I run several online businesses and have an office based team of staff that work across them all. My problem is that I feel I have a lack of focus and direction (due to having multiple businesses) and I'm sure the staff feel confused at times too. All businesses produce an income, but none are doing anything "amazing" or as good as they could. I'm torn; I like having multiple income streams (not reliant on one thing) but at the same time I'm frustrated with lack of progress across them all. What should I do? Get rid of some businesses to clear my head, delegate/structure it better or something else?
There is no harm in having several businesses BUT it is wisdom to focus your full energy on the best business out of your lot. Let that focused business give you all the income you need on ongoing basis.
Then you need to develop systems so that business doesn't need your full time attention. And then only focus on the next one and so on. Till then just see that other businesses are just maintained.
this is a very good question, which I have had to decide on as well. when I was younger, I had about 4-5 internet websites. All generated some income (also not 'amazing' :-) ) but I was spread thin. After reading an article titled something like: "a true winner knows when to quite" I realized that I had to 'let go' (see below) of at least 1-2 websites.
My advice is this:
1. Analyze (to your best ability) which business has the potential to be most profitable. I would include your staff in this discussion/research and be open minded.
When analyzing the businesses, don't forget to take into account what you're passionate about, and which business is the most time consuming (for you and your staff) in relation to the profits it brings in. Imagine that you are getting paid an hourly salary to work on each website.
* side note: if possible, and seeing how you are probably biased towards some of the businesses, I you can have staff present you the facts/numbers without telling you which business they are referring to.
2. Let go of the 1-2 least most profitable business. By letting go, I mean either sell it, or bring in a partner who will manage it completely (after you complete the handover process). The partner can have the majority of the shares, and that way he/she has an incentive to make it profitable - and you can enjoy the passive income (just be clear that after the handover is complete you will not be involved). This partner might even be one of your staff if they already know the business and have the potential and passion to take it further (on their own time).
Bottom line: your most valuable assets are your time and skills. Make sure that you are investing them in something that will maximize your profits.
I'm happy to further advise by phone. Either way, let me know what you decided and how it turned out.
Short answer: Running multiple businesses at once isn't a bad idea, it just takes more planning.
If you're making enough that you can afford to delegate out roles and you trust the team member to manage it, try handing off some responsibilities. You can do a trial run to see if it will work. Give your team space to grow and learn. It will be better for their careers in the long-run too. Also, project managers can help by overseeing quite a few -- if not all -- of your individual projects and are inherently great at creating structure from chaos.
If some businesses are stagnating or could be obsolete within a few years, consider selling it off -- or creating a tool to replace it.
Long answer: The best way to determine if a business is worth the effort is by writing out a long-term plan. You don't have to make it extensive. Even just high-level points for each should help you decide. Primarily look at:
1) Quick questions like:
- Are you a market leader?
- Is it something you'll be passionate about later on?
- Will it provide capital for future projects?
- Do you see yourself running it in 5 years?
- Has it, or can it, survive the 10-year mark?
2) Which businesses are more hassle than they're worth?
You may already be tracking your and your team's hours by business (both billable and non-billable time.) If not, seeing the profit it generates divided by the time spent on it will give you a better sense of how worthwhile it is. Ideally, employees should have an 80/20 billable to non-billable ratio. Employees who are solely non-bill would be factored into overhead costs.
You may also have too many high-level employees working on entry-level projects. Assigning an hourly rate to each role -- one that takes into consideration the high end of their pay scale, any benefits, and company overhead costs per employee -- will help with delegating out work, determining hourly rates to charge clients, and can increase your profitability per business.
Look at your profit margin for products too. Ideally, you want to be at 30% or above per product once you factor in inventory, storage, shipping, taxes, added-value items, discounts, referral or finder fees, etc.
2) Which businesses can scale.
If one of them is maxed out on the monthly income it can provide, have your team document how to maintain it so it can be delegated out to one or two people. Writing out a process can help you see any redundant or unnecessary steps that can be eliminated moving forward.
Is there a part of your business that can generate a hefty amount of capital now? You can always divest part of it or sell it off entirely so you can focus your efforts elsewhere. You can structure the deal to remain on as a shareholder too.
3) Which businesses can provide passive income.
Passive income is the golden ticket for companies. Let's say you have a consulting business and you've developed a playbook for one aspect of it. Consider setting up a course or some reading materials to sell. The content is already there, you may just need to expand on it. It's a great way to show your expertise too. Most course writers I've met with won't spend the time or effort on a subject they don't know.
You may still want to provide consultation meetings, especially for bigger clients. But it will give you another income stream with little management. You may find more opportunities in the future too. The courses I'm currently developing have stemmed from one-off questions that clients have about niche marketing techniques.
4) Which businesses will be obsolete in a few years.
Can a software eventually replace it? If so, make the money you can on it now, but be prepared to transition your efforts elsewhere. If you have a team that could develop that future software now, even better.
5) Which unnecessary channels you can cut.
While it's ideal for many business owners to have a well-rounded brand, you don't need to utilize every marketing outlet and monetization option for every business, especially if it creates very little value for a significant amount of effort. Analytics are your friend here. Focus on where your audience is for each and reduce (or cut out altogether) your efforts on other channels. Otherwise, you'll never have time to think long-term.
Let me know if you have any questions.
Best of luck!
This topic was actually the topic of the first episode in the Startups Therapy. "The Problem with Working on Multiple Ideas at Once"
I myself once believe that having multiple income streams would be great for business, but as of now, I'm pretty sure that it will be way more "amazing" to find which of that multiple businesses would have the most potential and focus on that one.
Running multiple business at one can dilute your focus and creates blind spots for issues to creep in. The companies I have coached over the past 6 years all find that a focussed offering and singular model is a better option for scalability.
That said, it is not entirely impossible to have multiple businesses. You will need to employ outstanding management/leadership teams that share your vision to hold the space for you. In doing so, you can protect what you have built and structure each company strategy in line with your overall strategy.
I work with companies and entrepreneurs to help design and implement strategies and work to transform leaders and leadership. If you would like to speak more about this, feel free to set up a call.
I launched my first two companies concurrently at age 19. I was successful because I understood both markets well. Having multiple businesses is only useful if you understand their markets thoroughly.
Your ability to communicate objectives, hire the best fit team and scale each business is routed in your knowledge of your target markets.
Divest yourself of any business you are unsure of because uncertainty weakens your focus not the number of companies.
This is a good idea, if you know how to operate most effectively. Pay attention most not just to the one activity you like, but concentrate also on those that bring you best results. Learn to deligate and hire professionals to the activities you'd like to be covered by someone else. You as a CEO should concentrate rather on gaiining more contacts and customers, working on strategies for your projects rather then getting stuck in operations management.
Read the book The E Myth by Gerber.
No . It actually is a great a idea . An even better idea is to make sure that each market of business you bring in is very diverse , but that you are knowledgeable of , from the other . That way , your market brackets will differ , you will gain an amazing amount of vast experience , and you will always find challenges , learning new tools for expanding , and never get bored. Again the key here is diversity , but , Knowledgeable . Organization , and you won't be overwhelmed .
As a Business Owner, you must have a certain Ego associated with the Business. The most successful business owners focus on one Business at a time. Let's say you have different services you can provide at a certain time - I would recommend that you combine it into one business under your ego
I would say you need to delegate/structure better. There is absolutely nothing wrong with creating multiple income streams as long as you can handle the bandwith. I personally feel with the right time management, discipline, and goal setting anyone can be an efficient jack of all trades. Not only would delegating allow your staff to feel more involved it would allow you to attend to more pressing matters in the case where one business may need more focus than another.