Multiple companies or one large company?

[tankman1989]

I'm kind of torn as to how to structure my business. I'm offering tech support and admin services but I'm also offering online services and a consulting service and on top of that there will be a lot of product (software/hardware) moving between us and the client so this could easily be 3-4 separate businesses or it could be one large business.

I would think that by separating the companies I would be able to promote each service individually and have more specialized marketing. I'm guessing that this would also be much more work and more costly (filing 3-4 tax returns a year, 3-4 domains, etc). This also means at least 3-4 business cards ...

An advantage to splitting them would be that if one was failing it would be easier to sell it off or shut it down.

Anyone ever been in this situation or have any thoughts on how to handle it?

 

[tom11011]

I think what you might want is one company with 3-4 marketing brands.

 

[lsi]

It's hard enough getting one company off the ground and you can always split off divisions later.

 

[nlinecomputers]

Unless you are incorporated then there will NOT be 4 separate companies, not from a income Tax point of view.

 

[codegreen]

I would think that by separating the companies I would be able to promote each service individually and have more specialized marketing.

Why would you think that? What is that you think you can do with 3 or 4 separate companies that you can't do with a single company?

 

[AndyM]

Not sure about the US, but in the UK, each would be legally required to have it's own separate insurance policies.

In addition, with data protection policies here, you could not send an email to client A from Company B, C or D if that client had only had dealings with Company A.

It all sounds a bit overkill to me. Start simple, and if the time should come to divide the infrastructure, then consider it only then.

Andy

 

[SoloCon]

I'm kind of torn as to how to structure my business. I'm offering tech support and admin services but I'm also offering online services and a consulting service and on top of that there will be a lot of product (software/hardware) moving between us and the client so this could easily be 3-4 separate businesses or it could be one large business.

I would think that by separating the companies I would be able to promote each service individually and have more specialized marketing. I'm guessing that this would also be much more work and more costly (filing 3-4 tax returns a year, 3-4 domains, etc). This also means at least 3-4 business cards ...

An advantage to splitting them would be that if one was failing it would be easier to sell it off or shut it down.

Anyone ever been in this situation or have any thoughts on how to handle it?

Keep it as one!! I have done work for someone who you would think has many different companies, but it is all under 1 company. His company does Insurance, IT, hosting, B2B lending, merchant processing, Web design, Marketing.... I could give at least 10 more just off the top of my head. Now, most of these "departments" are in different states from each other, but the fact still remains that they are under one company.

They do brand them self differently. This is a common practice. Unless you are trying to protect each "company" from each other for liability reasons, keep them as one!

 

[tankman1989]

Keep it as one!! I have done work for someone who you would think has many different companies, but it is all under 1 company. His company does Insurance, IT, hosting, B2B lending, merchant processing, Web design, Marketing.... I could give at least 10 more just off the top of my head. Now, most of these "departments" are in different states from each other, but the fact still remains that they are under one company.

They do brand them self differently. This is a common practice. Unless you are trying to protect each "company" from each other for liability reasons, keep them as one!

Thanks for the insight! The liability issue is part of the reason I was considering this.

Not sure about the US, but in the UK, each would be legally required to have it's own separate insurance policies.

In addition, with data protection policies here, you could not send an email to client A from Company B, C or D if that client had only had dealings with Company A.

It all sounds a bit overkill to me. Start simple, and if the time should come to divide the infrastructure, then consider it only then.

Andy

Thanks for the notice on the data protection policies, I'll have to look into that. I know that these could easily be 4 different solid companies so that is why I was thinking about being proactive about dividing them from the beginning. This way if I decide to focus on one company I could easily sell the others and invest in my main company.

 

[14049752]

. This way if I decide to focus on one company I could easily sell the others and invest in my main company.

Honestly, this thread gives me the impression that you're just lobbing this out there... But whatever, I get that impression from most of your threads.

Companies don't intrinsically have value, just because they exist. To sell, you'd have to have focused on each other company enough to make them worth something to someone else. You may develop a framework of how you think this company will operate, but unless it's tested in the real world you're not just going to "easily" sell it.

Ultimately, I think it'd be smarter to have one company. You're never locked in to doing the same thing with that one company, and if some service takes off, you can always form another company to handle that task and hire employees and whatever else is involved, if you feel it's grown enough to justify it. You can market your single company multiple different ways, you can have multiple business cards, etc. The advantage is that you're only dealing with one set of taxes, licenses, accounting files, insurance, etc.

 

[scotts]

I think before you decide anything you should speak to your account, insurance agent, and lawyer. often ramifications such as these can have severe unintended consequences such as need for separate insurance policies each having a minimum policy amount. tax consequences are something that a good accountant can explain to you. more importantly without knowing what kind of support you have lined up, i can't imagine how you think you can successfully build 8 companies at once.

 

[frederick]

I say single. Splitting would require too much work, time and monies. When you get big enough, you can break up the company, and have the parent an LLC at the least, and all the others being a DBA of the LLC. Hopefully that makes sense.

 

[tom11011]

Just have one company with different brands. Not all companies use their company name as a brand.

 

[untoldtech]

You can use the same name for a business but have a different entity own it. Legally, you should make 1 LLC per business location (IMO) to structure it in a way that if one got sued or went into default your other company doesn't face the wraith of the first but then there are tax implications. You should consult a lawyer and CPA but this is how many big companies do it.