Question about owning 1 or different businesses

PeterBPeterB subscriber Posts: 6
edited November 2008 in Business Planning
  Say you have a business that makes and sells products to a wide audience (not a specific niche). Lets call it business "A". If you wanted to branch off and produce specialty products that target totally specific and very different niches but wanted to keep the look and feel of these two niches business separate from business "A". Would you still have them as part of business "A" but have them as division or something? Or would it make more sense to have a separete business for each specialty niche you get into?
 I was thinking of having the parent business (business "A") and having branches that specialize in specific niches and call them "So and So" by business "A". Any thoughts? I hope this makes sense.

Comments

  • ninchan632ninchan632 subscriber Posts: 0
    To answer your question, you have to consider a few factors.  One - staffing.  Do you have sufficient staffs to either run a big organization as a whole or it`s practical enough to run a small organization with you being the "boss"(the manager, executive, CEO, HR etc).  Two - accounting.  Are you comfortable having a few accounts from different businesses or you want it to be a single account with several journals.  Three - what kind of products are you selling, own or somebody else`s. If you are doing affiliate businesses, perhaps it is better to have them separate because you might want to see which one can give you the kind of income you targeted.  Meaning you can easily strike off the one that gives you problem.  
    Anyway, it depends how you want to control your business - the way you are comfortable with and you have the resources.  SuhaimiNinchanceshttp://urlPass.com/3uavhttp://urlPass.com/3uau  
  • robertjrobertj Tampa Bay, Floridasubscriber Posts: 0 Member
      Say you have a business that makes and sells products to a wide audience (not a specific niche). Lets call it business "A". If you wanted to branch off and produce specialty products that target totally specific and very different niches but wanted to keep the look and feel of these two niches business separate from business "A". Would you still have them as part of business "A" but have them as division or something? Or would it make more sense to have a separate business for each specialty niche you get into?
     I was thinking of having the parent business (business "A") and having branches that specialize in specific niches and call them "So and So" by business "A". Any thoughts? I hope this makes sense.
     Peter,If I follow correctly, you want to open different "markets" without confusing your message of weakening your positioning in an established market. Would you be selling the same products in different markets? There are a couple of ways to accomplish this. Remember that the company name and the product name (brand) can be separate. Contact me directly or send me a PM if you want to discuss the specifics of your situation.
  • PeterBPeterB subscriber Posts: 6
      Say you have a business that makes and sells products to a wide audience (not a specific niche). Lets call it business "A". If you wanted to branch off and produce specialty products that target totally specific and very different niches but wanted to keep the look and feel of these two niches business separate from business "A". Would you still have them as part of business "A" but have them as division or something? Or would it make more sense to have a separate business for each specialty niche you get into?
     I was thinking of having the parent business (business "A") and having branches that specialize in specific niches and call them "So and So" by business "A". Any thoughts? I hope this makes sense.
     Peter,If I follow correctly, you want to open different "markets" without confusing your message of weakening your positioning in an established market. Would you be selling the same products in different markets? There are a couple of ways to accomplish this. Remember that the company name and the product name (brand) can be separate. Contact me directly or send me a PM if you want to discuss the specifics of your situation.
    Yes you are exactly correct.  They will be the same type of product but directed towards specific niches. Example: Say if you sold plain white t shirts to the general public and you wanted to sell a line of shirts specialized for baby boomers and a line of t shirts specialized for teens. Each market is different. I want to "look" like a separate company and have the brands be named something different. Can they both be "part" of my bigger generalized t shirt company without totally being separate businesses? In other words, all earnings will be made by oen company. I`ll have 1 bank account.  What are the benefits or downfalls legally and business wise of doing it this way? Thanks so much for your help!
  • robertjrobertj Tampa Bay, Floridasubscriber Posts: 0 Member
    Generally, this approach is done to "compartmentalize" assets and liabilities.
     
    For a startup - I`d say the complexity and expense of  maintaining several entities, the cost of keeping separate records along with multiple filings, plus the  reduced flexability and access to capital would not make it my choice of direction.
  • SlowCookerMateSlowCookerMate subscriber Posts: 1
    As a CPA, I have to agree with Robert.  A start up needs to keep it simple so you can focus on promoting the product and not focus on the admin of the business.
     
    If you are selling a product, the brand name is what is important and not the company name.  Promote as many brand names as you need under the same company name.
  • PeterBPeterB subscriber Posts: 6

    As a CPA, I have to agree with Robert.  A start up needs to keep it simple so you can focus on promoting the product and not focus on the admin of the business. If you are selling a product, the brand name is what is important and not the company name.  Promote as many brand names as you need under the same company name.
    Thank you. That answered my Q.
  • WebJunkyWebJunky subscriber Posts: 8 Member
    add to that brand recognition and establishment.  if your businesses are even slighly similar in some form, you should focus on establishing that common brand platform so that you can introduce more products in the future and have them received well in the market. people will already know who you are. if they enjoyed your earlier products they will potentially buy the new one too (if they need it of course).
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