Business Development: Start One Business Or Build A Portfolio?
The answer from my experience is ... it depends!
Posted by Jacky Sherman on 13/04/2022 @ 8:00AM
As you can imagine I talk to a lot of new business owners and the question of whether they should (or could) start several businesses often arises ...
Start your business development early and decide if you want one business or to build a portfolio!
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Serial Entrepreneurs will advocate for hedging your bets by running several whilst those running a successful single business, for want of a better word I’ve called them artisans, will usually talk about the value of focus.
The answer from my experience is ... it depends:
it depends on what kind of business(es) you’re planning
it depends on what kind of person you are
and most of all it depends on your vision for your future
Let’s walk up that list from the bottom!
What is your vision for your future? The classic way of looking at this is to imagine yourself three to five years from now. Where are you and what are you doing?
If you’re like many artisan businesses or consultancies your financial ambitions may not be great. What drives you is giving that personal service directly to your ideal clients. The height of your ambitions is that it becomes easier to get and keep those high-quality clients and you are able to deliver equally high-quality results. Your business is simply the vehicle to achieve that, so why complicate it? If you go to any business networking meeting the majority of the people you’ll meet fall into this category.
"Less often you’ll meet others who have a more ambitious, usually financially, driven vision!"
If you’re like this you may plan to retire early to pursue other life passions. Alternatively, you enjoy the process of starting a business and watching it grow. It may be that your vision is to sell your business for a fortune. Usually whatever your original intention, you’re quickly into the next venture. If building the business is where your heart is, building a portfolio may seem natural.
Of course, there are many variations on a theme around that vision. Which vision is yours will depend on what type of person you are. Business owners come in all shapes and sizes, but in my experience, the most successful are those who concentrate on the following behaviours in running their business. The difference between the entrepreneur and the artisan is more about how they express those behaviours.
All the best leaders keep focused on what they want to achieve. The difference between the entrepreneur and the artisan is what they focus on. You’ve probably heard it said many times to the small business owner in particular. To spend more time on the business rather than in the business. The artisan is focused more on delivering the product or service whilst the entrepreneur is focused on the total business performance and results.
"Both have to manage risk and both may be innovative!"
The Artisan on the whole manages risk by sticking to what they know and enjoy most. Their business is likely to have grown out of their professional background. So the Health and Safety consultant usually has a background of working in Health and Safety for one or more companies. Innovation is likely to be around product design rather than back-office processes.
The entrepreneur, on the other hand, is drawn to new business processes as much as new products. If we look at recent highly disruptive businesses that have emerged, the innovation is often not the product, but the method of getting the product to the customer and the money to the business. Think of Amazon.
These can be easily adapted for different businesses. Starting up several businesses with variations on this theme can reduce the risk to the total business as a failure early on in one part does not mean disaster for the whole organisation.
The other two behaviours that can affect any business's success are how you manage yourself and other people. Again the style of business and your role in it are different.
The hardest part for most artisan business owners is bringing other people into the business. Their own identity and technical knowledge are often integral to the success of the brand. The people they need to bring in are the experts in running the back office business rather than the technical expert on the product/service.
The entrepreneur builds into their vision and operations from the start by recruiting a team of experts to run the operational aspects of the company as the plan is always to prepare the business for sale and the value of the business is embedded in the team, not the originator.
So my tip for you is to define your vision and what is really important for you to be able to say in 3-5 years' time about your business and your life within that business and outside of it. Then set up a business model that will get you there without working every evening and weekend!
My last observation is that in researching what else is written on this subject. Time management and being organised are particularly relevant to the serial entrepreneur and the importance of the value of planning in downtime. If the second or subsequent businesses are going to eat into your rest time ask yourself if it really will be worth it!
Until next time ...
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like some help with exploring your vision and choosing the right business model for you, it may be a great idea to give me a call on 07970 638857. Let's have an initial chat over a coffee and see how I can help you.
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