How To Operate More Than One Business at the Same Time

We often have people reach out who want to add a secondary business to their existing business and they ask how it is possible to do that.

The short answer is yes and depending on how you have structured your business already, there are different possibilities.

Sole Proprietorship

A Sole Proprietorship can only maintain one business and one business name.  The only thing that can be changed is the business activity if you have changed what you do in the description of the business.  The business name can’t be changed.

Adding a secondary Sole Proprietorship

You can complete a new Sole Proprietorship for the secondary business however this means operating two different businesses with separate bank accounts, tax accounts including HST and Payroll if applicable.  If you have a Sole Proprietorship and want to add another business, it may be time to look at incorporation where all the businesses you have are under one business umbrella.

Adding Trade Name To Existing Corporation

If you currently have an Incorporated company, you are able to add a secondary business as an operational name aka trade name or dba under the existing corporation.  This allows you to operate a business under the corporate entity you currently have where the secondary business name can be added to your existing corporate bank account and all tax accounts.  There is one main drawback and that is that the new business name registered under the corporation does not have name protection as your corporate name has.  This can be a challenge to those who wish to put this new name out on socials, paid ads etc where the business name could gain lots of attention.  If you are concerned, an alternative is to incorporate your first or secondary business.

Incorporation

Incorporation provides all of the bells and whistles to starting or changing a business from a Sole Proprietorship or General Partnership.  It allows you to have the liability protection away from your personal assets, reduced taxation opportunity, loans and credit availability and name protection.  Many businesses operate more than one corporation at a time especially when the business wants to have anonymity from other businesses.  This makes it very clean if you decide to partner or sell one incorporated business while not interfering with another corporate entity you own.  It also has another opportunity for the lowest tax bracket available to businesses by providing the 500,000 tax cap.

Ensure that you think through your plans as each business will need lots of attention, commitment and time from you and your team.  

Take time to evaluate and plan before execution.  Things to consider are as follows:

Define Your Objectives and Drive:
Determine your reasons for managing multiple businesses. Is it for diversification, increased earnings, or pursuing various passions?

Evaluate Your Resources:
Assess your financial capabilities, time availability, and skillset to ensure you possess the essential resources for effective management.

Select Synergistic Ventures:
Consider launching businesses that are interconnected or complementary, as this can streamline operations and reduce the time and effort needed to oversee each enterprise.

Delegate Responsibilities:
Recognize that you cannot solely handle multiple businesses. Entrust tasks and duties to reliable employees or partners, and hire capable managers if required.

Implement Streamlined Systems:
Develop standardized processes and systems for each business to minimize your involvement in day-to-day operations. Automation tools and technology can be advantageous.

Establish Clear Priorities:
Identify which business demands immediate attention and prioritize tasks and decisions accordingly, focusing on high-impact areas.

Effective Time Management:
Efficiently managing your time is vital when managing multiple businesses. Create a schedule that allocates specific time blocks to each enterprise and adhere to it.

Financial Oversight:
Maintain separate financial records for each business to accurately track revenue, expenses, and profits. Consider seeking advice from a financial advisor for effective financial management.

Risk Management:
Be aware of the risks associated with each business and have contingency plans in place. Adequate insurance coverage is essential to safeguard your assets.

Networking and Support:
Establish a network of advisors, mentors, and fellow entrepreneurs who can offer guidance and assistance as you manage multiple businesses.

Continuous Monitoring and Evaluation:
Regularly assess each business’s performance, utilizing key performance indicators (KPIs) to gauge success and make necessary adjustments.

Avoid Overextension:
Be cautious not to spread yourself too thin. If managing multiple businesses becomes overwhelming, consider scaling back or divesting from one of them.

Exit Strategy:
Develop an exit plan for each business, outlining when and how you might sell or transition out of an enterprise as part of your long-term planning.

Self-Care:
Prioritize your physical and mental well-being. Managing multiple businesses can be stressful, so allocate time for relaxation and self-care.

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Ontario Business Central Inc. is not a law firm and cannot provide a legal opinion or advice. This information is to assist you in understanding the requirements of registration within the chosen jurisdiction. It is always recommended, when you have legal or accounting questions that you speak to a qualified professional.