Dream of owning their own business
A lot of people dream of owning their own business and being their own boss.
What’s Good? Experts universally agree, two, but no more, due to diminished synergies to owning more than two, along with a dramatic increased workload over simply owning two.
1.Shared Learning
Because all my businesses are in a similar space, we tend to come across
the same types of problems consistently.
So the great thing is that when we figure out how to do something once, we
can generally apply that learning across the board, which saves us a bunch
of time and headaches
2.Informed Decision-Making
When you limit your ownership to two businesses, you have an opportunity
to test a lot of stuff at the same time, such as, which marketing strategies
you should use, or when to push sales and when not to, etc. which is a
massive boost to decision-making. This is also necessary when you sell
products on two platforms like Shopify and eBay, by doing this way, you will
know which platform is better to run ads campaigns, and which is better to
drive more sales
But there’s another benefit here, too.
As long as you’re able to hire a strong leadership team or individual
contributors, you’ll find that running two companies doesn’t necessarily take
that long.
Your role pivots from making all the decisions yourself, to removing
roadblocks and helping smart people reach their own decisions.
3.Diversified Income
This one’s pretty obvious – and it’s never been more relevant than during a
pandemic that’s had a massive impact on the global economy. If you’ve got two businesses, then even if one goes down, you’re still in a
position to make good money.
So the great thing is that when we figure out how to do something once, we
can generally apply that learning across the board, which saves us a bunch
of time and headaches
4.Harnessing My Skill Set
This is a personal point – it might not apply to you. But like I said earlier,
running two businesses is just the best use of my own strengths.
My skill set lies in building businesses from zero to $10 million. Personally,
I’ve not founded a company greater than that. So all I’m doing is focusing on
replicating that two times.
5.Buy Companies for Growth
It’s not like I literally built all nine of those businesses from the ground up.
Some of them I did, but others I acquired along the way.
Actually, I was pretty early to doing this – it’s much more of a trend now. I
was able to buy companies for great deals and do things that would be
much, much harder and more costly today.
6.Big Problems Don’t Seem So Big Anymore
The fact is, if you run two businesses, you’re going to deal with a lot of shit
coming your way.
That might sound like a negative – I guess in some ways it is! But it’s also a
positive, because it helps you develop a thick skin.
Let me give you an example. One day in 2019, Google accidentally shut
down Mailshake. They literally told us we couldn’t use their API anymore.
Turned out to be an error on their part but that was one of roughest 72 hours
in my life. It didn’t help that it landed on my wife and I wedding anniversary
and I just purchased a 911 GT3RS ($200k race car) the week before.
Any other problem besides Google accidentally killing your company just
seems like peanuts. And the cool thing is, literally within 48 hours we solved
the problem and were up and running with a backup solution.
So if anything ever happens to my businesses today, it just doesn’t seem like
a big deal, which means I can get straight to work on figuring out how to fix
it.
7.You’re Less Emotionally Involved
When you’ve got one business, it’s inevitable that you’re going to be deeply
personally invested.
But I’ve found that’s just not the case with two businesses. Obviously, I care
about their success and making sure we do the right thing for our customers,
but I’m not emotionally tied to any of them. They’re not my babies.
I am passionate, but I’m not emotional about it. There’s a difference.
When it’s not personal, I find that people in general make better decisions.
8. Cross Promotion
When you have two businesses, you can get them to work synergistically.
For instance, Right Inbox and MailShake are two different products. However,
I can cross promote MailShake in a blog post on RightInbox.com and vice
versa.
And the beautiful thing about this promotion is that I don’t have to pay
another company for advertising or guest posts.
Having digital real estate is important. The more you have, the more
attention your companies receive. A spike in traffic for one of my businesses
could actually equate to growth for my other companies, since I own them.
But it goes beyond simply mentioning one of my business ideas on another
of my businesses’ websites. Cross selling is a great opportunity as well.
A company that uses email heavily for their sales outreach may find that
mail shake is a great fit for that. After using the software and seeing how
powerful it is, I’ve built trust.
Using some simple customer surveys, phone calls, or follow up techniques, I
can uncover additional needs that their business has. Maybe they need a
tool to help with managing their emails with scheduling, notes, reminders,
and other features.
In that case, recommending Right Inbox would be a natural fit.
9.Trend Spotting
I already mentioned how having two businesses helps with diversification.
And that’s true, having two income sources is a huge benefit.
But there is also more to it than that. A more general type of diversification
occurs when you run two businesses. You have your hands in two markets.
Every market or segment of that market has unique needs, problems, and
preferences. Therefore, the more companies you have, the more of these
insights you uncover.
I can determine some pretty accurate trends by looking at behavior from
customers across my portfolio of companies.
What are people wanting in terms of B2B tools right now? What are my
market’s primary concerns? Where is the industry headed? Where is
business headed in general?
Even just pattern recognition of certain buzz words can clue me in to what’s
coming around the corner. You typically hear chatter about a topic, trend, or
tool before it gets really wide spread.
Being able to spot a trend and be a first mover is a huge advantage. You can
already plan your marketing and product strategy before your competitors
know they want to be in that space at all.
10.Economy of Scale
Most businesses have minimum costs to enter. In other words, you need to
spend a certain amount of money to form the company, drive brand
awareness, and ultimately get your business off the ground.
Beyond that, there are several business expenses — warehousing, web
hosting, business software, accounting, legal counsel, customer service,
and more.
Because of this phenomenon, it is actually more expensive, relatively, to own
and operate just one business instead of several. You can add more revenue
streams by having two companies, while sharing a lot of the expenses
among the companies.
$1 million in expenses for one company with $10 million in revenue is 10% of
total revenue. But if expenses increase only slightly with two businesses to
$2 million, but I now have $60 million in revenue per year, that’s only 3.3%
of total revenue.
Economy of scale is a powerful business force. When you play big and focus
on top line revenue, you can afford more expenses because they’re actually
a lower portion of your income.
It’s why Coca Cola doesn’t just bottle a few dozen drinks at a time, they
produce millions. They’re already paying a minimum expense to bottle one
Coke. Might as well scale operations up, especially when the ratio of
expenses to revenue goes down.
