This week, I chatted with the founder of a growing company. The business is doing well, but he’s uncertain about the future because the business is in a heavily regulated industry. This makes planning more challenging, especially since a new presidential administration will take over here in the U.S. in January.

The regulations he’s concerned about will determine what customers he can sell to. If the regulations are loose, the number of customers he can serve will be large. If they’re strict, the market of potential customers will shrink materially. There are lots of competitors in the market, so loose regulations mean plenty of business to go around for everyone. Strict regulations will lead to steep competition and, probably, price wars, which will reduce profit margins.

So, while he’s watching the regulatory environment, what he’s primarily worried about is the future size of his market. Markets can make or break a company. This founder hopes that regulation doesn’t shrink his market and put his company in a challenging situation.