Entrepreneurs, how important is it to plan your personal home purchase or sale to align with your business’ growth and needs?
Too often, I see entrepreneurs choose to sell or buy a home that ends up very negatively impacting their business financially. Whether the home purchase or sale is due to a life shift, need around the kids or their own perceived needs I regularly experience entrepreneurs missing the incredibly vital connection of choosing their personal home needs through their business needs FIRST. I call it the “business of home”.
The simple mantra here is: Lead with your business needs. Communicate to your agent/broker where the business is today and it’s biggest needs as well as the business goals for the next few years. This creates context for your agent/broker to balance your family needs as well as the business needs. It’s akin to arming your CPA with your business goals…they can guide you through your tax strategies much more effectively. Additionally, work with an agent/broker who is analytical enough to marry your life needs, business needs and the local real estate market trends within the current cycle. They should also be able to provide hard market stats/trends. When done effectively, your agent being able to provide all this ensures optimal alignment between market timing and business timing. As an entrepreneur it ensures you buy or sell appropriately now so you can really make the dream home happen later if that’s what your business really needs today to scale.
Jason, a client I admire hugely in so many ways is the perfect example. When he first moved to Austin his insurance business was scaling. At the time, he could have bought a $1m home or more. During our diagnostic of needs meeting we recognized his business needed a lot of investment at that time and was poised to grow rapidly if he did exactly that. At the time the market still had a solid 3-4 years of high appreciation ahead in our opinion. We advised him to scale back and buy a $650k home. He did exactly that as well as upgrades he liked. He vested the rest in his business which allowed him to scale to earning a $1m a year within 15 months! He has told me countless times that the company would not have scaled that rapidly had we not taken this approach. Additionally the value of his home moved up 40% during that time! 2 years ago we sold his home, he bought a $1.7m property on the lake and fully built his dream home where he and his wife also host growth centered workshops! The words they regularly use are, “we pinch ourselves every day when we wake up and see the tranquil waters and beautiful hills of Lake Austin as well as the workshops we get to host that help others grow! Thank god we took the patient approach by putting the business first in buying our previous home!”
As an entrepreneur, you must recognize your business is the golden goose. Be very aware of what it needs and be willing to put it first when making your personal home decisions, this approach often ends up serving you, your family and loved ones best. Download this questionnaire to ensure your agent has the chops to truly represent you as an entrepreneur or business owner.