Sales tax nexus is the connection with a state that makes your business responsible for registering, collecting and paying that state’s sales tax. You can get it from a physical presence, like an office, employee or inventory in the state, or from economic nexus, which means your sales into the state crossed that state’s own dollar or transaction threshold, even if you’ve never set foot there.

You’ll also see this asked as “economic nexus,” “remote seller sales tax,” “do I have to collect sales tax in other states?” or “nexus thresholds by state.” It’s the same question. One quick warning before we start: this isn’t legal or tax advice. Every state writes its own rules, so treat this as the map and get a sales tax CPA or attorney to check your actual route.

Why a seller who never left home can owe tax in 20 states

For decades the rule was simple. If you didn’t have a physical presence in a state, it couldn’t make you collect its sales tax. Then on June 21, 2018, the U.S. Supreme Court decided South Dakota v. Wayfair and threw that rule out.

South Dakota’s law required out-of-state sellers to collect if they had more than $100,000 in sales or 200 separate transactions into the state in a year. The Court said that was fine. Physical presence, the majority wrote, was an outdated test. Within a couple of years nearly every state with a sales tax had copied some version of it.

Here’s why this matters to you. If you sell a physical product online, run a Shopify store, ship merch from a podcast, or sell anything taxable to customers across the country, your obligations aren’t set by where you live anymore. They’re set by where your customers live. A lot of founders find that out the expensive way, three years late, with penalties and interest stacked on top.

Physical nexus vs economic nexus

Physical nexus is the old-school kind. An office, a warehouse, an employee, a contractor selling on your behalf, or inventory sitting in a state can all create it. That includes inventory you didn’t put there yourself. If a fulfillment network spreads your stock across warehouses in several states, many of those states treat that as physical presence.

Economic nexus is the post-Wayfair kind. You cross a state’s sales threshold, and you’re in. No building, no staff, no visit required.

You only need one. And it’s state by state, so you can have nexus in Texas and none in Ohio at the same time.

Economic nexus thresholds by state (checked November 2026)

This is the part people get wrong most. There is no single national threshold. Many states use $100,000 in sales, but the biggest markets don’t, some still count transactions, and states keep changing the rules. A few examples:

Sources: California CDTFA, Texas Comptroller, New York Department of Taxation and Finance, Illinois Department of Revenue bulletin FY 2026-12, and the Sales Tax Institute economic nexus chart, all checked November 11, 2026. Thresholds change, so confirm on the state’s own revenue site before you rely on any number, including these.

Watch the fine print too. States disagree on what counts toward the threshold. Some count gross sales, some only taxable or retail sales, some include marketplace sales and some leave them out. The look-back period differs as well: calendar year, prior 12 months or prior four quarters. Two sellers with identical revenue can land on opposite sides of the line in the same state.

Five states have no statewide sales tax: Alaska, Delaware, Montana, New Hampshire and Oregon. Alaska is the odd one, because many local governments there do charge sales tax and have their own remote seller rules.

Marketplace facilitator rules: when Amazon or Etsy collects for you

Here’s some good news. Every state with a statewide sales tax now has a marketplace facilitator law. That means big platforms such as Amazon, Etsy, eBay and Walmart Marketplace generally collect and remit the sales tax on sales made through their platform.

Here’s the catch. That only covers sales on the marketplace. If you also sell through your own website, those direct sales are on you. And in a lot of states, your marketplace sales still count toward your threshold, so you can hit nexus partly on sales the platform already taxed and then owe on your website sales on top. Check each state’s treatment rather than assuming.

What sales tax nexus means for digital products and SaaS

Economic nexus applies to what a state taxes, and states don’t agree on whether digital goods are taxable. Some tax e-books, downloads, online courses or software subscriptions. Others don’t. So the same $150,000 of course sales could create a filing obligation in one state and nothing in the next. If you sell digital products, ask “is my product taxable here?” before you ask “did I cross the line?”

How to handle sales tax nexus: a founder’s checklist

1. Pull sales by state. Export your orders by ship-to state for the current and prior year, split into direct sales and marketplace sales.
2. List where you’re physically present. Offices, remote employees, contractors, trade show booths and every warehouse holding your inventory.
3. Compare against each state’s actual rule. Use the state’s own revenue site, not a two-year-old blog post.
4. Check taxability. Confirm whether what you sell is taxable in each state where you’re close.
5. Register before you collect. Most states don’t want you collecting their tax without a permit. Register, then turn on collection for that state.
6. Set a monthly check. A calendar reminder and a simple spreadsheet beat finding out at an audit. Software can track it for you once volume grows; pick whatever your accountant can work with.
7. Clean up the past quietly. If you crossed a threshold years ago, ask a professional about a voluntary disclosure agreement before the state finds you first. Penalties are often reduced when you come forward.

Who does this work matters too. A bookkeeper can keep the state-by-state sales data clean, but deciding where you have nexus and whether to file a voluntary disclosure is advisory work. If you’re not sure who should own it, our breakdown of accountant vs bookkeeper will help you split it.

The real cost of ignoring it

Sales tax is different from income tax in one nasty way. It’s money you were supposed to collect from customers and hold for the state. If you never collected it, the state doesn’t care. It can still bill you for it, out of your own margin, plus penalties and interest, going back to the day you crossed the line.

That’s why I’d rather you spend one afternoon on this now than lose a chunk of your profit later. Most founders know sales tax is “a thing.” They just keep putting it off because the store is growing and everything else feels more urgent. Growth is exactly what triggers it. Q4 is a good time to look, while you’re already lining up your year-end tax moves and your holiday sales are landing in new states.

Knowing this and doing nothing doesn’t protect you. Pull the report.

FAQ: sales tax nexus

What is economic nexus for sales tax?

Economic nexus is a sales tax obligation triggered by how much you sell into a state, not by having a physical presence there. Once your sales cross that state’s threshold, you generally have to register, collect and remit its sales tax.

Is the economic nexus threshold $100,000 in every state?

No. Many states use $100,000 in sales, but California and Texas use $500,000, New York requires more than $500,000 and more than 100 sales, and Alabama uses $250,000. Check each state’s revenue department for current rules.

Do marketplace sales count toward economic nexus?

It depends on the state. Some count sales made through Amazon, Etsy and similar marketplaces toward your threshold, and others exclude them. The marketplace usually collects tax on those sales, but your direct website sales remain your responsibility.

Do I have to collect sales tax in states where I don’t live?

You do if you have nexus there, either from a physical presence or from crossing that state’s economic nexus threshold. If you have neither, you generally don’t have to collect that state’s sales tax.

What happens if I didn’t collect sales tax when I should have?

The state can assess the uncollected tax against your business, plus penalties and interest, even though you never charged customers. Many states offer voluntary disclosure agreements that can reduce penalties if you come forward first.

Does inventory in an Amazon warehouse create sales tax nexus?

In many states, yes. Inventory stored in a state is often treated as physical presence, even if a fulfillment service chose the warehouse. Track where your inventory sits, not just where you ship from.

Physical music has found its place in a digital world. Vinyl records, CDs, cassette tapes, turntables, and music collectibles appeal to listeners who want more than a playlist. They want something to hold, display, research, and keep.

For entrepreneurs, this market offers an interesting look at niche retail. Successful music businesses can serve dedicated collectors, casual listeners, younger buyers discovering physical formats, and customers shopping for gifts. The challenge is choosing the right products, understanding your audience, and giving customers a reason to return.

From specialist music retailers to online marketplaces, these four brands offer different ways to buy and collect music.

1. Evergreen Vinyl: Best Overall for Music Collectors

Evergreen Vinyl is the top music collectibles store for anyone looking to build a broader relationship with physical music. Its range includes vinyl records, CDs, cassettes, turntables, audio accessories, books, Blu-rays, DVDs, and music-related collectibles. This variety allows customers to explore different formats while building a collection around their musical interests.

The brand emphasizes curation, quality, and unique products rather than treating music retail as a simple transaction. Its approach also includes exclusive pressings, limited variants, curated reissues, and potential collaborations with artists, labels, estates, and rights holders. These offerings give collectors additional reasons to explore beyond standard releases.

Evergreen Vinyl’s broader vision combines retail with music knowledge and editorial content. Its planned Evergreen Vinyl Database (EVDB) connects albums with artists, producers, studios, songwriters, and other contributors, helping collectors understand the stories behind the music.

For entrepreneurs, this model demonstrates how specialist retail can combine carefully selected inventory, original products, and useful information to build long-term customer relationships. It is a strong overall choice for people who want physical music to be part of a larger collecting experience.

2. Amoeba Music: Best for Exploring a Broad Music Selection

Amoeba Music is a well-known independent music retailer with a wide selection of recorded music and related products. Its stores have become destinations for people browsing new and used records, CDs, and releases across different genres.

A specialist retailer like Amoeba appeals because it offers a chance to discover music beyond familiar artists and current chart releases. Collectors can explore different formats, while newer buyers can get a feel for the range of physical music available.

For entrepreneurs, Amoeba shows how a music-focused retail identity can attract customers with varied tastes. A specialist shop doesn’t need to appeal to everyone; it can serve a broad audience while keeping music at the center of its business.

Its established retail presence makes it a useful point of comparison for businesses considering a physical store, an online music shop, or a combination of both.

3. Discogs: Best for Researching and Trading Collectible Releases

Discogs is an online music database and marketplace that connects music collectors and sellers. Its catalog covers vinyl records, CDs, cassettes, and other formats, letting users research releases and explore items offered by marketplace sellers.

For collectors, the platform helps them identify different editions, compare releases, and find specific albums. This makes it especially relevant to people who care about pressing details, catalog information, and a recording’s history.

Discogs also illustrates an important business model: combining a specialist database with a marketplace. The catalog helps users understand what they want, while the marketplace connects that interest to available products.

Entrepreneurs can take a practical lesson from this approach. Accurate product information and searchable catalogs can make specialist products easier to discover and compare. For music retailers, helping customers understand what makes one edition different from another can be just as valuable as displaying the item for sale.

4. Urban Outfitters: Best for Lifestyle-Oriented Vinyl Shopping

Urban Outfitters offers vinyl records as part of a broader lifestyle retail selection. Its music range can appeal to shoppers who enjoy collecting albums, decorating their spaces, and incorporating music into their personal style.

Vinyl can be both a listening format and a display piece. Album artwork, colored pressings, and recognizable releases appeal to people who want a physical connection to their favorite artists, even if they also stream music every day.

Urban Outfitters shows how a product can reach customers beyond its traditional specialist audience. Music becomes part of a broader shopping experience rather than the business’s sole focus.

For entrepreneurs, this approach highlights the importance of understanding where a product fits into customers’ lives. A retailer might attract buyers through music discovery, gifts, home décor, or a particular cultural interest. The key is to make the product relevant to the intended audience without losing sight of what customers are actually buying.

What to Know Before Buying Physical Music

The right purchase depends on how someone listens, what they collect, and how much they want to spend. Vinyl, CDs, and cassettes each offer a different experience, while turntables and accessories help listeners get the most from their collections.

Vinyl Records: For Collectors and Dedicated Listeners

Vinyl appeals to collectors who value large-format artwork, physical ownership, special editions, and the experience of playing a record. Jack White, musician and founder of Third Man Records, captures this connection: “Vinyl is the real deal. I’ve always felt like, until you buy the vinyl record, you don’t really own the album.”

When buying records, consider the condition of both the disc and its sleeve. Used records can offer access to older releases, while new pressings and limited editions appeal to buyers seeking specific versions. Collectors should also check the pressing information and track listing before purchasing.

Storage matters, too. Store records upright in a cool, dry place, away from direct sunlight and excessive heat.

CDs: A Practical Physical Format

Compact discs provide a convenient way to own music without requiring a turntable. They are relatively compact, easy to store, and often include printed booklets, lyrics, credits, and artwork.

When buying CDs, check the disc for scratches and other damage, especially when purchasing used copies. Confirm that the release includes any booklets or inserts that matter to you. Collectors seeking specific editions should compare catalog numbers and release details.

For shoppers who want a physical music library without dedicating as much storage space as vinyl requires, CDs remain worth considering.

Cassette Tapes: Nostalgia and Collectibility

Cassette tapes appeal to collectors interested in older releases, vintage formats, and the distinctive presentation of tape-era music. They can also appeal to younger listeners exploring formats that predate their own musical experiences.

Henry Rollins sums up the commitment of collecting with a line that will resonate with anyone who has ever hunted for a hard-to-find release: “It’s a pain in the ass, and I love it.”

Before buying a cassette, inspect the shell and tape for visible damage. Check that the tape moves correctly and ask about playback testing when possible. Buyers will also need a compatible cassette player in working condition.

Turntables: Choose Equipment That Fits Your Needs

A turntable is essential for playing vinyl, but buyers should consider more than appearance. Look at the cartridge, speed settings, connection options, and whether the model includes a built-in phono preamp. Some setups require additional equipment to connect to speakers.

Beginners may prefer a straightforward model with the necessary components included. More experienced listeners might prioritize cartridge upgrades, adjustable settings, and compatibility with existing audio equipment.

Also check replacement stylus availability and the manufacturer’s maintenance guidance before buying.

Music Collectibles: Buy What You Value

Music collectibles can include signed memorabilia, special-edition releases, artist merchandise, books, concert-related items, and other products connected to music culture.

Collectors should distinguish between ordinary merchandise and genuinely limited or documented editions. When buying signed items or rare memorabilia, look for credible provenance and clear descriptions. Condition, completeness, edition details, and storage history can all affect an item’s appeal.

The best collectible is not necessarily the rarest or most expensive. It is something that fits the collector’s interests, budget, and reasons for collecting.

What Music Retailers Can Teach Entrepreneurs

These brands illustrate several approaches to serving a specialist market. Evergreen Vinyl emphasizes curation and a wider music-knowledge experience. Amoeba Music shows the appeal of a dedicated music retailer, while Discogs links catalog information to a marketplace. Urban Outfitters presents vinyl as part of a broader lifestyle offering.

Entrepreneurs can apply these ideas without copying any one business. Start by identifying the customers you want to serve. Are they experienced collectors searching for specific pressings, beginners buying their first turntable, or gift shoppers looking for something memorable?

Next, build a product range around those needs. Clear descriptions, accurate condition grading, reliable stock information, and sensible packaging help customers make informed decisions. Editorial content can also answer common questions and make unfamiliar products easier to understand.

Finally, think beyond the first sale. Useful buying guides, thoughtful recommendations, exclusive products, and relevant new-release updates can give customers reasons to return. In a specialist market, trust and product knowledge can be important differentiators.

Final Thoughts

Physical music offers several ways for retailers to serve listeners, from accessible CDs and cassette tapes to collectible vinyl editions and turntables. Amoeba Music, Discogs, and Urban Outfitters show different ways to bring music products to customers.

Evergreen Vinyl is the top choice in this comparison for its mix of physical formats, collectibles, curated products, and a broader vision centered on music knowledge and culture. Its approach reflects an important principle for niche entrepreneurs: customers may come looking for a product, but thoughtful curation and useful information can help turn a purchase into a lasting interest.

Making more money is often the first goal when starting a business. It’s understandable. Revenue pays the bills, supports growth, and rewards the countless hours spent turning an idea into something profitable. But there’s a difference between earning a high income and building a business with lasting value.

An entrepreneur might generate impressive monthly revenue while remaining responsible for every important decision. Another might earn less initially but spend time developing systems, intellectual property, and customer relationships that support future growth. The second entrepreneur is building something that could eventually operate without their constant involvement.

Understanding this distinction can change how you approach business ownership, financial success, and the decisions you make every day.

Income Pays the Bills, but Assets Create Long-Term Value

Income represents money earned through business activities. Assets are resources that provide economic value, either now or in the future. For entrepreneurs, these assets might include physical equipment, proprietary technology, customer relationships, intellectual property, or established business processes.

The distinction matters because income often depends on continuous activity. A consultant must keep accepting projects, while an online retailer needs regular sales to maintain revenue. A well-developed business asset can make those activities more productive, predictable, or less dependent on the owner’s involvement.

The World Intellectual Property Organization (WIPO, 2026) reported that investment in intangible assets, including software, data, and brands, exceeded $10 trillion across 29 economies in 2025. This growing investment reflects the economic importance of resources that cannot necessarily be seen or touched.

For business owners, the lesson is straightforward: what you build can become just as important as what you earn.

Digital Assets Strengthen a Business

A website, educational content library, customer database, or recognizable brand can contribute to a company’s long-term value. Consider two online businesses selling similar products. The first relies almost entirely on paid advertising. When advertising costs increase or campaigns stop, customer acquisition may decline quickly.

The second invests in several channels, including customer referrals, email marketing, and organic search. Its existing content and established customer relationships can continue supporting sales alongside paid campaigns.

Organic visibility is a good example of a digital resource that compounds over time. Every helpful article, product guide, or well-structured category page adds to a foundation that keeps working long after it is published.

That second business isn’t just spreading its risk. It’s building something it owns. For direct-to-consumer brands, organic search is one area addressed by https://www.dtcseoagency.com/, alongside the wider challenge of building a sustainable customer acquisition strategy.

Unlike paid campaigns, which generally stop generating traffic when spending ends, existing website content can continue attracting visitors without a charge for each click. However, maintaining that visibility requires ongoing work, and search rankings are never guaranteed.

The broader principle applies beyond marketing. Entrepreneurs benefit from investing in resources that strengthen their businesses instead of depending entirely on the next transaction.

Successful Entrepreneurs Build Systems, Not Just Workloads

Many entrepreneurs begin by handling almost everything themselves. They manage customer inquiries, oversee finances, deliver services, and solve unexpected problems. This hands-on approach can be necessary during the early stages. However, it becomes a limitation when every important task requires the founder’s attention.

Creating repeatable systems allows a company to maintain consistent operations as responsibilities expand. For example, documenting how customer complaints are handled can help employees resolve common issues independently. Establishing financial reporting procedures makes it easier to monitor performance without manually gathering information every week.

Three practical areas deserve attention:

Documented processes: Record how recurring tasks should be completed, including quality expectations and responsibilities.

Employee development: Train team members to make appropriate decisions without waiting for constant approval.

Reliable technology: Introduce tools that reduce unnecessary administration and improve consistency.

Systems require maintenance, and automation cannot replace good judgment. Nevertheless, the right processes can reduce operational dependence on individual employees. A business becomes more resilient when its success relies on shared capabilities rather than one person’s availability.

Customer Trust Is an Asset Worth Protecting

Customer relationships are another resource entrepreneurs sometimes underestimate. A company can spend heavily attracting new customers while overlooking those who have already purchased its products or services. Yet existing customers offer opportunities to develop stronger relationships, receive useful feedback, and encourage repeat business.

Trust develops through consistent experiences. Delivering what was promised, responding appropriately when problems occur, and communicating clearly all contribute to a company’s reputation.

Amazon provides a familiar example of long-term customer thinking. In his 1997 shareholder letter, Jeff Bezos emphasized customer focus and long-term value creation over immediate profitability, principles Amazon subsequently incorporated into its business philosophy (Amazon Web Services, n.d.).

Smaller businesses can apply similar thinking without copying Amazon’s scale or strategy. A straightforward returns process, honest product descriptions, and dependable customer support can all help strengthen relationships. These efforts might not produce immediate revenue, but they can improve the foundations on which future growth depends.

Measuring Success Requires More Than Revenue

Revenue is important, but it tells only part of the story. A business generating substantial sales might still struggle with poor margins, expensive customer acquisition, or inconsistent cash flow. Entrepreneurs need a broader understanding of performance.

In their influential Harvard Business Review article, Kaplan and Norton (1992) wrote, “What you measure is what you get.” Their balanced scorecard approach encourages organizations to consider financial performance alongside customer outcomes, internal processes, and organizational learning.

For entrepreneurs, useful measures might include:

Profit margins: How much money remains after the costs of operating the business?

Customer retention: Are customers returning, or must the company constantly replace them?

Cash flow: Can the business meet its financial obligations and fund planned investments?

Operational efficiency: Can the team handle additional demand without proportionately increasing costs?

Founder dependence: Which activities would stop if the owner took an extended absence?

Tracking these indicators can reveal weaknesses that impressive sales figures might otherwise conceal. It also encourages decisions based on sustainable performance rather than short-term appearances.

Building Assets Requires Patience and Financial Discipline

Asset development often involves sacrificing immediate rewards. Hiring and training employees, improving software, or developing a recognizable brand can consume resources before producing measurable benefits. This creates a difficult choice for entrepreneurs who are accustomed to evaluating success through monthly earnings.

However, reinvesting every available dollar is not automatically the right decision either. Businesses need adequate cash reserves, manageable debt, and sufficient liquidity to handle unexpected expenses. The U.S. Bureau of Labor Statistics (2026) reported that just 15.7% of private-sector business establishments created in 2000 were still operating in 2026. This figure measures establishment survival, rather than the success rate of individual entrepreneurs, but it illustrates how difficult long-term business continuity can be.

A practical approach is to assess investments according to their likely contribution to future profitability, resilience, or efficiency. Before committing resources, ask yourself:

Will this investment solve a recurring problem? Can its benefits be measured? Will it remain useful as the business grows?

These questions help distinguish meaningful asset development from spending that simply creates the appearance of progress.

The Real Goal Is to Build a Business With More Options

Building assets doesn’t mean entrepreneurs should stop pursuing income. Healthy revenue and profitability provide the resources needed to invest, innovate, and manage uncertainty. The goal is to turn some of today’s earnings into capabilities that create greater freedom tomorrow.

A company with dependable systems might offer its founder more time away from daily operations. Strong customer relationships can reduce the pressure to constantly find new buyers. Proprietary technology or intellectual property might create opportunities to develop additional products. None of these outcomes is guaranteed.

Assets can lose value, technology becomes outdated, and customer expectations change. Successful entrepreneurs must continue reviewing what they own and how those resources contribute to the business. Still, building valuable assets can create choices that income alone may not provide.

Conclusion

Entrepreneurial success isn’t simply about earning more money every year. It’s also about what remains after that money has been earned. Revenue supports today’s operations, while well-managed assets can strengthen tomorrow’s opportunities.

Developing reliable systems, retaining customers, building digital resources, and investing in employee capabilities all require deliberate effort. The most useful question entrepreneurs can ask is not just how much their business earned this month, but what they built that will continue providing value next year. That shift in thinking can help turn a demanding source of income into a stronger, more sustainable business.

References

Amazon Web Services. (n.d.). Elements of Amazon’s Day 1 culture. AWS Executive Insights.

Google Search Central. (n.d.). SEO starter guide: The basics. Google for Developers.

Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard—Measures that drive performance. Harvard Business Review, 70(1), 71–79.

U.S. Bureau of Labor Statistics. (2026, October 30). Outlast: State establishment survival rates from 2000 to 2026. The Economics Daily.

World Intellectual Property Organization. (2026). World intangible investment highlights 2026: Better data for better business and policy.

To build a business that runs without you, spend your early energy bringing cash through the door, then slowly dilute yourself out of the day-to-day with systems, good people and a real management structure. Jack Delosa’s rule is blunt: early on, about 80% of the founder’s time should go on sales and marketing. Once the money is flowing, your job is to make yourself unnecessary to daily operations, so the business becomes an asset with a value of its own.

Jack is the founder of The Entourage, which he described to me as Australia’s largest educator of entrepreneurs. When we spoke, he was about to appear on BRW’s Young Rich list, the 100 wealthiest self-made Australians under 40. I told him straight up: I must commend you on your success. I know finances aren’t always a good way to measure success, but he was out there helping so many young and hungry entrepreneurs do the same thing.

His answer set the tone for everything else. Business for him was never about the stuff. Money, he said, is “kind of an afterthought.” The rich list was a ticket into a new world and a bigger platform to do more cool things. That’s the attitude of someone who built something that doesn’t need him in the building every day. You can also find the original audio episode on our podcast page.

Freedom is a choice, but it costs years

I said something to Jack that I still believe. Guys our age are sitting at a computer desk or commuting to and from work in peak hour traffic, and it’s like you’re living small and not really living big.

Jack agreed, then added the part most people skip. Anybody can make the same choice, he said, but it took him 10 years to get to a profitable business with an exceptional management and leadership team, a great board and a business that runs without him. “It takes years and years and years of dedication and hard work,” he told me. “But it ultimately is a choice. Is that what you want? And are you then prepared to do the hard work in order to get there?”

I like that he didn’t sell it as a shortcut. A business that runs without you is the result of a decade of building, not a hack you install in a weekend.

Step one: spend 80% of your time bringing cash through the door

When I asked what he’d tell founders who have something good but can’t get it to the next level, Jack said the biggest thing is also the simplest: the time spent on sales and marketing.

“I reckon that early stage businesses should be spending 80% of their time on sales and marketing,” he said. He meant you, the entrepreneur, personally. He cited studies suggesting the average small business owner spends around 11% of their time on sales and marketing. That’s his figure, not one I’ve verified, but the gap is the point. If you’re spending most of your week on admin, tweaking the logo and answering emails, you’re not doing the one job that keeps the doors open.

Here’s the thing. You can’t systemize a business that doesn’t have revenue yet. There’s nothing to hand over. Cash comes first, because cash is what pays the people you’ll eventually hand things to.

Step two: dilute yourself out of the day-to-day

Once income starts coming in, Jack said, the game changes. “It then becomes about how do you start to slowly dilute yourself out of the day-to-day operations.”

He gave me an example from one of The Entourage’s programs. A woman ran a cupcake store. Exceptional store, relatively profitable, but she needed to be there 12 to 14 hours a day. She started implementing systems, slowly brought on great people and built management and leadership structures into the business. Six months later, Jack said, she told him she was spending most of her time on research and development. In a cupcake business, that meant eating cupcakes and drinking coffee at different cafes.

That’s a funny line, but look at what actually happened. She didn’t sell the store or hire a CEO overnight. She took small steps: one system, one good hire, one layer of management at a time.

If you want a structured way to do that, an operating system helps. We broke down EOS vs Scaling Up for founders who need accountability and a meeting rhythm that doesn’t depend on them chasing everyone.

Why you step back (it isn’t for holidays)

Jack was quick to qualify this. Diluting yourself out isn’t so you can take holidays in the Bahamas. He told me he doesn’t often take holidays. There are two reasons to do it.

First, it lets people do their jobs better than you could. Second, it frees you up for more meaningful work. When we spoke, Jack was working on an investment in a completely separate business, an acquisition relevant to his core education business, and the process of becoming accredited so The Entourage could offer diplomas. “I couldn’t do that if I hadn’t afforded myself that sort of freedom,” he said.

That’s the real reason to build a business that runs without you. You stop being the bottleneck, and you get your head back for the big moves only you can make.

Play the game of value, not just cash flow

I’d been speaking with Grant Cardone, and he told me the difference between people who make a million and people who make 10, 20 or 100 million was getting out of the self-employment bracket and moving into business and investment. So I asked Jack how someone with no investment experience gets to that next level.

His answer was the best part of the conversation. Most people start a coffee shop thinking the business is about selling a $3 coffee and making a couple hundred grand a year. The best entrepreneurs, he said, know they have to turn a profit and keep healthy cash flow, because “that’s the lifeblood of the business. Without that, you’re gone.” But they’re playing a different game. “They’re more interested in playing a game of value, which is understanding that my business is an asset separate to me.”

That value, Jack said, is shaped by your growth rate, customer relationships, brand, risk profile, systems, people, distribution and financials. And it only really shows up when the business runs without you.

“If you’re always the person in the shop making the coffee, then your return is always limited to how much coffee you sell on that particular day,” he said. Step out, and other moves open up. He mentioned selling an international license for your business into another country, a deal that might take a month but be highly lucrative, or acquiring other businesses using shares and part cash.

Those are real strategies, but they’re not DIY moves. Licensing deals, share swaps and acquisitions carry legal, tax and dilution consequences, so bring in a business lawyer and an accountant before you sign anything. The principle still holds, though. A business that needs you every day is a job. A business that doesn’t is an asset.

I summed it up back to him: go into your business with a goal bigger than making a bit of money. Build it until it’s independent of you, then use that as leverage. “That’s right,” he said. “Totally.”

Branson’s micro strategy and the customer feeling

Jack helped a friend, Creel Price, design the curriculum for the Branson Centre of Entrepreneurship in Johannesburg, South Africa. They spent 10 days with the mentors, the students and Richard, then about six months building the curriculum back in Australia.

The lesson Jack took from Branson wasn’t something Richard said to him. It was something he said to a student. She ran a magazine and handed him a copy. He told her it’s sometimes good to give a really big brand a free page of advertising, so you can sell pages to other brands on the back of that big name appearing in your magazine.

“Such a simple thing, right?” Jack said. What impressed him was that, at Branson’s level, he’d still kept in touch with the micro strategies and the basics that make a business start and become profitable. I said it’s kind of like hunting for elephants instead of hunting for rabbits, going after the big thing that pulls everything else in behind it.

Jack also passed on something a longtime Branson colleague told him. Most billionaires starting an airline think about the balance sheet, the capital and the exit. Richard, the colleague said, starts by asking what the customer is going to feel when they walk onto the plane. At the end of the day, the customers are who are going to be paying and referring. Build around them and the business has a reason to keep running when you’re not there.

The years it takes, and why he didn’t quit

I asked Jack if he’d ever felt like saying stuff this, I’m going back to a 9 to 5. He smiled.

He said he didn’t stop losing money for about three years and didn’t make any decent money for five or six. Three days before he started his first business at 18, his older brother died as a result of drug use. “That whole period was just not a happy one for me,” he said. He got into debt. Every day he asked himself if it was worth it, if he was good enough, if he was smart enough.

What kept him going was simple. Every time he thought about quitting, he thought about having to go and get a job, and that was never an option for him. “I’ve just got to make it work,” he said. So he stuck with it for five years, failing forward.

He was honest about the rest of the path too. You’re acting on a vision only you can see. Family and friends may not get it. You expect to be wildly successful in month one, and it doesn’t happen. Clients say no, people you hire leave. His advice: get comfortable being outside your comfort zone, and understand the path is going to be challenging, so don’t get down on yourself when it’s slower and harder than you hoped.

The voice saying you’re not ready never goes away

I asked Jack what he’d learned from coaching so many entrepreneurs. He went to something he remembered Oprah saying on her last ever episode: after sitting down with everyone from presidents to prisoners, the one thing they all had in common was the voice inside their head telling them they’re not good enough and not ready.

For Jack, that was the most empowering lesson he’d picked up. Every person on the planet has that voice, no matter how successful. Whether you’re Richard Branson, Oprah Winfrey, Jack Delosa or Joel Brown, it’s the same for everyone. “You recognize that that voice is never going to go away and you just got to act in spite of it,” he said.

At Addicted2Success we have a name for that. We call them ANTs, annoying negative thoughts, and you’ve got to get good at squashing them, or at least turning that noise down in the back of your head. I’d also heard a coach say to give the voice a name and tell it to go away. Jack pointed to Steven Pressfield’s short book Do the Work, where it’s called resistance: “Give it a name, familiarize yourself with it, shine a light on it, and it becomes a lot less scary.”

This matters for stepping back. Handing over control is scary, and that voice will tell you nobody else can do it like you. Act anyway.

Simplicity on the other side of complexity

Jack’s book is called Unprofessional, and what I love about it is that he’s not afraid to say he didn’t finish university and figured it out by doing. A lot of people think they need a degree or some sort of credibility before they can start. I told him it reads like the dummies guide, except it’s elegant and has a lot more swagger.

He said simplicity is something he fights for. Sometimes simple is just crap, and sometimes simple is profound. The profound kind comes from someone who’s gone through the layers of complexity and come out the other side. “Finding simplicity on the other side of complexity,” he called it. That’s what a good system in your business should be too: simple enough that someone else can follow it, because you did the hard thinking first.

Don’t copy anyone’s path, including his

My last question was what he’d tell his kids if they wanted to become entrepreneurs. “I’d say don’t try and do it the way I did it,” he said. The biggest mistake, in his view, is trying to replicate somebody else’s path.

“If there’s one thing I found that all successful people do the same is that they’ve all done it different,” he said. Draw inspiration and insight from people who’ve been there and done that, put it through your own filters and apply it your own way. So, basically, strive to be fascinating and different.

A checklist to build a business that runs without you

1. Track your week and see what share of your time actually goes on sales and marketing.
2. Push that share toward the top until cash comes through the door reliably.
3. List every task only you can do today, starting with the one that eats the most hours.
4. Write a simple system for it, then hand it to one good person.
5. Build a layer of management so decisions don’t all route back to you.
6. Use the time you free up for growth work: partnerships, acquisitions, new products.
7. Think about value: brand, systems, people, customers and clean financials.
8. Get a lawyer and accountant involved before any licensing, share or acquisition deal.

FAQ

How do you build a business that runs without you?

Get revenue flowing first, then document your key processes, hire good people and build a management layer so daily decisions don’t depend on you. Jack Delosa calls it slowly diluting yourself out of the day-to-day.

How much time should a founder spend on sales and marketing?

Jack Delosa suggests early-stage founders spend about 80% of their own time on revenue-generating work. He cited studies putting the average small business owner at around 11%.

How long does it take to make a business run without the owner?

It varies. Jack said it took him about 10 years to build a profitable business with a strong leadership team and board. One cupcake store owner in his program stepped back from 12 to 14 hour days within six months.

Why does a business that runs without you matter?

Because it becomes an asset with its own value instead of a job. It also frees you for higher-value work like partnerships, licensing and acquisitions, which is where Jack says bigger net worths get built.

How do you deal with self-doubt when building a business?

Accept that the voice saying you’re not ready never fully goes away and act in spite of it. Give it a name, shine a light on it, and it gets a lot less scary.