February 20, 2024 • 43 mins
Discover the secrets to a prosperous future in veterinary practice with Travis York of Three and One Veterinary Advisors, our latest guest on the Veterinary Blueprint podcast. Travis, a seasoned expert in veterinary practice transitions, shares his knowledge on acquisitions, expansions, and the essential strategies for a successful exit. With over 500 practices under his guidance, his advice is indispensable for veterinarians and practice managers aiming to navigate the complexities of significant wealth changes.
This episode is a treasure trove of insights as we unpack the role of EBITDA in evaluating practice profitability and distinguish between economic and actual ownership, shedding light on the nuances of veterinary practice ownership. Whether you're pondering the longevity of your career or contemplating selling your practice soon, the wisdom shared here holds value for all stages of your professional journey. We dive into the spectrum of ownership and the importance of aligning expectations with ownership goals, and explore alternative compensation methods that could be the key to retaining crucial talent without relinquishing equity.
Prepare to be armed with strategic tools for retirement planning and understanding the array of exit options available to you. Hear a compelling story about a veterinarian's seamless transition to retirement and learn why early communication with associates can make or break the future value of your practice. Our conversation also takes a critical look at the evolving landscape of veterinary services and the underlying importance of maintaining client trust in a fiercely competitive market. This episode is not only about finding the right exit but also about mentoring your team and managing your business with foresight and precision for that eventual, rewarding transition.
GUEST INFORMATION
Travis York
678-523-0234
www.threeandonevetadvisors.com
travis@threeandonevetadvisors.com
Host Information
Bill Butler – Contact Information
Direct – 952-208-7220
https://butlervetinsurance.com/
https://www.linkedin.com/in/billbutler-cic/
Schedule a Strategy Session with Bill – Strategy Session
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:00):
quite frankly, you have to have a vision of what is
your retirement, what is theexit, what's on the other side?
Speaker 2 (00:14):
Welcome to the Veterinary Blueprint podcast
brought to you by Butler VetInsurance.
Hosted by Bill Butler, theVeterinary Blueprint podcast is
for veterinarians and practicemanagers who are looking to
learn about working on theirpractice instead of in their
practice.
Each episode we will bring yousuccessful, proven blueprints
from others, both inside andoutside the veterinary industry.
(00:34):
Welcome to today's episode.
Speaker 3 (00:39):
Welcome to this episode of the Veterinary
Blueprint podcast.
I'm your host, bill Butler, andtoday we're joined by Travis
York, from three and oneVeterinary Advisors.
Travis grew up in theveterinary world, working in his
father's animal hospital inIowa.
He later got a degree inaccounting and worked for a
number of lenders.
Over the course of his past 20year career, he's had experience
(01:04):
and helped more than 500veterinary practices with
acquisition, expansion and exitstrategies.
He's a certified exit planningadvisor and Travis is going to
bring a wealth of knowledgetoday, navigating the
complexities of selling oracquiring a veterinary practice
or just thinking about exitstrategies in general.
So let's get started and we'regoing to welcome Travis to the
(01:24):
podcast.
Welcome, travis.
Speaker 1 (01:26):
Thanks, bill.
Thanks for having me.
I'm excited to be here and diveinto some of these fun topics.
Speaker 3 (01:31):
Absolutely so.
We were just chatting beforehopping on, as we generally do.
So for those people listeningall of our listeners we always
have the pre-call call.
You know we have a list ofquestions, but I think, just
diving into start, Travis, whydon't you give the listeners a
little background?
You know I gave the 50,000 footview.
What have you been up to in thelast decade or so, working with
(01:54):
veterinary practices andhelping them with your expertise
?
Speaker 1 (01:58):
Yeah.
So I mean it's been a very fun,you know fun and exciting time
in veterinary medicine over thelast 10 years.
We've been learning a lot.
I kind of over that 10 yearperiod was a part of Live Oak
Bank so got to experience, youknow, the use of SBA lending a
lot of construction financing.
You know, in that realm workedwith a lot of hospital owners
who were two and a half.
(02:19):
Three doctor hospitals hadstarted five to seven years ago
and expanding into a 5,000,7,000 square foot freestanding
building.
You know also over the last 10years spent some time with a
company called Calico which isnow inside of Suvedo.
So got, you know, a real tasteof some creative acquisition
(02:40):
structures you know, including,you know, some subordinate debt.
That was maybe a little bitmore stretch.
We, you know, worked withseller notes.
We utilized some retainedownership in some of those
strategies, spent a you know,very, you know short time also
working alongside of, you know,the team that built Suvedo, so
got a little bit of a firsthand,you know seat at some corporate
(03:05):
acquisition world and then overthe last two and a half years,
been working with, you know,some of my clients on just
thinking about exit and you knowbest business practices and,
quite frankly, just you knowwhat are the nuances and, like
any entrepreneur, trying tofigure out where is their,
where's their opportunity andinefficiencies in this evolving,
(03:25):
in this evolving space.
Speaker 3 (03:28):
I'm glad you bring that up.
So you know, as we chattedabout right before this, we said
, well, we got some questions,but we'll just kind of let the
conversation float where it goesto, because you have your own
podcast.
Just plug your own podcastright now and then we'll mention
it at the end.
So you have your own podcast aswell.
Speaker 1 (03:44):
Absolutely.
I really appreciate that I hosta podcast with a good friend of
mine, a gentleman by the nameof James Yost.
That podcast really came out ofconnecting with James, who
works with a company calledSignature FD.
Signature FD focuses on wealthadvisory for veterinarians and,
as a lot of veterinarians were,you know, obtaining kind of
(04:04):
generational type of wealth,their needs were different and
so the podcast really launchedthere out of hey, how do we help
veterinarians who areexperiencing life changing
liquidity events have the rightknowledge base to, a, obtain
those if they're interested inthem, and then, b, if they do
obtain that, how do you, how doyou be prepared for it?
(04:26):
And you know not, not kind ofbe one of those stories of hey,
this generation got generationalwealth and, because we didn't
put the right systems andprocesses in place, the next
generation is, you know, back tothe short.
Speaker 3 (04:39):
We gave 60% away to the federal government and now
that money is gone into twogenerations or generations gone
right.
Speaker 1 (04:46):
Yeah, absolutely so.
That's kind of the foundationof that podcast.
It's evolved a little bit, youknow, over time.
I'm sure you experienced thiswith your podcast.
You're always trying to findnew and interesting topics,
right, you can't go find thathorse and just keep beating this
, beating the same thing, youknow.
But so we brought in some newtopics.
But you know that's a lot of.
It is kind of, you know, how dowe, how do we think about some
(05:07):
of these things that are new toveterinary medicine and how do
we think about, you know,creating some of the best
business practices you know toobtain, you know, the value
that's aligned with you.
Speaker 3 (05:18):
So I just in my own world.
You know we were talked aboutsimilarities and dissimilarities
between the insurance industryand veterinary industry and I
think you know, as we mentionedbefore we got on the call here
on the podcast, businessprinciples or business
principles.
You know I have a P and L, ashoe store has a P and L, a
(05:39):
restaurant has a P and L, aveterinary practice has a P and
L and it's going to have thingson it like payroll and cost of
goods.
Now I don't have a cost ofgoods because what I'm selling
is a intangible product.
But you know, I think at theend of the day, for for
veterinarians, I think you knowwe'll probably spend a lot of
time talking about figuring out,you know the extra strategy
planning that you've got acertification in that and
(06:01):
background in that, and I wentthrough this at my own practice,
my own agency, planning for thefuture, right, so I'm under the
age of 50.
And but I know at some pointI'm not going to sell insurance
until I'm dead.
Speaker 1 (06:16):
Yeah.
I mean look father time isundefeated right.
Speaker 3 (06:20):
Yeah, yeah.
Speaker 1 (06:21):
No matter how good Nick Saban and the Alabama
Crimson Tide are, father time ismore undefeated than Nick.
Speaker 3 (06:25):
Saban, he's going to, he's going to win, he's going
to hold the trophy up.
And so you know, I purchasedanother insurance agency and
that was a seven-year-oldgentleman that hadn't done a lot
of preparation I won't go intoa lot of detail on it but it got
to a point where he had to makea decision and there was no
preparation, didn't have a P&L,didn't have some of these things
(06:48):
in place.
And so I think, when you're asmall business owner and correct
me if I'm wrong, from your ownexperience, travis you get to a
point one day, if you haven'tprepared, and said, hey, I'm
done, I want to cash out, and ifyou haven't done the prep,
you've now discounted yourbusiness or practice.
If you're a veterinarian, right.
Speaker 1 (07:07):
Absolutely right.
I think back to the story mydad tells about the first time
he had the opportunity to buy aveterinary hospital, right, and
this was in Wisconsin in thelate 70s and really the way the
profession traded didn't requireprep work.
For my dad, who's a babyboomers generation, to buy kind
of that silent right, the guycame in one day and said, hey,
I'm ready to retire.
(07:27):
And my dad said well, okay, I'mvery interested in buying your
hospital.
Can I get your tax returns?
Well, no, you can't.
Right, you can either here's mynumber, I'll finance it, I'll
get a life insurance policy onme to protect my family and you
can buy it, or not, but you'renot gonna get into the
financials.
And that's really the way a lotof veterinary hospitals trade
(07:50):
and you didn't have to do prepwork, right?
We've also kind of gone througha period where consolidators
were coming in and if you were athree plus doctor hospital
didn't require prep work becausethe valuations that they were
paying relative to yourexpectations were significantly
higher, and so you achievedsuccess without prep.
(08:10):
But we're really in a newenvironment where that prep work
is critical.
Right, you have to have thebusiness in place.
Right, you need to understand.
Operationally, the business isset up.
You've invested in the rightequipment.
The facility is up to date, sothat it's attractive, so that a
young doctor would want to buythat facility.
Speaker 3 (08:29):
You need to I don't wanna buy all your old equipment
.
Speaker 1 (08:32):
Right right Now.
And what you can't do is, ayear before you get ready to
sell your hospital, go put newequipment in it.
So you need to be continuouslyplanning and thinking about that
.
You need to continuously bebuilding systems, because
today's doctor doesn't wannahave to be the one doing
reminders, paperwork on Saturday.
Speaker 3 (08:51):
They don't wanna have to build the innovation into
your business that you ran for35 years.
Speaker 1 (08:56):
Absolutely.
So you gotta think about that.
You have to, quite frankly, youhave to have a vision of what
is your retirement, what is theexit, what's on the other side.
I mean, I have a lot ofcolleagues who they exited for
incredible multiples but theyhad no vision of what they were
gonna do and they're almost,like you know, like a car stuck
(09:17):
in the mud at this point in time, just kind of spinning their
wheels with a big pile of cashin a checking account, but not
really a vision of how to usethat and how to make that matter
.
And so that personal vision ishuge.
And then connecting thatpersonal vision to where most of
these entrepreneurs are goingto get their retirement funded
is out of their business, and sowe've gotta make sure that we
(09:40):
have the right.
Speaker 3 (09:40):
I mean that's me right, yeah, so, yeah.
So I did a fair marketvaluation to say, okay, I mean
I'm nowhere close to retiring orselling my agency or anything
like that.
I mean, you know, because theventure capital money also plays
in the insurance world, I getoffers all the time and I always
say 35 times EBITDA.
When I'm on the phone with themand they laugh at me, I said,
(10:01):
well, I'm not selling today, I'mselling, you know, 15 years
down the road, so I have tofuture value this thing.
And they're like, well, wecan't do that.
I was like, well, then, I'm notfor sale, right, that's the
truth.
But you know, as a businessowner, I have to think about,
okay, where am I gonna be,where's the ball gonna be?
Or, gordy Howe, I'm a bighockey fan, where's the puck
gonna?
You know, I have to skate towhere the puck's gonna be.
(10:22):
And so for a small businessowner who has a lot of skin in
the game, you think you know, alot of times you're not paying
yourself because you're puttingmoney into the business on that
future investment.
The investment is not your 401K, the investment is the asset
that you're going to sell offone day, either internally to an
internal sale or external to anexternal sale, whether that's a
(10:45):
third party associate who'sgonna come in, or, you know,
corporate I mean, because thecorporate world and the
insurance thing is the same.
And so, okay, I'm a minimum of10 years out.
So I have a three year like,okay, here's my benchmark,
here's what I need to do for thenext three years, here's what I
need to do for the next five,and then, five years out, do
(11:06):
another fair market valuationand say, okay, what's the next
10 to get me to retirement.
And one thing that I was told bythe firm that I had due my fair
market valuation was threeyears prior to your exit.
Pull out everything you payyourself as an owner to put it
into the bottom line and show itas revenue instead of business,
(11:27):
travel, car expense, meals,education you know all the fluff
that business owners and I knowveterinarians are in the same
boat.
They use your business as alifestyle.
If you're a small businessowner, there's a lot of tax
advantage.
Pull all that out three yearsprior so it shows up as income,
to help you not have to say well, I pay myself a lot of money
(11:48):
and here's all the 50 differentways.
What do you think about thatKind of that thought process for
exit planning?
Speaker 1 (11:55):
No, I mean, I would take it even a step further,
right, and?
Speaker 2 (11:59):
again.
Speaker 1 (11:59):
We're in a very transitional period in the
veterinary space.
I think in the veterinary spaceand I don't have any depth of
knowledge in, you know again,business principles are the same
, but I don't have a depth ofknowledge in the insurance space
.
But in the veterinary space, wecome out of an environment
where it was a seller's marketand you could get a lot of
(12:20):
people to lean into projectedand adjustments and the market
was so aggressive that you couldget those accepted right.
What we're seeing now is kindof that black and white EBITDA
number is the black and whiteEBITDA number that people are
willing to look at and these areeven corporate buyers, right?
So you have to have cleanfinancials.
(12:40):
Now is it?
You know, two years, 18 months,you know again, bill, I think
that all depends, you know,beauty's in the eye of the
beholder on that.
The other area that I see is Ihad a lot of people who they
were off on margin, right,they're like they just hadn't
tightened up some of theirbusiness operations, right.
They always knew it, fully,acknowledged.
(13:01):
I run this a little bit loose,I just don't want to put in the
extra effort to drive three or4%.
So they made a decision in 2021that hey, I'm going to tighten
the ship, I'm going to get that12 clean months Not anything to
do with personal or any of that,but like, maybe even personal,
you can make an argument and allof a sudden they're like OK,
well, I'm going to tighten it upso I can go sell at 18 times
(13:24):
EBITDA and with a 3% highermargin on a $4 million hospital
and that matters right.
And now all of a suddenhospital, that four-doctor
hospital, is not selling for 18times EBITDA, it's selling for 9
to 10 times EBITDA.
Speaker 3 (13:40):
So for our listeners out there, what is EBITDA?
Speaker 1 (13:44):
EBITDA would be earnings before interest, taxes,
depreciation and amortization.
I always like to think of itkind of in simple terms, as it's
like the discretionary cashflow that's available to you as
the owner right.
If you own the business, whatare you going to be able to get
out of it?
Speaker 3 (14:01):
Yeah, in the insurance world it's always, you
know, they used to say, well,premium, I sold for X times
premium, two and a half timespremium, or two and a half times
revenue.
Well, you know, whatever thatnumber is.
But insurance agencies want totalk about premium versus
revenue.
So I've, you know, I've got a$10 million book of business.
Well, you're, $10 million bookof business may only revenue
(14:23):
$50,000.
I've got a $5 million book ofbusiness that revenues a quarter
of a million dollars, and soit's, it's where the profit
comes in and that's that EBITDAnumbers, really the, the bottom
line number of, as you, as youmentioned, discretionary number
at the end.
So when we say EBITDA, for ourlisteners it's, it's a, it's
really the true measurement ofprofitability at your business,
(14:44):
right.
Speaker 1 (14:45):
I think it's basically, you know it's your
revenue less everything it coststo run the business right,
paying for all your costs togood soul, paying for your staff
, paying for your doctors,paying yourself a reasonable
wage as a doctor, right, if youdon't pay yourself as a doctor
and you go to sell your hospital, we're gonna back out something
for you to be paid as a doctoryour rent and then all of kind
(15:07):
of those other ancillary costs.
They're all backed out and thenwhat's left is what you have as
a business owner.
Speaker 3 (15:14):
And then that's the number multiple.
So whether that's 18 or 9, itcan make a huge difference,
because that's what thatgenerational wealth you're
talking about, right?
So you spend 25, 35 yearsrunning your practice and when
you say, okay, I'm done, youwant to be prepared.
So you know, I think you hadyou talked about spectrum of
(15:34):
ownership as one of the thingsthat that maybe we want to cover
today, and what you know, forif I'm a veterinarian and I come
to Travis and say, hey, youknow, I'm interested in in, in
engaging your services, you'regonna talk to me about spectrum
of ownership, whether I'm anassociate or I own the practice.
What is that?
What does that mean to you?
Speaker 1 (15:52):
Well, I like always kind of my first question when
you talk about spectrum ofownership.
So so, bill, I'll just kind ofask you a simple question if you
own a hundred shares ofCoca-Cola, are you an owner of
Coca-Cola?
Speaker 3 (16:04):
Technically yes, but not really.
Speaker 1 (16:06):
Okay, so what you have is you have economic
ownership.
Okay like that and so always.
My first question on spectrumof ownership is when you talk
about ownership, what is it thatyou want?
And you answer that questionvery much like an entrepreneur.
Right, because entrepreneurialownership is the choice and the
opportunity to have.
(16:27):
The buck stops here, all thedecisions are mine.
Right?
Historically and veterinarymedicine ownership has always
been attached to only andexclusively Entrepreneurial
ownership.
Right, we say, hey, I'm anowner in this hospital.
You're that means your decisionmaker.
Speaker 3 (16:42):
Yep.
Speaker 1 (16:43):
To your point, technically, if I own a hundred
shares of Coca-Cola, I am aneconomic owner in Coca-Cola and
I always want to understand formy clients what is the objective
of ownership.
Right, because if I own amillion shares of Coca-Cola I'm
gonna do pretty welleconomically.
But even if I own a millionshares of Coca-Cola and it's
(17:04):
funny I know they're not gonnagive you the secret formula.
Speaker 3 (17:07):
You don't get the combination to go.
Speaker 1 (17:09):
I always used to joking when I was I was doing
some kind of talking with vetschools and some of the
veterinary students.
I'm like if I owned a millionshares of Coke.
I'm not calling the CEO of Cokeand saying, hey guys, we need
to go make, you know, coffeeflavored Coca-Cola.
And now all of a sudden theyhave coffee flavored Coca-Cola.
So but like the CEO is nottaking my call, he's laughing me
out of the room, right.
(17:31):
And so, as we've seen veterinarymedicine evolve, we're seeing
more opportunities for minorityownership.
We're seeing more opportunitiesfor profit interests.
We're seeing more interests,like you know, just different
structures in ownership whereyou may not be an
entrepreneurial owner.
Does that mean it's a bad?
I'm not gonna say it's a badthing or a good thing.
(17:51):
I want to help peopleunderstand what are your goals
from ownership?
Or, if you're an owner of ahospital, if you're giving a
doctor ownership or having thembuy ownership, what are your
goals and what are their goals?
Because if your goals are toretain them or to compensate
them better economically and youdon't want them to be an
(18:13):
entrepreneurial owner, then Iwouldn't be giving them like
getting them in as a minorityowner, because they're only
gonna be disappointed.
And then you have a financialmarriage that you've got to
break up and I'm sure as aninsurance person you've dealt
with some of those.
Speaker 3 (18:26):
Well then there's a whole host of ways to you can do
.
Deferred compensation plan, say, hey, you know, I want to give
you a slice of pie that's biggerthan all the everyone else here
, and some sort of unqualifiedPlan that you get a little bit
more than everyone else becauseI want to keep you around for 10
plus years.
There's different ways to dothat than giving up a stake in
(18:46):
your business.
Speaker 1 (18:47):
Absolutely right.
And if you have somebody who isentrepreneur driven and you
talk with them and they wantentrepreneurial ownership,
they're never gonna be happy.
Speaker 3 (18:57):
As a 15% shareholder of your know, they see
themselves in your chair somedayright, they want your chair
right, and so then you've justgiven them that.
Speaker 1 (19:05):
Now I'm not saying it's not a way to sit down.
Where you can, you can win andthey can win and you guys can
all come together.
I like, I'm a big believer that.
You know, if you have thoseopen dialogues, you set
appropriate expectations, youcan find a way and, quite
frankly, the pie and veterinarymedicine is big enough that it
can go around.
It's just you can't be too, toogreedy on how much pie you want
(19:28):
.
Speaker 3 (19:28):
Yeah, absolutely so.
Creating an exit plan, I mean,you know I think there's a lot
of conversation around thatright now in the industry as a
whole.
I'm not gonna pretend tounderstand all the nuances, but
just you know in from where Isit In my chair and in
networking.
You know there is a lot ofconversation about the
(19:49):
consolidation within theveterinary industry and exit
planning strategy and I think itweighs heavily on some owners
where they look at thatgenerational wealth and it's
hard to say I don't wantgenerational wealth.
But in some respects and thisis my own personal opinion with
my own business if I wantgenerational wealth and I want
to perpetuate that internally,it's up to me to build the model
(20:10):
versus just say, okay, I'm done, one day, hey guy working for
me or a woman working for me atthe agency buy me out, but I
didn't put a mechanism in therefor them to buy me out at the
level that I want, right?
So talking about planning andcreating exit strategy and how
that works in the veterinaryworld, I mean, what are one or
(20:30):
two key things that that ownershould be thinking about when
they number one, when and numbertwo, what are a couple of
things they should be doing?
Speaker 1 (20:38):
Well, like I'm a big believer in that statement, you
know you got to begin with theend in mind, right?
Speaker 3 (20:43):
Yep, what is done?
Look like.
Speaker 1 (20:45):
Like I think you know , day one you buy a business day
to you should be building yourexit plan.
Now that exit plan is going tochange because, in case you
didn't know it, as anentrepreneur the minute you, you
should never start a businesswithout a business plan, but the
minute you finish your businessplan it's garbage, correct,
right.
So, like you know, again, youshould not enter ownership
(21:08):
without an end game in mind,knowing full good and well that
that in game will probablychange.
So you know, to me it'ssomething you want to start
regularly, right, and it startswith, like what you said you did
Understand the fair marketvalue of your business.
Understand what the differentoptions are.
Right, like we've heard, esopsfloated in veterinary medicine.
You can sell to a corporateunder four or five different
(21:30):
structures.
Right, you can have a jointventure.
You can have 100% cash exit.
You can get topco.
You know platform equity.
Speaker 3 (21:39):
You can be a top under.
You can do all kinds of stuff.
Speaker 1 (21:41):
You can do all different kinds of things, right
, you can sell to an associatein an earn out process, like
there's a lot of different ways.
You know, maybe it's family,like I have some doctors now who
want to look at familystructures where you know it's
maybe a non DVM and they've gota larger network of.
But understanding what arethose eight different exit
(22:01):
options?
Then assessing your hospitaland your personal place right,
what is the profit gap in yourhospital?
What's the best hospital likeyou operate at and where do you
operate?
So then you can compare, okay,how close am I and how ready am
I to sell and what do I need todo to get to best in class?
You need to understand thevalue gap, right.
(22:24):
What is if?
Speaker 3 (22:27):
what is the risk?
Right, like, if you've got oneDVM at your practice generating
60% of the revenue and I'm goingto come by your practice and
they're not going to buy it,that DVM leaves.
Speaker 1 (22:37):
I'm done it's an un-stallable asset.
Speaker 3 (22:39):
Yeah.
Speaker 1 (22:40):
Right, and then understanding the last thing is
understanding your vision.
And for all these smallbusiness owners, what's that
wealth gap?
Right, and the wealth gap ishow much are you worth today
yourself, outside of yourbusiness, and how much do you
need to fund out of yourbusiness to obtain your
retirement vision?
(23:01):
And that changes over time.
Right, because, like, if yousold today Bill that number.
Speaker 3 (23:07):
That's why it's that's why you know, yeah, if
somebody wants to buy me today,it's the number I want to get
when I'm 65, not the number youknow.
So you got to pay me.
What I'm worth when I'm 65 is Icontinue to build this over the
next 15 years not today's value, because I'm not retiring.
If you give me money today, itneeds to last the rest of my
life, not from age 65 to death,age under 50 to death.
And so and that's why I wasvery interested in your answer
(23:31):
that question, because it'sreally what does done look like.
You know, I did an acquisitioninside the insurance world, as I
mentioned, and it's it'sfiguring out what's important to
the seller and what's importantto the buyer, and those are
going to be two different things.
You know, obviously the buyer,they want to get returned on
their investment and make surethat the money that they're
(23:51):
investing in the acquisition isgoing to be returned over the
period of time.
And then, because, eventually,once the payout is done, as the
buyer, obviously, well, that'swhen the owner gets a raise, or
you get a raise like I'm goingto eat lean while I'm doing the
acquisition, but then, once theacquisition is done, I'm done
paying it off, I'm going to getto eat a little bit better, and
(24:13):
for the seller, it's well, Iwant my team taken care of, or I
want my clients taken care of,or you know, I'm going to rent
the building, or you know allthese kind of things.
But at the end of the day, itreally does boil down to OK,
well, what am I getting paid?
Because I spent 35 years of mylife, blood, sweat, tears,
missed ball games, all thestress of all of it, especially
(24:34):
in the vet world, withadditional stress around the
practice.
Speaker 1 (24:39):
No, I mean, there's no doubt right and it's, I think
it's to your point.
It's mentally and emotionallywhat is it worth, practically,
what's the value worth?
And then, in today'senvironment, it's a lot of times
it's reconciling those twopieces together, because we'll
talk with sellers who, well,when I bought my hospital, I
paid one times revenue, so myhospital's worth one times
(25:02):
revenue.
Well, that's how hospitals werevalued in 1983.
Speaker 3 (25:06):
Like I said yeah, it's insurance right, two and a
half times premium I, or two anda half times revenue, whatever
that is, whatever that number is.
Speaker 1 (25:13):
Yeah, you know, and in the veterinary hospitals it's
what falls to the bottom linenow creates value, not what
comes in at the top.
And so you know having thatinformation earlier so that you
can be prepared and then you canoutline.
Because the other issue is isyou know you're trying to solve
(25:34):
for retirement?
You're weighing like what aremy exit options?
Do I want to sell, maybecorporately?
Do I want to sell for legacy?
The sooner you outline whatthat is, you write out a path to
get there, the more optionsthere are.
If you show up at 63 years oldand say, hey, I'm out in two
years, well, I mean, we'relooking for an all cash buyer to
(25:57):
solve for your whatever yourwealth gap, whatever value it is
you need out of the hospital.
If you start at 53, we canbuild a whole roadmap and now
you could have five differentoptions available.
Speaker 3 (26:12):
Well, you know, from an acquisition standpoint right
and I talked a little bit aboutthat where you have to build, if
you want to sell internally,you've got to build the
mechanism internally forsomebody to be able to buy that.
Because if I just come and saymy practice is worth, you know,
$6 million, hey, associate,working for me, I'm going to
sell this to you in 18 months.
(26:33):
Number one did you pay themenough to qualify for a loan and
jump through all the hoops?
You know you have a lot ofexperience, 20 plus years
experience lending money topractices for acquisitions and
stuff.
It's not just snap the fingers,get a $3 million loan anymore,
it's.
You know you're putting it allon the line.
And how much is going to beseller finance for the
(26:53):
veterinarians holding the note,and how much is bank finance and
SBA lending versus traditionaland all those things that come
into play.
If you didn't take time toprepare to have the cash
available inside the practicefor the associate or the person
who's going to buy it internallybe able to use the revenue for
the business to buy the businessfor them, you have to go
(27:14):
somewhere else.
Speaker 1 (27:16):
Absolutely Well, I mean again, one of my favorite
stories is a veterinarian whokind of started the process 10
years ahead of time.
Probably end up, you know,because he started that process
and made that commitment.
May have extended a little bitearly, but when he started the
process he was working a six day, you know, six days a week, 65
plus hours and managing thestress of a, you know, two and a
(27:36):
half doctor, three doctorgrowing hospital had a couple of
great associates, gave them apath to ownership over the next
10 years where basically he gavethem responsibilities.
Now he did something thatveterinarians really don't like
to do.
It's called delegating.
You went down that road ofdelegating these management
responsibilities.
At the time he started theprocess they were three doctors.
(27:58):
Usually when he exited theywere six and a half, seven ish
doctor hospital.
They moved from a leastfacility to a free standing
facility.
The doctors bought it.
I did.
He get like absolute optimalvalue.
I'm sure he could have gone outto the market and pushed a
little bit harder and squeezedanother million dollars out of
(28:19):
it.
Right, and for some people they, they, like you know, they sent
their flag in the ground andlook, I win by getting the
biggest number.
But if you want thatflexibility, like I don't think
there's anything he couldn't doin his retirement that he wanted
to achieve and oh yeah, by theway, he got to continue to own
15% of the hospital and get adividend out of it Right.
(28:40):
So there's.
If you start early and youempower team members, you either
flush out they want it or theydon't.
And if they don't want it, thenwhen you have to create that
exit, like there's nothing thatthey can really be upset about
you don't get 18 months beforeexit and go hey, are you?
Speaker 3 (28:58):
okay, you want to buy this?
Now I'm going to get out andthey go.
I have no interest in doing it.
I just want to be an associate.
I love practicing medicine.
I want nothing to do withownership, management, hr You've
done a really good job withthat and I want nothing to do
with it.
But in that owner's mind thatthat veterinarians bend their
exit strategy for the last 10years and they get to that exit
(29:19):
part and they go oh, that persondoesn't want to buy it.
Now what?
Speaker 1 (29:23):
Well, and you've, I've seen it play out.
You know, on both sides, right,like in the smaller two doctor
hospitals, the associate wasalways the exit strategy.
The owner started to take theirfoot off the gas.
And what was it?
You know, it's a million, fivemillion, six revenue hospital.
For the longest time, the ownerwas the million, million to
million one producer and theassociate was the four to 500,
(29:44):
right.
And then the last three years,the associate, the associates
going to buy the hospital, likeI get communication never
communicates to the associatebut starts to take his foot off
or she starts to take their footoff the gas.
And now, all of a sudden, theassociates, the million one
producer, super happy, they'remaking $200 plus thousand a year
.
No management, no headaches, no, nothing.
(30:05):
The owner is now the $400,000producer and they go to the
associate and say, hey, I'mgoing to.
You know it's the start of 2024.
I'd like to be out by the endof 2024.
Are you ready to start theprocess?
Well, I'm not your buyer.
Well, now, all of a sudden, youhave that revenue concentration
problem.
The new buyer can't fire theassociate.
Speaker 3 (30:25):
Yeah, cause that's the.
They're the rain maker, they'remaking the money, yep.
Speaker 1 (30:29):
They're making the money, and so now, all of a
sudden, this doctor has aworthless hospital.
Speaker 3 (30:34):
Yeah.
Speaker 1 (30:35):
Right, or or you've got you know the scenario where
it's a really large hospital andthey never have that
conversation to start themechanism in place.
And then they go to the doctorand they say, hey, yeah, like
absolutely I'll sell it to you.
And let's say they're going tosell it for five times earnings
at the banquet finance.
I've got a you know $6 millionhospital that does a million
(30:56):
dollars of EBITDA earnings.
I'd like to sell it to you for$5 million.
And the associates eyes justget big cause.
There's like no way I can runthat.
Well, if you would have startedwith them three or four years
ago and demystified everythingthat happens in the back room
absolutely a hospital with theright systems, the right team
(31:16):
and it's not a complex business.
It is a cash in, cash outbusiness and I don't I don't
want to oversimplify a verycomplicated no correct, Because
it takes significant humanskills and significant
relationship skills to make thatwork.
But strictly from the businessthings, I mean we're not dealing
(31:36):
with accounts receivable, we'renot dealing with prepays, we're
not dealing with invent, like atime.
I mean, yes, there's inventorybut you know we're not buying
raw goods, Like a lot of thosebusiness principles that you and
I talked about aren't presentin a veterinary hospital.
Speaker 3 (31:49):
Yeah, yeah.
So you know I guess that theend thinking about everything.
We just kind of chatted aboutthe last 10 minutes.
It's never too early if you'rea veterinarian looking or
thinking at some point I own, sofor all the owners out there or
partners, you're not going tobe farther time and at some
(32:12):
point you're going to say I'mdone and the best time, the best
day to plant in oak trees today, and so you know it's the
thinking about.
Okay, I'm at a certain levelnow.
I'm done, five, eight, 15 yearsaway from retirement or selling
.
What does that look like andwhat are some things that I can
(32:32):
do to start planning that?
And you know, quite frankly,it's as simple as because
there's two conversations right,if you're an employee anywhere,
it's the mindset of doing myjob and what my role is to
accomplish the task in my role.
If you're a veterinarian, ispracticing medicine.
However, there's also themindset of the entrepreneur or
(32:53):
the business owner, and it's adifferent mindset and a
different conversation about howyou handle a specific situation
with an employee, with a client, with a vendor, whatever that
might look like of.
Well, from the employeestandpoint, this is the
conversation, but from the ownerstandpoint, this is my mindset
in approaching that decision andmentoring the team of yeah,
(33:14):
this is the decision, why we'remaking it, and here's the
mindset.
File that away for if you'reever sitting in my chair, and so
that way, if they ever do wantto sit in your chair, they've.
You've trained them up so it'snot brand new, fresh for them on
the outside, but really thebest time to plant the oak trees
today, right?
Speaker 1 (33:31):
Absolutely.
Hey, you can't start earlyenough.
Speaker 3 (33:34):
So, talking about the management piece and
transitioning a little bit tothat, to kind of wrap things up,
what are some areas of hospitalmanagement that are frequently
neglected?
I mean, so you know we'retalking about that mentorship
piece when do you see thingsthat are frequently neglected in
the veterinary management role?
Speaker 1 (33:51):
Well, you know, the business of veterinary medicine
has changed so much over theyears, right, Like it used to be
a business where you gave awayyour services and sold your
products, and that's a fairlysimple business, right, Because
the product comes in.
You know how much you have tomarket up to make a make a
living, and you know we havechewy and pet met express and we
(34:13):
can be upset that somebody cameand took our business.
But welcome to entrepreneurshipand business ownership, right,
Everybody's always looking forinefficiencies to capitalize on,
you know.
So where I feel, I mean again,I think there's a lot of
components of management.
I think we could deal with youand I could spend probably hours
talking about HR and we couldtalk about, you know, but from a
(34:34):
simplistic standpoint, like Ithink we've almost tried to make
fee schedule and ourunderstanding of fee and
profitability like too simple,right, Like if I just go step on
fees, it'll all work out.
Well, I mean, what happens?
Are we accounting for the factthat we've just been through
this period where, to retainquality staff, we didn't raise
(34:57):
staff wages 6%, we may haveraised staff wages 25% and our
largest cost is staff wages andour staff is spent is spending
time doing procedures.
So I've been very intrigued, youknow, kind of been working in
this project related to tryingto break down fees where they're
(35:20):
understandable, right, whenwe're looking at what is the
cost to deliver a service andapplying some cost accounting
principles to fees, because tome that is really the driver A
strong fee schedule that youcreate a regular process in
reviewing, is the foundation ofhow you can ensure that your
(35:40):
business isn't just healthy in ashort period of time, but that
process is how you ensure that Ayou maintain trust with your
team so your team doesn't feellike you're just profit driven.
You maintain trust with yourclients, which is huge right.
We can't erode the trustbetween veterinarians and their
(36:03):
clients.
It's one of the biggestconcerns that I have in the
veterinary space as we headforward is can we maintain
veterinary medicine as one ofthe most trusted professions in
the country?
Speaker 3 (36:14):
Especially so.
I'm in an industry that is nottrusted.
I just you know, I know what Isell, right, and if you look at
everything out there in themarketplace, it's make it easy
save money.
You just need to get thisproduct and check the box.
And I think there's somecommoditization that's happening
in the veterinary industry aswell, where you look at
(36:35):
telemedicine, different servicesfor well visits being offered
at different locations thataren't traditional veterinary
practices, where it's just showup, get your vaccine and walk
out.
Without naming any big majorbrands, but you know, we know
the ones that are out there thatare trying to dip their toe in
this because they see how bigthe marketplace is and that what
(36:55):
happened with you know Chewieand some of these other places
coming in where you can come inand order all your dog food and
everything.
Now it's well, I don't have toschedule an appointment with my
vet.
I can go grocery shopping,bring my dog in, get a vaccine
and walk back out without havingto go through all the rigmarole
of scheduling an appointment atmy vet practice because they're
booked out four months.
Speaker 1 (37:13):
Well, you tapped another thing that's huge to me,
that people need to focus on,like have you ever stayed at a
hotel?
Speaker 3 (37:20):
Yes, I have.
Speaker 1 (37:24):
What do you?
Do?
You stay at the super eight.
Speaker 3 (37:26):
No, I generally like to stay at a little bit better
than I've stayed at super eightsTravis, but I generally don't
like to stay at super eights.
So every time you book the fourseasons, no, I like to get the
best value for my money.
Speaker 1 (37:39):
So a lot of people don't are kind of bothered.
But veterinary medicine in mymind is a service business,
right?
We're selling a service thatservices medical care to a
client and not.
There's a reason.
You just said you don't want tostay at the super eight, but
somehow, some way, the supereight is a massive brand, or you
(38:03):
know I.
And again I'll pick my favorite, you know cause I always love
Tom Baudet.
You know the hotel six right.
Absolutely.
You know, I mean those thatfills a need of a client base.
Speaker 3 (38:18):
Correct.
Speaker 1 (38:18):
There's a segment of the market.
Speaker 3 (38:20):
That's okay with the super eight and is happy to stay
at the super eight.
Speaker 1 (38:25):
And when you think about veterinary medicine as a
service business, we need tothink about how we we meet each
different group of clients wherethey're at.
Speaker 3 (38:36):
Sure.
Speaker 1 (38:38):
And I think you're going to see that need, that
need to come out more and morein veterinary medicine as
there's, it never used to matterbecause there wasn't the level
of diagnostic tools available,there wasn't the cost to invest
in those diagnostic tools Someof the you know, some of the end
of life care, some of theroutine care, even right Like,
wasn't always where it is, andthe the need to meet those
(39:05):
clients that are looking forthis level of service or that
level of service, and then buildyour business model around.
That is really I think it'sreally a very needed skill set
and something that each personwho owns a hospital should think
about, because it's verydifficult to be everything to
every client base.
Speaker 3 (39:27):
Yeah Well, I really enjoyed our time today, travis,
I think for for for ourlisteners out there as, as we
wrap up here, what's what's theone you know if you're, if you
were going to say anything to aveterinarian about exit planning
or business planning for theirpractice, what's the one?
What's the one thing that yougenerally tell all practices at
all of your meetings?
Speaker 1 (39:50):
Thick skin?
I think it's thick skin, rightLike it's.
You may hear some things you'redoing great.
If you sit down with an advisoror a guidance person and they
tell you there's nothing wrongwith your business and there's
no area to improve, kindly getup, push the chair in and walk
away, because you know exitplanning is about having
(40:14):
somebody help us see where ourblind spots are and then putting
team members around you toimprove those blind spots.
Speaker 3 (40:24):
Yeah, there's a great quote from Doc Rivers Good
players want to get by, Greatplayers want to be coached and
superstars want to be told thetruth.
And so you know you.
You want to be told the truth.
Well, I really enjoyed our timetoday, Travis, For our
listeners out there, where canthey find you online, and and
how would they reach out to youand get ahold of you and then
name your podcast again for us,just so it'll be in the show
(40:46):
notes for everyone?
But just where can people findyou online?
Speaker 1 (40:49):
Yeah, absolutely so we are.
We've got website.
Love to go visit it.
It's just three and one andthat's three spelled out and one
.
Vet advisorscom.
Email is the same Travis atthree and one vet advisors.
You know, certainly feel free.
Anybody can give me a call,phone number 678-523-0234.
Happy to happy to catch up andcontinue the conversation at a
(41:13):
personal level with anybody.
Speaker 3 (41:14):
And then you, you and I connected on LinkedIn as well
.
So you're there, and and what'sthe podcast again for us.
Speaker 1 (41:19):
Our podcast is a vet worthwhile.
Speaker 3 (41:22):
Vet worthwhile podcast.
Well, thanks so much for thetime, Travis.
I've really enjoyed connectingwith you and and collaborating
on exit planning and managementfor veterinary practices, and
thanks so much and reallyenjoyed the time today.
Speaker 1 (41:37):
Thanks a bunch, Bill.
I really appreciate it.
Speaker 3 (41:40):
Thanks for tuning in to veterinary blueprints.
If you have any thoughts,questions or suggestions for an
episode, I would love to hearfrom you.
Email me at bill atbutlervetinsurancecom.
Don't forget to subscribe soyou never miss an episode, and
if you could do me a huge favoryou know it helps with the
algorithm.
If you can like, share orcomment on the post, leave a
(42:02):
review, I would love it.
Thanks for tuning in and untilnext time.
quite frankly, you have to have a vision of what is
your retirement, what is theexit, what's on the other side?
Speaker 2 (00:14):
Welcome to the Veterinary Blueprint podcast
brought to you by Butler VetInsurance.
Hosted by Bill Butler, theVeterinary Blueprint podcast is
for veterinarians and practicemanagers who are looking to
learn about working on theirpractice instead of in their
practice.
Each episode we will bring yousuccessful, proven blueprints
from others, both inside andoutside the veterinary industry.
(00:34):
Welcome to today's episode.
Speaker 3 (00:39):
Welcome to this episode of the Veterinary
Blueprint podcast.
I'm your host, bill Butler, andtoday we're joined by Travis
York, from three and oneVeterinary Advisors.
Travis grew up in theveterinary world, working in his
father's animal hospital inIowa.
He later got a degree inaccounting and worked for a
number of lenders.
Over the course of his past 20year career, he's had experience
(01:04):
and helped more than 500veterinary practices with
acquisition, expansion and exitstrategies.
He's a certified exit planningadvisor and Travis is going to
bring a wealth of knowledgetoday, navigating the
complexities of selling oracquiring a veterinary practice
or just thinking about exitstrategies in general.
So let's get started and we'regoing to welcome Travis to the
(01:24):
podcast.
Welcome, travis.
Speaker 1 (01:26):
Thanks, bill.
Thanks for having me.
I'm excited to be here and diveinto some of these fun topics.
Speaker 3 (01:31):
Absolutely so.
We were just chatting beforehopping on, as we generally do.
So for those people listeningall of our listeners we always
have the pre-call call.
You know we have a list ofquestions, but I think, just
diving into start, Travis, whydon't you give the listeners a
little background?
You know I gave the 50,000 footview.
What have you been up to in thelast decade or so, working with
(01:54):
veterinary practices andhelping them with your expertise
?
Speaker 1 (01:58):
Yeah.
So I mean it's been a very fun,you know fun and exciting time
in veterinary medicine over thelast 10 years.
We've been learning a lot.
I kind of over that 10 yearperiod was a part of Live Oak
Bank so got to experience, youknow, the use of SBA lending a
lot of construction financing.
You know, in that realm workedwith a lot of hospital owners
who were two and a half.
(02:19):
Three doctor hospitals hadstarted five to seven years ago
and expanding into a 5,000,7,000 square foot freestanding
building.
You know also over the last 10years spent some time with a
company called Calico which isnow inside of Suvedo.
So got, you know, a real tasteof some creative acquisition
(02:40):
structures you know, including,you know, some subordinate debt.
That was maybe a little bitmore stretch.
We, you know, worked withseller notes.
We utilized some retainedownership in some of those
strategies, spent a you know,very, you know short time also
working alongside of, you know,the team that built Suvedo, so
got a little bit of a firsthand,you know seat at some corporate
(03:05):
acquisition world and then overthe last two and a half years,
been working with, you know,some of my clients on just
thinking about exit and you knowbest business practices and,
quite frankly, just you knowwhat are the nuances and, like
any entrepreneur, trying tofigure out where is their,
where's their opportunity andinefficiencies in this evolving,
(03:25):
in this evolving space.
Speaker 3 (03:28):
I'm glad you bring that up.
So you know, as we chattedabout right before this, we said
, well, we got some questions,but we'll just kind of let the
conversation float where it goesto, because you have your own
podcast.
Just plug your own podcastright now and then we'll mention
it at the end.
So you have your own podcast aswell.
Speaker 1 (03:44):
Absolutely.
I really appreciate that I hosta podcast with a good friend of
mine, a gentleman by the nameof James Yost.
That podcast really came out ofconnecting with James, who
works with a company calledSignature FD.
Signature FD focuses on wealthadvisory for veterinarians and,
as a lot of veterinarians were,you know, obtaining kind of
(04:04):
generational type of wealth,their needs were different and
so the podcast really launchedthere out of hey, how do we help
veterinarians who areexperiencing life changing
liquidity events have the rightknowledge base to, a, obtain
those if they're interested inthem, and then, b, if they do
obtain that, how do you, how doyou be prepared for it?
(04:26):
And you know not, not kind ofbe one of those stories of hey,
this generation got generationalwealth and, because we didn't
put the right systems andprocesses in place, the next
generation is, you know, back tothe short.
Speaker 3 (04:39):
We gave 60% away to the federal government and now
that money is gone into twogenerations or generations gone
right.
Speaker 1 (04:46):
Yeah, absolutely so.
That's kind of the foundationof that podcast.
It's evolved a little bit, youknow, over time.
I'm sure you experienced thiswith your podcast.
You're always trying to findnew and interesting topics,
right, you can't go find thathorse and just keep beating this
, beating the same thing, youknow.
But so we brought in some newtopics.
But you know that's a lot of.
It is kind of, you know, how dowe, how do we think about some
(05:07):
of these things that are new toveterinary medicine and how do
we think about, you know,creating some of the best
business practices you know toobtain, you know, the value
that's aligned with you.
Speaker 3 (05:18):
So I just in my own world.
You know we were talked aboutsimilarities and dissimilarities
between the insurance industryand veterinary industry and I
think you know, as we mentionedbefore we got on the call here
on the podcast, businessprinciples or business
principles.
You know I have a P and L, ashoe store has a P and L, a
(05:39):
restaurant has a P and L, aveterinary practice has a P and
L and it's going to have thingson it like payroll and cost of
goods.
Now I don't have a cost ofgoods because what I'm selling
is a intangible product.
But you know, I think at theend of the day, for for
veterinarians, I think you knowwe'll probably spend a lot of
time talking about figuring out,you know the extra strategy
planning that you've got acertification in that and
(06:01):
background in that, and I wentthrough this at my own practice,
my own agency, planning for thefuture, right, so I'm under the
age of 50.
And but I know at some pointI'm not going to sell insurance
until I'm dead.
Speaker 1 (06:16):
Yeah.
I mean look father time isundefeated right.
Speaker 3 (06:20):
Yeah, yeah.
Speaker 1 (06:21):
No matter how good Nick Saban and the Alabama
Crimson Tide are, father time ismore undefeated than Nick.
Speaker 3 (06:25):
Saban, he's going to, he's going to win, he's going
to hold the trophy up.
And so you know, I purchasedanother insurance agency and
that was a seven-year-oldgentleman that hadn't done a lot
of preparation I won't go intoa lot of detail on it but it got
to a point where he had to makea decision and there was no
preparation, didn't have a P&L,didn't have some of these things
(06:48):
in place.
And so I think, when you're asmall business owner and correct
me if I'm wrong, from your ownexperience, travis you get to a
point one day, if you haven'tprepared, and said, hey, I'm
done, I want to cash out, and ifyou haven't done the prep,
you've now discounted yourbusiness or practice.
If you're a veterinarian, right.
Speaker 1 (07:07):
Absolutely right.
I think back to the story mydad tells about the first time
he had the opportunity to buy aveterinary hospital, right, and
this was in Wisconsin in thelate 70s and really the way the
profession traded didn't requireprep work.
For my dad, who's a babyboomers generation, to buy kind
of that silent right, the guycame in one day and said, hey,
I'm ready to retire.
(07:27):
And my dad said well, okay, I'mvery interested in buying your
hospital.
Can I get your tax returns?
Well, no, you can't.
Right, you can either here's mynumber, I'll finance it, I'll
get a life insurance policy onme to protect my family and you
can buy it, or not, but you'renot gonna get into the
financials.
And that's really the way a lotof veterinary hospitals trade
(07:50):
and you didn't have to do prepwork, right?
We've also kind of gone througha period where consolidators
were coming in and if you were athree plus doctor hospital
didn't require prep work becausethe valuations that they were
paying relative to yourexpectations were significantly
higher, and so you achievedsuccess without prep.
(08:10):
But we're really in a newenvironment where that prep work
is critical.
Right, you have to have thebusiness in place.
Right, you need to understand.
Operationally, the business isset up.
You've invested in the rightequipment.
The facility is up to date, sothat it's attractive, so that a
young doctor would want to buythat facility.
Speaker 3 (08:29):
You need to I don't wanna buy all your old equipment
.
Speaker 1 (08:32):
Right right Now.
And what you can't do is, ayear before you get ready to
sell your hospital, go put newequipment in it.
So you need to be continuouslyplanning and thinking about that
.
You need to continuously bebuilding systems, because
today's doctor doesn't wannahave to be the one doing
reminders, paperwork on Saturday.
Speaker 3 (08:51):
They don't wanna have to build the innovation into
your business that you ran for35 years.
Speaker 1 (08:56):
Absolutely.
So you gotta think about that.
You have to, quite frankly, youhave to have a vision of what
is your retirement, what is theexit, what's on the other side.
I mean, I have a lot ofcolleagues who they exited for
incredible multiples but theyhad no vision of what they were
gonna do and they're almost,like you know, like a car stuck
(09:17):
in the mud at this point in time, just kind of spinning their
wheels with a big pile of cashin a checking account, but not
really a vision of how to usethat and how to make that matter
.
And so that personal vision ishuge.
And then connecting thatpersonal vision to where most of
these entrepreneurs are goingto get their retirement funded
is out of their business, and sowe've gotta make sure that we
(09:40):
have the right.
Speaker 3 (09:40):
I mean that's me right, yeah, so, yeah.
So I did a fair marketvaluation to say, okay, I mean
I'm nowhere close to retiring orselling my agency or anything
like that.
I mean, you know, because theventure capital money also plays
in the insurance world, I getoffers all the time and I always
say 35 times EBITDA.
When I'm on the phone with themand they laugh at me, I said,
(10:01):
well, I'm not selling today, I'mselling, you know, 15 years
down the road, so I have tofuture value this thing.
And they're like, well, wecan't do that.
I was like, well, then, I'm notfor sale, right, that's the
truth.
But you know, as a businessowner, I have to think about,
okay, where am I gonna be,where's the ball gonna be?
Or, gordy Howe, I'm a bighockey fan, where's the puck
gonna?
You know, I have to skate towhere the puck's gonna be.
(10:22):
And so for a small businessowner who has a lot of skin in
the game, you think you know, alot of times you're not paying
yourself because you're puttingmoney into the business on that
future investment.
The investment is not your 401K, the investment is the asset
that you're going to sell offone day, either internally to an
internal sale or external to anexternal sale, whether that's a
(10:45):
third party associate who'sgonna come in, or, you know,
corporate I mean, because thecorporate world and the
insurance thing is the same.
And so, okay, I'm a minimum of10 years out.
So I have a three year like,okay, here's my benchmark,
here's what I need to do for thenext three years, here's what I
need to do for the next five,and then, five years out, do
(11:06):
another fair market valuationand say, okay, what's the next
10 to get me to retirement.
And one thing that I was told bythe firm that I had due my fair
market valuation was threeyears prior to your exit.
Pull out everything you payyourself as an owner to put it
into the bottom line and show itas revenue instead of business,
(11:27):
travel, car expense, meals,education you know all the fluff
that business owners and I knowveterinarians are in the same
boat.
They use your business as alifestyle.
If you're a small businessowner, there's a lot of tax
advantage.
Pull all that out three yearsprior so it shows up as income,
to help you not have to say well, I pay myself a lot of money
(11:48):
and here's all the 50 differentways.
What do you think about thatKind of that thought process for
exit planning?
Speaker 1 (11:55):
No, I mean, I would take it even a step further,
right, and?
Speaker 2 (11:59):
again.
Speaker 1 (11:59):
We're in a very transitional period in the
veterinary space.
I think in the veterinary spaceand I don't have any depth of
knowledge in, you know again,business principles are the same
, but I don't have a depth ofknowledge in the insurance space
.
But in the veterinary space, wecome out of an environment
where it was a seller's marketand you could get a lot of
(12:20):
people to lean into projectedand adjustments and the market
was so aggressive that you couldget those accepted right.
What we're seeing now is kindof that black and white EBITDA
number is the black and whiteEBITDA number that people are
willing to look at and these areeven corporate buyers, right?
So you have to have cleanfinancials.
(12:40):
Now is it?
You know, two years, 18 months,you know again, bill, I think
that all depends, you know,beauty's in the eye of the
beholder on that.
The other area that I see is Ihad a lot of people who they
were off on margin, right,they're like they just hadn't
tightened up some of theirbusiness operations, right.
They always knew it, fully,acknowledged.
(13:01):
I run this a little bit loose,I just don't want to put in the
extra effort to drive three or4%.
So they made a decision in 2021that hey, I'm going to tighten
the ship, I'm going to get that12 clean months Not anything to
do with personal or any of that,but like, maybe even personal,
you can make an argument and allof a sudden they're like OK,
well, I'm going to tighten it upso I can go sell at 18 times
(13:24):
EBITDA and with a 3% highermargin on a $4 million hospital
and that matters right.
And now all of a suddenhospital, that four-doctor
hospital, is not selling for 18times EBITDA, it's selling for 9
to 10 times EBITDA.
Speaker 3 (13:40):
So for our listeners out there, what is EBITDA?
Speaker 1 (13:44):
EBITDA would be earnings before interest, taxes,
depreciation and amortization.
I always like to think of itkind of in simple terms, as it's
like the discretionary cashflow that's available to you as
the owner right.
If you own the business, whatare you going to be able to get
out of it?
Speaker 3 (14:01):
Yeah, in the insurance world it's always, you
know, they used to say, well,premium, I sold for X times
premium, two and a half timespremium, or two and a half times
revenue.
Well, you know, whatever thatnumber is.
But insurance agencies want totalk about premium versus
revenue.
So I've, you know, I've got a$10 million book of business.
Well, you're, $10 million bookof business may only revenue
(14:23):
$50,000.
I've got a $5 million book ofbusiness that revenues a quarter
of a million dollars, and soit's, it's where the profit
comes in and that's that EBITDAnumbers, really the, the bottom
line number of, as you, as youmentioned, discretionary number
at the end.
So when we say EBITDA, for ourlisteners it's, it's a, it's
really the true measurement ofprofitability at your business,
(14:44):
right.
Speaker 1 (14:45):
I think it's basically, you know it's your
revenue less everything it coststo run the business right,
paying for all your costs togood soul, paying for your staff
, paying for your doctors,paying yourself a reasonable
wage as a doctor, right, if youdon't pay yourself as a doctor
and you go to sell your hospital, we're gonna back out something
for you to be paid as a doctoryour rent and then all of kind
(15:07):
of those other ancillary costs.
They're all backed out and thenwhat's left is what you have as
a business owner.
Speaker 3 (15:14):
And then that's the number multiple.
So whether that's 18 or 9, itcan make a huge difference,
because that's what thatgenerational wealth you're
talking about, right?
So you spend 25, 35 yearsrunning your practice and when
you say, okay, I'm done, youwant to be prepared.
So you know, I think you hadyou talked about spectrum of
(15:34):
ownership as one of the thingsthat that maybe we want to cover
today, and what you know, forif I'm a veterinarian and I come
to Travis and say, hey, youknow, I'm interested in in, in
engaging your services, you'regonna talk to me about spectrum
of ownership, whether I'm anassociate or I own the practice.
What is that?
What does that mean to you?
Speaker 1 (15:52):
Well, I like always kind of my first question when
you talk about spectrum ofownership.
So so, bill, I'll just kind ofask you a simple question if you
own a hundred shares ofCoca-Cola, are you an owner of
Coca-Cola?
Speaker 3 (16:04):
Technically yes, but not really.
Speaker 1 (16:06):
Okay, so what you have is you have economic
ownership.
Okay like that and so always.
My first question on spectrumof ownership is when you talk
about ownership, what is it thatyou want?
And you answer that questionvery much like an entrepreneur.
Right, because entrepreneurialownership is the choice and the
opportunity to have.
(16:27):
The buck stops here, all thedecisions are mine.
Right?
Historically and veterinarymedicine ownership has always
been attached to only andexclusively Entrepreneurial
ownership.
Right, we say, hey, I'm anowner in this hospital.
You're that means your decisionmaker.
Speaker 3 (16:42):
Yep.
Speaker 1 (16:43):
To your point, technically, if I own a hundred
shares of Coca-Cola, I am aneconomic owner in Coca-Cola and
I always want to understand formy clients what is the objective
of ownership.
Right, because if I own amillion shares of Coca-Cola I'm
gonna do pretty welleconomically.
But even if I own a millionshares of Coca-Cola and it's
(17:04):
funny I know they're not gonnagive you the secret formula.
Speaker 3 (17:07):
You don't get the combination to go.
Speaker 1 (17:09):
I always used to joking when I was I was doing
some kind of talking with vetschools and some of the
veterinary students.
I'm like if I owned a millionshares of Coke.
I'm not calling the CEO of Cokeand saying, hey guys, we need
to go make, you know, coffeeflavored Coca-Cola.
And now all of a sudden theyhave coffee flavored Coca-Cola.
So but like the CEO is nottaking my call, he's laughing me
out of the room, right.
(17:31):
And so, as we've seen veterinarymedicine evolve, we're seeing
more opportunities for minorityownership.
We're seeing more opportunitiesfor profit interests.
We're seeing more interests,like you know, just different
structures in ownership whereyou may not be an
entrepreneurial owner.
Does that mean it's a bad?
I'm not gonna say it's a badthing or a good thing.
(17:51):
I want to help peopleunderstand what are your goals
from ownership?
Or, if you're an owner of ahospital, if you're giving a
doctor ownership or having thembuy ownership, what are your
goals and what are their goals?
Because if your goals are toretain them or to compensate
them better economically and youdon't want them to be an
(18:13):
entrepreneurial owner, then Iwouldn't be giving them like
getting them in as a minorityowner, because they're only
gonna be disappointed.
And then you have a financialmarriage that you've got to
break up and I'm sure as aninsurance person you've dealt
with some of those.
Speaker 3 (18:26):
Well then there's a whole host of ways to you can do
.
Deferred compensation plan, say, hey, you know, I want to give
you a slice of pie that's biggerthan all the everyone else here
, and some sort of unqualifiedPlan that you get a little bit
more than everyone else becauseI want to keep you around for 10
plus years.
There's different ways to dothat than giving up a stake in
(18:46):
your business.
Speaker 1 (18:47):
Absolutely right.
And if you have somebody who isentrepreneur driven and you
talk with them and they wantentrepreneurial ownership,
they're never gonna be happy.
Speaker 3 (18:57):
As a 15% shareholder of your know, they see
themselves in your chair somedayright, they want your chair
right, and so then you've justgiven them that.
Speaker 1 (19:05):
Now I'm not saying it's not a way to sit down.
Where you can, you can win andthey can win and you guys can
all come together.
I like, I'm a big believer that.
You know, if you have thoseopen dialogues, you set
appropriate expectations, youcan find a way and, quite
frankly, the pie and veterinarymedicine is big enough that it
can go around.
It's just you can't be too, toogreedy on how much pie you want
(19:28):
.
Speaker 3 (19:28):
Yeah, absolutely so.
Creating an exit plan, I mean,you know I think there's a lot
of conversation around thatright now in the industry as a
whole.
I'm not gonna pretend tounderstand all the nuances, but
just you know in from where Isit In my chair and in
networking.
You know there is a lot ofconversation about the
(19:49):
consolidation within theveterinary industry and exit
planning strategy and I think itweighs heavily on some owners
where they look at thatgenerational wealth and it's
hard to say I don't wantgenerational wealth.
But in some respects and thisis my own personal opinion with
my own business if I wantgenerational wealth and I want
to perpetuate that internally,it's up to me to build the model
(20:10):
versus just say, okay, I'm done, one day, hey guy working for
me or a woman working for me atthe agency buy me out, but I
didn't put a mechanism in therefor them to buy me out at the
level that I want, right?
So talking about planning andcreating exit strategy and how
that works in the veterinaryworld, I mean, what are one or
(20:30):
two key things that that ownershould be thinking about when
they number one, when and numbertwo, what are a couple of
things they should be doing?
Speaker 1 (20:38):
Well, like I'm a big believer in that statement, you
know you got to begin with theend in mind, right?
Speaker 3 (20:43):
Yep, what is done?
Look like.
Speaker 1 (20:45):
Like I think you know , day one you buy a business day
to you should be building yourexit plan.
Now that exit plan is going tochange because, in case you
didn't know it, as anentrepreneur the minute you, you
should never start a businesswithout a business plan, but the
minute you finish your businessplan it's garbage, correct,
right.
So, like you know, again, youshould not enter ownership
(21:08):
without an end game in mind,knowing full good and well that
that in game will probablychange.
So you know, to me it'ssomething you want to start
regularly, right, and it startswith, like what you said you did
Understand the fair marketvalue of your business.
Understand what the differentoptions are.
Right, like we've heard, esopsfloated in veterinary medicine.
You can sell to a corporateunder four or five different
(21:30):
structures.
Right, you can have a jointventure.
You can have 100% cash exit.
You can get topco.
You know platform equity.
Speaker 3 (21:39):
You can be a top under.
You can do all kinds of stuff.
Speaker 1 (21:41):
You can do all different kinds of things, right
, you can sell to an associatein an earn out process, like
there's a lot of different ways.
You know, maybe it's family,like I have some doctors now who
want to look at familystructures where you know it's
maybe a non DVM and they've gota larger network of.
But understanding what arethose eight different exit
(22:01):
options?
Then assessing your hospitaland your personal place right,
what is the profit gap in yourhospital?
What's the best hospital likeyou operate at and where do you
operate?
So then you can compare, okay,how close am I and how ready am
I to sell and what do I need todo to get to best in class?
You need to understand thevalue gap, right.
(22:24):
What is if?
Speaker 3 (22:27):
what is the risk?
Right, like, if you've got oneDVM at your practice generating
60% of the revenue and I'm goingto come by your practice and
they're not going to buy it,that DVM leaves.
Speaker 1 (22:37):
I'm done it's an un-stallable asset.
Speaker 3 (22:39):
Yeah.
Speaker 1 (22:40):
Right, and then understanding the last thing is
understanding your vision.
And for all these smallbusiness owners, what's that
wealth gap?
Right, and the wealth gap ishow much are you worth today
yourself, outside of yourbusiness, and how much do you
need to fund out of yourbusiness to obtain your
retirement vision?
(23:01):
And that changes over time.
Right, because, like, if yousold today Bill that number.
Speaker 3 (23:07):
That's why it's that's why you know, yeah, if
somebody wants to buy me today,it's the number I want to get
when I'm 65, not the number youknow.
So you got to pay me.
What I'm worth when I'm 65 is Icontinue to build this over the
next 15 years not today's value, because I'm not retiring.
If you give me money today, itneeds to last the rest of my
life, not from age 65 to death,age under 50 to death.
And so and that's why I wasvery interested in your answer
(23:31):
that question, because it'sreally what does done look like.
You know, I did an acquisitioninside the insurance world, as I
mentioned, and it's it'sfiguring out what's important to
the seller and what's importantto the buyer, and those are
going to be two different things.
You know, obviously the buyer,they want to get returned on
their investment and make surethat the money that they're
(23:51):
investing in the acquisition isgoing to be returned over the
period of time.
And then, because, eventually,once the payout is done, as the
buyer, obviously, well, that'swhen the owner gets a raise, or
you get a raise like I'm goingto eat lean while I'm doing the
acquisition, but then, once theacquisition is done, I'm done
paying it off, I'm going to getto eat a little bit better, and
(24:13):
for the seller, it's well, Iwant my team taken care of, or I
want my clients taken care of,or you know, I'm going to rent
the building, or you know allthese kind of things.
But at the end of the day, itreally does boil down to OK,
well, what am I getting paid?
Because I spent 35 years of mylife, blood, sweat, tears,
missed ball games, all thestress of all of it, especially
(24:34):
in the vet world, withadditional stress around the
practice.
Speaker 1 (24:39):
No, I mean, there's no doubt right and it's, I think
it's to your point.
It's mentally and emotionallywhat is it worth, practically,
what's the value worth?
And then, in today'senvironment, it's a lot of times
it's reconciling those twopieces together, because we'll
talk with sellers who, well,when I bought my hospital, I
paid one times revenue, so myhospital's worth one times
(25:02):
revenue.
Well, that's how hospitals werevalued in 1983.
Speaker 3 (25:06):
Like I said yeah, it's insurance right, two and a
half times premium I, or two anda half times revenue, whatever
that is, whatever that number is.
Speaker 1 (25:13):
Yeah, you know, and in the veterinary hospitals it's
what falls to the bottom linenow creates value, not what
comes in at the top.
And so you know having thatinformation earlier so that you
can be prepared and then you canoutline.
Because the other issue is isyou know you're trying to solve
(25:34):
for retirement?
You're weighing like what aremy exit options?
Do I want to sell, maybecorporately?
Do I want to sell for legacy?
The sooner you outline whatthat is, you write out a path to
get there, the more optionsthere are.
If you show up at 63 years oldand say, hey, I'm out in two
years, well, I mean, we'relooking for an all cash buyer to
(25:57):
solve for your whatever yourwealth gap, whatever value it is
you need out of the hospital.
If you start at 53, we canbuild a whole roadmap and now
you could have five differentoptions available.
Speaker 3 (26:12):
Well, you know, from an acquisition standpoint right
and I talked a little bit aboutthat where you have to build, if
you want to sell internally,you've got to build the
mechanism internally forsomebody to be able to buy that.
Because if I just come and saymy practice is worth, you know,
$6 million, hey, associate,working for me, I'm going to
sell this to you in 18 months.
(26:33):
Number one did you pay themenough to qualify for a loan and
jump through all the hoops?
You know you have a lot ofexperience, 20 plus years
experience lending money topractices for acquisitions and
stuff.
It's not just snap the fingers,get a $3 million loan anymore,
it's.
You know you're putting it allon the line.
And how much is going to beseller finance for the
(26:53):
veterinarians holding the note,and how much is bank finance and
SBA lending versus traditionaland all those things that come
into play.
If you didn't take time toprepare to have the cash
available inside the practicefor the associate or the person
who's going to buy it internallybe able to use the revenue for
the business to buy the businessfor them, you have to go
(27:14):
somewhere else.
Speaker 1 (27:16):
Absolutely Well, I mean again, one of my favorite
stories is a veterinarian whokind of started the process 10
years ahead of time.
Probably end up, you know,because he started that process
and made that commitment.
May have extended a little bitearly, but when he started the
process he was working a six day, you know, six days a week, 65
plus hours and managing thestress of a, you know, two and a
(27:36):
half doctor, three doctorgrowing hospital had a couple of
great associates, gave them apath to ownership over the next
10 years where basically he gavethem responsibilities.
Now he did something thatveterinarians really don't like
to do.
It's called delegating.
You went down that road ofdelegating these management
responsibilities.
At the time he started theprocess they were three doctors.
(27:58):
Usually when he exited theywere six and a half, seven ish
doctor hospital.
They moved from a leastfacility to a free standing
facility.
The doctors bought it.
I did.
He get like absolute optimalvalue.
I'm sure he could have gone outto the market and pushed a
little bit harder and squeezedanother million dollars out of
(28:19):
it.
Right, and for some people they, they, like you know, they sent
their flag in the ground andlook, I win by getting the
biggest number.
But if you want thatflexibility, like I don't think
there's anything he couldn't doin his retirement that he wanted
to achieve and oh yeah, by theway, he got to continue to own
15% of the hospital and get adividend out of it Right.
(28:40):
So there's.
If you start early and youempower team members, you either
flush out they want it or theydon't.
And if they don't want it, thenwhen you have to create that
exit, like there's nothing thatthey can really be upset about
you don't get 18 months beforeexit and go hey, are you?
Speaker 3 (28:58):
okay, you want to buy this?
Now I'm going to get out andthey go.
I have no interest in doing it.
I just want to be an associate.
I love practicing medicine.
I want nothing to do withownership, management, hr You've
done a really good job withthat and I want nothing to do
with it.
But in that owner's mind thatthat veterinarians bend their
exit strategy for the last 10years and they get to that exit
(29:19):
part and they go oh, that persondoesn't want to buy it.
Now what?
Speaker 1 (29:23):
Well, and you've, I've seen it play out.
You know, on both sides, right,like in the smaller two doctor
hospitals, the associate wasalways the exit strategy.
The owner started to take theirfoot off the gas.
And what was it?
You know, it's a million, fivemillion, six revenue hospital.
For the longest time, the ownerwas the million, million to
million one producer and theassociate was the four to 500,
(29:44):
right.
And then the last three years,the associate, the associates
going to buy the hospital, likeI get communication never
communicates to the associatebut starts to take his foot off
or she starts to take their footoff the gas.
And now, all of a sudden, theassociates, the million one
producer, super happy, they'remaking $200 plus thousand a year
.
No management, no headaches, no, nothing.
(30:05):
The owner is now the $400,000producer and they go to the
associate and say, hey, I'mgoing to.
You know it's the start of 2024.
I'd like to be out by the endof 2024.
Are you ready to start theprocess?
Well, I'm not your buyer.
Well, now, all of a sudden, youhave that revenue concentration
problem.
The new buyer can't fire theassociate.
Speaker 3 (30:25):
Yeah, cause that's the.
They're the rain maker, they'remaking the money, yep.
Speaker 1 (30:29):
They're making the money, and so now, all of a
sudden, this doctor has aworthless hospital.
Speaker 3 (30:34):
Yeah.
Speaker 1 (30:35):
Right, or or you've got you know the scenario where
it's a really large hospital andthey never have that
conversation to start themechanism in place.
And then they go to the doctorand they say, hey, yeah, like
absolutely I'll sell it to you.
And let's say they're going tosell it for five times earnings
at the banquet finance.
I've got a you know $6 millionhospital that does a million
(30:56):
dollars of EBITDA earnings.
I'd like to sell it to you for$5 million.
And the associates eyes justget big cause.
There's like no way I can runthat.
Well, if you would have startedwith them three or four years
ago and demystified everythingthat happens in the back room
absolutely a hospital with theright systems, the right team
(31:16):
and it's not a complex business.
It is a cash in, cash outbusiness and I don't I don't
want to oversimplify a verycomplicated no correct, Because
it takes significant humanskills and significant
relationship skills to make thatwork.
But strictly from the businessthings, I mean we're not dealing
(31:36):
with accounts receivable, we'renot dealing with prepays, we're
not dealing with invent, like atime.
I mean, yes, there's inventorybut you know we're not buying
raw goods, Like a lot of thosebusiness principles that you and
I talked about aren't presentin a veterinary hospital.
Speaker 3 (31:49):
Yeah, yeah.
So you know I guess that theend thinking about everything.
We just kind of chatted aboutthe last 10 minutes.
It's never too early if you'rea veterinarian looking or
thinking at some point I own, sofor all the owners out there or
partners, you're not going tobe farther time and at some
(32:12):
point you're going to say I'mdone and the best time, the best
day to plant in oak trees today, and so you know it's the
thinking about.
Okay, I'm at a certain levelnow.
I'm done, five, eight, 15 yearsaway from retirement or selling
.
What does that look like andwhat are some things that I can
(32:32):
do to start planning that?
And you know, quite frankly,it's as simple as because
there's two conversations right,if you're an employee anywhere,
it's the mindset of doing myjob and what my role is to
accomplish the task in my role.
If you're a veterinarian, ispracticing medicine.
However, there's also themindset of the entrepreneur or
(32:53):
the business owner, and it's adifferent mindset and a
different conversation about howyou handle a specific situation
with an employee, with a client, with a vendor, whatever that
might look like of.
Well, from the employeestandpoint, this is the
conversation, but from the ownerstandpoint, this is my mindset
in approaching that decision andmentoring the team of yeah,
(33:14):
this is the decision, why we'remaking it, and here's the
mindset.
File that away for if you'reever sitting in my chair, and so
that way, if they ever do wantto sit in your chair, they've.
You've trained them up so it'snot brand new, fresh for them on
the outside, but really thebest time to plant the oak trees
today, right?
Speaker 1 (33:31):
Absolutely.
Hey, you can't start earlyenough.
Speaker 3 (33:34):
So, talking about the management piece and
transitioning a little bit tothat, to kind of wrap things up,
what are some areas of hospitalmanagement that are frequently
neglected?
I mean, so you know we'retalking about that mentorship
piece when do you see thingsthat are frequently neglected in
the veterinary management role?
Speaker 1 (33:51):
Well, you know, the business of veterinary medicine
has changed so much over theyears, right, Like it used to be
a business where you gave awayyour services and sold your
products, and that's a fairlysimple business, right, Because
the product comes in.
You know how much you have tomarket up to make a make a
living, and you know we havechewy and pet met express and we
(34:13):
can be upset that somebody cameand took our business.
But welcome to entrepreneurshipand business ownership, right,
Everybody's always looking forinefficiencies to capitalize on,
you know.
So where I feel, I mean again,I think there's a lot of
components of management.
I think we could deal with youand I could spend probably hours
talking about HR and we couldtalk about, you know, but from a
(34:34):
simplistic standpoint, like Ithink we've almost tried to make
fee schedule and ourunderstanding of fee and
profitability like too simple,right, Like if I just go step on
fees, it'll all work out.
Well, I mean, what happens?
Are we accounting for the factthat we've just been through
this period where, to retainquality staff, we didn't raise
(34:57):
staff wages 6%, we may haveraised staff wages 25% and our
largest cost is staff wages andour staff is spent is spending
time doing procedures.
So I've been very intrigued, youknow, kind of been working in
this project related to tryingto break down fees where they're
(35:20):
understandable, right, whenwe're looking at what is the
cost to deliver a service andapplying some cost accounting
principles to fees, because tome that is really the driver A
strong fee schedule that youcreate a regular process in
reviewing, is the foundation ofhow you can ensure that your
(35:40):
business isn't just healthy in ashort period of time, but that
process is how you ensure that Ayou maintain trust with your
team so your team doesn't feellike you're just profit driven.
You maintain trust with yourclients, which is huge right.
We can't erode the trustbetween veterinarians and their
(36:03):
clients.
It's one of the biggestconcerns that I have in the
veterinary space as we headforward is can we maintain
veterinary medicine as one ofthe most trusted professions in
the country?
Speaker 3 (36:14):
Especially so.
I'm in an industry that is nottrusted.
I just you know, I know what Isell, right, and if you look at
everything out there in themarketplace, it's make it easy
save money.
You just need to get thisproduct and check the box.
And I think there's somecommoditization that's happening
in the veterinary industry aswell, where you look at
(36:35):
telemedicine, different servicesfor well visits being offered
at different locations thataren't traditional veterinary
practices, where it's just showup, get your vaccine and walk
out.
Without naming any big majorbrands, but you know, we know
the ones that are out there thatare trying to dip their toe in
this because they see how bigthe marketplace is and that what
(36:55):
happened with you know Chewieand some of these other places
coming in where you can come inand order all your dog food and
everything.
Now it's well, I don't have toschedule an appointment with my
vet.
I can go grocery shopping,bring my dog in, get a vaccine
and walk back out without havingto go through all the rigmarole
of scheduling an appointment atmy vet practice because they're
booked out four months.
Speaker 1 (37:13):
Well, you tapped another thing that's huge to me,
that people need to focus on,like have you ever stayed at a
hotel?
Speaker 3 (37:20):
Yes, I have.
Speaker 1 (37:24):
What do you?
Do?
You stay at the super eight.
Speaker 3 (37:26):
No, I generally like to stay at a little bit better
than I've stayed at super eightsTravis, but I generally don't
like to stay at super eights.
So every time you book the fourseasons, no, I like to get the
best value for my money.
Speaker 1 (37:39):
So a lot of people don't are kind of bothered.
But veterinary medicine in mymind is a service business,
right?
We're selling a service thatservices medical care to a
client and not.
There's a reason.
You just said you don't want tostay at the super eight, but
somehow, some way, the supereight is a massive brand, or you
(38:03):
know I.
And again I'll pick my favorite, you know cause I always love
Tom Baudet.
You know the hotel six right.
Absolutely.
You know, I mean those thatfills a need of a client base.
Speaker 3 (38:18):
Correct.
Speaker 1 (38:18):
There's a segment of the market.
Speaker 3 (38:20):
That's okay with the super eight and is happy to stay
at the super eight.
Speaker 1 (38:25):
And when you think about veterinary medicine as a
service business, we need tothink about how we we meet each
different group of clients wherethey're at.
Speaker 3 (38:36):
Sure.
Speaker 1 (38:38):
And I think you're going to see that need, that
need to come out more and morein veterinary medicine as
there's, it never used to matterbecause there wasn't the level
of diagnostic tools available,there wasn't the cost to invest
in those diagnostic tools Someof the you know, some of the end
of life care, some of theroutine care, even right Like,
wasn't always where it is, andthe the need to meet those
(39:05):
clients that are looking forthis level of service or that
level of service, and then buildyour business model around.
That is really I think it'sreally a very needed skill set
and something that each personwho owns a hospital should think
about, because it's verydifficult to be everything to
every client base.
Speaker 3 (39:27):
Yeah Well, I really enjoyed our time today, travis,
I think for for for ourlisteners out there as, as we
wrap up here, what's what's theone you know if you're, if you
were going to say anything to aveterinarian about exit planning
or business planning for theirpractice, what's the one?
What's the one thing that yougenerally tell all practices at
all of your meetings?
Speaker 1 (39:50):
Thick skin?
I think it's thick skin, rightLike it's.
You may hear some things you'redoing great.
If you sit down with an advisoror a guidance person and they
tell you there's nothing wrongwith your business and there's
no area to improve, kindly getup, push the chair in and walk
away, because you know exitplanning is about having
(40:14):
somebody help us see where ourblind spots are and then putting
team members around you toimprove those blind spots.
Speaker 3 (40:24):
Yeah, there's a great quote from Doc Rivers Good
players want to get by, Greatplayers want to be coached and
superstars want to be told thetruth.
And so you know you.
You want to be told the truth.
Well, I really enjoyed our timetoday, Travis, For our
listeners out there, where canthey find you online, and and
how would they reach out to youand get ahold of you and then
name your podcast again for us,just so it'll be in the show
(40:46):
notes for everyone?
But just where can people findyou online?
Speaker 1 (40:49):
Yeah, absolutely so we are.
We've got website.
Love to go visit it.
It's just three and one andthat's three spelled out and one
.
Vet advisorscom.
Email is the same Travis atthree and one vet advisors.
You know, certainly feel free.
Anybody can give me a call,phone number 678-523-0234.
Happy to happy to catch up andcontinue the conversation at a
(41:13):
personal level with anybody.
Speaker 3 (41:14):
And then you, you and I connected on LinkedIn as well
.
So you're there, and and what'sthe podcast again for us.
Speaker 1 (41:19):
Our podcast is a vet worthwhile.
Speaker 3 (41:22):
Vet worthwhile podcast.
Well, thanks so much for thetime, Travis.
I've really enjoyed connectingwith you and and collaborating
on exit planning and managementfor veterinary practices, and
thanks so much and reallyenjoyed the time today.
Speaker 1 (41:37):
Thanks a bunch, Bill.
I really appreciate it.
Speaker 3 (41:40):
Thanks for tuning in to veterinary blueprints.
If you have any thoughts,questions or suggestions for an
episode, I would love to hearfrom you.
Email me at bill atbutlervetinsurancecom.
Don't forget to subscribe soyou never miss an episode, and
if you could do me a huge favoryou know it helps with the
algorithm.
If you can like, share orcomment on the post, leave a
(42:02):
review, I would love it.
Thanks for tuning in and untilnext time.
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