Latest / No Appointment Necessary / From Cryo Chambers to Clinic Chains: The Carter & George Expansion Story

Transcript

From Cryo Chambers to Clinic Chains: The Carter & George Expansion Story · No Appointment Necessary

• 0:00
  Michael: So welcome to the latest episode of No Appointment Necessary.
• 0:04
  Michael: Today we've got Reese from Carter and George.
• 0:06
  Michael: We've had a actually a good few number of requests to have him on because Carter and George are I someone described him as the Trump of the physio world.
• 0:16
  Michael: We want the Trump tower in every in every city.
• 0:20
  Michael: So Carter and George are definitely making names for themselves in terms of expansion and scaling.
• 0:25
  Michael: And I think that'll be really interesting to get into.
• 0:31
  Michael: The first part is going to be the origins piece where we're going to talk about how it all started and so on.
• 0:35
  Michael: And then we're going to go on to all the all the fun stuff where where he spends everybody's money and uh and we'll talk about that.
• 0:42
  Michael: But first of all, Rhys, welcome.
• 0:44
  Michael: Give us a quick introduction to yourself and we'll go from there.
• 0:47
  SPEAKER_00: Thanks, Michael.
• 0:48
  SPEAKER_00: Yeah, I'll push back on the on the trump.
• 0:50
  SPEAKER_00: I'd like to not be associated with that description.
• 0:53
  SPEAKER_00: But no, I'm I'm Reese.
• 0:54
  SPEAKER_00: I'm uh the co-founder and managing director, if you like, of Carter and George.
• 1:00
  SPEAKER_00: Um I'm a physio, uh, I graduated from Cardiff um back in 2012, and yeah, I've I've kind of worked in private practice or sport most of my career to date.
• 1:11
  SPEAKER_00: Um we set up Carter and George in 2018.
• 1:15
  SPEAKER_00: My co-founder, Jamie, is far more interesting for those that know anything about us.
• 1:19
  SPEAKER_00: Um, he is the my former England rugby captain, current England rugby player, Jamie George.
• 1:25
  SPEAKER_00: Um, we've been good friends for yeah, 25 years.
• 1:29
  SPEAKER_00: We went to school together and um yeah, we we set up Carlton George really.
• 1:34
  SPEAKER_00: Uh I was working out in Dubai in um in kind of a combination between private practice and and in uh golf and motorsport and a few bits and pieces, and um kind of was getting bored of of the Middle East, like a lot of people do, and decided that I was gonna set my own place up.
• 1:50
  SPEAKER_00: Uh Jamie was currently injured when he was coming out to visit me um just before the Lions tour to New Zealand back then.
• 1:57
  SPEAKER_00: And yeah, we just had, you know, like like all good ideas.
• 2:00
  SPEAKER_00: We had a a few drinks and brainstormed over uh you know what you could do in terms of producing a practice that that kind of replicated the stuff that he was doing in elite sport and the type of healthcare experience they got.
• 2:11
  SPEAKER_00: One thing led to another.
• 2:12
  SPEAKER_00: We decided it was a good idea for me to relocate and come home and uh and give it a crack.
• 2:17
  SPEAKER_00: And um, yeah, we can go into kind of like how that looks now compared to then, but I think um at the time we didn't well, I had no idea what I was doing really.
• 2:26
  SPEAKER_00: So we we probably stupidly or naively at the time took on a three and a half thousand square foot lease and like kit it out with everything that we could and then hoped it would work.
• 2:36
  SPEAKER_00: And um, yeah, we were kind of lucky it started and um kind of grew fairly organically, um, made some made some you know plenty of mistakes on the way and did stupid stuff like buy like a cryo chamber and all that stuff because I thought it was cool and interesting.
• 2:51
  SPEAKER_00: Obviously it wasn't, and um yeah, kind of now where we're at, yeah, we can go into a bit more, but probably a bit more structured and a bit more sensible and kind of understand the model a bit better now.
• 2:59
  Michael: So so you started off with a bit of a Jerry Baguire moment.
• 3:02
  Michael: Um you you imagined and uh ideated this amazing clinic with Rio James and all sorts.
• 3:08
  Michael: And I remember when you first started, I saw so much Health Tech.
• 3:12
  Michael: Um, you had loads of stuff going on, it's quite interesting.
• 3:14
  Michael: Um, but I'm interested in the in the Jamie George element of it because it to some extent that gives you a bit of a head start to to a lot of other clinics because you got that brand straight away.
• 3:24
  Michael: Did you have any strategy behind that at all in any way, or were you just like, oh, it's a name, we'll we'll start it up, or is it what is there anything you did specifically?
• 3:32
  SPEAKER_00: Yeah, good point.
• 3:34
  SPEAKER_00: Um I probably naively thought it would help more than it did.
• 3:38
  SPEAKER_00: Um, A, because he's not a footballer and actually rugby is still fairly niche.
• 3:42
  SPEAKER_00: Um, but secondly, um, yeah, like to people like it's a nice that it's nice that he's a rugby player, but like generally if people have got a problem with their back, like is that really the the defining decision why someone comes in?
• 3:55
  SPEAKER_00: What I didn't appreciate until later on down the line, and I still do appreciate this, was it gave us something that is hard when you're first starting, and that is like an immediate trust with the brand.
• 4:06
  SPEAKER_00: Um, and that we it wasn't like day one we had keys out the door, no, by no means.
• 4:11
  SPEAKER_00: It was like every other practice, but what we did have was enough people that were willing to give it a go at the start because because of his name and because if he's put his name to it, there must be something that's okay about that place.
• 4:22
  Michael: Interestingly, I and I agree totally.
• 4:24
  Michael: I think that trust element is is massive, but interestingly, when I first came across you, you didn't really mention it on the website.
• 4:31
  Michael: Like most people would would push that really hard.
• 4:33
  Michael: You know, you put Jamie George's pictures up there, you talk about um high-end performance physiotherapy, and you you know, you didn't do that.
• 4:42
  Michael: And and was that a conscious decision, or was that just you didn't do it?
• 4:47
  SPEAKER_00: Yeah, yeah, we didn't do that much, and that was conscious, and the reason was was because um if we wanted to grow it and scale it, which was always the kind of ambition to do so, um Jamie, it was too it was too niche to build everything around Jamie and him the person.
• 5:04
  SPEAKER_00: There was too much, there's risk associated to that, obviously.
• 5:07
  SPEAKER_00: Like he's a sports person, I could get could get injured or you know, get red carded doing something stupid, and all of a sudden if the whole brand's built around him, that's quite a you know a risk to take.
• 5:16
  SPEAKER_00: The other side was very intentional.
• 5:17
  SPEAKER_00: We kind of leveraged him in the first few months to kind of create trust, and then we leveraged ourselves.
• 5:23
  SPEAKER_00: And the reason we were trying to do that was trying to create a brand that people wanted to come and see us for us, and it was socially proofed by Jamie being involved rather than the other way around.
• 5:32
  Michael: Didn't we I remember first speaking to you a long time ago?
• 5:35
  Michael: And and I think at the time you were coming up with an idea of doing some kind of strength and conditioning class or something led by Jamie or or something.
• 5:46
  Michael: Did that ever work out?
• 5:47
  Michael: Is that something you ever ended up doing?
• 5:49
  SPEAKER_00: Yeah, we did.
• 5:49
  SPEAKER_00: We did it as a kind of like a few niche one-off events to see what would happen.
• 5:54
  SPEAKER_00: Unsurprisingly, they were they were um popular, but also unsurprisingly they were like popular with people that turn up in full Saracen's kit with like autograph books and stuff.
• 6:02
  SPEAKER_00: So um they weren't um they weren't probably like a sustainable model.
• 6:08
  SPEAKER_00: Um I'm pretty sure if I asked him right now to do a strength and conditioning class, our patients he'd say no as well.
• 6:11
  SPEAKER_00: So it probably wasn't a very long-term for you, but helpful at the start, maybe.
• 6:15
  Michael: Um something I want to explore is you you are very different from your average clinic owner.
• 6:22
  Michael: And I and I say that with a lot of love because I love clinic owners, but they are not the most commercial people, they are not always the most um people that are really interested in the marketing side of things, and certainly not in data.
• 6:35
  Michael: Uh, and I know from working with you that the data is is incredibly um important to you.
• 6:41
  Michael: And so, first of all, what was it like moving from physio to physio business owner?
• 6:49
  Michael: Um, because you did make mistakes, okay.
• 6:51
  Michael: You spent way too much money on silly stuff.
• 6:53
  Michael: But what was that like?
• 6:54
  Michael: And do you have any help or was this all self-taught?
• 6:56
  Michael: Or where did where did all of that come from?
• 6:59
  SPEAKER_00: Yeah, I mean, I was super lucky.
• 7:01
  SPEAKER_00: I grew up in a I suppose an entrepreneurial family.
• 7:04
  SPEAKER_00: My uh my old man, yeah, kind of built and ran businesses, so I've kind of always been around it until I set my own business up.
• 7:12
  SPEAKER_00: I'd like adamantly didn't want to do anything that he did.
• 7:14
  SPEAKER_00: I used to hate everything about what he did.
• 7:17
  SPEAKER_00: Um, I found it boring, and then all of a sudden I find myself now running a business doing the same thing.
• 7:21
  SPEAKER_00: So what was his what was his financial recruitment, completely, completely separate industry.
• 7:26
  SPEAKER_00: So like I think I was just around people that like ask curious questions and didn't necessarily accept that this is how you have to do it because everyone else does it like this.
• 7:34
  SPEAKER_00: So a lot of it just came from having a bit of a kind of an open mind to how things work.
• 7:38
  SPEAKER_00: And I suppose maybe one of my strengths probably got also got me in trouble a few times as a business owner, is like actually not really ever just being like, what like not settling for this idea of like why just because everyone's done it like that forever, why like does that mean you have to do it like that?
• 7:53
  SPEAKER_00: There does it didn't have to do it like that.
• 7:54
  SPEAKER_00: Um, and so yeah, it's kind of bad.
• 7:56
  SPEAKER_00: I mean, in how how it happened, or like how did I make the transition?
• 8:00
  SPEAKER_00: Um I think when I first started Carter and George, I really genuinely thought I would be a physio forever and would practice with patients forever, and I would just hire a team that could help and I'd still be seeing 50 people a week forever, and I loved it.
• 8:15
  SPEAKER_00: Um as we've grown, I've found I've been introduced to interesting people, I've had conversations that uh you know challenge how I think, and then uh like anything, like I just became more and more interested in how to actually grow it.
• 8:26
  SPEAKER_00: There's a there's a whole side I'm sure we'll get into around kind of like this a scale or a growth side, which a kind of a deep passion at mine, which is around people and good people and giving people opportunity that became more apparent if it became a business owner, I could I could help more people in that way.
• 8:41
  SPEAKER_00: So yeah, there's a there's a few things.
• 8:43
  Michael: But in terms of um the the day training analytics, I I'm sure that wasn't something that you had early on as a physio.
• 8:51
  Michael: So how did that how did that all happen?
• 8:54
  SPEAKER_00: Yeah, it's a good question.
• 8:56
  SPEAKER_00: I think I think like nowadays, like practice software helps, like you get you get a lot of data if you want to look at it, and um a lot of it was well.
• 9:04
  Michael: Well, let me start with you there.
• 9:05
  Michael: There's a big difference between having access to data and acting on that data.
• 9:09
  Michael: So most clinics have got Google Analytics, right?
• 9:12
  Michael: And we talked about this before.
• 9:13
  Michael: You've got everyone's got Google Analytics.
• 9:15
  Michael: I don't know very many that actually will look at that and and then make decisions upon it, or they'll look at their their churn rate or the turnover rate or whatever it might be, or you know, they're not making decisions on that.
• 9:27
  Michael: I I I imagine you're looking at all sorts of things, occupancy and and and you are acting on all of those things.
• 9:32
  Michael: How did that happen?
• 9:33
  Michael: Because that that can't be just a magical, oh, I'm gonna do this, or maybe it was.
• 9:38
  SPEAKER_00: No, I think um early on, like I've there was a I did look at that looking at data and kind of like challenging why certain things like I don't know, for example, client visit average or you know uh session average, whatever they call it on some of the platforms, like looking at that, I was like, it's quite weird, that's a bit higher or a bit lower than I thought.
• 9:54
  SPEAKER_00: And then you'd be like, that's super interesting.
• 9:56
  SPEAKER_00: If you break that down by like shoulder versus back, that's also really interesting.
• 9:59
  SPEAKER_00: Why is it much higher for that condition versus that condition?
• 10:02
  SPEAKER_00: Then the real magic happened when you start pinning to be like, okay, that number is that, but what behaviors actually drive that number?
• 10:09
  SPEAKER_00: And then you can be like, okay, so if I do this differently, that number actually goes up.
• 10:13
  SPEAKER_00: Now, what's interesting is in most cases, which is why I love the industry, is that that number going up, let's say in a session average, for example, is usually directly correlated to better clinical outcomes and better patient care.
• 10:26
  SPEAKER_00: So like you're not selling something that's, you know, that is immoral.
• 10:30
  SPEAKER_00: You're selling like the better care you get, the better those numbers tend to look anyway.
• 10:33
  SPEAKER_00: And then I I think I found it super interesting that you could just find a number, find the behaviors that drove a number, change how you how you interacted or behaved, both from like a clin a care delivery perspective, but also, yeah, from marketing and you know, we look at phrases on websites or you look at, you know, there's all sorts of stuff you can jump into.
• 10:52
  SPEAKER_00: But like I I found it interesting you could correlate data to behaviors, and and I think particularly clinically, behaviors are what people are actually interested in.
• 10:58
  Michael: Yeah, and I think it's interesting because it's kind of like rehab in some ways, right?
• 11:03
  Michael: When you when you're working with a patient, test, retest, you see what's working, what's not, but that doesn't often translate to a clinic owner when it comes to business.
• 11:10
  Michael: You know, most clinic owners, if you ask them what their net profit is, they they they don't know.
• 11:14
  Michael: Um if I ask you what yours is, you know it today and probably what it's gonna be tomorrow and what it's gonna be in six months.
• 11:20
  Michael: And so I think it's super interesting.
• 11:21
  Michael: I think that's really allowed you as well to do what you've done because without that kind of control, you I don't think you can ever scale a business properly.
• 11:29
  Michael: Um, you might be able to if you're very, very lucky, but generally you've got to have a good control over those numbers.
• 11:34
  Michael: You've got to have a good accountant, um, which I always say to people who who pay their accountant 500 quid a year and expect miracles, like, no, you need someone who's gonna help you do all the, you know, really understand the business and and so on.
• 11:47
  Michael: I I want to touch on uh it's it's what everyone's talking about at the moment, which is transitioning from clinician into business owner.
• 11:56
  Michael: I think often it's a terrible idea, um particular stage of business that they're at.
• 12:00
  Michael: I think uh there are so many gurus out there pushing everyone must be a business business owner and focus on the business rather than treating patients.
• 12:08
  Michael: Of course, they forget that if they're doing 70% of the turnover, you can't just hire two new physios and hope that it fucking works.
• 12:14
  Michael: It's ridiculous.
• 12:17
  Michael: So um, and I spoke to someone else about this actually, and and and I I don't think it's as simple as one day waking up saying, I'm gonna be a business owner now.
• 12:25
  Michael: What is that transition like?
• 12:27
  Michael: What did you have to do?
• 12:28
  Michael: How long did it take?
• 12:30
  Michael: Um, and and one other thing I want to put um sort of put in there is it's very easy for a company like ours to go, oh, I'm gonna focus on something else, because we've got the margins just to hire someone.
• 12:39
  Michael: But clinics do not have the margins to put a leadership place in uh leadership team in place or two practice managers or whatever the case may be.
• 12:46
  Michael: So, how did you do it?
• 12:48
  Michael: What was the time frame?
• 12:49
  Michael: What advice would you give people who do want to go from clinician to business owner?
• 12:54
  SPEAKER_00: Yeah, um, there's a lot there.
• 12:55
  SPEAKER_00: I mean, I'd start with like the a very, very fundamental question.
• 12:58
  SPEAKER_00: That is like, what is the point in like what you actually want to do?
• 13:03
  SPEAKER_00: Because if you love being a physio and growing a business is not what you want to do, then like you don't have to you don't have to do that.
• 13:10
  SPEAKER_00: You know, you really don't.
• 13:12
  SPEAKER_00: Like it was a passion of mine for many reasons that we can touch on about why I wanted to, but that was an active choice I made.
• 13:18
  SPEAKER_00: It wasn't because I randomly grew because I don't know, we were busy.
• 13:21
  SPEAKER_00: Like I actively chose to do that, and there's a lot of pressure around growth and scale and all this stuff that like people talk about.
• 13:28
  SPEAKER_00: But like if you're a physio and you've owned your own practice and you've got three clinicians and your margins are fairly decent at one site, and you don't want to grow a business because you enjoy your lifestyle, then don't.
• 13:40
  SPEAKER_00: You don't have to.
• 13:41
  SPEAKER_00: Like it's really okay not to.
• 13:42
  SPEAKER_00: Like, and I think that's the thing.
• 13:43
  SPEAKER_00: Like, people like between one clinic and we put 17 sites now, right?
• 13:49
  SPEAKER_00: Between one and 10, it was worse.
• 13:52
  SPEAKER_00: Because you have to go through pain because there's a load of infrastructure problems you don't have the problem with when you've only got one site.
• 13:59
  SPEAKER_00: There's a lot of control issues you no longer have um you know when you've got one site or just a couple of physios.
• 14:04
  SPEAKER_00: So like there is a choice, an active choice you have to make to do it.
• 14:07
  SPEAKER_00: Um, so that's the first thing I'd say as an advice.
• 14:10
  SPEAKER_00: Actually look about what you're, you know, what you're actually trying to achieve here.
• 14:14
  SPEAKER_00: The second thing, really, for me, like, how did I change?
• 14:16
  SPEAKER_00: Well, I was fully clinical up until COVID.
• 14:21
  SPEAKER_00: When we had COVID, I kind of was at a point where, you know, like a lot of practice owners, that was like hey, the worst time ever.
• 14:29
  SPEAKER_00: But it did have a force change where we're already kind of at capacity for myself.
• 14:32
  SPEAKER_00: So I basically decided that if we were gonna grow and we we wanted to grow, um, and I can kind of talk in a sec, I'm sure you'll ask about kind of some of our growth that did start around that time.
• 14:41
  SPEAKER_00: I chose to take a day off per week in terms of from the clinical side and um manage the business and have enough time to actually think about strategy and actually think about the business and look at some of those numbers to actually understand the model a bit better.
• 14:55
  SPEAKER_00: Um, my clinicians at the time, I always remember one of them used to say to me every uh every Thursday, used to work non-clinically on a Wednesday, and every Thursday she said to me, Do you enjoy your day off?
• 15:05
  SPEAKER_00: And um, it was kind of like a fundamental, interesting thing to me because I reflect on it, being like, She has no idea about actually like the difference between being a clinician and running a business here, but whatever.
• 15:14
  SPEAKER_00: Um, so yeah, I took one day there.
• 15:17
  SPEAKER_00: Um, I then like very actively had to like yeah, there's no there's no like hiding the fact there are risks associated with any of this stuff.
• 15:25
  SPEAKER_00: So like there's very active like drop down to two days, non-clinical, very defined about how that looked.
• 15:31
  SPEAKER_00: And then there was one day where I just decided I set a date in mind about what I was gonna do, and I just said, right, from that day on I'm not clinical anymore.
• 15:38
  SPEAKER_00: And that's a risk, but yeah, there is.
• 15:42
  Michael: But you were already full, you're at capacity, and and probably it was quite easy to move patients and revenue across to someone else without losing too much money, right?
• 15:50
  Michael: And I think also with COVID, there was probably more of an opportunity.
• 15:55
  Michael: I I imagine if it wasn't COVID, uh you wouldn't have done it in quite the same way.
• 16:00
  SPEAKER_00: Yeah, I mean, there was an opportunity that was presented to us uh just before COVID to grow uh as a business in terms of that was our first acquisition that we did in the end.
• 16:09
  SPEAKER_00: Um, and that was a I suppose an opportunity that that kind of presented itself where I thought if I actually do that, there's no possible way I can be in a clinic room 40 hours a week.
• 16:19
  SPEAKER_00: I I have to I have to have a day where I go to another site or I talk to other people or I have to trust people to deliver a job that I'm no longer delivering.
• 16:26
  SPEAKER_00: And if I'm gonna do that, I have to have enough time to speak to them to train them.
• 16:29
  SPEAKER_00: And then so there was like a natural kind of like, hang on, all of a sudden that's like an 8, 10, 12, 16-hour job that's not clinical.
• 16:37
  SPEAKER_00: Then you start having this realization where you're like, actually, like without being too cliche, like I can actually help more people if we grow, both as patients, but also as um as a business owner.
• 16:47
  SPEAKER_00: I had lots of really great people that were developing their careers.
• 16:50
  SPEAKER_00: I didn't want to lose them.
• 16:50
  SPEAKER_00: So there was a like a if I want to keep these people, what do they need from me in order to stay?
• 16:55
  SPEAKER_00: And a lot of that's around career growth, but also kind of opportunities and development and everything else.
• 17:00
  SPEAKER_00: And I couldn't do that inside a room.
• 17:02
  Michael: Did you get any external help in terms of how to run a business or how to do something?
• 17:09
  Michael: So for me, for example, I pirated it for an awful long time, and there came a point where I just I was like, I'm underwater here, and I hired someone to come in and kind of say, Michael, this stuff's really bad, we'll fix this, and so on.
• 17:22
  Michael: Did you get anybody at all?
• 17:23
  SPEAKER_00: No, actually I uh no, I didn't.
• 17:25
  SPEAKER_00: I learned as I went.
• 17:26
  SPEAKER_00: Um I have in the last couple of years had a bit more.
• 17:29
  SPEAKER_00: I've um I I was on a kind of an executive MBA with Goldman Sachs and Sci Business School at Oxford doing a um doing a program there, which actually did help a lot, if nothing else, to teach me that I kind of actually did know what I was talking about.
• 17:42
  SPEAKER_00: But um, but yeah, no no formal training.
• 17:45
  Michael: You know what's interesting is the um the the the MBA, the first one you mentioned, where was that?
• 17:51
  SPEAKER_00: Uh yeah, it's like well, it's it's it's kind of a joint bench between Goldman Sachs and um and uh Syed.
• 17:58
  Michael: So I've had a lot of clients who have been on that and they come out of it different people, and just honestly, there's there's nothing more than pleasure working with those people once they've come out of it because everything is so much easier to explain.
• 18:11
  Michael: They're willing to look at the data more and the numbers, they stop being scared about spending money, for example.
• 18:17
  Michael: Um, they they understand ROI, and it's a I I would recommend it to anyone because from what I've seen, everyone that's been on it has come out and and run a far better business.
• 18:27
  SPEAKER_00: Yeah, yeah, they would.
• 18:28
  SPEAKER_00: Um, and there are clients of yours, I know I know some of your clients have been on it, and there are people that would benefit from it.
• 18:34
  SPEAKER_00: So actually, while we're on that, if anyone does ever want to ask questions about it, I'm a big fan of that program, so feel free to reach out, happy to happy to answer any questions.
• 18:42
  Michael: Definitely.
• 18:42
  Michael: I I as I say, it every single person has come back and I start speaking to them, and they're like, they start using words that they've never used before, and um and life becomes much, much easier, and you see their business grow.
• 18:54
  Michael: It's it's really fascinating.
• 18:55
  Michael: So yeah, interestingly, you didn't get any help.
• 18:58
  Michael: Uh I I guess uh as I did as well, when we got really big, you kind of do need a little bit more help, um, whether that's financially or whether you're paying your accountant more to do more growth stuff and modeling and so on.
• 19:09
  Michael: Um, but I think it's a good lesson because I don't think you have to go and spend you know two grand a month on some um physiogrowth expert to help you scale your clinic.
• 19:20
  Michael: I don't think any of this is all is all that different.
• 19:23
  SPEAKER_00: Can I can I just make one comment on this, right?
• 19:26
  SPEAKER_00: Without being too controversial, I think um there are people that really know what they're doing.
• 19:31
  SPEAKER_00: Um, but I'm a big believer, like if you're gonna listen to someone, make sure that they've done it.
• 19:35
  SPEAKER_00: Um and there are other lot of people that haven't who are happy to talk about how to do it, but actually haven't done it themselves.
• 19:42
  SPEAKER_00: Um I won't mention any names because one of them uh I did very, very, very briefly, I suppose for about two weeks, three weeks, engage years ago.
• 19:52
  SPEAKER_00: Um and I've subsequently found out that did they actually was a complete fraud anyway, and they'd never even run a physio practice whatsoever, just run a marketing campaign.
• 20:00
  SPEAKER_00: Company for business owners to try and sell them, you know, advice.
• 20:02
  SPEAKER_00: So look, I think that side of it, you're never going to learn more than by doing, right?
• 20:06
  SPEAKER_00: So just you know, be sensible and have frameworks about how you do it, but crack on and you know back yourself.
• 20:12
  Michael: I I think that's really good advice.
• 20:13
  Michael: Something I always say to people, and I do it myself.
• 20:15
  Michael: If I hire a builder to do an extension, I look at their company's house, right?
• 20:19
  Michael: I I want to know what's going on.
• 20:21
  Michael: And I say to people, if you're gonna hire someone, go look at their company's house.
• 20:25
  Michael: And if that person owns a clinic and uh it has seven grand in the bank and two grand of assets and three employees, is that what you want your business to look like in five years' time?
• 20:38
  Michael: Because if not, don't hire that person.
• 20:40
  Michael: It's it's really important.
• 20:42
  Michael: When when I got advice, I found someone who had sold two agencies, the first one for 25 million, the second one for 17 million.
• 20:48
  Michael: I was like, all right, guy knows what he's doing, he's been there and he's done that.
• 20:51
  Michael: But I think there is too there are too many people in this industry who are running around promising uh you know every dream possible, but they've never actually run a successful clinic.
• 21:00
  Michael: And and when you look at the company's house, their their coaching numbers are way in excess of anything they've achieved as a physician.
• 21:07
  SPEAKER_00: Yeah, it's hard, it's hard.
• 21:11
  SPEAKER_00: We work in a people-heavy industry that like it isn't easy to grow a business.
• 21:16
  SPEAKER_00: So that's why not many people have done it in our sector because you're relying on a lot of people pulling the right way, right?
• 21:21
  SPEAKER_00: And so for someone that hasn't done it, teaching people how to scale, yeah, in theory it's pretty easy to have to scale.
• 21:27
  SPEAKER_00: Like the actual execution of that is a different story.
• 21:30
  Michael: What I will say though is I I do want to uh point out that there are those people who need help mentally, and I don't think you necessarily have to have run the best business in the world ever.
• 21:42
  Michael: Um, I think there are many people out there who need a little bit of um mental support.
• 21:47
  Michael: It's lonely at the top, right?
• 21:48
  Michael: It's lonely in this industry, it's very isolating, and actually having a coach, as long as they're in charge of the earth and make you do stupid things, I think having someone there that's gonna listen to you and give you a bit of advice, I think that can be incredibly valuable.
• 22:01
  Michael: So I wouldn't want to put people off doing that.
• 22:02
  SPEAKER_00: No, that that's actually 100% you know, very happy to kind of you know go there a bit.
• 22:10
  SPEAKER_00: But like I believe fully in that.
• 22:12
  SPEAKER_00: I've I think it's really important if you're gonna be you have to have someone that's got no vested interest in your business, it's not your family members or friends, because they're gonna they're gonna say stuff to make you feel good, and that's not always what you need.
• 22:23
  SPEAKER_00: Um, but you do need someone to yeah, you you just need someone so that you yeah, I'm I still speak to someone myself who I can talk to who's um got no vested interest in my life, but it's the only hour and a half or whatever every six, eight weeks that I speak to her that I get to actually talk about me and our business and things that are worrying me and all that stuff.
• 22:41
  SPEAKER_00: And I don't know 100% I think that is something that every business owner should actually do.
• 22:46
  SPEAKER_00: I think it's probably the best investment I've ever made in myself.
• 22:48
  Michael: Yeah, just don't spend a thousand pounds a month on uh a specialist blueprint mindset program.
• 22:54
  SPEAKER_00: That that sort of thing is different.
• 22:55
  SPEAKER_00: That's like, oh, you this is exactly how to grow a business.
• 22:57
  SPEAKER_00: That's very different to having someone who can be like, tell me what's going on.
• 23:00
  SPEAKER_00: Yeah, no, exactly.
• 23:02
  Michael: What's you worried?
• 23:02
  Michael: Because it's probably not as big as you think it is.
• 23:04
  Michael: Yeah.
• 23:05
  Michael: I remember when we got our first client that churned, my week was ruined, the business was falling over, we were gonna everything was ending, and I just needed someone to give me a slap and say, Stop being a dick, and it's fine.
• 23:18
  Michael: You got 200 others, you're all right.
• 23:20
  Michael: And you know, it's little things like that that can really help.
• 23:23
  Michael: And uh yeah, it does have a bit of uh nouse in the industry, not in the industry, but certainly running a business as well.
• 23:30
  Michael: Um, yeah, it's uh yeah, really interesting that you did have that.
• 23:33
  Michael: Let's talk about so you've got your your clinic, it's it's hugely successful, it's making lots of money, and then you think, you know what, I'm gonna use it.
• 23:41
  Michael: I want to be Donald Trump and I want to try to expand and I want to grow and and so on.
• 23:47
  Michael: What made you do that?
• 23:48
  Michael: Was it was it a a money thing purely?
• 23:52
  Michael: Was it helping more patients?
• 23:53
  Michael: Was it a combination of the two?
• 23:54
  Michael: Or was it just your entrepreneurial brain going, I must grow?
• 24:00
  SPEAKER_00: A bit of all of the above.
• 24:01
  SPEAKER_00: Um I can tell you, I don't know if it's worth or interesting to talk through kind of about how it how it came to be that we did that because you can kind of see it as a bit of organic and a bit of everything.
• 24:11
  SPEAKER_00: But um the first, so we had one clinic um in Hertfordshire.
• 24:15
  SPEAKER_00: That was our yeah, our baby, our first one.
• 24:17
  SPEAKER_00: That's the one I worked clinically at literally the day before COVID, like literally the day before COVID, I had a patient who was a physio, respiratory physio, and um we were talking about, you know, hey, I was saying you're yeah, suddenly, suddenly life's looking pretty decent for you because you're about to just be absolutely inundated with work while everyone else has to stop.
• 24:36
  SPEAKER_00: Whereas we're gonna have to give the keys back.
• 24:37
  SPEAKER_00: And she was like, Oh, yeah, I've got a friend down the road half an hour away, she's got practice, I think she is literally gonna get the keys back.
• 24:42
  SPEAKER_00: And I thought it's such a shame.
• 24:43
  SPEAKER_00: I said, We're like literally just this is gonna be our best ever month, but then we're gonna have to shut.
• 24:47
  SPEAKER_00: Yeah, it's a shame to like shut it down.
• 24:49
  SPEAKER_00: I said if I wasn't shutting down for COVID, I'd have a chat to her because yeah, at some point I'm gonna have to grow this thing because I've got two great physios that work here that need yeah, development and progression.
• 24:58
  SPEAKER_00: And one of the biggest blockers in the industry, in my opinion, is that if the person who owns it, operates it, and doesn't scale, like don't be surprised when people leave because like there is a kind of a ceiling to their career unless they get an opportunity somewhere else.
• 25:10
  SPEAKER_00: So I was like, I don't want to leave, I mean to grow.
• 25:13
  SPEAKER_00: So anyway, randomly called this person up and said, like, hi, um, I don't know how to do this, you probably don't know how to do this, but like I've heard you're gonna but sell the yeah, it's gonna shut the business down.
• 25:23
  SPEAKER_00: I'd be interested in buying it instead of doing that.
• 25:25
  SPEAKER_00: And she said, Yeah, well, yeah, I'm interested in that too, because it's either I shut it down or you know, or I sell it.
• 25:32
  SPEAKER_00: And I said, Well, how much do you want for it?
• 25:34
  SPEAKER_00: And it was literally like as blasé as that.
• 25:36
  SPEAKER_00: She gave me a number, I was like, that actually sounds fairly reasonable.
• 25:39
  SPEAKER_00: I don't really, I've never seen her account or anything, it's good, no idea.
• 25:42
  SPEAKER_00: Um, and so we went through this like very blind leading the blind process where we got lawyers involved and got absolutely rinse deck because I didn't know what's talking about time, and then basically kind of ended up buying this business in right in the middle of COVID, as in like we completed on the 1st of October 2020.
• 25:57
  SPEAKER_00: Um, so then I had the second business, then I hired my now operations director, Chris, who's unbelievable, and got Chris in to run that practice for me.
• 26:06
  SPEAKER_00: That's when I was like, okay, if I'm gonna mentor Chris to run that practice, how I want to run it, I do kind of need to have a day off a week.
• 26:13
  Michael: So let me just step in there.
• 26:15
  Michael: So you buy the clinic, which it doesn't matter what the number is, but it's a number, and then you hire an operations director.
• 26:21
  Michael: How are you paying for that?
• 26:23
  SPEAKER_00: Well, that was no, sorry.
• 26:24
  SPEAKER_00: So he's now operations director because he understands the model better than I do.
• 26:27
  SPEAKER_00: But he actually is a he's a physio, his background was in sport, decent pedigree, good bloke, kind of hired him as a I suppose what I would now coin in our businesses like a lead physio of that practice.
• 26:36
  SPEAKER_00: Um you carried on as a physio, he grew that, you know, alongside me.
• 26:40
  SPEAKER_00: We kind of grew that practice, it worked really well.
• 26:42
  SPEAKER_00: Now we had like five or six physios that needed progression, and we were at capacity at both sites.
• 26:46
  SPEAKER_00: Uh, about two years after that, we decided to open a third practice.
• 26:49
  SPEAKER_00: That one was purely out of like we're gonna lose a couple of good people here.
• 26:52
  SPEAKER_00: It's organic.
• 26:53
  SPEAKER_00: We opened that one from scratch.
• 26:55
  SPEAKER_00: Um, got to three sites, did okay there, probably wasn't as quick as I wanted it, but it was fine.
• 27:01
  SPEAKER_00: And then um realized that three practices actually there was no point because we it was more expensive to run it and the margins were less because you needed a bit, then I did have to bring in operations manager and like you've got people in accounts, and you've got like a lot of non-billing overheads like receptionists, all this sort of stuff.
• 27:18
  SPEAKER_00: So then I was like, well, we either need to get smaller again or get bigger again, but I have no idea how to get bigger again properly.
• 27:26
  SPEAKER_00: So then what we did was I spoke to a uh friend of mine who has scaled an IT comms business completely different sector, obviously, but asked him how he did it, and he said, I'd go and hire a good finance director.
• 27:38
  SPEAKER_00: And I was like, okay, I'd have no idea what a finance director is gonna do, but fine.
• 27:42
  SPEAKER_00: So I ended up exploring that idea.
• 27:44
  SPEAKER_00: Spoke to Jamie, we were like, if we're gonna do it, we need to do it properly.
• 27:47
  SPEAKER_00: So um I spoke to a finance director, I interviewed a few different people, um, met our current finance director, Andrew, uh, who's uh a charter accountant, he kind of modelled out how it would look, and basically it was pretty obvious that we needed to get to like 10 before it made sense.
• 28:05
  SPEAKER_00: So a lot of the steep growth was because actually if you're gonna grow it, you need to actually properly grow it rather than kind of um you know grow it slowly.
• 28:13
  SPEAKER_00: So then all of a sudden we found ourselves buying and scaling very quickly with like a decent infrastructure, um, got to 10.
• 28:20
  SPEAKER_00: And then it was a case of like now you've got a big problem.
• 28:23
  SPEAKER_00: Like my big passion really is around like good people that I want to create opportunity that they create.
• 28:28
  SPEAKER_00: The industry I don't think is brilliant at creating amazing opportunities for people to progress.
• 28:32
  SPEAKER_00: I think it's quite like jumpy, and you see that with star patrician rates across the sector.
• 28:37
  SPEAKER_00: Like you have like, you know, I'm a physio in this practice, I get I do it for two years, then that clinic over there is offering, I don't know, free lunch on a Friday, so I'm just gonna go and work over there now because whatever.
• 28:47
  SPEAKER_00: They do that for a year, go, oh hatch, it's a bit shit as well.
• 28:49
  SPEAKER_00: I'm gonna go work for that person because you'll pay for my acupuncture course or whatever.
• 28:52
  SPEAKER_00: So you they jump around for shit reasons.
• 28:54
  SPEAKER_00: So I was like, how can I get people to stay and actually properly engage people in an actual proper career?
• 28:58
  SPEAKER_00: And a lot of that is, you know, physios really, if you I've spent a lot of time doing this.
• 29:02
  SPEAKER_00: If you really ask them like what motivates them or what do they actually want out of their career, they can say bonuses and money and stuff, but it's actually it's actually secondary.
• 29:09
  SPEAKER_00: The thing they want is to is to feel like they're being valued as a clinician, that they're getting decent proper career development, and they've actually feel like they're contributing something.
• 29:17
  SPEAKER_00: And so a lot of the growth came from suddenly, as we got bigger, I had more people that needed that, and then you keep growing, and then you kind of get addicted to it, and then you find it fun, and then like this kind of carries on.
• 29:26
  SPEAKER_00: So there was a bit of a everything to it, really.
• 29:29
  Michael: There's a couple of really interesting points there.
• 29:31
  Michael: First is the growth came from a need at both times.
• 29:35
  Michael: First, the need was I want to keep my best physios and I want to help grow talent, and then the second one was the need of reducing cost base or centralizing costs a bit more and being able to scale and making things cheaper.
• 29:46
  Michael: The it's a really interesting thing that you the point that you made about um physios and and nutrition and and what they really want.
• 29:54
  Michael: Because I think most clinic owners they are always told, I want more money, because that's the only way they know the physios know how to kind of communicate what they what they think they want.
• 30:06
  Michael: And it rarely is.
• 30:08
  Michael: I always say this, it it rarely is.
• 30:10
  Michael: It's normally about other things.
• 30:11
  Michael: And we from the survey, I just pulled up the data quickly.
• 30:14
  Michael: From the survey, we found that um the the churn amongst um PAYE employees is almost 14%, um, and actually contractors is less uh for obvious reasons, but quite a high churn rate.
• 30:28
  Michael: Um and and during for multidisciplinary, it's almost 19-20%.
• 30:32
  Michael: And that's something that that really surprises me because I think a lot of clinics forget the cultural part the cultural piece, making clinic a joy to work for, some of the non-financial benefit stuff that you you can do with people, whether that's training, will ever girls.
• 30:46
  Michael: But it's exactly what you spoke about, it's that progression.
• 30:49
  Michael: Um, because otherwise they will leave after two years, maybe three at most.
• 30:54
  Michael: So it's really interesting that that you have that.
• 30:56
  Michael: Do you know what your rough rate is?
• 30:58
  Michael: Your rough channel rate of stuff will turn out.
• 31:00
  SPEAKER_00: Of people that there's two there's two figures there that we quote.
• 31:03
  SPEAKER_00: If you it our total proper actual attrition rate across the whole company is about 17%, but that is inclusive of 14 acquisitions in or 13 acquisitions in 18 months.
• 31:14
  SPEAKER_00: If you input in terms of including people that we have actually hired ourselves, our attrition rate's about 5%.
• 31:19
  SPEAKER_00: That's amazing.
• 31:20
  Michael: Yeah but that's where it should be as well.
• 31:22
  Michael: I think that's where most things should be.
• 31:23
  Michael: And and the 17%, uh, I'm not I'm surprised it's not higher than that because you hire a lot of people.
• 31:28
  SPEAKER_00: Yeah, it's completely different.
• 31:29
  SPEAKER_00: Yeah, that's a different number.
• 31:30
  SPEAKER_00: Uh but no, I think yeah, it's it's you know, it's really about like I make a point of talking to all of our physios still, where it's like actually go and take them for coffee and talk to them for half an hour about like about them as people, like don't worry about work and talk about courses of like actually what actually motivates these people, and like you know, there's lots of psychology around, you know, keep asking the why until you get to the reason, all that sort of stuff.
• 31:54
  SPEAKER_00: But I actually like unless they've got a financial event in their life, like they've just bought a house or having kids or like something like that.
• 32:00
  SPEAKER_00: Generally, most of it's like I just want to feel like I'm actually a really good physio, or like I want to feel like I'm learning, or I feel like I'm contributing more in a different way.
• 32:08
  SPEAKER_00: I can think of two people, and like bear in mind we've got more than 50 physios.
• 32:12
  SPEAKER_00: I can think of two people that genuine genuinely is like I'm motivated by money at the moment because I've just bought a house or I've just yeah, have my second baby or something.
• 32:20
  Michael: Yeah.
• 32:20
  Michael: Well, it's interesting because we we also do a thing where sometimes it's not money people want, it's uh more holiday.
• 32:27
  Michael: In fact, when I recruit people, I always ask them, you could either have 50k and 15 days holiday, um, or let's say 50k and 30 days holiday or 100k and five days holiday.
• 32:39
  Michael: Which would you prefer?
• 32:40
  Michael: Now it's not it's a hypothetical, we don't actually do that.
• 32:42
  Michael: But it's interesting to see the different kinds of people that you get, those that are just not motivated by the money at all, but more in free time.
• 32:48
  Michael: So then you have to think about the work-life balance and and do they fit the business and so on.
• 32:52
  Michael: Um we tested this in real time, by the way.
• 32:55
  SPEAKER_00: Um, we we um I had a thought a couple of years ago, probably three years ago now.
• 32:59
  SPEAKER_00: I I found this idea of like staff benefits quite an a strange idea because it was so standard, it's like, oh, you get a medical insurance and you get a bonus and like I don't know, what whatever else.
• 33:10
  SPEAKER_00: I was like, it's so weird, isn't it?
• 33:11
  SPEAKER_00: Because I I hire people that are 21 and I also hire people who are 65, and they've got completely different interests in life, so why would they all want the same thing?
• 33:20
  SPEAKER_00: So I I initially set up this very manual and I cannot like it was a horrendous idea in terms of admin, but it did teach me something, which was I basically put a survey out to all of our staff, and I was like, right, if you could name and design your perfect staff benefits package, like feel free, fill your boots, do whatever, write down and send it to the survey anonymously, and I'll categorize them and see what what people are saying.
• 33:43
  SPEAKER_00: Now, other than like the stupid things, and sorry if some of my physios listen to this, like stupid things like a box at the freaking like Formula One or whatever, like you know, whatever, boat trip to Monaco for the Grand Prix, like other than that sort of stuff, most of it was like book vouchers, cinema tickets, like you know, tickets to rugby and arcade, sort of stuff like they want to, they some people did want a bonus, travel vouchers, clothing vouchers, like insert, like probably like 50 things.
• 34:08
  SPEAKER_00: So what I did was I assigned what how much it would cost us, roughly based on what the medical insurance is and like a bonus that we'd normally typically pay.
• 34:15
  SPEAKER_00: I assigned a point system to how much of these new benefit perks people wanted would be.
• 34:20
  SPEAKER_00: And I basically gave everyone a certain amount of points they could redeem on whatever they wanted.
• 34:24
  SPEAKER_00: Funnily enough, our staff benefit engagement went from like 10% to 95%, because actually gave people what they wanted.
• 34:30
  Michael: Amazing.
• 34:31
  Michael: I'm I'm gonna go and do that.
• 34:33
  Michael: Seriously, after this, I'm gonna go suggest that and that we do that because you're absolutely right.
• 34:37
  Michael: We already do a few little things, like we'll do a delivery Thursday, where if everyone's feeling a bit stressed or it's been a really good week, we'll everyone get a 20 quid delivery voucher.
• 34:45
  Michael: We also do bonuses of vouchers because for tax reasons, um, you can you can get some money off.
• 34:51
  Michael: We also do holidays.
• 34:52
  Michael: So uh last year we went to a Betha, next year we're going to Alicante, so we take the whole team to a big expensive villa, we'll do centre parks, and we know that people love that, and it's great to get people together and just get pissed and have some fun.
• 35:04
  SPEAKER_00: Physios don't really get spoiled, right?
• 35:05
  SPEAKER_00: I mean, most of your audience here will be, yeah, we'll be private side more than an HS side, but like I'm sure everyone listening knows that you go to like your Christmas party in HS, you get taken to the local curry house, and like your own is like, I'll get the first drink, but yeah, everyone covers their own sort of food stuff.
• 35:19
  SPEAKER_00: So I mean, I don't really be I don't really buy it.
• 35:22
  SPEAKER_00: Yeah, we've just done you have to do something mad, but like we just did an event on Friday um in London for our kind of South team, if you like, and yeah, 50 people turn up.
• 35:30
  SPEAKER_00: We have we just did pub quiz, we put food on and drinks on.
• 35:33
  SPEAKER_00: You can't spoil them, you know, make them feel special because like without them, you haven't really got anything.
• 35:37
  SPEAKER_00: So like you just look after your people really well.
• 35:39
  SPEAKER_00: And and essentially something one of the lessons actually, Jamie would you know Jamie would quote this a lot.
• 35:43
  SPEAKER_00: I think if you talk to Jamie about why the Saracens have such a strong team for such a long time and how did they retain players, he was he'd always say that when he first signed for Saracens, there was almost on the wall, it was like, if you look if you work unbelievably hard, I will look after you guys unbelievably well.
• 35:58
  SPEAKER_00: And we've kind of carried that a little bit into what we do.
• 36:00
  SPEAKER_00: Like we we do have high expectations and we do push our physios to be good, but I will look after them.
• 36:08
  Michael: And you know what, they they go to all for you.
• 36:10
  Michael: It's it's something I discovered quite early on was that if you treat people really well, then you can ask anything of them and they will invest in the business as much, maybe not quite as much as you do, but certainly more than they otherwise would.
• 36:22
  Michael: And you know, we'll I can't go into too many specifics, but if someone has a personal problem that costs a lot of money, tens of let's say£10,000, and it's a personal problem of some sort, whatever that might be, we'll give them money, we'll we'll look after them.
• 36:35
  Michael: Um, or if someone's boiler breaks and they can't afford to fix it, don't worry about it, just ask us, we'll we'll we'll look after it.
• 36:40
  Michael: Now I know lots of clinics can't have the money, just start throwing money around.
• 36:43
  Michael: It's not like it happens every day, but you find that when you look really look after people in that way, that you get so much back.
• 36:50
  Michael: And they do answer the phone at 8 p.m.
• 36:52
  Michael: when you've got a question for them, or they do come to work at 12 on a Friday, 12 a.m.
• 36:57
  Michael: on a Friday when there's an emergency, and they don't mind and they're happy to do it.
• 37:01
  SPEAKER_00: And no, that and it doesn't have to be expensive, you know, because like some of the stuff we're offering are like you know, you give someone a 200 quid voucher at the end of the year to spend at you know on their favorite shop, they're like buzzing because they don't really want medical insurance.
• 37:12
  SPEAKER_00: They're like 21, they'll just they want to go out by their mates, whatever.
• 37:15
  Michael: So it's a good point.
• 37:16
  Michael: That's a really good point because we do the standard vitality insurance, but uh and we pay 100% of it.
• 37:22
  Michael: So it's a good point.
• 37:22
  Michael: Maybe they all want to spend it differently.
• 37:24
  SPEAKER_00: There's a there's a really cool, there's a really cool website, and I don't it's like a this is like a plug.
• 37:28
  SPEAKER_00: I feel like a professional here that we don't there is no plug here whatsoever, but we use them now because that was not a scalable model.
• 37:33
  SPEAKER_00: I had like this mad spreadsheet where I had like 50 tabs and everyone was redeeming different stuff.
• 37:37
  SPEAKER_00: But we use a company out called HECA, H E K A.
• 37:40
  SPEAKER_00: They're a um they're an online platform which um allow you to load money into an account on a monthly basis, however much you want to, and your employees can redeem it for whatever they want.
• 37:50
  Michael: Oh, fantastic.
• 37:52
  Michael: We we have everyone on Monzo Teams and they get a certain amount of money, and we just get them to buy the vouchers because the vouchers also have to be under, I think for tax reasons, under 50 quid, I think, or 20.
• 38:02
  Michael: Something like that, yeah.
• 38:03
  SPEAKER_00: Um gets pretty good.
• 38:05
  SPEAKER_00: It's like you stick it in there, you can go, I don't know, people buy supplements with it, people do the gym memberships or whoop bands, cooking classes, you know, plants, anything, whatever.
• 38:14
  Michael: Right.
• 38:14
  Michael: I quite enjoyed seeing on Monzo, you see the account, like 50 quid vouchers coming out, and you're like, oh, you spent it on that, did you?
• 38:20
  Michael: Interesting.
• 38:22
  Michael: Love honey, okay.
• 38:23
  Michael: All right.
• 38:24
  Michael: Yeah, exactly.
• 38:24
  Michael: Yeah, yeah, yeah.
• 38:25
  Michael: No comment, no comment.
• 38:26
  Michael: No comment.
• 38:27
  Michael: Cool.
• 38:28
  Michael: Okay, so let's talk about um, I guess now part two, which is um you've got, you know, you've got your your your main clinic, you started growing, um, you've started building essentially a a bit of an empire.
• 38:41
  Michael: Let's let's call it that.
• 38:42
  Michael: Um, in terms of uh and this is more of an interesting thing to me, maybe not to the audience, but I'm really interested in and that's unit economics.
• 38:53
  Michael: So it's it's making sure that the one site isn't subsidizing the other.
• 38:58
  Michael: How are you how are you controlling that?
• 39:01
  SPEAKER_00: Yeah, it's not as it's not as easy as it might sound.
• 39:05
  SPEAKER_00: Um I suppose we have three phases that we categorize our clinics into.
• 39:10
  SPEAKER_00: We have kind of like our our kind of high performance clinics, we have our growing clinics, and we have our clinics that need sorting out.
• 39:16
  SPEAKER_00: Um and we just make sure that the blend between those those three phases, if you like, are um are sensible so that the top the top performing clinics we have a top heavy focus on making sure that they are actually um able to not bail out, but we yeah, we're not gonna run out of cash basically while we have too many clinics that are underperforming.
• 39:36
  Michael: Yeah.
• 39:36
  Michael: Okay.
• 39:37
  Michael: And and and top of which we I think we spoke at Therapy Expo and you said one of the biggest questions people always ask is how do you fund it?
• 39:44
  Michael: Um let's model that one.
• 39:45
  Michael: So how have you funded it?
• 39:46
  Michael: How have you funded everything?
• 39:48
  Michael: Because I believe there's no external funding at all.
• 39:50
  SPEAKER_00: Well, i i half half of that's true.
• 39:53
  SPEAKER_00: I mean, we are not backed by anyone in terms of we have got no investors, we've got no uh big fund sat behind us that keep throwing money at it.
• 39:59
  SPEAKER_00: Um I'm super I love it because it gives us complete flexibility to do things how we want to do it.
• 40:06
  SPEAKER_00: I don't have to answer to anyone.
• 40:07
  SPEAKER_00: If we want to change something or do something, I'll just do it.
• 40:10
  SPEAKER_00: Um and that is quite um freeing.
• 40:14
  SPEAKER_00: We took on a bit of debt last year from just from a lender, a bank, um, just to bridge a bit of finance, really, to because we did quite, yeah, for those that didn't uh don't know kind of who we are or anything, we we grew from three sites in January 2024 to uh 17 sites now in December 25.
• 40:33
  SPEAKER_00: So we we grew very quickly.
• 40:35
  SPEAKER_00: A lot of that's been through acquisition, which is fairly kind of capital heavy.
• 40:38
  SPEAKER_00: So we just borrowed a bit of cash just to make sure we didn't run out of money.
• 40:41
  Michael: Um, but that's a debt repayment that's you you said you've used the word bridge, and that always makes me really nervous.
• 40:48
  Michael: Um we're not talking a bridging loan, are we?
• 40:50
  SPEAKER_00: No, no, no, no.
• 40:51
  SPEAKER_00: No, this was like it's just a normal, a normal loan that anyone can access from their bank that they lend us some money that we repay back, we repay every month at a normal interest rate, and it was it was used to finance growth, I suppose, more than um to um sit in a back yeah, in the bank account to yeah, yeah, no make suffer expenses.
• 41:09
  Michael: I just know that there's a few bridging companies running around the MSK sector at the moment.
• 41:14
  Michael: Um don't get a bridging loan.
• 41:16
  Michael: Unless you've got the money in your pocket to pay off straight away, don't ever get a bridging loan.
• 41:20
  Michael: Because I know people in this industry have taken some and I don't want it to be like Reese from Carter and George, grew his business through.
• 41:26
  SPEAKER_00: Yeah, no, no, no, don't don't do that.
• 41:28
  SPEAKER_00: No, it was uh it was very much a normal loan that anyone anyone listening can ring their bank up and ask for some money.
• 41:33
  SPEAKER_00: That's one of those okay.
• 41:35
  Michael: So loan for growth, which is but again, no outside um money, which is really interesting because that's not the model, as far as I know, for anybody else.
• 41:43
  Michael: Uh uh, certainly at your scale and and your size anyway.
• 41:46
  Michael: Um out of interest, what do you think about um the the the state of the market and the amount of acquisitions going on, um, and particularly as well about the the multiples that are being thrown around right now, because some of them are absolutely insane.
• 42:03
  Michael: And and I think that's and tell me if you think I'm right.
• 42:07
  Michael: I think there are so few clinics out there that are actually really good and and and people really, really want that means there's there's such a a high amount of competition, which means those multiples automatically go up a little bit.
• 42:18
  Michael: I mean, I know one clinic turning over a hundred K, uh sorry, a hundred K eBit that was offered seven times as a multiple, which is mind-blowing.
• 42:26
  Michael: I know you you you want to.
• 42:28
  Michael: No, that was that wasn't that wasn't us.
• 42:29
  Michael: Um we were today.
• 42:31
  Michael: That's happening.
• 42:32
  Michael: And and and also just on that, again from the data from the practice barometer, which we'll release fully soon, um we found that only about 12% of clinics are looking to sell in the next three years, which is really interesting, um, and and not a surprise, actually, which means there's very few clinics that are really actively looking to sell, which again I think drives the the multiples up.
• 42:55
  Michael: So there's that question, and sorry, a follow-up question to that is do you think over time that the multiples of people are currently paying is sustainable?
• 43:03
  SPEAKER_00: Yeah, good question.
• 43:05
  SPEAKER_00: Um, that's a good question.
• 43:07
  SPEAKER_00: What I think about uh the amount of acquisitions going on, I think it's good.
• 43:11
  SPEAKER_00: Uh I think it shows that there's interest and strength in the sector.
• 43:14
  SPEAKER_00: Um people that have got no interest in the sector wouldn't be throwing money at a sector um unless they were going to get money back.
• 43:21
  SPEAKER_00: So um, you know, they don't do it because it's a nice thing to do.
• 43:24
  SPEAKER_00: Uh these companies that are investment companies that are coming in, and I actually don't really mind.
• 43:29
  SPEAKER_00: Like, I know a lot of people get freaked out by all these you know big guys with deep pockets coming in and entering the sector.
• 43:34
  SPEAKER_00: It happened in dental, it happened in veterinary, it's happened in accounting firms, it's currently happening on air conditioning companies.
• 43:41
  SPEAKER_00: Like it happens, right, in sectors that people can see a good return.
• 43:43
  SPEAKER_00: And the reason there's a good return is because there's a market demand.
• 43:46
  SPEAKER_00: So like I actually think these people are you know certainly much big, you know, much, much bigger, deeper pockets than uh than most people in the MSK sector.
• 43:54
  SPEAKER_00: They spend a lot of time analysing this stuff, and if those guys are coming in thinking it's a good idea, I think most of us can be feel comforted by that fact rather than threatened by it.
• 44:02
  Michael: I I agree on that.
• 44:03
  Michael: That's that's definitely true.
• 44:04
  Michael: What I would say on on the other side is that I think that there is certainly a threat to those more traditional clinics, those clinics not willing to innovate and not willing to change.
• 44:17
  Michael: They've got the same all stay that they had 10 years ago.
• 44:19
  Michael: And I think they're the ones that probably are a bit under threat, and I can understand why they're worried.
• 44:24
  SPEAKER_00: And then also sorry to sorry on that, but I maybe this is slightly controversial because the sector is a bit like that sometimes.
• 44:32
  SPEAKER_00: Like, yeah, I mean, newspapers were under threat when online you know newspapers turned up, and yeah, that's not because newspapers aren't bad, taxi drivers are under threat when Uber turned up, and you know, that's not because Uber's a bad idea.
• 44:45
  SPEAKER_00: So like I think sometimes there is a lack of innovation that people do as a strength, but actually, like you do kind of have to keep up.
• 44:52
  SPEAKER_00: The world's changing, you gotta you gotta change with it.
• 44:54
  Michael: I agreed, like tough shit.
• 44:56
  Michael: Like it you if you if you have to innovate, you have to innovate.
• 44:58
  Michael: And it's not like you know, you see this with AI now, and I'm gonna do something on this soon.
• 45:03
  Michael: These people who are just scared of it, well they said, Oh, I tried it, it didn't work.
• 45:07
  Michael: The AI works, your processes and your implementation didn't work.
• 45:10
  Michael: And if you're not you're not moving with the times, you're gonna be left behind.
• 45:14
  Michael: You won't be competitive, you won't be productive.
• 45:16
  Michael: You're still that person that says, I don't want to use a computer because it's more expensive than a pen and paper.
• 45:19
  Michael: Yeah, but you're thinking and forgetting about the productivity gain and the the time that's freed up by using the computer, right?
• 45:25
  Michael: Yeah, I don't think it's a valid excuse, but I just think that there are, I think those clinics are a little bit under threat.
• 45:31
  Michael: The other thing I've seen a lot of, uh, and definitely not you, is people from outside the industry coming in and going, hmm, they've got a 23% margin.
• 45:41
  Michael: We can do loads of cool stuff and we can make it 45% just by making changes.
• 45:46
  Michael: And then they base their multiple on that 45%.
• 45:49
  Michael: That ain't ever happening.
• 45:52
  Michael: Good luck to them.
• 45:53
  Michael: Exactly.
• 45:54
  Michael: Anyone in the now, of course, the clinic owners going, yeah, we can hit 45%, no problem.
• 45:58
  Michael: If you just weave your magic wand because you're oh so wonderful, they that you know, but there are a lot of clinics that are not obviously getting to those numbers.
• 46:07
  Michael: The multiples were were based on those numbers, and I think there's a a few of those um businesses that are struggling, and I know one in particular that is currently about to go into administration, or they may already have have done.
• 46:20
  SPEAKER_00: If or I would forewarn people on that stuff, if you do get some um some nice offers or people are interested in your businesses, um just just be very like cautious around like if particularly if you're gonna go down a you know the kind of you get towards the end game, you end up signing contracts, like just make sure you understand what happens if lofty targets and stuff don't get hit because these guys aren't stupid and they're they're not gonna give it to you for free.
• 46:48
  SPEAKER_00: Um they're gonna make you work for it.
• 46:49
  SPEAKER_00: If you think if you're selling them with some changes, you can hit 45% margin, then make sure you hit 45% because you'll end up giving you your money back.
• 46:56
  Michael: Um and the same goes the same go in the same way as you know, you've got a one-bed flat in in York and and Fox's comes along and says it's worth 600 grand.
• 47:05
  Michael: It's not, don't listen to them, be realistic with what you think you can get, because there's always a sting in the tail when someone starts offering those kind of higher numbers.
• 47:15
  SPEAKER_00: Yeah, and I think like just you know, I think if I'm allowed to like blow our trumpet for one second, I'd say like, in terms of acquisitions, like we take a pretty open book policy to it.
• 47:25
  SPEAKER_00: So when we're valuing businesses, we'll present all of the numbers that you've given us back in a spreadsheet about how we've worked it out.
• 47:31
  SPEAKER_00: We show what the average multiples are that we've done, we've shown what the average multiples are in the sector for the turnover size of that business, we'll show um exactly how we've come to their adjusted number, um, their adjusted dollar number, profit number.
• 47:43
  SPEAKER_00: And we put an offer that's in line with that.
• 47:46
  SPEAKER_00: And because of that transparency, we've never not executed on any deal that we've offered.
• 47:51
  SPEAKER_00: Um we we've never chipped people because they haven't got a cybersecurity certificate or they haven't got you know whatever else.
• 47:58
  SPEAKER_00: We sometimes the the nice big shiny number can be blinding, but actually um we've never not executed once we've reached kind of heads of terms stage.
• 48:09
  Michael: I I think it's also useful not only that you're in industry, but you've um completed on a lot of clinics because like you, um now I wasn't buying a business, but I was selling a business completely blind, never done it before, and was rinsed by about 150 grand for lawyers.
• 48:24
  Michael: Um an actual number.
• 48:26
  Michael: I don't want to be mean to them because they they really did help.
• 48:29
  Michael: Um but I think the the fact that you've done it multiple times, you know what it looks like.
• 48:34
  Michael: It's it's I'm sure everything is templated now.
• 48:37
  Michael: You've got your calculations, you've got your formulas, and there's no kind of guesswork anymore, right?
• 48:42
  Michael: Um they you you can be very upfront with a clinic and saying and say, look, this is where our numbers are, this is where you'll get to.
• 48:49
  Michael: We are not going outside of that, we're not gonna muck around here, we're not gonna negotiate and give you a lower price, then go up.
• 48:55
  Michael: We're not gonna do any of that bullshit.
• 48:56
  Michael: We're just gonna do this in a really open way.
• 48:59
  Michael: Um I think that yeah, I think so.
• 49:02
  Michael: I I remember chatting to Ben just not so long ago, and he I said, Did you have any reservations about buying H and D G?
• 49:07
  Michael: And he said, Yes, you.
• 49:08
  Michael: I was like, Christ, why?
• 49:09
  Michael: Well say the wrong thing on a fucking podcast.
• 49:11
  Michael: And he said, No, because every time you asked me a question, I told you the I told him the answer truthfully, and I even gave up more information.
• 49:19
  Michael: I was like, there might be this potential legal issue, legal issue, and and he said he gave it to his solicitor.
• 49:24
  Michael: So this is like, why is he even mentioning this?
• 49:27
  Michael: This is really strange that someone would offer all of this information.
• 49:31
  Michael: I just thought, you know what, best way is be really honest, open everything up, and don't hide stuff because it the warranties are gonna get anything.
• 49:38
  SPEAKER_00: I was gonna say I was I was gonna say there's a disclosure part for those that haven't bought a business, there'll be a disclosure part of the last thing you sign, which says if you haven't told me anything and I'll find out about it, I'm gonna come after you.
• 49:46
  SPEAKER_00: So um you're gonna have to get up to say anyway.
• 49:49
  SPEAKER_00: Exactly.
• 49:49
  Michael: But I I think it's it's a really it's a really nice thing to to have everything done really clearly, not have any sort of stumbling blocks and things coming up at the last minute where suddenly there's something to sign, and you know, I I I think that's really good.
• 50:04
  Michael: And and that's one of the reasons, and I don't want don't want to get into this too much, actually, if at all, but one of the reasons because there are advantages to brokers, there's there certainly are, but one of the reasons why selling direct to a business is often the best way.
• 50:18
  Michael: Um you take out a middleman that can often or or woman who can often cause quite a few issues um during a sale, um and and and sometimes give bad advice.
• 50:29
  Michael: And I know there's one major broker, I'm not talking about him necessarily.
• 50:33
  Michael: Um, I don't want to uh do anyone down or or criticize.
• 50:36
  Michael: It's it's just a general kind of thing.
• 50:38
  Michael: And I may have him on on the podcast as well.
• 50:40
  Michael: Um Josh, if anyone wants to know.
• 50:42
  Michael: But I I think it is it is one of those things where brokers can bring in a lot of problems.
• 50:46
  Michael: Sometimes you they are needed, right?
• 50:49
  Michael: I I think there are some people saying in the clinic who do need them.
• 50:52
  SPEAKER_00: Um yeah, and we and for transparency on that, we've we've um we've done both.
• 50:57
  SPEAKER_00: We've bought people direct, you know, direct buyers who've come to us directly.
• 51:01
  SPEAKER_00: Um we've also had, you know, I think we've done two or three through Josh, so maybe more than that, actually.
• 51:06
  SPEAKER_00: So um, and and actually we've done one to a different broker.
• 51:09
  SPEAKER_00: I think, yeah, they have their place for certain for sure.
• 51:11
  SPEAKER_00: Um, but it has to be right for the right business.
• 51:14
  Michael: It does, yeah.
• 51:15
  Michael: Um and I think most of the time you can get some pretty good information from a decent lawyer.
• 51:18
  Michael: Uh, out of interest, when you are, let's say I'm I'm a clinic owner, I'm Alison, for example, I want to see you in my clinic, you know I'm gonna need a lawyer, you know I'm gonna need an account, and and probably not the fella that's doing my accounts currently.
• 51:31
  Michael: You probably need somebody with a bit of due diligence or can look at adjustments and so on.
• 51:35
  Michael: Do you give advice on those people?
• 51:37
  Michael: Do you have people that you would recommend?
• 51:39
  SPEAKER_00: Yeah, we've we've we will give people um other solicitors that we have uh and accountants that generally solicitors, most people at least have their accountants that can look at it.
• 51:48
  SPEAKER_00: I would I would slightly warn on accountants slightly with this sector that they'll give you valuations based on sector that other sectors.
• 51:55
  SPEAKER_00: This is this is not just because an accounting firm's worth X multiple doesn't mean a physio company is, but what's worth 12 times doesn't mean yeah, so like just be a bit cautious on that because I see that sometimes where accountants go, oh yeah, it's standard multiple eight to ten times.
• 52:09
  SPEAKER_00: I'm like, not in this sector, it's not, but anyway, so um accountants is a bit funny, but no lawyers we've we've used like two or three different lawyers from um people selling, and they've always been pretty fair and transparent.
• 52:19
  SPEAKER_00: So we we'll just say, like, these are the guys that we've actually worked with.
• 52:22
  SPEAKER_00: We know they do it quickly, they know we we know they do it well.
• 52:24
  SPEAKER_00: It's equally as important for your lawyers to be good for us because we want to be confident that yeah, it's all kind of actually there's no surprises down the line and everything.
• 52:31
  SPEAKER_00: So we we're not gonna like tell people some dodgy lawyer um um because there's no actually we'll end up getting stung on it anyway.
• 52:38
  Michael: So but also you it's very difficult to get a dodgy lawyer who's gonna work on your side where it it just that is they don't want to get disbarred and sued.
• 52:46
  Michael: So um I would be interested to get those names off you, and I may put those in the notes or make them public because I think um there's a lot of people out there charging a lot of money for the average physioclinic.
• 52:56
  Michael: Uh what would you say is a is a reasonable price to pay a lawyer?
• 52:59
  SPEAKER_00: Like, unless it's super complicated, which most of them are not, you shouldn't be spending any more, what any more than 10.
• 53:08
  SPEAKER_00: It should be five.
• 53:09
  SPEAKER_00: I'd say most people spend about five grand, five to ten grand on lawyers.
• 53:13
  SPEAKER_00: Makes about 150 grand feel but it's not complicated.
• 53:16
  SPEAKER_00: Like in most physio acquisitions, it's either like just to break it down a little bit for people, like you're gonna have one of two things, you're gonna have either a share purchase agreement where you're buying the actual entity, or you're gonna have an asset purchase where you're really buying like you know the patient list really and what's inside your company your your building.
• 53:30
  SPEAKER_00: And then you're either gonna have a lease assignment or a new a new lease.
• 53:33
  SPEAKER_00: And there's there's not really a lot of like we're not talking like major complex stuff here.
• 53:39
  SPEAKER_00: Um depending on the business, there might be a little bit of like a deferred payment based on certain things.
• 53:44
  SPEAKER_00: Sometimes there isn't, sometimes there is, but it's just literally being on you being there in a year or whatever.
• 53:48
  SPEAKER_00: So there is there is some variance, but like I would be really cautious, even like on our side, which we do all the drafting as well, like we do we'll draft all the contracts so that we can save the seller cost on that side.
• 54:00
  SPEAKER_00: Um even on our side, we wouldn't spend more than 10.
• 54:03
  Michael: Yeah, no, that's really interesting, and I will get those names off you because I I know that there are um they're being recommended actually 30, 40k um for some pretty basic sales.
• 54:13
  SPEAKER_02: Um it's close to five.
• 54:16
  Michael: That would be very, very useful.
• 54:17
  Michael: So, in terms of um how you because I think everyone finds this of interest, and I'm sure there are some clinics out there, and and just to put it out there, you are totally open to buying clinics if anyone has a clinic they want to sell.
• 54:28
  Michael: Um don't don't throw your one man ban clinic turned over eight grand last year to Therese, but there are certainly um you know you're open to offers and and so on.
• 54:38
  Michael: Um and we'll give your details, I'll put them in the notes as well, um, so people can get in touch.
• 54:44
  Michael: But out of interest, what is the way you calculate?
• 54:47
  Michael: And I know this is a difficult um exact number to give, but roughly, how are you calculating the value of a business?
• 54:55
  SPEAKER_00: Uh it's on a multiple of Ebit R, which um for those that don't know that name, that kind of that that phrase, it's just really a I suppose a profit uh profit number with a few adjustments that kind of give you your real trading profit, not the profit you declare to company's house.
• 55:11
  SPEAKER_00: Um so um yeah, it's normally a bit lower or higher on your net profit, depending on how you how you calculate your accounts.
• 55:20
  SPEAKER_00: The thing that the biggest mistake we see made is that the if the company director or owner is selling and is still practicing, like we will incur that cost so that salary gets added kind of back in, so your your profit will come down.
• 55:35
  SPEAKER_00: Um if you've got you know your mate rents you the property and uh your clinic's super cheap and it's not market rate, we're not gonna get that benefit, so that will bring your profit down.
• 55:43
  SPEAKER_00: Um so there's a few things like that to consider, but it's yeah, we we debase it on a multiple of eBit Dara, and the multiple that you get is dependent on the turnover of your business, really.
• 55:53
  SPEAKER_00: Um plus risk, plus risk.
• 55:54
  SPEAKER_00: If there's a load of risk to it, like you're the main person that affects it.
• 55:58
  Michael: Or your lease has got six months left to run on it, or whatever the case may be.
• 56:02
  Michael: So just to clarify and explain that, um it's quite a simple calculation when when it comes down to it.
• 56:08
  Michael: It's it's what your profit is after you've paid for everything.
• 56:11
  Michael: Um, what's that profit before tax?
• 56:14
  Michael: And if it's three grand per month, then that's 36 grand as an EBITDA.
• 56:18
  Michael: If it's a hundred grand a month, then etc.
• 56:20
  Michael: And things you have to be wary of, just make sure all costs go through, um, which includes your wage.
• 56:25
  Michael: That's always the important one.
• 56:26
  Michael: People forget that.
• 56:27
  Michael: Um, but there are things you you add back in as well.
• 56:29
  Michael: So if you've uh it's a one-off cost, let's say you spent 50 grand on doing up your clinic, you could actually put that back in because it's one off.
• 56:38
  SPEAKER_00: There's a few, there's a few like that, and there's some common ones.
• 56:41
  SPEAKER_00: Uh like, I don't know, their 16-year-old son also does the social media account for the company, which actually he doesn't, but it's um yeah, a nice way to put through someone else's on the payroll.
• 56:51
  SPEAKER_00: Obviously, we don't incur that cost, that gets added back as your profit goes up.
• 56:55
  SPEAKER_00: Um, I don't know, the clinic gardener for the clinics on the second floor that you've got that you know actually also cuts the lawn at home, that gets added back.
• 57:02
  SPEAKER_00: Um equally I'll clinic television in your living room.
• 57:07
  SPEAKER_00: Yeah, like obviously there's some stuff there.
• 57:09
  SPEAKER_00: There is some transparency there.
• 57:10
  SPEAKER_00: I think also like on that, and I would say like there's a really good example.
• 57:15
  SPEAKER_00: There's like a clinic, I won't go into too much detail because it'd be obvious what we're talking about, but like there's there are also some that where that gets a bit too far, and that that puts a bit of a red flag over to us as buyers.
• 57:26
  SPEAKER_00: So like if you've got multiple properties under multiple different companies and it's all a bit like it's all a bit sus, and like you've got a load of costs, and like I don't worry, you won't incur that cost because like that's you know, that's my home kitchen that I got stuck in, not the actual click.
• 57:41
  SPEAKER_00: Yeah, technically that goes back on the on the profit number.
• 57:44
  SPEAKER_00: There is also a an a morality issue there where we go, are we dealing with someone here that's actually a little bit like kind of below the line that we don't trust?
• 57:51
  SPEAKER_00: So be a little bit careful with that stuff.
• 57:54
  Michael: Yeah, I think so.
• 57:54
  Michael: We we obviously like any business owners, we certainly you know did things in in in not well, I've got to be careful what I say.
• 58:02
  Michael: What I will say is we had uh uh Buzzercott who was the agency doing our um due diligence, and they were like, if the line's here, right on it.
• 58:11
  Michael: So we were like, okay, good.
• 58:12
  Michael: We we didn't do anything that was completely dodgy.
• 58:15
  Michael: Um and actually we declared everything.
• 58:16
  Michael: We were very clear, I can't remember what it's called, PID Ford or whatever it was.
• 58:20
  Michael: But you do have to be really careful of you know, what's that 10 grand?
• 58:24
  Michael: That's a Rolex.
• 58:24
  Michael: Come on now, like you you've got to be silly.
• 58:27
  Michael: And ultimately, if it does get silly, that does then go into the warranties as well, right?
• 58:31
  Michael: So at the end of your SPA, it'll say something along the lines of if you fuck around and you get fined and found out, you will be paying HMRC an awful lot of money, not us.
• 58:40
  SPEAKER_00: Yeah, and and um that does happen, you know.
• 58:42
  SPEAKER_00: We we've we've had a couple where we've had like unpaid tax bills that they just haven't paid and they've been like, oh chin up, you just bought the company.
• 58:48
  SPEAKER_00: So your problem, like, that's not actually like you told us you paid that.
• 58:52
  SPEAKER_00: So like that that does that does happen.
• 58:55
  SPEAKER_00: Um, yeah, I just think just don't be stupid.
• 58:57
  SPEAKER_00: Like, if obviously yeah, people can run it however they want, but like if you're gonna try and sell it to someone, there is a major, it's such a people-heavy industry, so much of this stuff is like all great, and we can be as technical as you want to about valuation, but when I look you in the eye and I don't trust you, that's that's actually quite important.
• 59:12
  SPEAKER_00: Yeah, I think so.
• 59:14
  Michael: Also, another another thing when you're selling a business and and and um some costs you have to take into account.
• 59:19
  Michael: So you've got your solicitor costs, you've got your recruitment costs, uh sorry, your your accountancy costs.
• 59:24
  Michael: There are some other costs which I was completely unaware of until they popped up.
• 59:28
  Michael: And uh networking capital is one, which is an interesting one.
• 59:32
  Michael: Uh, another one is making sure that you have paid, if you sell pre-July when your corporation tax is is put due, you're paying that corporation tax that is due up until that point.
• 59:43
  SPEAKER_02: Yeah.
• 59:43
  Michael: Um can you so you explain some of those numbers as well?
• 59:47
  SPEAKER_00: Yeah, I mean, there's a few other costs um that people incur.
• 59:51
  SPEAKER_00: There's I think that's probably the big one that you just mentioned there, the corporation tax.
• 59:54
  SPEAKER_00: That's the one we've had twice that we where people have not realized that's actually their bill to pay.
• 59:58
  SPEAKER_00: Um there are things like Subscription costs.
• 1:00:00
  SPEAKER_00: We've had a couple where people have like signed up to like five years of HR advice that they didn't declare.
• 1:00:05
  SPEAKER_00: Um, and then we can't get out of that contract, so we claw that back.
• 1:00:10
  SPEAKER_00: Um, or it'll be things like you've signed up to a three-year phone contract that we can't get out of and we don't want.
• 1:00:18
  SPEAKER_00: So that sometimes if that's declared before, there can be like an adjustment made.
• 1:00:21
  SPEAKER_00: But if we find that out after, then we claw that back.
• 1:00:23
  SPEAKER_00: That's a cost that ends up arising to you.
• 1:00:26
  Michael: Um but I don't imagine I I I or I rather I would imagine that most of that is quite innocent and just shit, I forgot about it, rather than true deception.
• 1:00:37
  SPEAKER_00: Oh, yeah, no, I think most of certainly in our case, I don't think I've ever seen anyone that's truly done it on purpose.
• 1:00:42
  SPEAKER_00: It's normally like the the corporation tax stuff literally was like someone was like, Well, it's I thought you guys paid that because it's not my company anymore, sort of thing.
• 1:00:48
  SPEAKER_00: It's like, yeah, but I didn't own it when that was due.
• 1:00:50
  Michael: So there's not that's why you need someone, a good accountant or a good solicitor who's going to walk you through that.
• 1:00:57
  Michael: Because I didn't have any idea about any of that, but I was very well informed on it and I knew what my costs were going to be.
• 1:01:03
  Michael: And and that's so important because otherwise you you're you're in a dream, you're loving life, you've got all this money, and before you know it, you're 200 grand down.
• 1:01:10
  SPEAKER_00: Yeah, we've had we've had one case um which was very innocent, but like we had a deferred, like we paid the first payment, we had a second payment that was coming up, and we had this big peninsula HR contract that we couldn't get out of, and we tried to get out of and we couldn't, but suddenly it was going to cost us like an extra eight grand or something to get out of this contract.
• 1:01:29
  SPEAKER_00: We already have our own HR software, so now I was paying for two.
• 1:01:32
  SPEAKER_00: So we had to pay the full amount to get out of the contract.
• 1:01:34
  SPEAKER_00: Now, as harsh as it sounds, like that's not really my problem.
• 1:01:37
  SPEAKER_00: That contract was signed into and not declared.
• 1:01:39
  SPEAKER_00: It was just, and it wasn't intentional, it was just accidental.
• 1:01:42
  SPEAKER_00: But equally, like, you the business you're buying is what you think you're buying.
• 1:01:46
  SPEAKER_00: If there's things that end up coming down the line that's not what you considered in terms of your valuation, that does need to be considered.
• 1:01:52
  SPEAKER_00: So we had to claw that back.
• 1:01:53
  SPEAKER_00: We came to a bit of a deal about how that worked.
• 1:01:55
  SPEAKER_00: But like, like you do have to kind of that that can happen.
• 1:01:58
  SPEAKER_00: So like, yeah, it's um that's probably why it's really worth having a really good accountant and a lawyer um who you trust on this, because for what you pay, yeah, and and by the way, like I don't I really don't think you need to spend a huge amount, but like if I have had people who are like, I don't want to have a lawyer because I don't want to um the first company I did that I don't want to have a lawyer because I don't want to have an extra 5k cost or something.
• 1:02:21
  SPEAKER_00: The problem is like really like where where we advise you do because I don't want to have to in a year's time come back to you and be like, oh by the way, um, you know, and I know you've already bought that car and you know you've bought a holiday house, but actually now we've got a problem because I need that money because it's so important.
• 1:02:38
  Michael: And in even things like um with your deferred payment, for example, uh when we were doing it, I remember we um we had an accountant tax advisor and CGT was at a different rate, wet rate, and we knew that CGT was going up.
• 1:02:53
  Michael: So we were advised to put the entire lot through as part of consideration, which meant that we were taxed on that current CGT and not the new CGT two years down the line or a year down the line.
• 1:03:05
  Michael: So little bits of advice like that, that saves you an awful lot of money.
• 1:03:08
  Michael: So although there's a cost, you will probably most likely save money in the long term.
• 1:03:13
  SPEAKER_00: Well, to translate it into healthcare speak, like as in like you wouldn't you probably wouldn't skimp on a decent doctor if you were, you know, wanted to do good diagnosis.
• 1:03:22
  SPEAKER_00: Yeah, you you probably would be willing to pay for good advice.
• 1:03:25
  SPEAKER_00: I think if you're selling your business, you've got to treat it the same way.
• 1:03:28
  SPEAKER_00: Like, don't um I'm not saying spend 40 grand or whatever you said, people are having quotes, so that is a bit stupid, but like between five and ten grand for like a half decent lawyer and a half decent accountant who will ask you questions and actually like push back on some of the stuff that we might ask or push or whatever, like you do need someone to stick up for you because ultimately if you don't we have had it, I have I'm not saying it's it's common, but we have had it where lawyers have people tried to skimp on it, and then we find something out that's innocent that ends up costing that person money again.
• 1:03:57
  Michael: And the thing is, this is your baby, you've worked on it for such a long time most of the time, and you're finally getting that financial freedom, and and and there's nothing worse, I think, than finding out down the line that you hadn't quite got the money that you wanted, and and particularly if it's significant money, it it hurts.
• 1:04:14
  Michael: And and as I think sometimes there are people that wouldn't have sold their business if they knew that they were gonna be down 20% or 10% or whatever, so it really does make a huge amount of sense.
• 1:04:25
  SPEAKER_00: Can I just uh just add to that and also just pivot on that point slightly?
• 1:04:28
  SPEAKER_00: But you made a you made a point about like they probably wouldn't have sold it.
• 1:04:32
  SPEAKER_00: The I really think that's worth mentioning because when you are thinking about selling your business, you really, really have to understand and be confident that's really what you want to do.
• 1:04:41
  SPEAKER_00: Because there is also something that we've seen a few times where people sell it and then it's done, and then all of a sudden there's this kind of like, oh, but don't change the colour of that wall.
• 1:04:50
  SPEAKER_00: And you know, but that person, you know, actually they are really good.
• 1:04:55
  SPEAKER_00: You might not think they're good, but they are good.
• 1:04:56
  SPEAKER_00: And because I own the business before I know they're good, uh you gotta appreciate from a maybe a buyer side that as soon as you sell that company, it's no longer yours anymore, and there's a there's a psychological attachment you'll have to it, obviously.
• 1:05:08
  SPEAKER_00: But like be really comfortable in your skin that if you sell it, like you have to be willing that if if that person decides to knock the place down tomorrow, they've got every right to if they really want to.
• 1:05:18
  SPEAKER_00: Now, most buyers, like I'm never ever gonna buy a clinic to intentionally tank it because why would you?
• 1:05:23
  SPEAKER_00: But I might have different ideas about how things work, you've got to be comfortable enough to know that that might happen.
• 1:05:29
  Michael: Yeah, and that happened to us.
• 1:05:30
  Michael: And and I remember about three days later, um, Ben had done something, it wasn't anything major, and Hannah was like, Oh my god, look what he's doing.
• 1:05:37
  Michael: I'm like, Hannah, if we sold our car and they wanted to paint it fucking pink, they're allowed to paint it pink.
• 1:05:43
  Michael: And and I had I had that mindset all the way along, but for her, it's often I think when the business is very much a part of your identity, that's where you really need to think about it.
• 1:05:53
  Michael: So for me, it wasn't my identity for Hannah, it was more of her identity, and she's fine now, and she's managing director again now.
• 1:05:59
  Michael: So uh anyway, but uh it it is really important to be absolutely confident you do want to sell it.
• 1:06:06
  Michael: Um, and and also the emotional part.
• 1:06:09
  Michael: I wrote an article on this about the realities of selling your business, and and uh it's it's hard.
• 1:06:15
  Michael: There's lots of things people don't tell you actually about selling your business.
• 1:06:19
  Michael: And talking of the mistakes and the things that you see, do you know what would be really interesting um is actually to put a a crib sheet together, like the biggest mistakes, the the things to avoid.
• 1:06:29
  Michael: Um maybe I'll do it and and if you're if you're happy, we kind of cope it.
• 1:06:34
  SPEAKER_00: I can uh I can contribute stuff.
• 1:06:35
  SPEAKER_00: I've seen some funny ones, but yeah, I can um yeah, absolutely.
• 1:06:38
  SPEAKER_00: Because yeah, it's it's c by the way, like as a buyer, you take absolutely no joy in bringing someone up a year later to be like, hope you're enjoying your time off.
• 1:06:45
  SPEAKER_00: Um congratulations on that retirement.
• 1:06:47
  SPEAKER_00: By the way, you owe me 10 grand.
• 1:06:49
  SPEAKER_00: You I don't want to do that.
• 1:06:50
  SPEAKER_00: So like it's way easier if it's just out of the way, like, because they may not have sold the business if they'd have known, but you may not have bought the business had you known, right?
• 1:07:01
  Michael: Extra 10 grand here, 20 grand there.
• 1:07:03
  Michael: That changes those those numbers for you, and and it would have been a different negotiation.
• 1:07:07
  Michael: So it goes both ways as well, and you've got to get that stuff right.
• 1:07:11
  Michael: Um, so get a good accountant, get a good solicitor.
• 1:07:14
  Michael: All right, don't spend 30 grand, but um yeah, and I'll I'll get those names off you as well.
• 1:07:19
  Michael: Um listen, I let's leave it there because I've taken enough of your time.
• 1:07:22
  Michael: I I think that was brilliant.
• 1:07:23
  Michael: I I really enjoyed that.
• 1:07:24
  Michael: I think everyone's gonna love that.
• 1:07:26
  Michael: Um, so in terms of getting in touch with you, what's your email?
• 1:07:29
  SPEAKER_00: Yeah, feel free to email me.
• 1:07:30
  SPEAKER_00: It says reese at cartrange.co.uk.
• 1:07:33
  SPEAKER_00: I've got the Welsh spelling of Reese, R-H-Y-S.
• 1:07:35
  SPEAKER_00: But um, yeah, just um yeah, feel free.
• 1:07:38
  SPEAKER_00: I also like I do this with a lot of people, like we're not gonna waste anyone's time.
• 1:07:42
  SPEAKER_00: So even if you're like curious or interested, just feel free to drop me a line.
• 1:07:47
  SPEAKER_00: Happy to answer any questions about the process or jump on a call and talk you through how it looks or you know, any concerns or whatever we might have, brainstorm.
• 1:07:54
  SPEAKER_00: We've had people that are like, it's actually really useful advice, which means I'm not gonna sell it now, but come back to me in a year or something.
• 1:07:59
  SPEAKER_00: So I'm pretty chill with it.
• 1:08:01
  SPEAKER_00: Like, I'd I'd like to think, and I'd maybe I'm slightly being grandiose about this whole thing, but like one thing I would like to say is like I am a physio and I do get it.
• 1:08:10
  SPEAKER_00: And um, I've worked in the sector my whole career, my whole working life has been as a physio and a physio business owner.
• 1:08:16
  SPEAKER_00: So I do understand the sector, I understand what worries people have, I understand what's important to patients and to people.
• 1:08:21
  SPEAKER_00: So um I'd like to think I'm fairly genuine with it.
• 1:08:25
  SPEAKER_00: I'm not gonna ever give people poor advice.
• 1:08:27
  SPEAKER_00: I'm not I'm not trying to impress anyone with shareholders.
• 1:08:30
  SPEAKER_00: We by the way, we've looked at probably 50 companies who've bought 12 or 13 because it wasn't right for them or us.
• 1:08:35
  SPEAKER_00: So like it's it's um, yeah, I'd like to think I'm fairly, yeah, fairly open and um and feel comfortable talking about it in kind of like a normal way rather than bamboozling you with you know speak you won't understand because I don't really understand it sometimes myself.
• 1:08:49
  Michael: Yeah, and it might even be useful um because I I get this a bit from from my side of the clinics, like what do you think I need to do to get to the number?
• 1:08:57
  Michael: Because everyone has a a number in their mind.
• 1:08:59
  Michael: I want to make a million or a million and a half or 800 grand or 200, or whatever it is.
• 1:09:03
  Michael: And you can actually tell them, like, this is what I would want to see.
• 1:09:06
  Michael: You need to do this much revenue in the business, you need this many staff, you need this much turnover and profit.
• 1:09:11
  Michael: So you can actually give them a bit of help and say, once you've got that, come and talk to us.
• 1:09:15
  Michael: Like 100%.
• 1:09:16
  SPEAKER_00: Had had that conversation last week with one of your clients, funnily enough, um, that you introduced me to.
• 1:09:20
  SPEAKER_00: Exactly that.
• 1:09:21
  SPEAKER_00: Like, time's not quite right, but actually, like, you know, like this is the sort of stuff that would would make that a better time for you if that's what kind of what you want.
• 1:09:30
  SPEAKER_00: And he was like, Cool, let's have chat in a year or so.
• 1:09:32
  SPEAKER_00: So, like, I'm look, I'm not gonna waste anyone's time.
• 1:09:34
  SPEAKER_00: We're never gonna sit down and run you through the numbers and put you through the ringer and you know, waste all your time.
• 1:09:39
  SPEAKER_00: We'll give a very honest, happy, open conversation.
• 1:09:42
  SPEAKER_00: Ask me whatever, and if it's great, carry on, we'll ask some more questions.
• 1:09:46
  SPEAKER_00: If it's not, then it's cool.
• 1:09:47
  SPEAKER_00: We you know, we we walk away.
• 1:09:48
  SPEAKER_00: So it's um, yeah, feel free to reach out if you if you're interested.
• 1:09:51
  Michael: Great stuff.
• 1:09:52
  Michael: So thank you again.
• 1:09:53
  Michael: I will definitely be looking at Hica.
• 1:09:55
  Michael: Got that Heka, I've got that saved.
• 1:09:56
  Michael: Okay, yeah.
• 1:09:57
  SPEAKER_00: Yeah, I should I should have had like one of those like affiliate links.
• 1:09:59
  SPEAKER_00: I I don't get one, unfortunately.
• 1:10:00
  SPEAKER_00: But yeah, you do, yeah, do look at them, they are good.
• 1:10:02
  SPEAKER_00: You greedy bastard.
• 1:10:04
  SPEAKER_00: Affiliate link.
• 1:10:05
  Michael: I should get one of them.
• 1:10:06
  Michael: I'm gonna go get one and put it on when I put it in the show.
• 1:10:08
  SPEAKER_00: Yeah, yeah, I was gonna say, you're gonna get you're gonna get it.
• 1:10:11
  Michael: Make a load of money.
• 1:10:11
  Michael: But yeah, I think that was a brilliant suggestion.
• 1:10:13
  Michael: Um, I will put to the team if they want to vote on like different benefits.
• 1:10:17
  Michael: I think that's a brilliant suggestion as well.
• 1:10:18
  Michael: And no, it's been really useful.
• 1:10:20
  Michael: Uh uh, honestly, it's been great.
• 1:10:21
  Michael: So thank you so much.
• 1:10:22
  Michael: And um, anyone that wants to get in touch with Reese, please do.
• 1:10:25
  Michael: Thanks, Alex.