There are many reasons why as a businessperson you might want to diversify into different areas. One of the most obvious, especially when you’re still starting out, is to have more than one income stream. This is the equivalent of having two jobs in order to make ends meet. One business might represent your real passion but is slow to turn a profit, while the other might be a steadier and securer line thatinitially pays the bills and perhaps also funds the business that you really want to be in.
Many successful businesspeople like to diversify for the sake of it, however. Like many of us, they have lots of different interests. One of the qualities that makes them successful is the ability to look at a number of different business models in different fields and see how it could be improved. Another is that they never rest on their laurels but want to keep pushing forward and challenging themselves. Starting new business ventures enables you to work with different people, learn new skills and keep yourself interested. However, before you go ahead and launch that new company, here are a few tips that you might want to keep in mind.
Don’t rush into multiple businesses all at once
Everyone has to start somewhere, and it’s best to make sure that your first business is up and running before you launch into something new. Any business venture initially requires a significant investment of time, energy and capital. Your first business should be steady and stable, and consistently turning a profit, before you decide to diversify. You’ll need to shift your focus primarily to the new business for a while, so wait until it’s safe to do so.
Know when to give up on a dream
We all know that persistence and determination to achieve your goals are paramount in business, but you also need to accept that not every idea or opportunity will be a success. Choose the ones to follow up on carefully, and be prepared to cut your losses and walk away if a venture isn’t working out. The advantage of having multiple interests is that you can afford to let one or two fail.
Richard Branson oversees some 400 companies under his Virgin business empire umbrella. He knows the importance of focusing on one project at a time and knowing when something isn’t working out. Branson had to let his Virgin Films business go as it took too many resources away from his other companies, especially Virgin Atlantic, which was launched in the same year.
Think about the big picture
It’s important to consider the overall structure of your burgeoning business empire, even when you’re still just at the “two jobs” stage. Get professional advice early on about how to structure your business interests for legal and tax purposes. You need to maximise opportunity and minimise risk while avoiding any conflict of interest. Early on, it might be possible to share infrastructure and resources, such as office space, or you might be better off keeping them separate.
Evangelos Marinakis is the chairman of Capital Maritime Trading Corp, which brings together multiple companies that he’s overseen and managed over the past three decades. Marinakis also owns Olympiacos FC, the main football club in his hometown of Piraeus, and has branched out into media and politics. Understanding how these multiple interests fit together and even complement each other is one of the major factors in his continued business success.
Surround yourself with people that you can trust
When you own more than one business, you’ll need trusted people to whom you can delegate responsibility. You can’t manage everything personally all the time and then you shift your focus from one business to another; you need to know that you’ve got someone in place who can keep things running smoothly in your absence.
Manage your time, not your team
As the owner of multiple businesses, you’ll need to become an expert multi-tasker with excellent time management skills. You’ll need to learn how to prioritise, deal with one problem efficiently and then move on to the next. However, you also need to learn to outsource and delegate. Not micro-managing every aspect of your businesses is often the hardest lesson to learn for a businessperson who wants to be in control and on top of every last detail; but to some extent, running multiple businesses is like building and winding up a number of intricate clocks, and then setting them going and moving on, confident in the knowledge that they will function as intended.