Is Small Business Consolidation a Good or Bad Thing?

Some small business owners have more than one business that they run.

At some point, they may think about the possibilities of merging the businesses into one large company. After all, that's what some of the big name businesses have done and they have done quite well.

Look at Gap, Athleta, Banana Republic and Piperlime or Raving Brands, who owns Moe's Southwest Grill, The Flying Biscuit, Monkey Joe's and more. They both successfully consolidated at some point. But should you, as a small business, owner do it?

How about looking at some pros and cons:

Pros of Business Consolidation

•  If you have one successful company already, you can attach your name to your other branches and have immediate name recognition in your marketing favor.

•  You can market them together, on your website, with discounts and loyalty cards and with consistency.

•  You will have a customer base already and your loyal ones will check out your smaller, less known companies and help spread the word.

•  You can have consistency in your company. You can set one mission statement and maintain consistent work place philosophies throughout.

•  You can shift employees around easier if you find a better spot for them.

•  You may end up saving money with consolidation, as you won't need as many people for certain positions.

Cons of Business Collaboration

•  Unfavorable reviews and customer ratings can follow you from company to company. In other words, if one facet takes a dive, it can hurt the others.

•  You can lose some of each company's identity. For instance, if you had a cupcake business and a decorating business and you combine them; one or the other may swallow up the other in the merge.

•  Each of the philosophies and goals may not go together.

•  It may be harder to house all of your employees together or maintain that consistency if they have all been doing different things in the past.

•  You may end up having to let some employees go if you find less need for multiple positions in a single job. This can be difficult for small business owners.

Business owners will run into many decisions they have to make, not all of them easy ones.

The bigger your company (or companies), get, the more decisions you have to make. The bottom line is you want to do what is best for you and your business to help it grow and become as successful as possible.

And perhaps in time, your merge might just be with someone else, whose name is even bigger.