Should my second business be separate or a division of my current S Corp?
I currently own an S Corp electrical contracting firm. I want to start a second related business, should it be a separate corp or a division of the existing corp?
Join us in a city near you at Entrepreneur’s Accelerate Your Business event series kicking off Feb 23. View cities and dates »You will need to ask your accountant or financial person the best way to organize that, but in terms of marketing, you have two choices: to use it as an "added-value" service to your existing service, or market it as a separate service under a different name, logo and trademark.
My first question would be is there a market for this business? Is it something that your customers typically buy with your current products or services or is it something they are asking if you offer?
Starting out, I would say to "test and measure" the idea with your current customer base to make sure it is a service or a product they really want to buy.
Then, add it as an additional service or as part of a "package" of services you offer and this package may be at a price point slightly higher than you are currently charging.
Test first before committing resources and marketing dollars and efforts to generating more leads to a new business.
You have the advantage right now (at least it sounds like it) of a "captured" base of current customers. Go back to them first. You already have a relationship with them and a reputation for your work.
Grow your "start-up" from this base, and you'll have a better idea of your new idea is a winner, and deserving of its own unique company.
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