Should you care about regulations, licensing requirements, and other ‘rules’ which someone or some government body has created? Why comply? Standard advice says: ‘rules are meant to be broken.’
Rather than get too much into being compliant, let’s flip the conversations and focus on scaling. The general premise is we want financial independence. That implies we need to do more than one deal so we can get there. And we want to believe that when we have reached our goal, the income is stable rather than a regulator is going to knock it all down.
There is a binary choice in Silicon Valley between a lifestyle business and a business which creates equity value. Let’s set out a few definitions.
A ‘lifestyle business’ has the founder at the center. They are selling time for money or just being the go-to person for significant decisions plus many of the day-to-day tasks. The founder is trading time for money, even if not every hour is billable. A litmus test is what happens when the founder goes on holiday. Or, they take their foot off the gas. For a lifestyle business, sales and revenue will slow down or stop. Momentum is lost. If the founder wants a lifestyle business which slows or stops each time they take a holiday, cool. If not, the founder needs to reconsider what they are building.
For a real estate investor who sources deals or runs a serviced accommodation business, little happens when the founder, the principal decision-maker, steps back. The founder is in control, and at the same time, the founder has created a job for themselves. Not a bad thing if they enjoy the work. Just not financially stable if they cannot continue to put in the hours.