that works for you today might not be the best fit in a few years as your needs change.
Think About Brand Strategy and Marketing
Do your multiple businesses have anything in common, or do they all have separate, different missions and target markets? Can you build a stronger brand for your business by combining them all under the same brand umbrella, or should you have a different business name and brand for each separate business?
There is no easy answer to these questions, as it depends on whether or not your businesses have complementary strengths and whether you can sell to the same types of customers.
For example, if you own a real estate company and a plumbing business, you might want to brand them under the same business name so that people know they can buy real estate and get plumbing services from you. But if you own a business that sells software to businesses (B2B) and another business that sells cupcakes to consumers (B2C), you might want to keep those separate with different brand names, since they are targeting totally different markets.
Know When to Quit
When running multiple businesses, it’s important to pick your projects carefully so you don’t get overextended. If you feel like a new product is not going to succeed, try to pull the plug early. If you have a bad feeling about a new market expansion, quit while you’re ahead.
Take Time Off
For entrepreneurs who own multiple businesses, it’s especially important to take some time away from work to rest, recuperate and think big thoughts about your business’s next steps. Don’t get burned out. Rest is a strategic asset, and too many entrepreneurs are not making the most of it.
Ideally, your multiple businesses will eventually be productive and profitable enough that you can take more time away and not have to be intricately involved in everyday operations. Some of the most successful entrepreneurs are the best at not just burning the midnight oil, but knowing how to relax.
Are you ready to start a business, form an LLC or reorganize your business structure with a Series LLC to fit multiple businesses or meet the changing needs of your company? Talk to Incfile today! Our incorporation experts can help you evaluate your options with state-specific advice.