How to Build a Business that Sets you free Instead of Trapping you with Ryan Tansom | Ep 98

Welcome back to the show. I'm your host, Phil Risher. And on today's episode, we're diving into how to build a business that sets you free instead of trapping you. With Ryan Tansom. Thanks so much for joining us today, Ryan.

What's up, Phil?

What's up, man? This is one that is going to hit people square in the head because everyone feels like they're trapped. I feel like. So I'm really, really excited to talk with you. Quick, quick bio. Ryan is the founder of Independence by Design and a business ownership strategist who helps owner operators create freedom through their business rather than becoming trapped by them. After turning around his family's $21 million business and selling it for eight figures in 2014, only to face unexpected challenges including 50% plus taxes, team losses, he developed a framework to help entrepreneurs build sustainable cash flow and equity value while maintaining personal independence. He hosts the Independence by Design podcast with over 400 episodes and has guided over 1500 business owners through his proven methodology for creating owner optional companies. All of those things, everyone's ears perking up like, okay, what does that mean?

What is it? What has Ryan got to say?

Yeah, so I guess if you could take us back to your family's business, like what was was not doing too hot. Then you came in and what was that like?

Yeah, maybe I'll start with we ended as you alluded to. We sold the business. I got a lot of wish I would haves and that's where all this is based off. So it's not me coming up with some random framework that is pie in the sky. My father started our business and early 90s we sold copiers, man. So he yeah, mortgage our house, bought a couple hundred grand worth of copiers and. And over the course of the next 10 years scaled up to 21 million 115 employees. I worked in out of business most of my life and swore my grave I'd never go work for him. A lot of family businesses, you know how that story unfolds. Well, I joined in 2009 and he had been very distant from the company and a lot of cash flow in the business. He was going through a bunch of personal stuff and we lost almost 950,000 bucks in 2009. And so I spent the next five years turning it all around. So new ERP system fired 50 people by the time I was 27 or 25. And then built up the managed it and the software automation, rebranded new comp plans, sold a couple branches for cash juggling $250,000 payroll every other week. Fighting with the bank the whole time. Finally got to the point where it was a nice seven figure EBITDA business and we couldn't get alignment on what we both wanted and how the business operations lined up with our goals of time, cash flow and wealth. That lack of alignment just, I mean my dad's my best friend, I love the guy and. But still we have this, you know, machine that we had to get alignment on. We couldn't, even though we joined peer groups and join, you know, eos, you name all the crap that we started, ended up selling the business so that way we could get unstuck and that was not the actual solution that we would have thought. Yes, we got an eight figure bank wire and I got a good chunk of money at the age of 27. Fired 60 people out of the 90 at the time, paid a lot in taxes and I've spent 11 years trying to figure out what I would have done differently. And the playbook is the end result of the decade long journey.

Yeah, so I guess going through that experience, then getting the payday, but then taxes and all the other stuff that goes along with it is now the premise that it's better to build a company through what you did but instead of selling, having it, you know, owner optional kind of.

I have an options man. And like the way I like to think about it Phil is where most owners that are owner operators, the owner, the owner operator hyphen is very important because I'm not working with VC firms or PE backed companies because they have the injection of the thought process of this as an asset from day one, the moment they take professional money because they have to give it back. And my dad and I were like, I mean thousands of people have been through my material and a lot of people like my father and I solve for revenue, gross profit, net income, how much money will come from our K1 and it's just this big huge mess. And I call it the owner operator trap where we're making gut based decisions, we've got unpredictable cash flow and we're stuck in our job and so we're not making decisions from the base layer of the matrix. I think about it like we actually have a job that we get paid a W2 income from and the goal is that we're understanding what is the trade offs over reinvesting back into the company for evaluation or are we taking more cash out for, you know, lifestyle or reinvesting outside the company. That's the constraint man. And most people don't put those goals in. So they're just making up every single day, hoping that they have more independence. And, like, that's really the whole point of the name is I just do this because I want to do whatever I want every day.

Yes.

And that's what my dad did. He got. He barely graduated high school. I got a D in accounting. Now I teach finance. And, like, the whole thing is, what is your goal out of time, cash flow, and wealth as an individual, how does your business fit inside of it? Because those constraints will drive whether you should reinvest, whether you should take on capital, whether you should take money out of the business. But to. To not have that base layer of thinking and a framework to make decisions, we're literally guessing.

Yeah.

So I want to eliminate that guess. So I'll never tell anybody what to do. I don't care whether you keep your company, sell your company, whether you sell some of it, all of it. Take the money out, put it all back in. Just know what you're doing.

Yeah, for sure. So the time, cash flow, and wealth, that's kind of the baseline. What are some of the questions that people would ask themselves or you would ask them to figure out what matters most to them?

What the hell are you doing? What's the point? What are you trying to accomplish? And, you know, the independence. Is this, like, the root of, like, I just want to be free?

Yeah.

What the hell does that mean for you? Is it to, like, do whatever you want every day and not. And not have anybody tell you what to do? How much money do you need for that? Are you gonna be able to retire? And when, like, I mean, just, like, thinking about it is just like, the first step instead of hoping. And what I've learned is that once you start asking those questions and then really getting serious about it, most people do not have a base understanding of how do actual valuations work, because, like, the fact that we're waking up and just grinding and making shit up and putting stuff back, you know, reinvesting back in the company, having no idea whether that's going to provide a return of time, cash flow, or wealth is insane. And the reason I have those three, I call it the independence escape velocity, where you can get out of your operations and you can run your company from the boardroom. So the, The. The owner's playbook is about extracting yourself from the operations to run your company from the boardroom. Because that's where real optionality happens, where you can be a capital allocator instead of just Having a job. I don't know anybody that wants more L10 meetings. And L10 is like, you know, in management meeting, it's like, I want to do whatever I want. Like, I cut my grass this morning at 10 in the morning.

Yeah.

You know what I mean? Like, can you do that? And most people can't. And so what's the trade offs of all of this stuff? And we have to take the ownership red pill, as I call it, which is understand valuations, understand the decision levers that you have. And I love, you know who Andrew Huberman is.

Yeah, yeah, yeah.

Like, I love the guy. Like, I've changed seriously dysfunctional habits in my personal life because of him. And he's got this phrase, you know, because he's like the bearer of bad news. Like, by the way, drinking's bad for you. You know, it's like, well, no, but he's got this phrase, Phil, of I'm not going to tell you what to do. Just know what you're doing.

Yeah, yeah.

It just resonates with me so much because I don't care what you do, just know what you're doing.

Yeah, it's so true. So a lot of people listen to this, are going to be like 1 million to $10 million home service businesses. And there's a couple of traps inside of there. I would say the biggest one is like one to like three million. You got to kind of build out your operational team or something so that you're not doing also. And I'm just saying this, but I want to get your thoughts on it. And then like 3 to 5 million is like, you're kind of in the sales or the big ticket sales, so you got to get out of that. And then like five to ten is like, you got to put some compensation in place to help your leadership team scale you. What, what would you say with those types of businesses? Like, how would you coach them or educate them to get through this? Because, like, obviously time, cash flow and wealth. But like, if you don't have the people or the, or the system, it's probably harder to figure that out.

Yeah, I, I'll break it down. So in my framework and the, in the owner's playbook, there are three phases. There's the plan phase, the build phase, and then the elevate phase. All of these use the constraints of time, cash flow and wealth, like to. We have to acknowledge that we have a constraint. So if we think about the time, cash and wealth is like the outline of the puzzle. Like, I mean, elon Musk, like physics has actual rules. Yeah, same thing with us. So within that constraint then there's nine modules. So there's three in each phase. And so all the things that you talked about line up in the different phase. But the reality, the purpose of this is based on your goals. Where should you put your time and money? Right. So each one of those, there's step up phases in each one of those things that you talked about. And I'll talk about the consequences of those because I've, with a couple of the other businesses that I've had over the last 10 years, I, I can get various nuance of like, what are the challenges? And like specific operational, mechanical ones. But at the end of the day it's going to be a choice of do I reinvest to build up more, you know, hire more people. What does that take? Cash flow. The only reason you do that is for wealth. Right. And so like we go, okay, well why do I do this? What's the goal? What's driving all of this? Because every one of those things that you just talked about, I mean I'll zoom out and just give you my, my, my 50, 000 foot view of those step ups that you're talking about. Every one of those is a reinvestment step up. So like, okay, let's say you're at a million bucks. Yeah. You're hopefully making a hundred grand.

Yeah, right.

Like, like, hopefully you're still eating. You like, you're still also like you know, doing the plumbing or you're doing the H vac or you're doing the particular blowouts or you're doing the roofing. Okay, well I want to hire more people. Well then you, so like you're getting to this point where you're constantly fighting against your own time and your own cash flow. And then you get up to the next step up and it's like the whole E myth, right? Where like now it's like, okay, now you need some accounting and some HR and it's like which is more money. And then you get up to then like the 10 million. I'll tell you what, because I work with a lot of the people from 5 to 100 million.

Yeah.

Usually more. From like the, call it 10 to 50. There's still cash flow constraints, man. Like I still work with people where they're, they're like, they're still the CEO, they're still eating. They got working capital, which is your payables, receivables, inventory. You got people, you got taxes and it's like after all the 10 million bucks I can walk through, like, you're maybe making four or five hundred grand.

Yeah.

What. What's the company worth? And so, so like the trade off is stay in one of those phases and make your 200, 250, but then save outside the business because you still got to retire. Or you say, I'm gonna stop making 250 grand, maybe tap my line of credit, you know, take on a loan, which is debt, and then you, you know, to, to hopefully maintain some of that cash flow to get you to the next step up, which hopefully you'll produce more cash flow. So the whole thing is like, when will I have more cash flow? And. And at the end of like the escape velocity of that time, cash and wealth of the playbook, you is that you have completely decoupled your time from the free cash flow of the company. So I have like lots of clients, Phil, where they actually end up finally hiring a CEO, call it for 250, 300 grand, put in a CEO comp plan, and they're literally running their company from the boardroom of like, what do we do with our cash? Do we reinvest? Do we take it back out? Do I put it in stocks, bonds, bitcoin, whatever the hell it is. Like, and you have this capital allocation framework, but you've gotten to the point where you don't have to work every day, but it's okay if you want to optimize for more freedom over your time and cash flow. And there's this whole like, growth at all costs. And it's like you're running someone else's race, man. Someone else put that game onto you where, like, you could have a really good life making a quarter million bucks working 30 hours a week. But just make sure that you're accounting for your retirement at some point.

Yes, yes.

Yeah, I think the time piece of it, and I mean, shoot, I feel guilty of this sometimes is like, oh, well, I should be working. Like, it's just like what you do, you know, it's like my team's working, so I'm working. And it's just like, I think it's games that you may play in your head that's like, this is the expectation.

But it's not because you're showing someone like, you know, like a good leader is in the trenches. And I get that, man. Like, I was, I did it with a 20 million dollar business. Like I'm eating crap every single day, firing people, or like getting on new customers, doing pric but at some point, to what end? And I'll give you a very relevant near term example. So I was on a call yesterday because at some point you're in the M and A space where you're talking about, do I sell, do I not sell? Or whatever. So I talked to a lot of PE firm, private equity firms. You can't make this shit up, dude. He's like, well, you know, I'm looking for this company. I'm looking for a company like, you know, you have somewhere around like, you know, 2, 3, 5, $4 million in normalized EBITDA. Because then, you know, there are owners at the inflection point and like, it'd be really nice to give them some capital, but you know, I don't want a job is exactly what this says. So what's your skill set? You understand capital? That's the extent of your effing skill set.

Yeah.

So their mindset though is very useful to learn from.

Yes.

So you say, okay, well what is a way that I as an owner operator can slowly extract myself from the operations while balancing that time, cash flow, wealth and like, you know what's my clients too, Phil, you can provide ridiculous leadership from the boardroom. You can come in there, be the chief culture officer, you can go on client meetings, but you don't have to if you don't want to. And that's the optionality I'm talking about. It's like, why have we told ourselves that we need to be a slave to our company for that? Like we have this badge of honor of like I am working so hard. It's like, well, by the way, when you finally get to a deal, it's going to completely f up your deal structure. You're going to have to have a three year earn out or a rolled equity or something. So you're going to end up outsourcing all the shit you should have done to someone else to make those decisions and you're going to end up being an employee.

Yeah.

Because you didn't do the stuff anyways. So like there's kind of this phrase like there's no way around, like what kind of hard do you want? There's a meme on Twitter or actually I saw recently, it's like two doors. It was hard shit. More hard shit.

Yeah.

And there's just, there's not the easy door. There's no OIC pen for business.

Yeah, exactly. I, I went through this. I was at a $3 million home service business and they went to 5 million EBITDA around like 1 1.5 million. And then a search fund came in and bought the company and plugged in an MBA guy, you know, 200, 300,000. And it reframed my whole mind because he came in and basically just like he's a CEO, you know, running it from, you know, his MBA suite. And then he just like put in all these people in place growing the business and I'm like, it's just crazy. Just the whole difference. Yeah, exactly. Like the whole different shift of mindset that like they have that playbook and they get it. But we can already just reframe the way that we think about our business and build that out too. It's just we got to get our own way.

Yeah, the end goal is cash, dude. Yeah, like it's not because by the way, 1.5 normalized EBITDA and there's, there's a whole lot of effed up things going on in like with the valuation because I, I've spent 11 years in finance now and even though a lot of this is very, as we're talking about is very high level goal setting, but like the through line, Phil, is cash. Not net income, not gross profit, but freaking money you can go buy with and $1 to $2 million normalized EBITDA. Let's take 1.5.

Yeah.

I can show if I looked at the set of financials so you, you're probably looking at maybe 3, 400 grand in owner's distributions on 1.5 because where's all the money? It's stuck in receivables, it's stuck in inventory, it's stuck in paying taxes. So 1.5 in EBITDA does not mean taxes. But what the, the mindset that you talked about that's very useful is how do I take that cash and reinvest it into the business to make more cash.

Yes, like actual money.

So like back to those step ups you're talking about. Okay, if I hire, let's say you go from like you want to hire your first salesperson, that's going to, let's say it's 60 grand base pay, 80 grand base pay, they want to make 200. We should literally be able to in the income statement, balance sheet and cash flow statement be able to see how it generates more revenue, how we have more gross profit, the net income, what will happen with payables and receivables, taxes and then how does that result in more cash? And if you can't see that through line, you're totally guessing.

Yeah, exactly. And I think there's a part of, like, you got to get the numbers together and get your stuff together basically so that you can get it. But then it's it. You should be thinking in that way, not just like, oh, I'm going to spend money and hopefully this guy's going to help me grow my business. But you don't have the data to figure it out.

Yeah.

What? Yeah, 100%, dude. And like, over the last 15 years, when Ben Bernanke hit the Fed printing But button in 2008, everything went up and to the right and the paradigm has shifted. Like inflation on wages, inflation on inputs of like, your equipment and your suppliers and dealers. And then you have all this stuff going on. Like you have to be looking at your cash flow statement.

Yeah.

To be able to see what kind of money. What happened over the last 15 years is people would sell more crap and then in four months, they would hopefully have some cash in the checking account and it was just enough to keep going. And this is a maybe ridiculous analogy, but I've grabbed onto it in my teens and twenties. I could drink a case of beer, eat a pizza two in the morning and then wake up and go for a run.

Yeah.

At almost 40, it's way harder, dude. And you don't do that anymore. And so the discipline is what allows you to do it and design it over time repeatedly, versus the guessing. And so in the. In the last 15 years, the guessing and the hoping by just selling more and doing brute force kind of worked. The paradigm is just different now. And the good discipline will actually outperform and God, the amount of opportunities that come to people that are doing this. Why would you ever want to sell if you're printing money?

Yeah.

You know, all of a sudden you're like, you get. You attract the best talent, you win the customers, and you're slowly decoupling your time. You're like, this is pretty sweet. Like, I'm making a bunch of money and why would I want to sell? So it's like this very like that mindset shift helps us realize that there is no easy button. But if I do the hard work, not only do I get a good business that I. It's the whole house. Like, you remodel your house the day before you sell it. Wouldn't it been nice to live in it the whole time?

Yeah, exactly.

I'm curious, when you get to the, you know, running it from a boardroom, are there specific, you know, like five numbers or something that you're like, hey, these Are the numbers that you got to know, you pull these up and down, or is there any set of frameworks for people that want to get there, but they don't really know what to even look at?

Yeah, great question. I'm gonna. Let's give. Let's give it like a peer inside of what a boardroom meeting would look like, and then I'll directly answer your 5 or 10 KPIs. So I want to kind of give the experience first, and then we can go. Okay, well, let's distill it down. If I. Because I'm on the board of client of companies.

Yes.

My. My job is to think like an investor. Everyone has to explain to me as a board member how is what they're doing gonna generate more cash? And all I do is ask why?

Yeah.

And if people can't answer the question with intelligent rationale, they need to go back, do harder work to explain to me how they're gonna generate more cash and how their activities are gonna generate more cash. So where does that show up in the. I call it the three functions. And then the. So I'll tie a lot of this stuff together and then how. Like an actual board meeting of budget to actual. Yeah, that's really what we're doing. But it's all of the thinking that goes into it, and there's this big misnomer. It's all about the financials. The financials are the scoreboard of what happened.

Exactly.

And then you're. And you're trying to anticipate the future. So at the end of the day, the whole point of the question why? Is we're thinking about how what we're going to do is going to generate more cash. So the more thinking we do, then we're testing our assumptions in those meetings. So in the income statement, the profit loss, you have revenue, you've got gross profit, and then you've got net income. So ironically, if people are familiar with eos or any of those, you have three functions. Sales, marketing, which is revenue. Operations, which is gross profit, and then your finance lead, which is then net income and cash. So what I would. Let's say let's. We'll role play here for a second, and you are going to have, like, each three function heads. So we say, okay, Phil, your sales. All right. Are you okay? Your home services company. Okay, H Vac. Okay. How much equipment are you going to sell? How much service you can have? Oh, you took on plumbing. Okay. How much plumbing are you going to do? You took on roofing. How Much roofing are you going to do month by month by month, line by line by line? Well, I don't know. Okay, well you don't know. Show me your service, Tate and CRM, what actions are you doing? How many phone calls return on, you know, return on ad spend, which I know it's a whole client acquisition cost. I need to see the CRM and the customer journey and the conversion rates to land predictable revenue on that revenue income statement every single month, line by line for the next year. If you can't show it to me, you're guessing.

Yes. Yeah.

Then what we need to do is then so that that's what the sales lead should be responsible for. We should be able to strangle one person that is responsible for revenue and strategic planning, sales and marketing all fall into that bucket of predictable revenue to land that on the income statement. You diversify all that kind of stuff. But then we go into the margins which is the operations manager, service manager, production manager, whatever you want to call the person gross profit, her equipment, service, plumbing, roofing, what are the margins? Well, I don't know what the margins are. Okay, go figure that out.

Yeah.

Okay, now we've got our equipment and our labor and we're allocating and service tighten or whatever it is the cost of the equipment and the time to each contract for each revenue bucket. So I can then go okay, we're at 55% margin on this. We're at 45% on this. You know like we're going to different. Okay. We're thinking yes. Then we go down to then overhead, sgna, opex, whatever the hell you want to call it. That's the finance lead which has your expenses hr it Yeah, a lot of times payroll in there. Most of the time payroll depending if it's in the cost of goods. And you're just going through and thinking about what is all those expenses. You're gonna hire a recruiter, we're gonna put the recruiting expense in there and we get the net income. But net income means jack shit other than for the tax man. What we want to look at is that normalized EBITDA, which is that recruiting expense, let's say you spend 100 grand in installing service type and those are normalized events that are a use of cash, but it's a normalized event. So we could track our normalized ebitda. That finance leader will be charged of that too. And then you can connect your income statement to the balance sheet to then see the cash flow statement. So I can look at the End of the month to say, how much will be in receivables, payables, inventory, how much will we pay in taxes? And then how much does Phil have left over?

Yeah.

And then do you want to put it more? You want to put it back into the company, or would you like to take it out and buy Bitcoin? You know what I mean? Like, I don't care what you do.

Yeah.

So, like, it's that cadence and that level of thinking is what we're trying to identify. So back to your five KPIs. I would be looking at revenue line by line, gross profit, line by line, net income and normalized ebitda. And then as an owner, I care about cash and taxes and debt. And so that's really where capital allocation comes in. So. And if we really wanted to get, like, first principles, Phil, and let's say you had your 2026 plan put together and you show it to me, and I can see in December, because all my clients are working on budgeting right now. End of 2026, you're predicting to have 500 grand in cash. Prove it.

Yeah.

Everything is a derivative of cash.

Yeah.

Because then you can just work backwards and say, okay, this is the numbers that I have.

This is the.

And then you work your levers.

Oh, well, I don't have enough cash. Okay, well, why? Well, I've got too much in receivables, collect receivables, you know, because you start on that, maybe the capital allocation, those levers of receivables, inventory. Then you go say, okay, well, I want more cash. I'm filled. Needs more money. Increase revenue.

Yeah.

How do we do that? Well, we don't know how. Okay, well, increase your margins, you know, reduce expenses. I mean, you can't cut your way to value. So at some point, cutting is like, you could be bloated and stuff like that. But you're just looking at all of those KPIs in relationship to am I going to generate the most the cash that I want?

Yeah.

I think this is something that I faced a lot, which was when. When the. The private equity company came in, the search fund guy was that he was putting people in place so that he could hold them accountable for things, opposed to doing them or not having people and then giving them numbers like what you're saying that they're responsible for. So then they're going to show up to these meetings and say, I didn't hit the goal. Yeah, but then there's people to hold accountable in your business opposed to you just halfway doing something and like, whatever. Because it's much easier to have a number and a person to hold accountable for it. And you need to have that in your business. That's what it sounds like.

Totally. And I think with the ask backwards, that thing that people do is, you know, EOS Traction, they put in this VTO 10 million. It's like, I had a $21 million business that lost a million bucks. Had we sold the business in 2009, we'd owe the bank two and a half million bucks.

Yeah.

85,000, though. Seriously, like, who cares? It's.

I know.

It's such a bunch of bs. So EOS is. Miss how I differentiate. EOS is an operating system. So I have a Mac. And there's an assumption that when I sit down, I know what I'm doing and why.

Yes.

And so that's what we're trying to insert here. So the owner's playbook sits on top of the operating system. And where that falls into with the KPIs, people go and make stuff up with these KPIs, what we want to do. And it's like, crazy, dude. Like, if you have that goal that we just talked about, and let's see, you're my sales director, it's like, okay, the KPIs are very obvious. If we want 100 grand in equipment sales, 100 grand in service sales for H Vac, and then we want 50 grand and sprinkler, you know, whatever plumbing or whatever it is. Show me the data. Yeah, and then, so then the income statement is the best KPI dashboard on the planet. If you have the right goal and you as the owner, you don't have to share your cash with everybody. But you as an owner are responsible for understanding that through line. So in that 500 grand example, you would know if we need to toggle different levers, and then you can add comp plans on that. But like Jack Stack, the great game of business in open book management, he literally puts people's face next to different GL codes. Like, I don't know, dude. Like, yeah, like, okay, customer service. How many tickets did we have? What was the first call? You know, effectiveness.

Yeah.

All right, Phil, we need to make sure our return warranties are this much on track, off track. It's not that complicated.

No, it's not.

And I think. I think it comes down to building the system and the functionality in your business that especially in the home service space is like, this is not a normal thing, you know, like, doing it Doing this. Which is. They're guys, you know, that were.

Me neither. Dude, I know. We were copier sales guys.

Yeah, that was it.

Like I sold copiers. I didn't know about numbers other than if we made 400 phone calls, 15 appointments, seven net news, five proposals, three closes, it'd be 40 grand in revenue every month.

Yeah, yeah, there you go.

That's how we built a $21 million business. Nothing I like. When I started, dude, there was no org chart for 115 people.

Oh God.

Like, what's everybody doing? We're doing stuff.

Yeah, yeah, exactly. So, so I'm guessing you help, you, you partner with these businesses and you help implement this in their business. Install.

It's a coaching program. So it's an ownership coaching. So a lot of my clients are also in peer groups. A lot of them are running a EOS traction type business and they're just like, wait a second, I still have no idea what my cash, time and wealth is.

Exactly.

And so they just, they're just looking for that high level owner framework and playbook so they know why they're. It's a decision making framework.

Yeah.

To say, okay, well what's your goal? Like, like I said, I'll never tell anybody what to do. It's like, but it's like if you don't have enough cash, why yes, I don't have enough time. Why, what's, what's the constraint? And I like, I don't know about you, but like every owner and entrepreneur I've ever met, we're willing to do really hard stuff for a goal.

Of course.

But like, let's eliminate the hope and let's, let's actually make it prescriptive so we actually like have meaning behind our hard work.

Yeah. I think that's the hardest part, is that we're all down to do it. We just don't really know what to do or feel stuck. And this decision framework would help illuminate. Okay, I need to do this next to, to reach this goal.

Yeah.

And what's the trade off of that? So if I go back to like, if it's a million or 5 million or 10 million, what do I have to do that's going to get me to the next level? And if I'm going to reduce my annual take home, what do I expect from that?

Yep.

And like, you know, one of the things that I've realized too because all my clients is like boiler reseller, commercial cleaning, you know, av. None of these people or finance degrees, none of us yeah. All of us juggle cash every day and juggle our time. And it's just providing the confidence, I think, Phil, of, like, your questions are legit. You're just not getting the correct answers from all of the people around you. And, like, I hate the healthcare system, dude. It took me this golf ball of reality that I swallowed to realize that doctors are insurance salespeople and no one cares. No one's going to ask you. Hey. Hey, Phil, how much you drinking? You sleeping? How's your stress? How's your workout routine? You sleeping? Like, no one's going to ask that because they're going to go, here's a pill. What do we need to cut?

Yeah.

And like, CPAs, attorneys, bankers, consultants. There's all a place for them.

Yeah.

But we have to own the outcome, because at the end of the day, you're either feeling good or not. That's right. And you either have cash and time or you don't. So we have to be confident in ourselves, that we have to take the discipline to just work through this. And taking the time to do this is going to benefit you. That's the first investment of time is actually doing this and realizing, like, stop being busy for a little bit. Don't. Like. I mean, my dad's best friend was. Was. He owned an H vac business here in Minnesota. Like, 10 million bucks. And the son of a bitch would come over and fix my furnace. I was like, charlie, you know his big butt crack. And he'd come over at like, nine at night. I'm like, why are you doing this? Someone else should be doing this. Charlie, you have a $10 million business. Like, what's your profitability? No idea. He had inventory leakage everywhere. Every one of his technicians was fixing shit on the side, making side hustles. You know? I mean, like, all of the problems. I'm like, dude, and you're sitting here fixing my furnace at nine at.

Yeah, that's. That's. Yeah, that is sad. That is just sad because there's another.

Yeah.

Oh, oh, yeah. It's common and it's sad because there's, like. There's a whole nother way. And I think a lot of guys just get in their way of just like, you know, I gotta do it. Yeah, I gotta do it. And it's like, as you build, the hustler has to die, and the leader has to be born and you have to replace. Yeah. You have to put systems in place to be able to like, okay, I gotta move on to the next phase of this.

Yeah, well.

And I don't. I'm curious with you and your experience is, like, what I realized maybe not as common as what I would have thought is, like, since I was a little kid, dude, there's two questions that, like, I can't stop thinking about. Why are we here? What's the point? And if I can't answer those, I won't do something. Which is why I was terrible at school. Because, like, no teachers answer why. It's like, read this book about these black. The black and white pictures of people with wigs. Why? I don't know. Because, you know, you have to do it. And like, actually, the really relevant example, my daughters are doing multiplication right now. And my wife was unbelievable at school. Like, 4.2 and all this. And. And so, like, they're doing these math problems and like, like 42 times 7. And my wife's like, let's do it. There was a time it was like, you have to do all this within five minutes. And I was like, 42 of what?

Yeah, they looked at me.

They're like, seven. What are we talking about? 42 clients and we have to get 7%. You know, I just like, I don't. I can't do it without context. And so the why behind this is worth sitting down and thinking about.

Yes.

Because then everything else will have meaning behind it.

Yeah, I agree. My wife is a teacher, and we have the same exact conversations. And I'm like, well, why are we doing this? And I think for business owners listening to this, maybe take a step back and say, okay, well, why am I doing it this way? Why am I still running all the sales calls? Why am I doing this? And maybe it's because you haven't thought about the time, cash flow or wealth and how you're going to allocate certain things. And it also changes within the season of where you're at, seasons of life, seasons of your goals. And I think that that's kind of the premise of this is ask why and then figure out what you can allocate to solve problems for what you want to do.

The first thing you should do if you're running in the woods is figure out if you're running the right direction.

Yeah. Yeah.

Solve that.

Yeah.

Like, well, you could be running deeper into the woods. Like, whoa, maybe you should stop, look up.

Yeah.

Where's the stars? Where's my compass?

Yeah.

I love it, man. Well, this has been great eye opening for me. You know, I have a. Businesses, obviously, so it's like thinking through that stuff. I appreciate your ability to talk high level, but also just bring it back down for people to relate it to eos and the different systems and put that in place. So thank you so much. Where should people go to learn more about you or read a book or what should they do?

I have a website, ryantanson.com and I've got a podcast link on there. I've got a newsletter, so it's in the content business, so I give a lot of stuff out for free. They can go watch videos, listen to podcasts. There's a bunch of stuff on the framework too. And be curious, man. It's like, you know, people listening to this, you're already way ahead of most people. And that's what I love about the home services, man. Like, Tommy Mello is a friend of mine and like, yeah, just there's so much thirst and curiosity in the home services space. And people are so humble, Phil. Which is why I love the space, because there's a lot of people who have the same problems in other, other spaces, but they've got like a lot of egos and arrogance and it's like, how's it working? You know what I mean? So just the fact that people are listening to podcasts and, you know, tuning in is a huge step.

Yeah.

And I think home service people, it's like they're out, you know, with real people every single day. They're not just sitting back building some SaaS thing or something, just like trying to, you know, here. It's like real, real people that are, like, into it. So. Yeah, that's what I love about it as well. It's like, it's real people, humble, willing to work with you, talk about things. So I appreciate that. Cool, man. Well, it's been great getting to know you, appreciate your, your guidance on this and look forward to continue the conversation.

Thanks, Phil. All right, man.