It’s one thing to launch a successful business. It’s quite another to establish multiple new businesses. Business owners who can start several businesses successfully have a unique skill set and the opportunity to be successful in multiple industries or verticals. While it may be enticing for an entrepreneur to become a serial entrepreneur, you should understand that it comes with a distinct set of pros and cons.
What are Serial Entrepreneurs?
Serial entrepreneurs as a business owner who starts multiple businesses. These companies may be in the same market sector or spread in various industries. A serial entrepreneur who starts several businesses may continue to grow or maintain them by outsourcing the work to a team or choose to sell them and funnel the earnings into new business ventures.
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What Makes a Good Serial Entrepreneur?
Serial entrepreneurship requires a unique perspective. Like all successful business owners, serial entrepreneurs must see a problem with demand and then supply the solution for that problem to meet the demand.
They must be able to identify unique problems that are present according to raw data and understand if the market is large enough to create a business out of. Serial entrepreneurs can see through the trends, read the markets, and realize the demands of a particular product or service to expand their ventures or create a new one.
One does not have to be an expert in a particular field to become a serial entrepreneur. While the thought of becoming someone who owns many businesses can be enticing, studies and business performance across time indicate that there are strengths and weaknesses to becoming a serial entrepreneur.
Pros: Advantages of Serial Entrepreneurs
There are many advantages to becoming a serial entrepreneur. Along with the increased earning potential of several business ventures, there is also the chance to serve a wider market or serve several markets. This potential creates even more business opportunities in the future.
The truth is, not everyone or every entrepreneur would make a great serial entrepreneur. Business owners need to consider the following advantages and disadvantages before deciding to pursue a new business or expand on the one they own now.
Greater Financial Success
The first advantage of serial entrepreneurs is greater financial success. Multiple businesses mean more income streams, more revenue, and ultimately–more earning for a single person who has a stake in all of them.
It isn’t easy to own and operate several businesses at once. Still, if one can maintain the discipline and the quality of service to keep both operational, they will reap serial entrepreneurship rewards.
Whether all businesses are in the same market or in several markets, these footholds will allow the entrepreneur to pursue even more business ventures in the future. Studies show that business owners who open a second business are more likely to open even more businesses beyond that–with an even greater success probability.
A study conducted on serial entrepreneurs’ businesses indicated that prior business experience indicated a much higher potential for business longevity and success. Companies of serial entrepreneurs tend to last longer in the market and are therefore more adaptable, flexible, and more resilient.
This resilience likely comes from the experience of having launched and operated a business already. The knowledge from past mistakes and successes accompany the entrepreneur into their new venture to increase its chances of lasting longer and growing business success.
Also, resilience comes in the form of flexibility. Data shows that serial entrepreneurs can have businesses in many various fields. If an owner can monetize the service and product properly in two fields, they can successfully own multiple companies using the same leadership and management experience.
So, a serial entrepreneur need not be an expert in a single field. They can operate in several markets so long as their business operations are intact.
Innovative Problem Solving
One last advantage is that serial entrepreneurs get to use innovative problem-solving to create opportunities. These business leaders find new products and services with the influence of their past business experience. Not only can they find these problems, but they also have the required skills to create products that will service and solve them.
That makes serial entrepreneurs incredibly valuable to their teams.
Cons: Disadvantages of Serial Entrepreneurs
There are some disadvantages for business owners to note if they decide to take on multiple ventures. Entrepreneurs can increase earning potential, serve new markets, and create new products, but all of these come with a bit of sacrifice they must be willing to make to handle more than one business.
Businesses grow to a certain extent with a single person at the helm. At a certain point, there comes the need for increased management skills, training, and maintenance. Eventually, a serial entrepreneur will have to face these responsibilities with several businesses.
These responsibilities are an expected part of leading a business, but having to do the work for several businesses will require a lot of time and effort from a serial entrepreneur. They will have to protect the workers, the product, and both companies’ customers to remain effective.
Timing the Economy
Studies show that businesses that begin when the economy is up and booming tend to fail more often. Companies that establish themselves during a recession tend to last. This can pose a problem for new entrepreneurs because it might be less advantageous for them to start a business when their prospects are looking good.
It’s a risk to invest in anything when the economy is tanking. Though, numbers show that it’s the business owners who take the risk when they have more limited resources that can create ventures that last longer.
Loss of Business Ownership
One last reality the serial entrepreneur faces is the likelihood that they will have to surrender at least some partial ownership of one business to be effective in their other companies.
Entrepreneurs can get attached to their projects, and letting go can be hard. Still, as the businesses expand or if one company begins to need more attention than another–it will become necessary.
Serial entrepreneurs have to understand when it’s time and how much to let go of for one business so they can pursue another. Owning and operating several companies means being responsible in some way for all of them. How much they let go of will be up to them, but they need to do it will become more and more of reality as they open more businesses.
Serial entrepreneurs have a lot on their plate. They can pursue more of what they love, but it comes at the cost of having to give up ownership and possibly having to risk resources when the markets downturn. Those who can navigate the storms and capitalize on problems they identify have the potential to become serial entrepreneurs.