It’s a fantastic achievement when you have reached the pinnacle in your current business. It’s now got to the point where are you are able to step away and watch the business run itself. So inevitably, the thought crops up on how you are going to move onwards and upwards. Naturally, the idea of starting up a second business venture will come to mind at some point. But, is this feasible, and will it prove to be as successful as your first? What do you need to consider when starting a second business?
Is it realistic?
While you might get very excited about the prospect of starting a new business, especially as you have the experience of growing one out of nothing. But, if you find that your current venture takes up a lot of your time, do you realistically have the time, resources, or even the energy to work 110% on a new venture? You need to think about what you have in your life right now that could hinder or distract you from setting up the second business. We all have commitments outside of work, and the age-old concept of work-life balance needs to be addressed. If you are a youthful entrepreneur who’s made your mark in the business world by the age of 24, and you’ve got no other commitments in life, and then sure! But this isn’t the case for the vast majority of us.
Is it financially feasible?
Okay, your finances for your current business are more than afloat, but does this mean that you are going to be able to keep a second business going, especially during the first year or two? Your financial options need to be considered. There are the standard approaches, from business loans, bootstrapping from your own savings, or angel investments, but you need to think about your first business funding the second one. There are many different approaches you can take, but you also need to factor in the accounting aspect. It could help if you mix your finances together, but this can cause a lot of confusion, and it can be modelled from an infrastructure perspective. If your second business venture has to be a separate entity, this is where you need to draw the line. The temptation to integrate your second business venture into your first, just so you can stay afloat financially is a very real one. But you need to consider whether this will help, or hinder your new venture.
In addition to these two, you need to put protective measures in place if the second business doesn’t do as well as you envisioned. If legal action happens to one of your businesses, you need to be sure that both aren’t going to be consumed in the process. Getting legal advice is always an essential, and hopefully, you know this by now, especially with regards to how your first business has gone through the mill. Setting up the second business is as much of a gamble as setting up your original one in the first place! And there is a lot to think about, but it’s best to take the perspective of someone who is looking to expand their horizons, rather than their wallets!
