What Is Your Strategic Plan for 2024?
Paul turns the findings of MHA's Delphi analysis with 15 industry CEOs into five action steps for a 2024 strategic plan, from knowing your business and compliance to clean financials and growth.
Full transcript
Generated from the episode audio and lightly edited for readability.
Hello, this is Paul Martin and I am with you today in another episode of Paul Martin's crucial conversations. Today what we want to do is we want to look back at the deli analysis that Martin Healthcare Advisors did with 15 CEOs in the industry today. And last week I talked about the results of that deli analysis. What are the CEOs recommending based on the trajectory of the mergers and acquisitions landscape in the rehabilitation industry? And so based on those conversations and the analysis, what we've come up with are five action steps that you can take in order to help plan for a very lucrative 2024.
Now, a lot of the discussion points with the Delphi analysis were based on preparing for the market. What are they looking for in terms of companies and is that unique based on some of the economic conditions that we have in the market today and that we will be having in 2024. But whether you're looking to potentially find a partner, sell your business in 2024 or you're simply just looking to improve your business, I think these recommendations from the thought leaders in the industry will be really helpful for you.
So again, we want to look at if you're going to do a strategic plan for 2024, how can you improve your company and how can you, if you so wish to move to the top of the list of the acquirers based on those CEOs and their recommendations. So, first and foremost, one of the things that was glaring with what the CEOs were coming back to me with the questions that we asked was something that you wouldn't really think about, which is they said, "We are looking for companies with business owners that really understand your business." And this to me would almost be an insult.
Wait a minute. What do you mean I don't understand my business? But my question to you would be, do you really fully understand your business? And I think acquirers see significantly less risk when an owner really knows their business. And I think some of the questions that I might ask you in terms of the level of knowledge that a business owner should have if they're going into the market and what the CEOs were looking for from former owners is first and foremost understanding what that current value what the current value of your business is in today's market.
Looking at your business and kind of getting inside the watch face into the gears as we call it and are your metrics at or above industry benchmarks. When you look at your financial performance, what are some of the key performance indicators in terms of percentages of revenue from your expenses that is driving your bottom line? Know your business beyond clinical care. I think that's one of we all know and most of us as physical therapist business owners really understand what goes into the guts of our business which is our clinical care.
But if we can go beyond that and look further at our business I think that is very impressive to acquires in today's industry. You know, how well do you and your staff know the community around you, the competitors around you, where they are, and kind of what they're up to. And then finally, a real good working knowledge of your payer contracts. Are they updated? Have you reached out to payers to see if there's any opportunities based on your performance for improved performance? And so again, I understand and as you're running your business, I know you have a lot on your plate and many of you are treating therapist as well as running your business.
But if you can take the time to kind of pause and look inside your business, it's a great time to have evaluation or an assessment done which would prep you for a plan for 2024. And we take this understanding your business to a deep understanding of your business. Next, compliance was a big area that many of the acquirers, you know, took on in these interviews. Have you recently had a compliance review done on your business? And was it done by someone who knows what acquirers are looking for when they're going to do that due diligence on your company?
And do you have a current upto-date and working compliance program in your business? Based on what we are seeing in the industry today, based on the deli analysis that we did, this is something that can trip up a deal and we don't want it to trip up your deal and the CEOs are advising that they don't want it to trip up a deal as well. So, I think a deep dive into your compliance would make a lot of sense. Next is your financial data in really good order?
And I know this is something that, you know, maybe you say we here at Martin Healthcare Advisors kind of harp on, but the reality and what was discussed in the interviews with these CEOs is as hard and as cold as it may sound, that's what they're buying. They're buying that stream of cash flow going forward. And what they really want to understand is how is that cash flow going to move forward in their hands? What are the risks involved in that cash flow? And if your financial data is not in good format, is has not been reviewed, potentially compiled or even audited by an accountant.
That will create risk to that financial stream of income that they are acquiring. You really want to get to a point where you can generate an accurate and reliable profit and loss statement and balance sheet monthly and get into the routine of actually looking at that with either a consultant or an advisor or your your accountant to really look at that. So you really understand all that's going into that. Okay. Now, next is what is your growth plan? Have you created a growth plan for 2024?
And have you created some clear goals and objectives for your 2024? You really want to have these outlined and your goals and objectives for growth should be both for internal growth as well as external growth. Internal growth could be improving your metrics, improving some of your efficiencies, improving how in which you schedule your patients, etc. And what will those improvements garner for you going into 2000 and through 2024? And then externally, are you looking to do startups and or potential small acquisitions in 2024? And have you outline steps and timing to completion for those strategies?
And then finally, I think it's really crucial and important that we show a growth strategy that goes through a partnership strategy. And what I mean by that is you don't want to show that we're going to grow up until the time that a company may acquire us or we may partner with a larger company. But what's that growth going to look like through that acquisition when you now will have more access to capital, maybe more services provided to you, etc. I think that's really important and one of the things that was clear from acquirers is they wanted to look for first of all companies where business owners want to stay on and continue a partnership kind of through that acquisition but also could contribute on a broader level in the market in which where they are.
And I so I think that is really critical to be able to show that in a plan to acquirers. You know, I hope this was really helpful and I hope this gets you started on etching out for you a growth plan, a growth strategy for 2024. If you would like some help and support in putting that growth strategy together and you just want a way to get started, click below and let's talk. Thanks and have a great rest of your day.
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