When I first heard the term “serial entrepreneur,” I had no idea what it meant.
It was only after my attorneys yelled at me for not keeping them in the loop with all my incorporation activities that I realized that I had become a serial entrepreneur. But what made it not so great was that I was an ADHD serial entrepreneur.
I was starting companies before I ‘finished’ the previous ones. Evidently I’m not unique in that aspect and there are pros and cons to this entrepreneurial path.
We all can understand why having one successful company makes it easier to start a second one, but what we often don’t realize is that if not done correctly, you risk not only jeopardizing the new company but the successful one as well. If you can successfully juggle the management of more than one company, you can create many advantages such as diversity, partnership and a brand extension.
Diversification with a second business can make sense in many aspects when scalability is a concern. Diversifying with a complementary offering can potentially stabilize the overall entities by blending cash flow generated from independent revenue sources. Jon Gillespie-Brown, a serial entrepreneur and author of “So You Want to Be an Entrepreneur,” describes diversity in business by likening it to a stool.
“If you’re running a smaller business, it’s tough to have a one-legged stool,” Gillespie-Brown says. “Having a couple legs gives you diversity, both in customers and in the stages of the business. In a recession, if one business is suffering, the other may be doing well.”
Another advantage is the built-in partnership. Developing partnerships between multiple common-ownership companies allows organizations to leverage the contacts and relationships of each other without the risk of entering into agreements with unknown or unproven partners. If the owner or CEO has current brand awareness, this can be a launching point for the credibility of the other company or companies and shorten the ramp up time to success.
My own ADHD serial business experience seems to follow the ‘stool’ concept, although I have to admit I really hadn’t planned it that way. After several years of building a fairly successful and growing government contracting business (Craig Technologies), I was presented with the opportunity to start a complementary manufacturing facility (Craig Technologies Aerospace and Defense Manufacturing Center). In addition to the manufacturing company we started GCC Innovative Technologies, which developed ProDashÔ, a government contracting ‘Software as a Service’ product. To make everything run smoothly and quickly, we made the decision to ‘share’ or ‘purchase’ infrastructure support such as HR, accounting, recruiting and payroll.
“An owner who can manage all of this can focus on the company that needs it the most, and if you have one firm that’s fairly self-sustaining, you can grab your best folks and use them to punch up the next company,” Gillespie-Brown says.
This is exactly what we did, although the path has not been that smooth. I realized, contrary to popular belief, that I am not Superwoman nor am I super human. Being pulled in multiple directions resulted in me being less than productive across all three companies. But, this led me to eventually find a battle rhythm and I managed to regain my previous levels of control and management.
Successful entrepreneurs seem to naturally want to continue the momentum of their success and expand their brand. Today’s market provides many opportunities for branching out and it is always tempting to try to capitalize on them. Just remember that it’s important that you evaluate your options with a serious and critical eye and move smoothly into the new businesses – poor expansion efforts can hurt your brand and your business more than if you didn’t expand at all.