Trace Kennemore on planning the next chapter for Southern Rehab Physical Therapy
The owner of Southern Rehab Physical Therapy in Kimball, Tennessee talks about planning one, five and 10 years out, the Outside-In Assessment, protecting a long-tenured team, and choosing the right partner.
In Trace's words
Planning the next chapter
First and foremost, I've always been blessed with more than I deserve in both my personal and my business life. In my business, things were going really well financially, operationally, et cetera. And from a personal perspective, things were going well also.
I'm a planner. As physical therapists, we are objective and a little bit analytical by nature. I usually look one, five and 10 years down the road, and that's where I was, both from a business perspective and a personal perspective: where did I want to be in those time frames, and what's the best way to get there?
I had one clinic going into this process. I was about 18 and a half years into ownership. This is a second career for me, by the way. I was a high school teacher and coach, and had a short stint in the military. I was looking to see what's my next step in five years, 10 years, et cetera.
I'm really proud of what my work family and I have been able to accomplish in the community over the last several years, and I just needed a strategy. Number one, I wanted to make sure this thing didn't die with me if I didn't have an exit strategy or a succession plan.
Number two, could I offer an even better service to the community? Could I make this business better serve me and my family? Could I make this business better serve my work family? I just started to ponder that a little bit.
Start early, and know what you want
I think the mistake some business owners make is that they wait too late in the process. At that point, they don't have time to gather the data, and they can't maximize their goals. Everybody has a different goal. Some people want to sell, cash out at maximum price and walk away.
That wasn't my circumstance, and that's what people have to start early on: what do you want out of it? I still get great joy out of helping people. I still treat. I love it. I don't want to treat 40 hours a week, but I get satisfaction out of helping others.
So I wanted to plan this out where I could treat reasonably, have someone assist me with the administrative burden, and have someone help me negotiate better contracts, so that I can do more for my community and my coworkers.
The biggest fear
Going into the sales process, I was most afraid of making a big mistake, because this is basically the culmination of your life's work. I agonized over not making a mistake, not only for myself.
I have an incredible work family. I have 18 employees, and 45% of them have been with me 10 or more years. I have a PT that's been with me 18 years, a business manager that's been with me 17, another PT at 13. That means something. My fear was that I wouldn't handle this correctly, and that at the end of the day the ones who wanted a future in this business wouldn't have a great future in a great company.
We also have a certain way I want to serve the community, and I wanted to make sure I would find the right partner. That was a fear, because I hear of a lot of people who make a lot of mistakes. They don't educate themselves well enough, and they just look at the dollar signs. That's important, of course, but there's more to it.
The Outside-In Assessment
Martin Healthcare has a good presence at conferences, so there's some name visibility there, and I investigated two or three others as well. I reached out to Martin Healthcare to do the Outside-In Assessment because I thought that was a good starting point.
It doesn't cost very much. And when you're going into a major business decision like this, you don't know what you don't know. The Outside-In process helps you, number one, understand how your business will be valued. That's critical. You have to understand the rules of the game you're participating in, the rules of engagement.
I needed a little bit of time to tweak a few things to make sure the value of my business was adequately represented in my EBITDA. It was just a few small tweaks I was unaware of.
The good thing about the Outside-In Assessment is that it gives you a relatively clear picture of how other companies will look at your company, because that's what's important. Eventually they did help me tweak the business, so to speak, to make it more presentable. If you're going to sell a car, you wash the car, you detail it. My business needed detailing.
Ten months later
Sometimes people have regrets down the road. December 1, 2025 was the official date of my partnership with a larger entity, and quite frankly, it couldn't have been better.
A lot of people have regrets, but I went through the appropriate process, educated myself and gathered as much data as I could to make an intellectual decision as opposed to an emotional one. I'm still blessed. Things are going great. I feel really good about the future. It's been a wonderful partnership for me.
Working with Josh
Josh was fantastic. Josh was the consultant who worked with me on a daily basis. I thought I was type A. Josh is type A++, which is a huge advantage. He's data-driven and analytical, yet you can have conversations with Josh about what you want out of this, not what he wants or what Martin Healthcare wants out of it.
He listens. One of the things Josh asked me early on was what I wanted out of this, and we also talked about what I did not want. He helped me narrow down potential partners based on my criteria, because he has inside knowledge about a lot of companies that I don't.
People who know me well will hear me call it smoke and mirrors. Whether you're interviewing an employee or anything else, you get a snapshot when you interview or have calls. You don't really know the true nature of a company unless someone has had more exposure to it.
Josh didn't lead me down one avenue or the other. He helped me understand the culture I was looking for, and shared what he already knew about certain cultures and expectations afterward. I think that's why, 10 months later, I'm in a great place.
Advice to other owners
If an owner is in the same position I was in about a year and a half ago, contemplating the next step: what's my one, five and 10-year plan? Where do I want to be? Where do I want my work family to be? Where do I want my business to be?
The Outside-In Assessment is a fantastic place to begin analytically. But you also have to look emotionally at what you truly want. Do I want to partner with someone and stay on as an employee? Do I want to exit? Do I still need the purpose of treating patients, like I do? Do I still want to work with my coworkers, my work family?
Look internally from an emotional perspective and figure out what you want. Then use the Outside-In Assessment to gather data and see the status of the market. Is this a good time? Is this a bad time? You don't know what you don't know until you gather the data and have conversations with people who are experienced.
Another analogy: I'm treating a young man right now with a partial ACL tear. I wouldn't want him going to the gym on his own trying to figure out the right exercises to get back to football. He needs someone with the knowledge and expertise. So I put him with one of my therapists who has been with me a long time and is smarter than me. He's in good hands.
Shared with Trace Kennemore's permission. Transcript lightly edited for readability.
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