The Ins And Outs of Growing a Home Care Agency Through Acquisitions (John Bennett Pt. 2)

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Sunny Days In-Home Care

[ 00:00:05 ] All right, welcome everyone to Home Care U. Happy Wednesday, great to be back with you. I hope everyone's having a great week. Again, great to have many new faces joining us for the first time and some existing listeners and subscribers back with us again. I've got John Bennett, the CEO of Sunny Days In Home Care, back for session number two. We did an extended introduction of John on our first session, so we're going to get right to the meat of the conversation. But just kind of a quick recap, last week he talked about how he scaled a really impressive agency in the Pennsylvania market. Today, we're going to talk about his M&A activity. He has grown and scaled significantly through recent M&A activity, and we talked a lot about processes, operations, lessons learned, and milestones last week.

[ 00:00:54 ] Today, we're going to focus heavily on the what, the why, and the how, and the lessons learned from some of the acquisitions that his company has made so um with that being said, we're going to jump right in. John, thanks for being here again, yeah, yeah, it's great to be back on, awesome. Well, let's get right after it, um, I want to start with a quick timeline, um, if you don't mind just highlighting really quickly kind of the timeline milestones of the business. When you got started, um, when you started thinking about M&A and kind of how things took shape in the business and then kind of how you got started with the ins in the more recent years since the pandemic so can

[ 00:01:29 ] we start there yeah sure so uh sunny days we started in 2011 I came on board in 2015 uh and we franchised uh I guess for a hot minute, you know as you would say, and uh then we decided we didn't have enough control of you know our entities so we got into the M&A space um and we acquired our company, a smaller agency, on the northern side of Pittsburgh, it was doing about 500 hours per week in 2017 uh they were split focused between senior care and uh working with people with intellectual disabilities uh we had that company for two years I grew up from 500 hours a week to about 1500 hours per

[ 00:02:08 ] week uh and then we sold it at the time we either needed to double down and hire people who were you know specialized in the space or sell and we decided at the time to sell and focus on growing sunny days so that was our first acquisition uh buy and sale in 17 and 19 uh then we did majority of the time we sold it to the M&A space and then we sold it to the M&A space and then we did majority of the time we sold it to the M&A space and then we sold it to the ownership of a small agency that Was doing about 300 hours per week, um, later in 2017. Uh, the founder stayed on, um, and we have majority ownership of that company still, but it's grown from 300 hours in 2017 to about 6,000. We just broke 6,000 a couple months ago. Now, that's also Western PA; that is a Medicaid-based agency uh, that also specializes in private pay and VA.

[ 00:02:50 ] One of the founders of Veterans so we have a VA contract, and we do a lot of different stuff with veterans there. We have a lot of different vets that are going to be on over 25 many times were going to be on scaled-up. Created our holding company in 2021 um, in late 2021 uh, we acquired a company uh up in the Upper Peninsula of Michigan, uh, that was about 50 Medicaid, 25 VA, 25 private pays, uh, they were doing about 600 hours of care per week um and now we we're going to break 2,000 this week hopefully, we're really excited about that. And then mid-January of '22, we acquired an agency near Hendersonville, North Carolina, just south of Asheville. Really cool place down there. Predominantly private pay. We have some VA and Medicaid down there now. When we bought it, it was doing about 800 hours of care per week.

[ 00:03:37 ] Right now it's doing about 600. So, it's actually went down a little bit. And then our largest acquisition, we acquired a company on the east side of Pittsburgh that was doing about 9,500 hours of care per week. And it still is doing about 9,500 hours of care per week. So, we kind of have all in. We have a company that's doing 500, 2,000, 6,000, 9,500, and 15,500. Sunny Day is our main company. So, we have about 33,000 hours of care per week or so, but we really have a wide variety of size of agencies out there and location as well. That was a perfect recap. So, if I'm not mistaken, is that five acquisition or six totally with the buy and sell one?

[ 00:04:20 ] So five acquisitions, but the one we bought and sold. So, we still have four of our acquisitions and our main company, Sunny Days, we never technically acquired. We just started it. So, we have five current operating companies. Awesome. Awesome. Let's jump back just briefly. I think you probably piqued people's attention with the thought of going franchising, retracting, going the acquisition route. Just kind of in a nutshell, why did you think about franchising and then why didn't it work or why wasn't it a right fit? Yeah. So, we felt like we have a pretty good model. If you listened to the last episode, we kind of talked about our field manager model. We've only got a really solid model, but franchising, franchisees, you have to get people that really follow all of your policies and practices as well.

[ 00:05:09 ] And like I said, we had a great couple with our first franchise out in Chicago, really good people. Just didn't quite work with them following all of our policies and procedures the way we wanted it. And we still speak with them. They were really solid, but just didn't work. We were looking at another place in Wisconsin and we just decided, you know what, we would rather have full control over it and make sure we can oversee and kind of, I hate these words, but enforce, make sure things are getting done the way. I have some friends at Chick-fil-A, they say cascade. That's the word Chick-fil-A is right. So, we want to make sure we can cascade the culture and the policies and everything down. You know, throughout the company.

[ 00:05:47 ] So we really wanted to have control, I guess, if you will. Awesome. Yeah, I think that just helps. A lot of large owners, operators get to the point where, like you said, have a really sustainable model, know how to scale and question, you know, is franchising a good fit? Is acquisition a good fit? So, it's just interesting to hear, you know, you went down that path, you know, pretty quickly saw some of the flaws or some of the challenges that you were up against and intentionally decided, you know, to like, step back, go a different direction, which I think is really admirable. And then, you know, look at the growth on the acquisition side. So, tell me if you can recall, like early days when you first started thinking about acquisitions, what was going through your mind?

[ 00:06:30 ] You like, you know, what were you thinking about? What were you worried about? You know, where was your head early on in the acquisition days? Yeah. So let me kind of break it into two eras. So, the 2017 acquisitions just kind of came to us. We weren't really on the hunt for that. We weren't really on the hunt for that. We weren't really on the hunt for that. We didn't really have like a holding company set up per se and like a, you know, kind of a shared services division that we have now. We just kind of acquired them and operated them. And so, we didn't really think much about, you know, building an empire or anything. We just had an opportunity to get some, and it was a good fit that we could kind of, you know, run it as a standalone agency still, but, you know, do some, there was some duplicity between job positions and we could kind of, you know, combine some things and that worked out well for us.

[ 00:07:13 ] So that was kind of just one of the things that came to us when we really decided we wanted to really make a big push in 2021, getting into really the M&A space. We really wanted to make sure that we had a holding company. We want to make sure that the corporate veil wasn't going to be pierced. We were very careful about that. We got, you know, our attorneys and accountants involved to make sure that we had everything structured properly for legal and liability and tax purposes and everything else. But we really wanted to make sure that once again, our whole focus at Sunny Days was we handle all the back-office stuff. So, everybody can focus on the people in the field.

[ 00:07:49 ] And we’ve, we’ve taken that same approach to our acquisitions: we'll handle all the back office stuff, whether it's at our corporate, you know, we call it out, like our home office now, or if it's in the back office of each of these companies; but we want the people still focused out in the field on caregivers and clients and making sure care is being delivered. So, we've kind of structured it to model. There's some nuances and differences, you know, between the different regions and areas and the different payer sources. But we've really tried to structure it in a similar manner to Sunny days. We've also tried to set it up. I guess one of the takeaways from franchising is how well franchises are structured from like an org chart standpoint and the support and when you need to add additional support and everything.

[ 00:08:29 ] So even though we stopped franchising, we took some of the stuff that we learned from it. We've implemented that into the way that we have, you know, the M&A set up and structured. So that's kind of what we were thinking going into it is we really want to make sure it's structured properly, you know, for that start. Can you share a little bit more about the holding company, the thinking there? Obviously when you go the M&A route, financing, capital partners, there's a lot of options. There's a lot of different paths. You maybe didn't know everything up front. Can you share why the holding company route and then just briefly like the benefits of the holding company and some of the core purposes? Yeah.

[ 00:09:06 ] So holding company, you want from a legal standpoint, just so you can have each company separated individually on its own and all the money kind of flows up to that holding company. You know, if you have Company A here, you don't want Company A loaning money to Company B over here. You want everything flowing up to your holding company. And then, you know, the holding company can loan money, if necessary, like if you're short on payroll or there's some kind of expense that comes up or whatever. So really from a legal standpoint, and we can talk about how that benefited us with one of our acquisitions where we've had, you know, some legal issues, but we've also had some legal issues we've had to deal with. And the other thing we set up kind of underneath the holding company is a shared services company.

[ 00:09:44 ] So the way I kind of break an agency down is into three parts. You have your operations, you have your finance, and you have compliance. Some people may put compliance under operations, but we break it out into really three separate areas. And we try to take all of that and have that all parked in our shared services division of people that are dealing with finance, dealing with compliance, and then overseeing operations. In each entity, we have a director of operations. You know, and all of our field staff that are out there working with the caregivers. But as far as who's kind of overseeing and supporting operations, that's all on the back end in our shared services model. So, we have holdings kind of from a legal and where all the money flows up to.

[ 00:10:21 ] Shared services is really like our, you know, our combined operating entity. And then we have each one of our actual, you know, agencies out there that's providing care. Awesome. Yeah, that's super useful. As far as the financing goes, you brought in a lending partner, correct? At one point, you know, to get kind of some outside money. When did that come into play? Yeah, we knew that if we actually did our first two acquisitions out of pocket with money that we had kind of saved up. And we did two smaller ones intentionally. We wanted to kind of get our feet wet and learn before we got to a larger one. But we knew we needed to get a partner, you know, from a financial standpoint with a larger one.

[ 00:11:01 ] So we started to work on that in summer of 2021 with the idea that we would have funding secured by January of 2021. I actually took until March for some various issues. We had a lending partner that bank backed out last second because they had a similar, in-home care, we're collateral light, right? We're a service-based industry. We don't have a lot of collateral that the bank can kind of hold if something happens to you. And they had a similar loan in their portfolio that kind of went, you know, went down the tubes, nothing to do with us, but they backed out because of that. So, we had to find another lending partner, you know, a couple months into it and start the process over again.

[ 00:11:40 ] So we were able to find, secure a partner and, you know, get everything squared away with them. We found somebody that, you know, they were able to, you know, they had some experience and did some research in the home care space. They ran some different reports, and they contacted a lot of different people. They wanted to make sure it was a good space for them to invest in as well. So, we got them and, you know, been working with them to, you know, to make sure that, you know, we have everything covered to go acquire, you know, acquire a larger acquisition. Was that finding a lending partner, would you say that was harder, as hard, easier than you thought, you know, just like strategically and broadly, was that difficult to do or you think it is doable?

[ 00:12:23 ] It was difficult to do at the time because we didn't have our finances structured in a way that was, I guess, kosher for what a lending partner would be looking at to loan you a large loan. Um, you know, we had our, our P&L, is really, we have to get, you know, audited financial statements now and everything. And before the lending partner, we were pretty organized, but it was more geared, geared towards how we ran the business and not necessarily how it presented from a financial standpoint. Um, so we've really changed how we do all of our, you know, all of our financial reporting, our profit and loss and our statement of cash flow, our balance sheet, all of those things. Um, but because of our, you know, our lending partners, so it was tricky because of that.

[ 00:13:04 ] I think if you have your finances set up in a way, um, you know, that whether you have a CPA or maybe if you're large enough to have a CFO, um, you may not deal with that issue. You know, we're good now, but at the time wasn't very easy because of that. There's a lot of people out there who want to lend you money, but they need to feel comfortable about your business and about your financial reporting. And I think they felt comfortable about our business, but our financial reporting was accurate. It just wasn't formatted in a way that was the easiest to understand. And we had to get that all fixed and straightened out. So, going at it again, you know, at some point we're going to need another lending partner or to re-up with our current lending partner, um, whenever our term ends and it's going to be a lot easier now because our finances are in order, you know, the way that they are presented.

[ 00:13:51 ] Okay. Yeah. You kind of answered my next question, which was going to be when you were getting your house in order, you know, for lack of a better term, what was it specifically that was out of order? And it sounds like it was a matter of formatting. Maybe you had all of the, the financial, you know, the balance sheet, but it was more of a matter of just how everything was structured. Does that sound accurate? Yeah. Formatting for us and the larger acquisition, um, their formatting was even messier than ours. Um, so we knew we could control kind of what's under the umbrella of our house because we currently own it, our agency, but going out there and trying to acquire a company, we had a grasp around, you know, what the company was bringing in, uh, what they were billing for, uh, what their gross margins were, you know, after they paid the caregivers, what's their gross margin.

[ 00:14:35 ] Um, and so, and so, and so, and so, and so, and so, and so, and so, and so, and so, and so, and then what their net was, you know, we were able to figure that out kind of all their expenses between gross and net. Um, that was where it was kind of tricky. And, you know, there was random expenses, and we don't know, you know, when we say marketing, what falls under the category of marketing for us may be different than somebody else. Or when you say, you know, subscriptions, you know, some, some may have, you know, like we use well, sky, well, sky is not under our script subscriptions. We have it for our own category. Some of the acquisitions we've looked at, they have, you know, their platform that's it's underneath subscription. So, figuring out all those nuances, um, you know, for companies that you're looking at, it's just a little bit tricky.

[ 00:15:11 ] You just have to ask a lot of questions and find out what, what does this number mean? You know, there's a lot of numbers, but what are those numbers mean? And be a humble beginner to ask all of those questions. Cause sometimes it's intimidating to go to an outside entity and it's their bread and butter, but it's not yours. And just be kind of a humble beginner and ask all those questions to make sure everything's in order. Um, a question that I've been wanting to ask you is about, um, you know, who these, these agencies were that you acquired, um, context. There's been a lot of M&A activity the last five years, obviously because of the pandemic, a lot of people were burnt out, you know, ready to exit, looking to exit.

[ 00:15:48 ] Um, I personally have come across a lot of owners that, you know, their agency was thriving, you know, pandemic hit, they dipped, struggled, kind of fell by the wayside. I see a lot of agencies trying to like to regrow and build back up to be able to sell when you were, you know, looking for the agency, you know, looking for the acquisitions, more seeking them out. Was that, is that typically the case of what you saw of who was looking to sell or is there different, you know, similarities or kind of a different trend that you saw on the agencies that were looking to sell? No, that that's, that's kind of, kind of what we dealt with. Um, typically what, you know, when we're looking at the people are trying to sell because of the pandemic and it's just not the same, um, dealing with caregiver shortages and margin compression and that type of thing, or it's people that, um, are older and want to get out of the business.

[ 00:16:39 ] Um, or it's people who maybe they're not older, but with the increased regulations, um, that you're dealing with from a state, whether it's Medicaid or private pay, there's still increased regulations that you're dealing with, the threat of unionization, kind of all these, um, you know, monsters in a closet that could come out, um, that people get worried about, um, then they're selling because of that, you know? So those are, those are kind of what we looked at. We do the three acquisitions since we've set up our holding company. We looked at about 40 companies, I think it was like 38 or 39. Um, and ended up with three, um, that we went after. There was a lot that looked great, but then digging into finances, you know, there was a company we were really excited, actually two different companies we were really excited about.

[ 00:17:17 ] And both of them had got PPP money, um, which you got to be careful with how that's done, you know, because there was a lot of people that were doing that, you know, fraudulently, um, but they put the PPP money in their income for the year, right? So, it over-inflated what they were bringing in. And as we dug in and did our due diligence and broke that out, we identified that and it was like, wait a second, this company's they're, they're not making any money and they're asking for this. And it's just, you know, it's, it's not worth, you know, it's not worth it. Um, so that's, that's one of the things, but yeah, it's, uh, we were, we were really looking kind of to go to your question.

[ 00:17:51 ] We were looking for companies, um, that were run well, that actually cared about people. Um, and that, um, had a good culture where the people were focused on delivering care, and that, that financially they were run responsibly, um, and that there were opportunities for growth. Um, so those are the three things. And we've kind of, from a growth standpoint, I mean, I I'm, I'm usually pretty transparent. The three companies we got one has exceeded our expectations. One has been exactly what we expected, and one has been below our expectations. So, we've kind of got all three, um, with our, with our three acquisitions that we've had recently. Yeah. Let's dig into that vetting process now. Yeah. Now I'm really intrigued.

[ 00:18:34 ] You talk about, you know, vetting 40 agencies and three came out of that, you know, that there's a whole process there and you were just kind of broadly mentioning what you were looking for. Let's dig in a little bit deeper. You know, how, how do you find those agencies? What do you, what's like the number one thing you're going to look at first is that finances, you know, where does culture and personnel play, like kind of just dig in a little bit deeper on like that vetting process and how you approached it. Yeah. So, there's a lot of different platforms out there. If you just Google home care agencies for sale, um, that have agencies, you know, people are trying to sell.

[ 00:19:09 ] Um, also if you ask, you know, if you're involved with like your local state chapter, um, ask if there's people that are selling, um, you can ask even like your vendor, if you're like our workers comp agent, um, he's does workers come, he specializes in home care. So, he kind of knows everybody in the area that's, that's in home care. And our first acquisition way back in 17, he's the one who told us, hey, this lady wants to retire. And I told her about you guys. I think you'd be a good match. And he was right. We were, um, so put your feelers out there. I guess if you're interested in doing acquisitions, let people know in the industry.

[ 00:19:38 ] I mean, we work with some different agencies that do home health and hospice and every now and then we'll send them referrals, or they'll send us referrals, let them know, hey, if you know an agency that wants to get out, um, let them know about us. And, you know, we'd be interested in talking to them. Um, so just getting the feelers out there. And as far as what we're looking at, right. So, I asked, I asked my team this question in the last, uh, in our leadership retreat. So, because we're, we're, we're going to be doing some more and hopefully another acquisition before the end of this calendar year. Um, if you could look at a company and pick three categories, three things, you can only look at three things.

[ 00:20:10 ] You can look whatever you want, have access to whatever you want, but there's only three that you can pick to look at. What would you look at? Um, so that's a good question. You know if you're listening to this podcast, you're probably thinking about that, you know? So, for us, the three things we would look at are how many hours are you of care are you completing per week or month? However, you track it. We do weekly. Some of you do monthly. But look at that in the trend. What's it been over the last two years as it went up, as it went down, has it been the same? So, what's your hours of care completed, not scheduled, but actually completing. The second thing we look at is gross profit margin.

[ 00:20:39 ] We had a really great looking agency that I looked at on Christmas Eve a couple of years ago. I had a great call with this lady. And then our gross profit my everything sounded great culture. Everything sounded like it was a perfect fit. And then I got to her gross profit margin, and she had formally done a different service line where she was billing about $5 an hour more and closed that down. But our caregivers were still making money as if they were getting paid $5 an hour more, and they weren't. So, her gross profit margin was so low that they were basically breaking even. Um, so it was a deal breaker for us because she's like, well, you could hire all new caregivers. And then what are we getting at that point?

[ 00:21:12 ] Then, you know, we're not, we're not really acquiring anything. So gross profit margins, a big deal. And you need to figure out what you're comfortable with. We look for gross profit margin, kind of in the range of 40%. Um, give or take a couple percentages depending on, and gross profit margin for me is if you're billing $20 an hour and you're paying a caregiver, let's say $15 an hour. Um, then your gross profit margin would be. $5 an hour, five out of 20 is 25%. Right. So that would be too low for us. Um, so if it's, if it's $12 an hour that you're paying a caregiver, then that's 60% that you're paying to the carrier. Your gross profit margin would be 40%. And like, so for us, we're, we're billing around $20, paying around $12.

[ 00:21:50 ] So our gross profit margins right about 40%. So, we're looking somewhere in that range. Um, and then below the line, we can make it run efficiently. That's a big thing we do is efficiency. So, the third thing, so we have hours completed, gross profit margin, is shift companies. They have all these hours, gross profit margins, great, but they're not covering the shifts, particularly when there's call-offs. So, we like to look at shift coverage. We pride ourselves on shift coverage. That's a, that's a metric we track. That's one of our main KPIs at every agency we have. We want our shift coverage to be as high as possible. We try to hit a hundred percent. Don't usually get there, but all of our agencies, but one, because of some geographical issues are 98% and above, you know, one of them is around 95, but it's really spread out up in the upper, upper peninsula of Michigan.

[ 00:22:32 ] So when there's a call-off, you don't have within driving distance in some locations. So, um, but that tells you if, if your shift coverage is really high, what that tells us is they actually care about making sure that people get care, especially whenever there's call-offs and they're replacing the call-offs or if you have open hours, right. You don't have staffed yet and you have a bunch of those. That's not good. You want to staff this, obviously there's circumstances and everything else, but in general, we want to have really high shift coverage. So, if we can look at those three things, hours completed, gross profit margin, and shift coverage, we have a pretty good feel of, of what that company, how they're performing financially, how they're growing or not growing and what their culture is, is their culture or culture of making sure that people get their care.

[ 00:23:11 ] So that was a kind of long-winded answer, but those are the three we look at. And that's so, so, so, so good. This is amazing. Um, what I'm curious is I think the first two are relatively common for any business to be tracking, shift coverage. Maybe they are, or maybe they aren't; where these acquisitions that are these agencies that you were vetting, were many of them tracking shift coverage and did they have like a firm KPI? Or was that all over the board? So, we had to get access kind of to look into their systems to see what that was. Um, one of the agencies, because it was local, um, for kind of competitive purposes, didn't want to, didn't want to do that. Um, so we had to get from them what their shift coverage was.

[ 00:23:52 ] Um, and the way I asked them to do it when they first sent it over, it wasn't correct. Right. Because when we think shift coverage, what are we scheduling? Right. So, say we schedule a thousand hours, let's say we schedule 1100. Let's say there's a hundred canceled by client. They go to the hospital or they're sick or whatever. So now we're 1100, we're down to a thousand hours. Well, if we have 30 that we don't replace for caregiver call-offs and we have 70 that are open hours that we never staff, then we've got 900 out of a thousand, right. Cause we subtract the client cancel that we're able to staff. So that'd be 90% shift coverage. Um, so explaining, we had to really simplify it to these agencies and how to, how to get that, you know, that explained to them.

[ 00:24:28 ] And so most, most of them, that's not something that they were able to get it for. But they weren't tracking it. Um, so that's something that we had to teach them how to do. Yeah. And what about when you helped them with that calculation? Like when you got that information, any estimation of like what their coverage rates were, you mentioned, you know, Sunny Days is doing 98% most of the time, you know, 98 plus were these other agencies in that ballpark or not really. Yeah. So, one of them was, one of them was like 99%, um, uh, which was great. A lot of Medicaid, um, some family cases, more of a small footprint, really close-knit community. So that was, that was, I think, why? Cause they could cover call us very easily.

[ 00:25:10 ] There's a call off and there was somebody two blocks away. Right. So, it was a little easier to cover call offs. Um, the, the agency up in Michigan at the time they were like 80, um, which was a little bit of a concern for us. Right. So, when you get a metric that you don't like, you need to ask the question, why, why is it 80%? Well, their policy, whenever there was a call off by the caregiver, they would just tell the client, we don't have anybody for you today. Um, and you know, you know, if you have an issue with not being okay, you know, please see your emergency backup. So, there was an attempt to staff them. Um, we found out after doing some more due diligence and vetting and talking to employees, the lady - they're running their operations.

[ 00:25:48 ] Um, he's retired since then; that was her policy, and nobody was allowed to try to find another caregiver because she was worried about getting a caregiver that matched and getting them upset and losing the client. Um, so we knew, we knew why we knew once we changed that policy that we'd be able to get that, at least we, we anticipated that we'd be able to get that up. Then our company down in North Carolina, their shift coverage was really high. Um, they had a platform I'm blanking on the name of it right now, but it actually tracked, you know, you have WellSky or Careswitch or, you know, whatever, AlayaCare, or AxisCare, this company actually tracked, I think it may be called CareSmartz360 may have been what it was, but it actually tracked.

[ 00:26:24 ] And like, if you filled in a call off, you got like 20 points. Once you got so many points, you could get swag or bonuses, and stuff like that. Um, so their culture, they had a culture of caregivers stepping up to cover shifts. So, um, but it varied, but the one that we didn't like, we had to find out why. And there were some agencies that we looked at and then we cancelled them out, like during our due diligence process, because when we asked why it was, well, we can never get caregivers to cover shifts. We try and we just can't, we don't like that. And there's some other issues that wouldn't be the only deal breaker, but, um, there was not even, you know, possibility thought in their mind, they could possibly get people to go do that.

[ 00:27:01 ] It wasn't just somebody saying, no, it was, well, that's not really what we do here. Um, so that was, that was tricky though. And that's, you're right. That's not when I talked to different people at, you know, some of the different association events we go to and everything, not everybody's tracking care coverage, uh, shift coverage. So, I have to not check it out. It's worth tracking. It tells you a lot. Yeah. That's, that's kind of where my head is at. I I've heard you track it. I know other agencies do. I don't feel like it's one of the, maybe the core KPIs that we talk about in an industry, but I think that's really useful. And like, you're identifying really useful in this context of looking at the performance of another agency with the acquisition in mind.

[ 00:27:40 ] But like what I'm thinking about with these three weekly hours, gross profit margin and shift coverage, they are leading indicators and, and tie back to a lot of other processes, people, culture, like some of the less quantifiable things, those things are a good indicator of all of the back end. Which was going to be my next question based off the acquisitions, you know, and you looking at those three things, how or do you rank like culture, people, processes, some of those things that you don't really know until you make the acquisition, you know, how, how do you factor those in or do you just trust, you know, kind of the metrics and hope that you can mold everything else? So, I'm going to put some caveats in my response to this, right?

[ 00:28:34 ] So I think it depends on your location. If you're doing an acquisition that is closer to your office, right? Like one of the first ones we got, it was 35 minutes away. It was their office location. So, the people there in management weren't as important to me because I felt like we could easily go cover it. You know, my leadership can you go cover it us if there were issues? But our acquisition in Michigan, it's a 12-hour drive from here to there. The people were usually important. I mean, they're important anywhere, but more important the further away the acquisition is, right? So that's very important, obviously metrics too, but the culture and the culture is usually important. And the shift coverage really tells you a lot about that, you know, what they're trying to do.

[ 00:29:19 ] And also the other thing that tells you like their growth, if you look at their growth, if it's been going up, you know, it's a culture that they're trying to grow and expand if it's been declining or stagnant. You know that they're kind of okay with status quo or they have issues, like they're not trying to grow or something's wrong. They're not bringing on business or they're not retaining, you know, business well, retaining employees, whatever it is. So those tell you a lot about culture, those metrics. I think we talked about this on the last episode being too culture heavy or too data heavy, and it's good to have kind of a mix. I think they're really closely intertwined when you're looking to see whether a company is one that you want to acquire or not.

[ 00:29:54 ] And the data speaks volumes initially, because when you look at, particularly finance, a lot of the, like the four that we looked at, there was like 20 that as soon as we got the financials, we're like, this is a no-go. Unfortunately, you know whether it was a location we liked or whatever, it was just people were asking, you know, for way too much for something. And it's just, you can't do it financially. You can't make it work no matter how great the people are. So that, that really is kind of a step one, whether they're financials, if financials aren't good, you can't really, it's not worth you are spending money on to, you know, or time to go through the rest of it.

[ 00:30:26 ] So we're people first, but, and we're talking about, you know, to be people first, the company has to be profitable. Let's talk about people and about retention specifically. I'm curious with all of the acquisitions, how has employee retention been in the office and on the caregiver side? You know, it's a big deal for the people that are being acquired. You know, there's a lot of change, a lot of new processes, a lot of new faces. How, how has retention been both at the office and the caregiver level? Yeah. So, I'll start with the caregiver level. It's been great. We came in and as we're a larger entity, there's a couple of things, you know, offering, you know, we pay for part of health insurance. We offer the ability for caregivers to earn time off.

[ 00:31:10 ] We call it accrued time off, you know, every, our policies, every quarter, if you have no call offs, at least 90% EVV, you got to work at least 20 hours a week, you're on a day off. So, we have abilities for caregivers to do that. And none of these other agencies had that. So, caregivers, there was, they were kind of moving up if you will. So that helped, and we really wanted it to be, we think about client retention too, was really important to us. We sent out some letters, we tried to make it as smooth as possible. So, there was no interruption of care. We got swag for the caregivers, which was big and kind of sent that out, you know, with, with, you know, some scrub tops or t-shirts, you know, depending on what the preference was.

[ 00:31:48 ] So really just try to make that good with the care. So, caregivers, not much turnover. Clients, not much turnover either, other than our one acquisition, I was, I was kind of over-promised and this gives them the office too. The, I was under, I guess, understated how much the owners were doing. They're like, oh, we're not doing this much and that much. And after the sale, we found out that they were doing way more than they said, and they were leaving and moving to another state. And that's the company that has actually gone down a little bit. And we had clients on the schedule that shouldn't have been on the schedule that were either abusive to our caregivers or just didn't belong. They needed more care, and we shouldn't have been in there providing non-medical care.

[ 00:32:33 ] They needed medical care. So, we've had to remove some of those clients and haven't really been able to get, you know, get our groove back. We did just change the name. That's something I'll probably talk about when we do that and stuff, but we did just change the name. I think it's going to help us down there with kind of getting some positive momentum going. But office staff down there, because I didn't have a strong leader initially, we've had to make some changes at the one location. The other one, we had to make some small changes. I'd say our, our retention in the office, we probably have kept 90% of the people that were there. We had, we went in and this all will be with any acquisition.

[ 00:33:04 ] We have no intentions of getting rid of someone when we come in, even if there's duplication and you know, job descriptions, we'll repurpose that person into something else. And with the intention of growing, right. Because that's our goal. We can repurpose them and grow, and you know, keep them on board. We don't ever want to come in and get rid of people just because to do that, you know, to save the bottom line, you know, save, save the bottom line. So, yeah, that's, that's amazing. Uh, we hadn't talked about this beforehand, but to, to be looking at, you know, really high caregiver retention, client retention, 90% office staff retention. I would say that's really successful and amazing because it does create a lot of change for them.

[ 00:33:42 ] Um, obviously you control all of that change, and you position it, and you communicate it, but inevitably, you know, there there's change that comes along with it and you want to reinforce, um, and highlight all the benefits. Like you said, health insurance to the, to the caregiver’s time off things that they'd never experienced, you know, it's a win-win for them as well. You, you did mention what I wanted to hit on was, um, renaming these businesses. Has that happened with all of them? And if so, when did that change occur? Yeah. And just one other thing. So, we have had caregiver turnover, like since our acquisitions, but it hasn't been related to the acquisition. It's your standard, you know, type of turnover you would have anywhere else.

[ 00:34:20 ] So I don't want anybody to think we don't have any caregiver turnover. That'd be amazing. Um, but yeah, as far as... So, uh, we renamed our location in Michigan after a year. Um, so we have sunny days in care with sunny days and care, great lakes. Um, cause it's kind of, you know, we want to continue to expand into the Great Lakes region. Now we're in, it's in Michigan, but we've expanded into Wisconsin as well now. Um, and then North Carolina, we waited for two years, uh, and renamed that some of these in them care Carolinas. Um, and I would say in hindsight, a year is a good time. Um, keep everything calm, not rock the boat too much, but if you're going to make the name change two years, uh, that was not the wisest decision I made.

[ 00:34:59 ] Um, and then the local entities that we have, we've kept them all kind of having their own specific names because the way that the referral sources and kind of who they target all differ. Um, and I kind of look at it as, you know, we have one agency that's got a giant boat that's fishing for tuna, another that's fishing for salmon, and another that's fishing for sea bass. Right. And if I combine them all into one big entity, maybe we are bigger with the tuna, you know, we're catching more tuna, but I feel like we're not going to be catching the, you know, the sea bass and the, uh, the salmon then, if you can track what my fishing boat analogy, right. So, we've kept the three different names in kind of the Western PA area.

[ 00:35:35 ] Um, you know, maybe that's something we do in the future, but for the time being just the referral sources and there's, there is, um, you know, some personal connections to the original name, you know, from some of the founders to the founder's family who's still involved. Um, so that is something that I always try to consider the personal and emotional with something, um, and weigh that out versus, you know, the business benefit and, you know, is it worth it or not? So, um, for anything kind of outside of the area, we'll probably rename it, but, you know, locally it kind of depends on what the referral, if we acquire a company, you know, in Western PA, that's getting the same type of referral sources. It's just in a different geographical area.

[ 00:36:13 ] We'll probably change the name a year in, um, is, is kind of what we expect to do. Yeah. Thanks for sharing that to be honest, it's kind of a mixed bag and it's all very situational. You know, I think if I'm not mistaken, like ideally is to roll everyone up under one brand, but like you're saying, it's not that cut and dry. It's not that simple. There's a lot, a lot that goes into it, particularly with the referral sources. You know, if you were to rebrand, lose all your referrals, you know, that could tank a location overnight. And so, there's just a lot of like strategic thinking that goes into everyone. And it's not as, you know, cut and dry as someone may think of, you know, I'm going to acquire these businesses, change their names within a year, you know, and it's that easy.

[ 00:36:54 ] It's really just not. So that was cool to hear your kind of just, you're thinking behind all of that and the factors. Um, I want to talk about the payer sources. So, we talked heavily last week, sunny days is heavily Medicaid, like primarily Medicaid. Um, but you do some private pay. You do some VA. You mentioned that not all of these acquisitions were Medicaid-heavy businesses. If I'm not mistaken, it sounds like there is a pretty diverse group of payer sources. Um, I want to talk a little bit more about that. Um, I want to talk a little bit more about that. Um, amongst now kind of your four full portfolios of com of companies was payer sources high on your kind of key factor list because you know, Medicaid so well, and it's your bread and butter, where you apt to look for other Medicaid businesses, or were you interested in diversifying through acquisition?

[ 00:37:42 ] Was it high when we got into it? No. Is it high now? Yes. So, um, learning experience. Um, so we know Medicaid. Well, we know the VA pretty well too, but, um, private pay, I don't claim to be an expert on private pay. We do private pay. We've had private Bay at sunny days was initially private pay. Um, we still do it. You know, it's a small portion of our business and the cases we have, we feel like we do pretty well, but, um, the company we acquired in North Carolina was a hundred percent private pay. We've since got Medicaid set up and we do some aid and attendance with the VA. We're in the process of getting a contract set up with the VA, um, which we should have here in about two months.

[ 00:38:17 ] Uh, and we know that really well, um, in the future, if we go to, uh, to find any companies, I'm looking more Medicaid VA. Um, but I'd still be interested in our private pay. If it was a larger established business that had been around a long time. Um, so they already had the referral sources. They already kind of had the business model up and running, you know, they're doing, you know, maybe 3000, 2000 hours a week, plus maybe up to, you know, three plus in that, in that range. Um, I'd be interested in that, but a smaller private pay agency, like the one we acquired, um, it's tricky, you know, I like the people down there and I don’t regret, regret acquiring that company, but, um, it is different, you know, it kind of, it’s just a different, you know, Medicaid and private pay from, especially from a referral source standpoint, it’s a little bit different.

[ 00:39:02 ] And, uh, so in the future private pay, but with the stipulation that has to be large enough that it’s already, you know, performing and running well. Uh, so we’re really looking for more Medicaid and VA, um, smaller Medicaid and VA we’re fine with because we know we can grow that space. Mm-hmm. Putting you on the spot, looking back at those 40 or so agencies that you vetted originally, do you recall what percentage of those were heavily Medicaid focused? Was it a big portion of those? What is, was it a small portion? I'm just curious. Yeah, I would say somewhere around probably 60 to 70% were, were Medicaid focused. A lot of the private pay agencies that we looked at were smaller that were for sale.

[ 00:39:45 ] Um, it seems like, from a private pay standpoint, 500 to 900 hours, maybe a week was kind of the range where we saw a lot of private pay agencies at. And it just seemed like agencies that people couldn't get any bigger than that, um, which we're experiencing ourselves right now with, you know, with North Carolina, you know, until we get Medicaid kind of rolling down there. Um, so that's a, yeah, 60 to 70% were Medicaid, but the ones that were private pay were smaller. We didn't really, I think it was one larger private pay one that we looked at that just didn't seem like it, they were asking too much, you know? And I guess, you know, I'll say that as well.

[ 00:40:19 ] So from like a multiple standpoint, so you're looking at your EBITDA, um, which is kind of in our space, kind of like your net profit. Um, and you know, you're looking for something, we're looking for stuff that's typically four to five times EBITDA. Uh, that's kind of what we're looking for. If it's really big, maybe six, uh, but kind of four to five, maybe even three, if it's smaller, um, it's kind of, and we have people that, you know, if their company's EBITDA was $200,000, we're looking to pay 800 to a million for it. Um, and they're out of, you know, they're out of, you know, they're out of, you know, asking for 2 million, you know, and we talked to them, maybe they're willing to get down to 1.8, but it's still, they're asking for like a nine or 10 X.

[ 00:40:52 ] It's not realistic. If anybody pays for that, they're overpaying for it unless there's some special growth connection that they can have with it, you know, fairly quickly. So, but yeah, that's kind of the breakdown of what we were looking at. Awesome. Yeah. Again, super helpful. And I, and I don't want even myself included to like to generalize that, you know, what you're seeing and what you, what you're sharing is like kind of the rule of thumb in the industry. But I was just curious, you know, are there, are there more private pay businesses on the market? Are there more Medicaid? You know, like you said, the size, you know, maybe smaller private pay, mid to large Medicaid, like there's so many factors here, but I'm just curious, you know, what you saw and if that can kind of relay back to the industry of, you know, what's, what's available and what's happening.

[ 00:41:31 ] Um, let's shift gears a little bit and talk about lessons learned about challenges about, you know, maybe the, uh, the horror stories that most people wouldn't want to share because I'm sure you've come across things that you weren't expecting. I'm sure you've learned some really tough lessons. So, um, I'll let you kind of steer, but where, where do you want to start? So, so I would say lessons learned. Um, uh, there's a, there's a lot here. Um, so one is if you don't feel like you could leave your business for a month and it would still be running without you successfully, you're probably not ready to do an acquisition. Um, so I would say that's one lesson. Um, so these are kind of tips, I guess, too, for, uh, two would be, are all of your processes and procedures standardized in your company?

[ 00:42:19 ] Um, ours were not a lot of it was in my brain, um, or other people's brains and which is great when you have one agency, but how do you get this process? This is a very specific when someone loses Medicaid eligibility, what is our process, right? My compliance person is really good at answering that question, but how do I make sure that somebody in Michigan does that the same way that we do? Well, I have to have a typed-up process for them. So, lesson learned is making sure that you have processes squared away that you can adapt. There's obviously nuances in each state or region, uh, but that's a big one for us. And we're still kind of catching up, um, with getting some of these processes typed up and changed for each, you know, each entity.

[ 00:42:59 ] Uh, the third thing is if you have stuff that, you know, works really well, um, you either need to implement that at the agencies that you acquire, or if they're killing it, do what they're doing and stick to what they're doing. Don't try to hide it. Um, you know, it's, it's, it's, it's, it's, it's hard to hybridize it and do what you have and what they have. And it kind of gets into this watered-down version. And we ran into that, um, kind of at two of our three acquisitions. And that was tricky. Um, and we don't want to come in and say, 'this is what we do.' We don't care what you've done before, right? That's not good either. But if you know, you have systems and processes in place that work really well, you got to figure out how to sell it to the people there that, you know, from the company that you just acquired, but stick to what you know, works, um, obviously get the input.

[ 00:43:43 ] There's going to be nuances, you know, and, and, and, and, and, and, and, and, you know, my kind of philosophy on it is 80% of the stuff that you have, you should continue to do everywhere. You acquire a company 20% is up for negotiation and wiggle room, but there should be an 80%. It's like, this is how we do things. Um, and that that's probably one of the biggest ones I would say. Um, so there's all things that, that I would say, I, you know, lessons learned are some of the biggest ones. I guess the other thing is this. So, our company that we acquired in North Carolina, we did not get to talk to anybody other than the owners before, because they were worried about them finding out about it.

[ 00:44:15 ] And so, um, and, and, and, and, and, and, and, and, and, and, and, if we would have talked to them, we would have found out how much the non-ownership was doing down there from a management standpoint. And we would have approached the acquisition a lot differently and probably paid a little bit less for it. Um, knowing that, um, and maybe had some more contingencies or kept more money in an escrow. Uh, but we would have definitely approached it differently. So, in the future, we have to talk to the key players, even if it's a local competitor across town, if they're not willing to let us talk to their, you know, their key personnel and management, we're not going to be able to talk to them. So, we're going to have to talk to moving forward. That's a deal breaker for us. Yeah. Yeah. If you're talking about red flag, that's all right. Yeah.

[ 00:44:53 ] Let's, uh, let's talk about kind of the hybridization, I like that word. I think that's really interesting. And then we'll talk about, you know, maybe some other red flags. Um, the 80/20 is really interesting, you know, 80% needs to model, you know, kind of like the corporate structure, the headquarters, you know, needs to be similar, but that 20% of negotiation, I'm assuming at this point, you have that pretty well defined, like one, what, what are some specific examples of things that some of these agencies are doing well that you've thought, like, we don't need to override that. I don't want to override that because it is going well. Can you share any like specific examples of that training? Is it rewards? Is it like, what are those? Yeah.

[ 00:45:33 ] So, and when I say that it's not like we're cramming stuff, you know, down people's throats, the 80% for me is finance has to be the same everywhere. Compliance has to be the same everywhere. I mean, there's maybe there's different things like with TB tests that varies from state to state, but in general, compliance has to be the same everywhere. How you do reporting has to be the same. Anything back office has to be the same everywhere. Right. So that's where like, that's non-negotiable basically. Um, but, and that's nice when we kind of have it all combined in the bag, but front facing is where there's some flexibility, right? So, we have a policy that if you don't cover caregiver or don't matter the caregiver call-offs, if you don't cover caregiver call-offs, like that's a major issue.

[ 00:46:11 ] And that's getting addressed by as a field manager, your direction, supervisors addressing that with you with the, the, the region in Michigan, because it's so spread out, they don't cover caregiver call-offs up there. And we had to be okay with that because it just doesn't, the clients are okay with that. The clients up their kind of are lower hour clients. It's not as dire. Somebody doesn't show up. Um, and that's just not culturally how they are up there. We want to cover the shifts and we do everything we can, but if they don't, the client doesn't want to, you know, we do that. Oh, we're going to lose the client. Really? Push back. And we actually lost some clients because we were so pushy about sending in another caregiver that they weren't as familiar with.

[ 00:46:50 ] Um, so culturally, they didn't want another caregiver, you know, in Pennsylvania, North Carolina, they were fine with another caregiver. Um, so we just had to adapt to, and we learned the hard way. Cause I'm like, no, this is how we do it. And I pushed it, and it backfired a little bit on us. And we lost a couple of clients because of that. So, we had to kind of reset and say, all right, well, maybe we need to change our view on that policy up there. Still try to get great shift coverage, but we're not going to force it kind of like we do at other locations. This is super interesting because one question I wanted to ask was how do you maintain continuity of culture through acquisitions?

[ 00:47:25 ] It sounds like from what I'm hearing, it's, it's more malleable than you may think, you know, the cult, like the local market, the people at that office, there is already a culture established there. Things may be going really well, and you don't want to rock the boat too much. And so maybe culture, there needs to be continuity of processes, finances, reporting, et cetera. But like I'm hearing is, you know, the culture is a little bit more fluid and less black and white through acquisitions because these are people, these are clients, these are families, you know, this is a local feel and you've got to, you know, go with what's working. Yeah. And, and we like, I guess, you know, you say that like the product, how we do an intake is the same everywhere, right?

[ 00:48:10 ] How we do a client interview, excuse me, caregiver interview is the same everywhere, but how we respond to, you know, the interactions with clients and caregivers, when situations arise, we have kind of our, this is the bumpers on the bowling alley lane, right. That we got to deal with, but inside that's where there's the flexibility, because it is people, right. And it's, it's different. Yeah. Let's, let's talk, you know, briefly about red flags. Obviously, that's, you know, to me seemed like a pretty obvious one. You know, the owners don't want you to talk to other administrators. That's, that's a red flag. Any other red flags that you either saw or didn't see until later that you wish you would have recognized? Yeah. So, finance, yeah, obviously that's kind of, I don't even know, that's just an out-of-the-gate issue.

[ 00:48:55 ] The other thing is, so our one acquisition and share this. So, we acquired three weeks after we acquired it, they got raided by the FBI and IRS for Medicaid fraud. I went over there; there was like 25 arm agents involved. I felt like it was on a movie. That was a, 18 days after the, this is a home care business. So, everyone's aware that this happened. Yeah. So, anybody that's got something crazy that's happened to them, sure. There are crazy things that have happened, but that's really high up there for about as crazy as it gets. One of the, what we believe happened is we believe there was caregivers that were essentially filling out timesheets before EVV in 2018, and they were working at Dunkin' Donuts or Starbucks or somewhere else.

[ 00:49:39 ] And then having you know signing off on these timesheets and taking advantage of either maybe there were family-run cases or clients that had dementia They're taking advantage of clients that were vulnerable and writing in timesheets that they worked double dipping essentially working another job We think that's what happened We haven't been able to prove that And this is way before this was like five years before the acquisition But I'm dealing with that now So one of the things that we look at is if a company and this is a I guess it was a beige flag that gets your attention but maybe isn't a red flag right So this is a, if companies have used timesheets, they're going to be able to get your attention. And you should really go through the vetting process of how they're ensuring that fraud's not being committed.

[ 00:50:21 ] We've learned that and are still dealing with that situation. So, timesheets really scare me. And I guess also, how are you? Are there client visits occurring? How are you making sure that the caregivers are in the home with the client performing the tasks that they're performing? You know, there's agents that we looked at, they said, oh, the state requires us to go once a year. Or I don't know, ever go. No one ever goes. It's just the caregiver and client there day after day, year after year. No one's been in that home in three years. That's not good. So, I would say that I guess just the checks and balances that are in place to make sure there's no fraud or that clients aren't being taken advantage of.

[ 00:51:00 ] If there's nothing like that, you got to start asking questions and really dig into it. That's what I was going to ask. And I don't know, maybe this is a dumb question, but like how they could send you anything. They could give you any papers. They can make up a spreadsheet. They can make up a spreadsheet. They can make up a spreadsheet. I don’t think many people would do that, but this is a big deal to purchase another business. Like there’s a lot of money, time, resources. So, they could send you anything. How do you like fact-checking? I think you mentioned like getting into their software, like getting access to their tech stack, doing the due diligence there. Would one step further by contacting people, contacting clients, families, employees to really do an extra layer of fact-checking? Yeah.

[ 00:51:38 ] We hadn’t done that. It’s not a bad suggestion. I mean, people may be nervous that that would cause, you know, kind of a stir with the clients and caregivers that they could freak out, you know, that there may be an acquisition. It's not a bad idea. But getting, I guess, asking people, recording everything that they're saying. And then before you get into it, we check their system of all of these companies. Like I was in their scheduling system and in their QuickBooks before the acquisition to verify everything that they said was true and accurate. So, and if it didn't match with what they told us, that's not, you know, then is there some, there's some integrity or some trust issues you have to deal with. So, you are trusting.

[ 00:52:14 ] I mean, you have to be comfortable with the person because you are trusting them with certain things. And, like I said, we've, we've, we're burnt a little bit in North Carolina. And, you know, but I think if we asked the management team some very specific questions, I think we would have not been burnt and we would have had a better grasp on what was going on there. Yeah. I by no means mean to be like a pessimist. It's just, to me, it's like, you want to go to the ends of the earth to really make sure you feel good about things. At the end of the day, there is some trust and accountability, and like, you know, like a leap of faith just to like, you know, go all in on it.

[ 00:52:47 ] But I guess, yeah, my wheels are turning on, like, you know, you can prove and identify so much with the existing records, but you know, at one point do you maybe go one step further and just have those conversations? Like you said, there may be concerns of like rocking the boat or even an entertaining and acquisition, but you know, if you're really serious about it, it could come either way. And you just have to figure out how to approach those conversations. And I'll add, so let's say something bad does happen. What team do you have in place that can go down and make sure that it doesn't turn into a giant dumpster fire, right? So, if you're going to do acquisitions, is it you?

[ 00:53:26 ] If you're the person who's going to go down and save the day in case something really bad happens, can your team at your current agency handle everything without you there? Like, can you go down there and set up shop? If it's not you, who is it on your team that's going to go do it? Do you have somebody that can go down there and be the hero and run that agency while you get it under control? If it can't be you and you don't have anybody, you either need to get that person before you do acquisitions, or maybe you're not ready. I want to discourage anybody from doing anything, because if you're listening to this, I would say that you probably want to be better as a home care agency.

[ 00:53:58 ] If you want to be better as a home care agency, you actually care about people. And if you actually care about people, and there's a lot of agencies out there where people don't, you should be buying those agencies. So those people that they're taking care of and that they're employing, have somebody like you, that's overseeing the agency. So, I don't want to discourage anybody from doing it. Just, I want to say, make sure that you have everything set up and squared away, especially personnel, whether it's you or your top players that can go handle it. And that's a little bit of a safety mechanism for me, is I know if we go buy something and something doesn't work, I have a good team in place, depending on the situation, that can either run all the other locations and I can go there, or more likely, I have a couple of players that can go there now, and handle it and make sure that everything gets, you know, gets taken care of.

[ 00:54:44 ] So that's, that's really important. And that goes back to being, you know, trusting the team that you have in place. Yeah, that was really well said. I think, you know, the essence of what you just said represents you as a CEO, represents Sunny Days really well. You've explained to me that, you know, you want to help the most people possible, and you're really good at what you do. And now you're really good at scaling, you can impact, we're talking 1,000s and 1,000s of people. And if it's done right, you know, you're really having a lasting impact and creating this, this culture of care, you know, and like the greater Pittsburgh, but then even, you know, regionally.

[ 00:55:25 ] And so I just think it's, it's so neat, you know, to find people like you that are so passionate, but are also sharp and pushing and working hard day in and day out to help as many people as possible. I think it's admirable. And I really just think it's incredible. Yeah. And it's something that I think there's, you know, there's a roll-up happening in our space right now with M&A. And there's a lot of firms getting into home care that maybe don't care as much about the people, and they just care about, you know, the bottom line. And it’s agencies like, like ourselves, and like everybody that's listening to this and live and is going to be listening to it that really want to do good things that I don't want to say 'unite', but kind of like we need to step up and acquire these companies or grow the companies that we have to make sure that the people that need quality care are going to get it.

[ 00:56:10 ] Because there's agencies out there, you know, everybody knows, there's competitors out there they have that that aren't delivering quality care, and you feel bad for those clients. I mean, I personally feel bad for those clients when, you know, I had somebody yesterday, an auditor that audited us, and her son is getting care. And, you know, she was talking about some issues she's seen in other agencies. And, you know, the agency that her son is getting care from, you know, they're a solid agency, but there's other ones she talked about that people go weeks and months without care and no attempts. Half of them. And, you know, those people, there's a reason that they're, you know, qualified for care. There's a reason they've called you if it's proper, and they've asked for care is because they need, they need help.

[ 00:56:47 ] And they don't want to go to a facility, they want to stay at home. So, agencies like us really need to step up and, and make sure we're getting care for those people. I couldn't say it better myself. You know, we talk about bad actors, and there are some. But like you're saying, you know, whether it's roll-ups, consolidation, it's really just letting the best rise to the top, you know, and have, you know, their pull and their influence on the market and to help as many clients at that level, you know, of care that really should be standardized across the board. So, I couldn't agree more. Just in closing, any anything that I didn't cover or any kind of last tips or advice that you want to make sure we get in in the last couple minutes?

[ 00:57:29 ] Yeah, I would say that when you go to do acquisitions, everybody thinks about acquisitions, maybe it's just as lessons I've learned, the acquisition that all the due diligence and maybe that takes three to six months, right? That's not the hardest part. The hardest part is the integration. Once you've acquired the company, getting it integrated to run to the same standard that your company is running. So obviously, due diligence and the acquisition part is very, very important. But make sure you have a plan in place, a checklist of everything that you want to get set up from an integration standpoint, down to whenever I hire a caregiver, is there a letter that I want them to get from? Yeah, that's a great question. I mean, you know, for me, as the new, you know, executive or owner, I mean, you want everything squared away.

[ 00:58:13 ] If there's satisfaction calls to the clients on a monthly basis, what statement am I telling them? I mean, you really want to get that all figured out. And how are you going to train that? How are you going to implement that the integration, like I said, the acquisition placement, maybe three to six months, the integration is taking more like three to 12 months. That's just a longer process to get all that set up because you can't, you can't force feed it too fast, you know, for it to be done correctly. So, that's a really big thing, I would say, that you know, that I would know that integration is actually harder, in my opinion, than the acquisition.

[ 00:58:47 ] And then I guess, lastly, if you acquire a company that's doing 1,000 hours a week, or you acquire a company that's doing 5,000 hours a week, it's pretty similar in the amount of work that is involved. So when you're looking at companies, we have found that the due diligence, acquisition and integration process for the one company we acquired that was smaller, that was at the time doing around 800, and the company that required it was doing 9,500 hours, very similar in the amount of work, there's obviously more players and more people that need notified, but the amount of work is similar. So, if you're, if you have the means to buy a larger agency, maybe it's doing a couple thousand hours a week versus under a thousand. And you're not sure what to do.

[ 00:59:26 ] It's the same amount of work to buy a smaller agency, there's reasons to buy smaller or larger agencies. But from a work standpoint, and the acquisition integration, the workload we have found at least has been about the same. Wow. Some really good points here at the end, John, I just want to thank you for your leadership, you know, at your agency at your org, but also across the industry, you're one of the maybe hidden gems in the space. But no, I needed to dig you up and make sure you could share these insights with the industry, because it really is fantastic. So, thank you so much for all that you're doing and for joining us. And for sharing so much transparent information the last two weeks, you're so willing to just share and vocalize and highlight lessons learned.

[ 01:00:07 ] And I know a lot of people are going to get a lot from this. So, thank you so much. Hey, thanks a lot for having me on. And it's been great. And yeah, for everybody that listens to this, go out there and crush it in 2024. And take care of many people as you can. Awesome. Well, we'll end here. Thanks, everyone for joining us. Thank you again, John. And we'll look forward to seeing everyone back next week. Take care.

[ 01:00:56 ] So much transparent information the last two weeks, you're so willing to just share and vocalize and highlight lessons learned. And I know a lot of people are going to get a lot from this. So, thank you so much. Hey, thanks a lot for having me on. And I'll see you next week. Bye. Hey, thanks a lot for having me on. And it's been great. And yeah, for everybody that listens to this, go out there and crush it in 2024. And take care of many people as you can. Awesome. Well, we'll end here. Thanks, everyone, for joining us. Thank you again, John. And we'll look forward to seeing everyone back next week. Take care.