From the June 2004 issue of Entrepreneur

What do you do when one business isn't enough? These two entrepreneurs started one business, then almost immediately began looking for their next.

Karen McMasters is president of Bare Babies Inc., a $2 million online baby products business she launched on Yahoo! Stores in February 2000. Three years later, she started AllCola.com with her mother, a lifelong collector of Coca-Cola memorabilia. In January 2004, she debuted Ciao Bella Baby to leverage her success with Bare Babies and attract a higher-end customer. In 2004, she projects sales of $60,000 for AllCola.com and $1 million for Ciao Bella Baby.

McMasters, 40, says one main benefit of having more than one company is diversification. "It's comforting to have a variety [of businesses] and not put all your eggs in one basket. It keeps life interesting."

, 37, started $10 million, Dallas-based Brinson Benefits Inc. in 1996 to administer employee benefits to midsize companies. She started COBRA Charmers three years later when she realized many of her existing clients were not in compliance with COBRA regulations; today, COBRA Charmers makes almost $100,000.

While serial entrepreneurs tend to get more publicity, McMasters and Brinson-Roark are examples of a new breed of "parallel entrepreneurs." "A parallel entrepreneur can't and doesn't wait to finish one startup before conceiving and launching other ventures," explains Dr. Debra Condren, founder and president of Business Psychology Solutions, a coaching and business consulting firm with offices in New York City and San Francisco. A serial entrepreneur, like a parallel one, may get bored working on only one business idea but is more inclined to fully exit a prior venture before moving onto the next one.

Based on her surveys of business owners, Condren notes that parallel entrepreneurs are more common in the service industry and among consulting businesses. Based on McMasters' example, certain Internet-based businesses-particularly those with low startup costs-can also be ideal for parallel entrepreneurs.

Both McMasters and Brinson-Roark acknowledge benefits to building more than one company. COBRA Charmers has supported Brinson-Roark's first company through money crunches. "Brinson Benefits has a long sales cycle, and our cash flow is hit hard the first year we take on a new client," explains Brinson-Roark. "COBRA Charmers' fees are collected annually, in advance, thus improving cash flow."

For McMasters, starting AllCola.com was a way to help her mother retire while allowing her to generate income doing something she loves. She started Ciao Bella Baby partly to address an issue with her first company-because of the word "bare" in Bare Babies, some of her potential customers with child-protection software couldn't access her site. "It was years before I realized [the domain name] was a potential problem," explains McMasters. "After establishing the brand name and the customer base, I decided the risks and hassles of changing the business name could cause more harm than good." A new company helped make up for any losses.

Brinson-Roark was initially concerned that starting and running a second company would diminish her original company's focus and that she had underestimated the investment another venture would require to be successful. With improved cash flow and stronger ties with her customers, however, she feels her business decision was sound. She'd even consider starting a third company if the right opportunity presented itself. Brinson-Roark says, "I'm willing to take calculated risks."

Would McMasters and Brinson-Roark recommend starting multiple companies to other women? "Absolutely. Go for it!" says McMasters. "There are fewer challenges when starting additional businesses-you know what steps need to be taken and in what order." With a parallel business, she points out, you can also leverage established customer relationships and credit references.

Brinson-Roark agrees. "Starting a second business is easier than the first. You'll know more of what to expect, and you'll be more realistic in your goals."


Aliza Pilar Sherman is an author, freelance writer and speaker specializing in women's issues.