08 Nov How to Own Multiple Businesses and Still Stay Balanced
When you start out, you may not be thinking of owning multiple businesses. That can happen, however, if your business is a great success and you have a strong management team behind it.
Multitasking is necessary to be successful in running many businesses. Your business already has other operating units which can help you grow and expand. Whether you run a small business or a large enterprise, being well-equipped to handle uncertainty is crucial.
In business, success and failure have become the norm. And unfortunately, many entrepreneurs who take on more than one business face financial difficulties. Nonetheless, you can manage your businesses well if you follow some simple rules. Entrepreneurs should be extremely organized and give their several small enterprises the time and attention that they need. Your company is only as strong as its weakest link, which is why it’s so important to make sure that you select the best people to run your business.
Smart Tips for Owning Multiple Businesses and Making Them Profitable
Living a wealthy life is a worthy goal of many business owners. In fact, some entrepreneurs strive to achieve financial freedom by building an empire of income streams. While some may want to make multiple businesses for the sheer pleasure of it, others aim to earn passive income from their business ventures.
1. Create Separate LLCs or Corporations
You may have more than one legal entity for each business. The maximum number of LLCs that you can have is not limited. The approach keeps everyone protected from the other companies. They will all be legally and financially protected from one another. It’s expensive, but it could still be less expensive than buying an individual company. Additionally, it takes quite a bit of time to get registered as a separate company.
Real estate investors should make sure to form their own LLC for each property they own so they do not risk liabilities by owning several properties at one time. An LLC or corporation must be registered and has to provide the proper documents at least once a year. It is also necessary to register and file the entity’s annual registration form and report of sales with the state. Just because each business or corporation files taxes separately does not mean that you have to file a separate return for each one of them. Instead, you’ll have to file an IRS form for each and every business or corporation you work for.
2. Create Multiple DBAs Under One LLC or Corporation
Your next option is to form one corporation or limited liability company and then hire your own DBAs for every other business. DBA is an abbreviation for ‘doing business as’, which means a business can operate under a different name. With this method, you can customize the business’s logo and create a completely separate identity for it, but you can save money and time by using just one LLC or corporation. Each company within the conglomerate is on its own, and thus each can be sued by any other company.
While this tip works for any business structure, it is more convenient to use the double-DBA method in business structures with limited liability protection. The situation: You are an entrepreneur who has already built one successful business.
3. Create Businesses Under a Holding Company
Each holding company may form as many LLCs or corporations as it needs to. A business owner may want to form a subsidiary to form a holding company. The owners wish to spin off a part of their businesses. To organize operations, you should use multiple companies or a parent company as a single corporation with a number of subsidiaries. This method facilitates oversight and control of the company by a central office, insulates each individual business from liability, and provides a degree of financial freedom to grow and expand. It may cause additional complications in the legal and tax fields.
4. Leverage Your Assets
Hiring an in-house administrative staff allows the use of one business for multiple small businesses. It may be beneficial to have separate businesses share purchasing and payroll responsibilities. The two or more smaller businesses are also capable of a higher level of specialization than if the entire operation were in a single organization. Similarly, a good business combination can benefit each other even in terms of marketing and sales.
5. Track Your Time
To help you manage your time better, consider recording how you spend your day, using an app or a browser extension. To track the effectiveness of your project, recording and examining your daily time spent on a specific activity can be very beneficial. You can use the information to see if you are spending substantially more time on one business than another. Use time-tracking software to make yourself more efficient. Many people waste a lot of time in meetings. You may have the opportunity to review the meetings you go to and see if it’s possible for you to delegate the tasks to other employees. This will free you up of your time.
6. Prioritize Work-Life Balance
The reality for the owners of small or new companies is that they are all too vulnerable to the burnout syndrome. Maintain a balanced work-life. If you can, try to avoid working overtime or taking on too many additional responsibilities at work. Managing your personal life and your business life are two separate things. Both of these things have to be balanced correctly, as doing so will result in a healthier, happier worker and a healthier, happier business.
7. Hire the Right People
If you own several businesses, you’ll find that managing all of them is too big a task for one person. Hiring the best team for your company is as important as finding the right product.
8. Learn from Past Mistakes
The truth is that every business fails at some point or another. The important thing is to not give up, keep your energy up, and learn from past mistakes so you don’t have to repeat them in the future.