Income Before Impact: The Melanin Money Blueprint for Wealth

Finding Peak w/ Ryan Hanley - Ryan Hanley

Ryan Hanley discusses the importance of prioritizing income before impact, emphasizing sustainable wealth-building over scaling for vanity. He highlights the emotional and financial pitfalls of neglecting personal assets

Key takeaways

• Income must precede impact for true sustainability

Transcript preview

You shouldn't scale your business unless you plan to walk away from it. The grass is always greener on the other side, right? Ryan, but people don't realize is that underneath that grass is always shit. It's almost like there's shame put on those people for choosing that option. Trying to make impact before you make income. Talk about it. It's almost impossible for you to be happy. My early success was built off of fear. I didn't want to be broke again. It's very important to be truly connected with yourself so that your beliefs are actually yours. My not going to be governed by what I say yes to. My nest level is the best will be governed by things I say no to. which is a lot of small business owners in the professional services space, you know insurance, accounting, legal, etc. Right? You said something, Car so I'm gonna start with you in a green room where big part of your work and what the two of you teach is that the business shouldn't be the only asset that we're growing as we're as we're in our ownership of it. Kind of why do you think that is? Because I know a very common practice and there are consultants out there that will that will will teach business owners this just dump everything back in your business why could that potentially be a pitfall yeah I think it's a great question and I think the answer is is what a lot of business owners need today and we're going through it actively right so your business is an asset and your business can be your fastest growing asset and me and George could testify that this our business is our fastest growing asset but that doesn't mean it needs to be our only asset because if you put everything back into your business and you never exit that business then how valuable is that business right because if you're not taking profit high profits every single year and then you don't end up exiting because a lot of these businesses if you're important to if you're important to your business if you're valuable to your business if you're valuable to your business if you're valuable to your business is not valuable right and people get to the end of the lives they get to retirement they like you know I got this thing I got this thing I got this thing I built nobody to build any personal wealth. So now I'm in this place where I still have to work for the rest of my life and we all can attest that that is not the goal of entrepreneurship. But I think the hard part that all of us deal with is like at what point do you start taking profits to start building personal wealth and not feel like you're robbing the business of its growth. And that is something that we actively help our clients decide so that they can have assets outside of just their business. add a little more sentiment to that. So to Carter's point, right, if you're valuable to your business, then your business is not valuable. So I've kind of broken it down into like, you know, four stages, right? And so we have the start phase where, you know, you might still even be working a job, right? And you're just, your business isn't profitable yet, so you're putting money, personal money into the business to get it off the ground or maybe you're a break even, best case scenario, right, highest percentage profit margin phase of the business on a percentage base. You might make more later on, but it'll feel like less because of how much you're reinvesting and how heavy the business is at that time, right? So the growth phase is where you have to make a very important decision, like, do I want to build a lifestyle business, meaning a business that can grow in proportion to the lifestyle that I desire and just be okay with that? Or do I want to scale this thing? You shouldn't scale your business unless you plan to walk away from it, right? Because your lifestyle business, my lifestyle. It's so profitable I probably can put an operator in place to continue to take distributions but you don't plan to sell it or give it to anybody else most likely. The scale phase is when you plan you're starting the process of planning that so we're in the scale phase actively right our business is growing is thriving we have 10x the team that we had you know when we were in the growth phase but we're having to put so much back into the business now what we did we both did is when we were in the growth phase we made sure that all that profit margin that we were getting we were taking that money off the table right so that way we feel more confidence and more liberation when we are in the scale phase right because we don't feel as bad like okay I'm putting all this money back into the business but I took home personal profits and started building personal wealth along the way right and then the last thing is something that we learned very new recently is while we're in the scale phase is there anything that we can do on the business, is there anything that we can do outside of the business that will create more insight and give us feedback loops to grow our business but also makes us money? Because if we can do that, then that can give us more resources on the personal wealth side that allow us to not have to put pressure on the business while we're in the scale phase. That's just been our personal journey. I'm not saying that's the best way to do it. But we want to make sure that we're mindful of the personal wealth part of it. But we're being mindful of the personal wealth part of it. isn't together. That's what we see with a lot of entrepreneurs that we work with is like they're making decent money, they're making great money, but their personal wealth houses in an order and it's creating a level of hidden stress that only they know about, right? So when they work with us, we start to unpack that, start to restructure things and they actually become more successful in their business because now they have that burden and pressure off of their shoulders. Yeah, there's so much in there's so much in there guys to unpack I think one of the things that I think, a major, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, a, A major decision that I'm very interested in how you made it was the decision to go from this is supporting my lifestyle this business that we're building to let's scale this thing to the next level. Because I think a lot of people get caught in that moment. I think there's a lot of, we'll call it entrepreneur porn that exists out there where it's like you gotta scale, you have to scale, right? Which we feel all this pressure. If I don't scale, I'm not gonna be put on podcasts on podcasts, and no one questions and my business isn't going to grow and people think that I'm a failure and it's like I know plenty of guys who own a one person law firm that take just the cases they want that make more than enough money that have the country club membership they're at their kids sports game and they're happy as hell right and then I know other guys that have been the same quality that have decided okay well because I'm good as a one person shop now I need to be a hundred lawyer shop and all of sudden they're miserable and they can't get to their kids sports games and they're making How did you make that decision and how do you guide your clients if they're in this moment of scale versus lifestyle right like is there an equation is there a framework that you use or some way to kind of think through this process? Yeah this is about to be therapy I'm really gonna say the same thing. It's about to be therapy for everybody in the room so I'll give you this quote by Alex Hormose and then me and George will do our best to unpack it and I'm gonna try not to budget this quote but business owners who were making a million dollars maybe 1.5 million and then they didn't want to scale. He's like, dude, there's so much juice left in this business to squeeze what are you doing? And after years of coaching people and doing it himself from what was he realized he said yes there's so much juice left to be squeezing this business but what gets squeezed is you, right? And so when we make this decision to leave being an entrepreneur to become a business owner and that's how me and George D. entrepreneur, you're entrepreneur, you have this lifestyle business, you know, do whatever you want, no major pressure, but then you switch to business owner, right? And then it's not about you anymore. And I think that that decision is so important, and people make the decision for the wrong reasons. They make the decision for things you say, right? Like, I want to scale because I want to have this big business, I want people to interview me. But what they don't realize is the cost, the price they have to pay to pay to get to pay to get to get to get to get to get to get to get to get to get to get to get to get to get to get to get to get to the things that they don't even know they want it. So the way me and George look at it, now that we know the good and the bad, the ugly on both sides, because the grass is always greener on the other side, right? Ryan, but people don't realize is that underneath that grass is always shit. And it's so much of it you don't know what's under the grass, right? And so when me and George's look at now, right, if you want to have that lifestyle business business, right, then do that, and do that. And so, Or if you want to say I want to scale because I want to exit and I love what I do and I want to build this team and build this dream, then do that. But don't get the two confused. We see so many people who are trying to scale their business, not taking any profits, not even knowing their business won't be exitable. And that's where I think you have a problem. Yeah, 100%. And so to his point, the decision, the only thing that led us to making that decision is, is realizing, is realizing the business that we were going to build had to be something that we can exit. But the issue is most people aren't looking at it that way. They're just, they're looking at it from vanity metrics. I want to make, I heard somebody saying they're making a million a month or two. I want to do that. Right? They didn't tell you about the team that they're paying or the multi six figure payroll. They didn't tell you about the ad cost. They didn't tell you about the stress. They just told you about the vanity. They told you about the vanity measure, they told you about the vacation. They told you about the vacation. They told you about the vacation. They told you about the vacation. They told you about the vacation. They told you about the we can see a path to be able to exit was one. Now the other part of that, that's just the money piece. We were already pretty solid financially before we made the decision. The other piece was, is this about me or is this about impact? Right? Because if it's not, and neither one is wrong, right? Like if it's about you, if it's about you, do not scale, right? If it's about you, build it to the level that you need to build it. So you can be like your friends who are in corporate America, corporate America. I don't want anybody to feel wrong if it is about you. That's called self-awareness, right? If you're like, you know what, I don't have that itch, I don't have this, this is big enough for me, please stay there because all you're gonna do is, it's gonna be hard either way. It's gonna be harder if you don't want to be there, or if you don't have a path, right, to be able to see the light at the end of this tunnel. Because it, it, it's gonna, it's gonna, So imagine having to carry the weight that you didn't even know that it was going to be that heavy and you don't even want to carry it. And so just really being able to sit with yourself and ask yourself is this impact that I want to have, this legacy that I want to lead, this mission that I'm trying to create through this scale, is it worth it to me, right? Because if it's not, you're not, it's not going to be good for you, I promise you. And we try to be as transparent as possible. We literally have a new client right now, right now, right now, to do that? I know you do but you don't know it's on the other side of it. Everybody wants to do it until they know what's on the other side of it. And we just try to be honest with people to let them know what's inside of and it's like, cool, if you know that you still want to do it, then you much really want to do it. But we just want to make sure that we're using our platform and our voice to say, hey, we are, we are, we are Yeah, there's two things you said in there that I think are really, well there's a bunch, but there's two things that stand out. One, and I know this wasn't the point of your conversation, but I think it's very important to bring up. We all need coaches, we all need people that we talk to about this stuff. Like you said you're talking to this client, you're walking her off the edge, right? I can tell you I have a coach that helps, I'm a coach that I do. like there are parts of it where I just didn't have my mind right right I needed someone to bounce stuff off and I think a lot of these decisions get made in a vacuum right we're like uncomfortable or insecure so we kind of turtle up and don't