ROI Consulting: Creating The Companies That Buyers Want Most
In today's market, average performance doesn't get deals done. Acquirers have more options than ever and are walking away from underperforming companies. In this episode, Paul Martin introduces ROI Consulting, our new approach to transforming rehab companies into growth leaders with lasting value.
Full transcript
Generated from the episode audio and lightly edited for readability.
Hello and welcome to another episode of the Martin Rehab M&A Advisory. I'm Paul Martin, founder and president of Martin Healthcare Advisors. If you've been following us over the years, you know that we are a top merger and acquisition advisory firm in the rehabilitation space. But what many of you may not know is that behind every great deal that we have closed, there's a company that we've helped prepare sometimes for months, sometimes for many years. There have been companies we have worked with for 10 plus years.
And our strive, our goal is to make these companies become the kind of companies that businesses want to acquire. They become the top on the acquirer list. And so today I want to share something new to many of you and something that we believe the industry needs right now. You know, the industry has changed and what we're seeing is that there are more sellers than ever before. Well, what is the conclusion to that? That gives acquirers more power to become more selective. Private equity-backed buyers are becoming sharper and also more cautious.
And for very good reason. Some of the deals that they've done over the years did not live up to their expectations. Growth stalled, profitability declined, cultures didn't integrate exactly the way they wanted them to. And so now we're finding that they're asking tougher and tougher questions. They're also walking away from more deals than they ever have before. We get so many calls from companies who say they went they tried to, you know, work with an acquirer and the acquirer simply walked away and acquirers are not interested anymore in rescuing underperforming companies.
Here's the reality. Poor performance now means no deal. Average performance, it's not much better. And with more options available, these acquirers will simply move on to the next available deal. And so that's why we are focusing on what privately held companies in this current industry need most and have made a big investment in consulting. We're calling it ROI consulting. You know, we've always helped owners get ready for a sale, but based on what we're seeing, the industry needs more than just M&A preparation work. It needs what we've always described as our consulting arm.
It needs transformation. And that's again why we're launching ROI, return on investment consulting. It's a new division completely dedicated into turning rehab companies into top performers in their market and helping business owners take their companies to the next level. This is the kind of businesses that grow fast. You know, why do some businesses out there just seem to be able to grow fast? They're also able to grow profitably and they become the top choice at some point in time for acquirers. And if that's the direction and owner that an owner like you wants to take, we are ready to take you to that next level.
This is about creating companies that operate better. They attract better and more professionals. They deliver real sustainable profitability for the owner and all done with high levels of clinical outcomes. Notice I said not quality care because quality care is up to the discretion of he who was getting that care. And what we want to look for is data that these companies are doing all this getting solid best outcomes. And this can all be done whether an owner wants to sell their business in the next 12 months or the next 5 years or even the next 10 years or maybe they never want to sell their company.
We're working with those kinds of companies as well. Now, we've already been doing this with many owners across the country who are facing and you all know this, they're facing real live challenges. They can't hire fast enough to keep up with the demand. Their profits aren't where they should be. Their growth has stalled or even worse, the costs are rising faster than the revenue and they're spending most of their time in the business. And look, this I was there. I was there back in 1991 when we were working in our business.
I was in that business. I could not see from the outside things that I needed to see to work on the business. And that's what we try to do today. And so if all this sounds familiar, you're not alone. But you don't have to stay stuck in this mud. We've developed a framework that really helps guide business owners just like you to turn that corner. And it all starts with something that we are calling the five Ps. Okay, the five Ps. All right, and you need to be aligned with these five Ps.
All right, what's the first P? The first P is the plan. You need a plan. And that plan should clearly define where your growth will come from. Whether that's growth with new programs within your current business, any changes that you're going to make within your current operations or that growth could come from new locations. It could come from deeper market penetration again in your current markets or through strategic acquisitions. That's how we grew when I grew my company. New startups, acquisitions, focused inward, and that's how we grew from three clinics to 21 clinics in three years.
And that plan also must be nimble enough to evolve with your market and you're there, you see that market every day. Sometimes having somebody look from the outside in on that market gives you a different perspective. Second P, the profit. Growth costs money. Profit is not a bad word. You need margins that are strong enough and healthy enough to fund the growth that you want to achieve and that you and your staff deserve if it's what you want. And it's going to be what acquirers are going to demand to get the best acquirer with the best deal.
We're going to dive deep into your financials and uncover opportunities that most owners they miss. They're levers that they if they had the time to look from the outside in and go through this and do this every day, they would see it. But unfortunately, many owners miss. It's payer mix, visit efficiency, scheduling gaps, charge capture errors. Notice I don't say we're going to add charge capture. It's with patients you're already seeing and you're not capturing those chargers the way the charges the way you should. So, we got the plan.
We got the profit. Next, the people. Nothing nothing works without the right team. As a former college football player, I am a team guy. I had the best offensive line in the ent entire country when I played running back at Gettysburg. But it's all about the team and the people. We help companies build and retain the best staff that's available in and slightly outside their market. You can't just recruit within your market. You need to go outside and convince the top professionals to come to you.
We also help structure your organizational chart so that it doesn't collapse as you grow. Your org chart needs to be at least one step ahead of your growth. We work through leadership development and that has to start early. Recruiting systems, accountability with data so that you're not looking at words that may have been said at a meeting. It's accountability to data on what we're going to accomplish. This is where companies either break down or they break through. And we want to help you break through with the right people.
Next is the product. Yes. Look, even in health care, we have a product. What is that product? As I look at the product that we have in this industry, it's your patient experience. It's your clinical outcomes and your brand reputation. That brand reputation in your communities is so important. And we help you refine what makes you different as opposed to trying to add more and more programs and different things. What are the programs that already make you unique and how can we double down on those and standardize it across every clinic so it becomes scalable.
Now you are a growth company and you are viewed very different from the competitors in your market as well as someday from acquirers. Then finally the partner that this is the time when you want to sell or as we've called partner with a larger business. This could be in one year or five years. But we help you make decisions now that maximize future value from looking at metrics tracking and documentation to legal structure and buyer fit. And when the time comes, we run a competitive process that drives the highest price, the highest and best terms that acquirers can dig up.
And acquirers will pay up when they see that an owner is wanting to grow not just to the transaction, but through the transaction. The plans that we present to acquirers for our clients is where are we going to be after you have acquired us and we get those resources because we have a desire to get to the next level. Those are the best deals that are happening in this current market. And I will tell you when those five Ps are aligned, the five Ps are aligned.
The plan, the profit, the people, the product, and finally the partner. When those five Ps are aligned, companies become efficient, companies become profitable and companies become sustainable and your business becomes more than just successful. It becomes valuable. Whether you want to transition it or not, creating value is a great thing for not only you but for your staff and for your business moving forward. So here's my question to you. Are you ready to become a top performer in your market? If so, click below and let's talk.
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