“Don’t put all your eggs in one basket” is a common saying that almost everyone was taught during their childhood. However, some people have different views regarding this. Today, there are many people who believe that you can put all your eggs in one basket and then give maximum care to this one basket. In business, it’s a good idea to run multiple businesses but it can’t be done while you’re just starting. It will save you more time, energy and money if you concentrated on doing one business at the start and then building the second after the first has taken off.
Elon Musk is one of the most famous entrepreneurs and a role model to many. He has founded and is still actively involved in over 5 different successful companies. But if you’re keen, you’ll realize Elon didn’t start all these businesses at once. He started one at a time and then after a couple of years, he starts another. There’s a reason for this. In this post, I will share with you reasons why it’s a dangerous move to start more than one business at the same time.
1 – Starting a new business needs dedicating a lot of time
Running a business needs putting in a lot of hours. You will need to dedicate even more time in the earlier stages of the business. In most cases, you will find yourself doing most of the work from marketing, negotiating with potential clients, doing the accounting work, etc. Most of the new small businesses do not have enough money to hire a big team to help in doing some of these tasks. At this stage, it’s important to avoid having divided attention by starting another business.
2 – New businesses require a significant financial investment
Investing in more than one business will require a lot of money especially at the start. The best strategy would be investing in one business at the start, and then you can invest in the other after the first one has taken off. Trying to divide the financial resources may lead you to lose out on both investments.
3 – Two startups may drain your mental and emotional energy.
Operating a business involves investing in a lot of mental energy and emotions. This gets worse when you are having more than one business to manage especially at the start. In a long run, you may not have sufficient mental energy to manage the stresses generated by two businesses. This can lead you into depression if not taken care of in time.
4 – You may not get enough time to rest
Getting enough rest is very important if you want to be productive. Running two businesses may put you into a position of not getting the necessary rest you need. In a long run, this will affect your overall performance and creativity hence leading to potential business failure. Giving your full attention to one business will give you enough time to rest that is important for your productivity.
5 – Running more than one business may lead to mediocre results
Having to divide your energy and other resources will likely lead to getting look-warm results in both businesses if they survive failure. Even if you have the resources to hire, your partners and employees will always need the guidance of the vision bearer, especially at the start. If not properly guided, your employees may end up steering the business in the wrong direction
6 – Starting more than one business at a go creates more managerial challenges
Choosing to manage two or more startup teams that are doing completely different stuff is a very risky decision. This can possibly cause mixing up of issues from one business to another. In the end, it may lead to confusion amongst your teams.
Running more than one business is not a bad idea, but starting both businesses at once is what I don’t recommend. The best option would be starting one business at a time and then starting the next one after building a sustainable business model for the first. It is important to remember that as a startup, your odds of failure are higher than those of succeeding. Starting two companies at once even increases the failure odds for both companies. You may choose to delegate, but delegation needs to be done with appropriate leadership.
When a business is still new, it requires you to guide those you bring on board to help you work towards your vision. This needs a lot of time especially at the start. Building the right culture and mindset amongst your partners and employees requires you to spend a lot of time with them. You also need to remember that when your first employees and partners adopt the company culture, it becomes easier for them to spread the same culture to the new guys who come after them. It’s at this point that you may think of starting the second business.
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