Are You Prepared for the New Generation of Acquirers?
This week Paul dives into a hugely important topic that was brought up during his recent interview with Michelle Collie of Highbar. Watch the episode to find out how you can prepare your company for a partnership with one of these new up and coming acquirers.
Full transcript
Generated from the episode audio and lightly edited for readability.
Good afternoon and welcome to another episode of Paul Martin's Crucial Conversations. Today we're going to provide for you some opportunities for action that you can put into place today and these are going to be based off of a discussion that we had with Michelle Collie. Michelle is the CEO of Highbar. Now, looking back at the interview that we did with Michelle, one of the first takeaways that I got from that interview is how the new generation of acquirers seem to have so much energy as they are looking and seeking partners in the industry and they feel like they have an opportunity because some of the larger companies have slowed down their acquisition trends and have slowed down that acquisition hunt.
And now some of these newer companies are being given opportunities for businesses just like yours. So, what are some things that you could do based on the discussion we had with Michelle that would make you prepared to go into a market with a company like Highbar taking a look at your company. So, we're going to start with what absolutely is the biggest challenge in this industry today, and that is to have a focus on attaining talent management and employee retention. Exploring innovative ways to attract, retain, and manage your business and your talent is one of the biggest tasks that you could do today.
You know, we think of tasks and systems that we have in place in our business, operations, financial, clinical systems, but we don't think of people systems that we can put into place. And one of the first steps on these people systems is communication and communication with the things that are at the top of your staff's mind like work life balance, burnout, job satisfaction. These are all things that your staff probably want to talk about, but they're probably afraid until the day they come to you and they found somewhere else that they talk about these things.
Or they're making or they're going to get more money or whatever it may be. But you want to tackle these things headon. And one of the best ways to do that is to create a company culture. Your culture, not the practice up the street, not the large company down the road, your culture. And it's a culture that will value employees. And we're going to talk a little bit more a little later in our discussions on some of the first couple steps you can take to do just that.
You know, one of the things that I find common among practices that we talk to, and this is something that Michelle brought out very clearly is what we would coin as a can do approach. Now, when you're integrating new staff or processes into your practice, you want to implement a can do approach. So, depending on how many patients you want your staff to see, they can do it as long as it's within the in the limits and guidelines obviously of our practice act as well as Medicare guidelines, etc.
But they can do it and they can do that to the levels the high levels of that. But if we immediately go straight into operations, financial results, which yes, we know that's what you're looking for, but it should be first based on how can we improve patient care as well as the working conditions that your employees work in every day. That will get you the best feedback in terms of this can do approach that I'm describing. Start clinical then go operational financial. So the next big point that I want to bring up is how to be innovative and forwardthinking.
How do we do that? You could see with Michelle Collie and what Highbar is doing is she truly believes that company is an innovative and forwardinking company. So look at your current business practices. Do kind of a little audit on all the things that you are doing and look at ways that you may be able to improve your services, patient satisfi satisfaction as well as financial stability. Look for some solutions that again that are the industrywide challenges today. Payment models, attracting talent, as we just described, demonstrating the value of physical therapy to patients as well as other stakeholders in your company.
In addition, consider some growth opportunities. You know, the best companies that are getting the best deals in this industry are growth companies. You can be a three clinic practice and be a growth company. And it's not just in terms of scaling your business to multiple clinics, but also in terms of professional development for your staff, enhancing the way in which you care for each and every patient and look for external growth as well. You know, contemplate some new clinics via startups, hospital partnerships, acquisitions, all of these as a way to realize your practic's value and financial security while continue to evolve and improve your practice with the external support and resources that you have available to you.
Again, growth is not easy. And we do a lot of work with our clients on helping them achieve the growth that they set out to do. And there are a lot of companies out there that help to foster this in a company. So, next is focus on cultivating a robust company culture. You know, culture is one of those, you know, words that brings in so many things to what you would describe as a robust, vibrant company culture. But this really involves fostering a healthy growthoriented program that is based on a set of shared values and practices by you foremost as well as your staff.
And what we're advocating and we have sought out partners to help us to do this because this is something that is absolutely needed in this industry today is positive culture. Look at behaviors instead of only relying on mission statements that I can tell you most of your staff could probably not even recite. The actions of what your staff does every day should align with the company culture that you and your staff will design. For instance, if your mission is to deeply care about your patients, well, let's make sure your staff is actively listening to patients and their needs and making an effort to truly connect with them.
That is just a finite example of a system that could be put in place. The system will define the beliefs, behaviors, and the resulting outcomes. And this will make the culture tangible and will drive employees literally to adhering to the company's values. Again, you drive it. They have the opportunity to contribute to your thinking and then set up a system that will remind them of the commitments that they have made. And do this in very small doses and you literally have that system put in place and again as I described we have a resource that can help you here.
Next is we really want to develop strategies for talent recruitment and retention. Okay. With changes in work expectations from the newer generation, especially in the wake of the pandemic, I mean, you know, I was talking to somebody the other day. They said, "How do you attract physical therapy staff when they want to work remotely? They want to make the highest salaries coming out of school and they want to have the perfect work life balance with, you know, having Fridays off every week and sometimes an occasional Monday off without having to take time away from their PTO.
So, yes, the newer generation has a lot of needs. But you know, are we listening to those needs? And is there a way to balance productivity and employee wellness? Right? Are we actually making an effort to understand what their needs are? And again, I know I'm standing here. I'm not in your clinic, but there are lots of strategies to engage in these discussions. Have your staff participate in setting those expectations. That really has an enormous impact on the level of retention that you will have. And again, communication is the key.
How would you like to be? How would you like to be a destination organization? We have clients that literally do not have one open position right now. Okay? They have become a destination. Why? Because their work environment is such that it attracts and retains talent. It's a kendu organization, positive culture, lots of communication, and this is something that you can do in your practice that based on the fact that you heard Michelle Collie is doing this in her company would be very attractive to some of these new generation of acquirers.
All right, now let's get to the operations and the financials. We want to optimize EPIDA to enhance business value. Michelle was very clear on the valuation methodology. It is epida times a multiple. Well, you know, you would think the first thing I would talk about would be we got to do this by driving operational efficiencies. Yes, you do. But number one, prioritize retention of your team. Okay? It's more cost-effective than hiring new staff. Ensure that your team feels valued and that they are being taken care of.
Does that mean that you give them every Friday and Monday off and they only have to see six patients a day? Of course not. But it does mean that they are being communicated to and that the expectations are being very clear that you're providing to them. Yes, you also want to drive operational efficiencies establishing operational and financial budgets and then actually measuring the operations weekly against a target and monthly on the financial side also against a target or a budget you know as a business owner and gosh I am not harping on you I promise okay but you don't want to be complacent okay sometimes you get kind of stuck in the rut of your business you want to keep learning.
Allocate some time every week, get into some small groups, stay engaged, and look to attend the conference this year. The PPS conference is a great way of getting out, talking to other business owners, and getting some new vibrant ideas to bring back. And then finally, you want to really consider what will the upside be for a partnership, meaning a sale of your company. As opposed to considering it and thinking of a spot, a stopping point. We like to say that you want to see right through to the end.
Okay? With the end not being the day you are acquired. But what is the capability of your business? Especially now, if you're looking at having unlimited capital. So again, if you're looking to be part of something larger, consider that upside that you're going to achieve and have that as a part of, you know, we always put that in our what we call confidential information memorandum so that the acquirers can actually see what your expectations are on what you're going to be able to achieve with a partner.
And again, seek out a professional in order to see where your business is today. Make an informed decision that would be the best decision for you, your family, and your business. So, I appreciate your time today and I know we talked about a lot, but I really felt like Michelle brought so many ideas that they are doing at Highbar that you can also seek to do. Pick one or two and start tomorrow. Give us a call. Let's talk about how you can get started. Thanks. I appreciate the time and I look forward to talking to you in the very near future.
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