Running or owning multiple businesses is advantageous. With one as the main source of income (probably a professional line of work), a person can venture into owning multiple small businesses, all fetching cool cash.
However, some effective strategies ought to be considered and implemented for successful execution and outcome.
Here today I would be talking about the key strategies for owning multiple businesses, and the personal and tax benefits of owning multiple businesses.
Also, you would understand how to own multiple businesses under one LLC, and the successful business activities to implement.
Table of Contents
Business in Practical Meanings
Business is the practice of making one’s living or making money by producing or buying and selling products (such as goods and services).
It is also any activity or enterprise entered into for profit. Businesses also focus on producing items or services to sell, making a profit, and meeting a particular need for society.
All individuals in a business work together toward common goals, which are dependent on the type of business. Business needs to undertake different activities and operations to ensure that things run efficiently and effectively.
Successful Business Activities one Must Implement
By separating these activities into groups, employees can work solely within their own area of expertise.
These activities support the entire business structure by focusing on several key factors, such as accounting, finance, manufacturing, research development, and sales.
- Accounting: Keeping track of all of the business’s financial transactions and helping managers make informed decisions when allocating company resources.
- Finance: Managing the business’s funds, overseeing the financial capital needs, and determining how borrowing funds may impact the business’s well-being.
- Manufacturing: Producing products and/ or services to meet customer needs
- Marketing: Determining customer needs in order to manufacture products or design services
- Research Development: Expert analysts help the business stay ahead of the competition.
- Sales: The business’s goal is always to increase revenue and close sales in order to remain profitable
Personal Benefits of Owning Multiple Businesses
There are so many personal benefits of owning multiple businesses and we have listed them below;
Because all my businesses are in a similar space, we tend to come across the same types of problems pretty consistently.
So the great thing is that when we figure out how to do something once, we can generally apply that learning across the board, which saves us a bunch of time and headaches
When you have multiple businesses, you have an opportunity to test a lot of stuff at the same time, such as, which marketing strategies you should use, when to push sales and when not to, etc. which is a massive boost to decision-making.
This one’s pretty obvious – and it’s never been more relevant than during a pandemic that’s had a massive impact on the global economy.
If you’ve got multiple businesses, then even if one goes down, you’re still in a position to make good money.
Big Problems Don’t Seem So Big Anymore
The fact is, if you run multiple businesses, you’re going to deal with a lot of shit coming your way.
That might sound like a negative – I guess in some ways it is! But it’s also a positive because it helps you develop a thick skin.
You’re Less Emotionally Involved
When you’ve got one business, it’s inevitable that you’re going to be deeply personally invested. This can affect your growth negatively.
But I’ve found that’s just not the case with multiple businesses. Obviously, I care about their success and making sure we do the right thing for our customers, but I’m not emotionally tied to any of them.
Owning Multiple Businesses Under one LLC
Owning multiple businesses under one LLC is never a good idea in the case where one business fails, and you lose money, it will put your agency assets at risk.
So the best option is creating a different LLC for each business which even has more tax benefits. But if you have decided to own multiple businesses under one LLC.
You would have to file a DBA (Doing Business As) to operate another business under a different name from your existing LLC name.
However, It’s never a good idea. If a lawsuit is filed against any business under your LLC, you will not be able to protect the assets of other businesses under the same LLC.
So having multiple LLCs for each of your businesses helps a lot, both for managing debts, expenses, and even liabilities.
Tax Benefits of Owning Multiple Businesses
Owning multiple businesses has some tax benefits only if you are running each business under different LLCs, which can help reduce your taxable income.
But if you are running multiple businesses under one LLC, It would increase overall income and tax liabilities.
So I still strongly advise you to form separate LLCs that can help reduce your taxable income.
Read: Tax Lawyer: 3 Perfect Reasons To Find One and Fees?
Strategy for Owning and Managing Multiple Businesses
Owning multiple businesses can pose a challenge for entrepreneurs, but there are strategies you can employ to successfully juggle multiple small businesses and make them all successful.
Strategy 1: McDonald’s Principle
The McDonalds Principle is the strategy most businesses if not all businesses use to succeed while running multiple businesses. Below are the McDonald’s Principles to take in each business.
- Ensure everything is in writing.
- Make sure every ingredient in every tool everyone is readily available.
- Ensure every protocol, process and procedure is available and clear
- Provide a central & uniform system throughout from purchasing, to sales to marketing to even how the product should be to what response the customer service representative should give.
- Get the right people onboard which are Loyal employees and experienced CEOs.
- Get a proper reporting structure in place.
- Ensure a proper feedback mechanism is in place.
- Delegate the right authority balancing with the right responsibility.
- Have corrective actions for any deviations.
- Ensure it is self-sustaining without your supervision.
Strategy 2: Be Passionate
Start with a business that you are passionate about and know well. This will make it easier to manage and grow your business.
Strategy 3: Time and Resources
Make sure that you have the time and resources to devote to running multiple businesses. This includes not only financial resources but also time and energy.
Strategy 4: Choose Synergistic businesses
Choose businesses that are complementary or synergistic, so that they can work together to boost each other’s growth.
Strategy 5: Keep Track of Records
Keep track of all your businesses in a single place, so that you can easily stay organized and on top of things.
Strategy 6: Be prepared
Be prepared to work hard and hustle, as owning multiple businesses is not for the faint of heart! You have to be diligent with planning, supervision, and maintenance. Make room for improvement, too.