How to Manage Multiple Businesses

Managing multiple businesses means running two or more companies at the same time, each with its own customers, money and obligations. It works when every business has a clear owner for daily tasks, shared systems reduce repeated work, each business is legally and financially separate, and the founder regularly decides which business deserves less attention or none.

The person who does this is sometimes called a multipreneur: someone who runs several businesses in parallel, as opposed to a serial entrepreneur who runs them one after another. In the interviews I do, multipreneurs rarely describe a grand plan. More often, one business started paying the bills, a second idea seemed too good to ignore, and then a third arrived. The skill they had to learn was not starting businesses. It was running several at once without letting all of them stall.

Who runs multiple businesses

Researchers have a name for this pattern. A 2008 review of research on habitual entrepreneurs by Deniz Ucbasaran, Gry Agnete Alsos, Paul Westhead and Mike Wright distinguishes portfolio entrepreneurs, who start or buy several businesses and keep owning them at the same time, from serial entrepreneurs, who exit one before starting the next. Multipreneur is the everyday word for the first group.

It is less common than social media makes it seem. In a study of close to 2.3 million retail businesses started in Texas between 1990 and 2011, Francine Lafontaine and Kathryn Shaw found that only 8% were started by an owner who was still running another business they had started earlier. Running several businesses at once is a real path, but a minority one.

	Serial entrepreneur	Multipreneur (portfolio entrepreneur)
Businesses at once	One	Several
Main challenge	Timing the next start	Dividing attention
Risk	Concentrated in one business	Spread, but each business may get too little
Key skill	Learning from one venture to the next	Delegation and systems

If the serial path fits you better, see What Is a Serial Entrepreneur?.

Time and focus

The first thing multipreneurs discover is that time is not the real limit. Attention is.

The cost of switching

Psychologists have measured this for years. The American Psychological Association summarizes a 2001 study by Joshua Rubinstein, Jeffrey Evans and David Meyer in which people lost time every time they switched between tasks, and lost more when the tasks were complex or unfamiliar. Meyer has estimated that these brief mental blocks can cost as much as 40% of someone’s productive time. That figure is an estimate, not a precise measurement, but the direction is clear.

Sophie Leroy, a management researcher, coined the term attention residue for a related effect: when people move from one task to another, part of their attention stays with the first one, and performance on the second suffers. Her 2009 study in Organizational Behavior and Human Decision Processes examined exactly this kind of switching between work tasks.

Switching between two businesses is task switching at a larger scale. Each business has its own customers, numbers and problems, and the residue is heavier.

What multipreneurs do about it

The founders who manage this well tend to use some version of the same approach:

• Block by business, not by task. Give each business whole days or half days rather than switching every hour. Many keep one day a week for the business that needs the most thinking.
• One business gets priority. At any time, one business is the focus and the others are in maintenance. The focus can rotate, but it should be a decision, not a drift.
• Separate inboxes and channels. Mixing all businesses in one inbox makes every message a context switch.
• A weekly review. One short session a week to look at the key numbers of each business and decide where the next week goes.

Delegation: every business needs an owner

A business that depends on you for every decision can only grow as fast as your attention allows. With several businesses, that limit arrives quickly.

The practical options are:

1. Hire or contract an operator. Someone who runs the daily work of one business and reports to you. This is the most effective option and the most expensive.
2. Partner. Bring in a cofounder or partner for one of the businesses, who owns the daily work in exchange for equity. The trade-offs are covered in What Is a Cofounder?.
3. Automate. Turn repeated tasks into processes and tools so they need less of your time.
4. Accept slower growth. Some businesses can run in maintenance mode for long periods. That is a valid choice if you make it deliberately.

What does not work is pretending you can give every business full attention. When to hire is covered in When to Hire Your First Employee, and the same questions apply to each business separately.

Document before you delegate

Delegation fails when the work only exists in your head. Before handing over a business, write down the recurring tasks, the key accounts, how decisions are made and what numbers matter. This is also the documentation a buyer will ask for if you ever sell.

Shared systems

The advantage of running several businesses is that you can build things once and use them many times. The risk is that sharing too much ties businesses together in ways that are hard to undo.

What tends to work well when shared:

• Processes. How you onboard customers, publish content, handle support or close the month.
• Templates. Contracts, proposals, emails, reports.
• Skills and people. A designer, developer or bookkeeper who works across several businesses, under separate agreements with each.
• Tools. The same software stack, set up separately for each business.

What should stay separate:

• Bank accounts and payment processors.
• Customer data and email lists.
• Contracts, domains and accounts, owned by the business that uses them.

The test is simple: could you sell or close one business tomorrow without untangling it from the others? If not, the systems are shared too deeply.

Legal and financial separation

This is the part multipreneurs often leave for later, and the part that costs most when it goes wrong. What follows is general information about the US, not legal or tax advice.

Liability

According to the US Small Business Administration, a sole proprietor can be held personally liable for the debts and obligations of the business. If you run several businesses as one sole proprietorship, a problem in one of them can reach your personal assets. The SBA says an LLC protects owners from personal liability in most instances, and that a corporation offers the strongest protection but costs more to set up and maintain. The SBA also notes that a separate business bank account helps with liability protection by keeping business money apart from personal money.

Many multipreneurs end up with a separate entity for each business, or for each business that carries real risk. Some use a holding structure on top. Which arrangement fits depends on your state, your taxes and how risky each business is, which is a question for a lawyer and an accountant.

Tax reporting

Separation also matters for taxes. The IRS instructions for Schedule C say that if you owned more than one business as a sole proprietor, you complete a separate Schedule C for each business. The IRS also states that a sole proprietor does not need a new Employer Identification Number simply because they own multiple businesses. Separate books for each business make both of these easier, and they also make each business easier to value and sell.

Why it matters at the end of the route

Clean separation pays off at Should You Sell Your Business?. A buyer wants one business with its own accounts, contracts and customer list. A business tangled with three others is harder to value and harder to sell.

When to drop one

Every multipreneur eventually has one business too many. The founders I talk to rarely regret dropping a business. They often regret how long they waited.

Signs it is time

• The business takes a large share of your attention but produces a small share of results.
• You have stopped looking forward to working on it.
• It has been in maintenance mode for a long time and is slowly declining.
• It blocks progress on a business with clearly better prospects.

The options

Option	When it fits
Sell	The business has value for someone else, even if not for you
Hand over to an operator or partner	It works, but needs more attention than you can give
Pause or run in maintenance	It is stable and cheap to keep
Close	It no longer has value and drains time or money

For selling, see How to Sell a Small Business. For closing, see How to Close a Business. The decision is the same one covered in When to Pivot, Push On or Quit, applied to one part of a portfolio instead of your only business.

A fixed review

The most useful habit I hear about is a review on a fixed schedule, every quarter or every six months, where each business is compared against the others: time spent, money earned, growth, and how much you still want to do it. A regular review turns dropping a business into a routine decision instead of a crisis.

How the route changes for a multipreneur

Each business still goes through the nine milestones, but the founder is at a different point on the route for each one. One business may be at How to Grow Your Business while another is still being validated. The founder’s real job becomes choosing which milestone gets attention this week.

Two future articles will go further. What Is a Multipreneur? will look at the term and the different ways people run several businesses, and Focus vs Diversification will weigh the case for concentrating on one business against spreading risk across several.

Where this sits on the route

This page is part of Types of Entrepreneurs. Before it comes What Is a Serial Entrepreneur?, the path of running businesses one after another. If you are building alone, What Is a Solopreneur? covers the limits of a single person’s capacity, which matter even more when that person runs several businesses.