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Every week, Helen Guo interviews successful acquisition entrepreneurs, independent sponsors, and investors who have acquired businesses. Learn how to buy a business rather than starting one from scratch from those who have done it themselves.
Hey everyone, it's Helen from SMB Deal Hunter. Uh, today we have Devin Fit Fitzgerald with us from the Boston area. Devon has acquired two home healthcare companies. Uh, he has a really diverse background. Uh, he previously worked in his family's, uh, quick serve restaurant business, growing it from three to 14 locations.
He also worked as a medic. Ation teacher, he modeled in some commercials and my favorite one is, uh, he was also a baker. Uh, so Devin, I'm really looking forward to hearing your story and it's great to have you on today.
Thanks so much, Alan. Great to be here.
Uh, well, Devon, let's get started. Um, what was your background, uh, and tell us a little bit more.
You know, I kind of, uh, brought up a couple interesting, uh, past life experiences you've had, but kind of tell us more about that and what led you eventually, you know, into acquisitions and owning your own business,
I guess. Uh, I've always been interested in. Living an interesting life. Um, I love learning. I love new experiences.
So that kind of, um, set the tone for my career path. I went to Williams College, which is a liberal arts school. So the idea of kind of a universal education, uh, really appeals to me. Um, but by the time I graduated, I was kind of burnt out from school. The plan was to go to law school, but it just seemed really too boring too.
I spent my early twenties doing that. Um, so I entered the family business as it were 'cause they gave me a lot of autonomy. And so kind of my official role was, you know, working in the restaurant, helping 'em grow. But I spent all of my free time studying yoga and meditation and that really kind of set the tone for my adult life.
Um. Always willing to kind of gather interesting, unique experiences. Um, and ultimately, right, the, the total sum of that education is just learning how to interact with a wide variety of people and yeah, being kind of socially nimble, I guess. Oh,
super interesting. You definitely have the zen voice, so, um, makes a lot of sense.
Uh, well tell, tell us sort of. Um, you know, how did you sort of learn about buying a business? You obviously run and grown your family's business. Um, why, you know, what kind of caused you to make that pivot?
Yeah, I heard, um, two sentences that really changed the trajectory of my life from, um, YouTube videos.
This is probably back in 2019, I think. Um, first one was it's easier to buy revenue than create it. That made all the sense in the world to me. And the second, um, I don't remember verbatim, but the idea was basically that there's this massive demographic shift, so there'll be more businesses for sale than at any point in time in human history.
So the time is right. Um, so kind of once I put two and two together, uh, I started kind of studying how to acquire businesses and just learn the game really. Um, a lot of. YouTube, uh, university as it as it's called, and, uh, some reading and just thinking a lot about it. Um, for probably a good 18 months trying to get, you know, my legs under me from a theoretical perspective.
And then it was really time to get to work and, and see what I could make happen.
And were you working this whole time, um, while you were actually searching and you spent 18 months sort of learning, reading, um, at what point were you like, okay, I gotta take action?
Yeah. So, um, pretty much learning, reading, I realized again, you can do all the studying you want, but exactly until you pull the trigger, until you take action, nothing will happen at all.
Um, so I was still working, um, began officially searching in 2021, um, and working throughout the whole time. I remember being on the phone with bankers while I'm delivering pizzas for the restaurant, putting them on hold while I hand off a pepperoni pizza to a family. Sprinting back to my car with my $3 tip and, you know, thanking the banker for his grace and patience because I'm trying to figure out how to negotiate, you know, a deal and, you know, six, seven figures.
So interesting juxtaposition. But, um, you know, super fun.
That's crazy. Um, that's so funny. I guess when you were, um, searching, did you, you know, come in, you obviously read a lot by the time you, you know, started really, um, pulling the trigger, but, um, did you have an idea of what kind of business you wanted to buy?
You know, was your idea always that you were gonna buy multiple, you were. Build a portfolio. What was kind of, um, your initial maybe thesis going into this, if there was one?
Yeah, there certainly was. Um, I guess kind of in general, basic way to put it, the thesis was roll up healthcare service businesses. Um, I initially started looking at assisted living facilities, but being 2021 COVID was still very real presence.
So I had, um. I had a scheduled visit to a facility, speak with their management team just to learn about the industry. It wasn't for sale or anything like that. I just was kind of doing some more industry research. Um, they had popped a COVID positive test the week prior. So by the time I visited, the whole place was on lockdown.
Um, I could only stay in the lobby and I could only speak to a person, one-on-one from a distance. And the message I got was that, uh, everyone was miserable. The workers, the staff, uh, on all levels, the residents, the family members who wanted to come visit the residents. Uh, so it didn't seem like quite the right time.
Um, so on the ride home, it was about an hour ride home. Kind of the logical extension of an assisted living facility to me would be home healthcare, where you're still caring for a largely similar population and the demographics, um, and kind of industry outlook was similar. Uh, so made that kind of immediate pivot.
Um, and always knew I wanted to buy many, many, many businesses in both a big portfolio. Um, but I know you gotta start with one. So.
Did you, um, at that point start only, uh, speaking to home healthcare businesses? Uh, were you, was this sort of a broker deal that your first one, um, did you, you know, start looking off market?
How did you kind of approach, approach the actual deal sourcing?
The first deal ultimately was through a broker, but all the way prior to that I was going kind of proprietary outreach. Um. GPT was not released at this time. So it was literally Google Maps search, uh, for kind of industry locations in a radius, build a list, cross-reference that with the Secretary of State website to get owner information.
So then when I cold call, it'd be a little easier to get through a gatekeeper because I could, you know, use the owner's first name. Um, so kind of, uh. Again, kind of unglamorous, quite a grind, but I think that, um, I think it all, it all paid off in the end. Uh, there was a deal we had on the table for, we worked on it for eight months and this was also through a broker actually.
Um, but it died the day we got a term sheet. And so I went back to the interwebs, found another broker deal that ended up, you know, closing, um, you know, many months later. But at first it was really just. Hundreds, I mean, thousands of cold calls, not just to owners, but to bankers as well. Um, but I think, again, all of that work where it's, um, maybe a lot of, we'll call it like top line activity, but nothing went to the bottom line really.
So it seemed like it was all for not, but I think, you know, there were all stones, uh, stepping stones on the way to the ultimate goal.
A hundred percent. I mean, any of those could have been the, the ultimate one that closed. Right. So, exactly. Um, I'm curious, and you spoke to so many sellers, cold calling them, uh, you probably became an expert at cold calling.
What was your, what was your approach, uh, how did you, you know, start those conversations? What did you say and how did you get them to, uh, maybe progress?
Yeah, so I think, um, what was really helpful was not. I didn't use the word sale or selling or any derivative of that word. I framed it as like a joint venture or a partnership.
Um, I think in the ideal world, I would want, wanted to have acquired businesses, you know, maybe 60 40, 70 30, 80 20, keep the owners rolled in a little bit. Um. I still have that dream as we look for more acquisitions now. But the first, the first two ended up being a hundred percent buyouts. Um, because the businesses were so small, there was a lot of education.
Um, most owners weren't kind of waiting for the call. You know, the one who basically was waiting for the call, it's 2025, she still hasn't sold yet. It's been listed with multiple brokers over the years and things like that. So, um. There is a, a massive element of fortune and luck involved, but I think that, um, you know, the more work you put in, the better chance you give yourself to, to catch that luck.
Um, but it was really rudimentary. I mean, just calling and looking to have a conversation. I wasn't trying to be very salesy or even really very businesslike in the beginning because I knew that whether it was a gonna be a partnership or it was gonna be a, a full sale. There's some human personal and partnership element to it.
And so I wanted to make sure that I could work well or at least, at least have a conversation with someone with whom I would undergo a transaction, potentially life changing for them and for myself. So had to make sure that we were, uh, that we could vibe in the proper manner.
Makes sense. And tell us about the deal.
You know, the first deal you actually ended up closing on. Um, what attracted you to it? Um. As you were sort of in diligence, you know, what, what made you decide to, to pull the trigger on it?
Really, my only requirement was that the cashflow would cover debt service, um, on like a flat model if we didn't change anything in the business.
We literally just switched out the ownership. If at the purchase price we bought the cashflow covered debt service with a little bit of a margin, then I figured that we would be, you know, I was willing to take that risk. Um, so due diligence was, was a, a major learning experience for me, just because I had not entered the industry until that point.
Um, so it was really, it's been quite an education since, you know, 2021 basically. Um. But again, I could get along well with the seller. She seemed genuine and sincere in our conversations. We had a number of, um, in-person conversations that help us get closer, um, which actually proved quite helpful because everything looked good.
As we're going through diligence and we get our term sheet, everything looks great until it doesn't. Um, so we ran into some static and friction that was unanticipated. We were scheduled to close in June of 2023, and we didn't close until September, um, because of that friction, and we wouldn't have closed if, if our relationship wasn't as strong as it as we had built it up in the previous months.
Um, so what, what attracted me to the deal? Really? Well, like I said, a, a deal died at the term sheet level, and that was, you know, not, not a feeling I was really looking for, maybe unconsciously I was, uh, but I didn't, you know, consciously I wasn't. Um, but I more or less put myself in a do or die situation.
Um, psychologically, so much time had passed. Especially eight months specifically working on that deal. You know, costs were, were rung up during that eight months. So, um, again, it was kind of just more of an emphasis on pull the trigger. This deal met the napkin math cashflow would cover the debt service, so just had to pursue it.
Um, happy I.
And tell us, you know, you, you didn't come from this industry obviously. What did you learn, you know, about the home healthcare industry and what have you learned? Maybe since then, since obviously now closing that first deal, closing the second deal, running the actual businesses. Um, what do you like about the industry, you know, for someone, uh, who you know, only knows maybe that, you know, there's an aging population and you know, there's some, some strong tailwinds here.
Tell us about, tell us you know, about that a little bit.
So, my personal relationship to the industry, um, is really just through the connection with my grandmother. Um, it's. Quite helpful to me to have something bigger than myself, um, to push me every day, to keep me disciplined and keep me focused on racking up victories wherever I can and providing those opportunities for the people I work with.
That we just want to continue to win and learn and win and learn. And. Uh, that's it. It's a, it's a great opportunity, so we're taking full advantage of it. Um, what I like about it since being in here, so I think it's not industry specific. I think that in every industry across the globe, probably since time began, there's gonna be people working in businesses that are, uh, you know, untapped potential.
It's hard to run a business. It's really hard to run a small business. Um. It's a lot more people oriented than folks may understand from the outside. It really is about personal relationships, leading people, creating trust with people, uh, giving people an opportunity to grow and learn. Um, and also, you know, dealing with the, the kind of unpleasant aspects of, of certain people sometimes as well.
So being able to kind of navigate social situations. Um, it's been. I mean a great, a great classroom for that. Uh, my previous work in the restaurant kind of lent itself to that. Um, but continue to learn every day on that front, which is just fascinating and terrific 'cause that, that compounds like leadership compounds so much.
Um, so I'm looking forward to, to seeing how that continues to unfold. Um, it's fascinating business as well. Effectively it's a staffing company. Um. Our, our patients, the folks we care for are at the center of everything we do. Our quote unquote customers are really like the caregivers themselves. 'cause of course they can go work anywhere.
So why would they choose to work with us? We have to make it compelling for them. Um, and then the, the referral partners that we have in offices. Which until kind of due diligence, I didn't necessarily understand the nuance of that, but once I did, once I was clear on that, it kind of made everything, um, it helped us set our systems up in a way to, to take advantage of that, where I think maybe other businesses in our, in our space don't necessarily look at it that way.
Um. But of course being in caregiving is like terrific. Everyone here is kind of dedicated to service. The, the A players we have are like incredibly good and gracious every day, and I think it's just easy to have to cultivate, um, a caring atmosphere in a caregiving business. So it's fun to come here every day.
Makes
sense. Yeah. No, that's great. And do you feel like, you know, people often talk about tailwinds. Do you actually feel a natural, maybe growth and demand every year that since you've been running the business, um, how does that, is that, is that palpable? I,
it is. Um, the demand far outpaces the supply. Um.
You know, nursing shortages, I think maybe leading up to COVID, but certainly a after COVID. Um, nursing shortages are a big problem, caregiver shortages, um, you know, across the healthcare industry. So again, yeah, the demand is there. Who knows if it'll ever be met a hundred percent. We have to do our best to try.
Um, but it, it is palpable because the, you know, we have certain software that gives us referrals that get blasted out by hospitals, and there's not a day where it's quiet, you know, it's referrals are constantly coming in. So, um, it's up to us to, to upskill our nurses and, and be prepared to, uh, do what we're here to do.
Interesting. And when you, um, when you were, I, I guess with the first deal, maybe even the second one, what did you know, what did the business come with in terms of, um, maybe nurses, you know, referral partners, patients, you know, what, what did that look like at the time? What were you maybe buying? Uh, what came with the business?
Yeah. First business came with, um, 12 nurses, two office administrators. The patient census was about 40, I'm sorry, it was 37 when we took over. Um, and there were seven insurance contracts. They had one really, really strong referral relationship, and then a, a few, um, you know, we'll call 'em lukewarm ones, but one was like incredibly strong.
Um, so that incredibly strong one basically was the model for us. We want to have. You know, five or six of these incredibly strong referral relationships and then we can kind of backfill with, with the lukewarm ones. Um, again, super fortunate and blessed that the office staff I inherited with the acquisition were very focused and enthusiastic folks.
They, millennials and Gen Z, so they're young, kind of energized, looking to grow. I appreciate that. Um, and. Maybe not so positive for them beforehand. But I think a great positive thing since the acquisition is that I don't maybe think they were, uh, well, certainly their potential wasn't tapped, but maybe they weren't like treated great.
Uh, I guess it's all relative, but I think there was a great opportunity to kind of treat them better and that builds a lot of trust. You can really build a strong business once you get that trust locked in.
Um,
so that was a terrific opportunity. Um, a few nurses left kind of immediately. That was an interesting experience, kind of learning how that whole whole deal works.
'cause some of the nurses had personal relationships with the, the sellers, so it kind of moved along with the sellers as well. Um, but it took some time to understand kind of who were the A players and who weren't who may be. You know, if given an opportunity could do a little better. Um, but it was, it was quite a whirlwind, um, you know, from, from the search phase, kind of going 110% to owning that first business, raising the level to 120% and then starting another search.
Uh, but it was awesome. I, uh, I have a lot of energy. I love working so. Good. That's awesome.
That's awesome. Tell us about, you know, I we're, I know we're jumping back and forth a little bit, but, um, tell us about how you financed that, that first transaction, maybe high level deal terms, you know, how did you, how did you finance that one and, and the second one?
Yeah. Um, so SBA for both first deal was, um, a little. What was it? Maybe 87% SBA and 13%, um, equity injection, which was some equity on my part and then a seller note. And the second deal was, uh, yeah, again, 90 10 through the SBA, the 10% was entirely seller note on the second deal. Um, because we use the, the.
What is it called? There's an SBA program.
Expansion Loan.
Expansion loan. Yeah. I was gonna call an add-on loan. Exactly. Yeah. So just use that. Once I heard that was available, it kind of,
I mean,
that meant go, so we had to go and get one.
That's awesome. And for those, for those, you know, listening to this, you know, what, what did you actually have to put down then on, on both these deals combined?
'cause you know, for, for the first deal. The seller who no contributed a part of that equity injection. The second deal, you effectively put no money down. Um, since you already own one, you could take advantage of this program. Um, so I guess combined, you know, what, what did you end up putting down
total of 50,000?
I will say this, we should not have put $50,000 down. So the seller broker on the first deal was insisting on a good faith deposit, and I didn't really push back. But I should have, so I would encourage all of your listeners and subscribers to push as hard as you can on brokers. Um, it would've been nice to have an extra 50,000 of course.
So it would've been helpful. Yeah.
And, you know, tell us about sort of high level, you know, what were the sizes of, of these two deals?
Yeah, so the first deal, um, did about a million dollars in revenue. Uh, the high point was 2021. They did 1.3, and then it was, again, I kind of shudder looking at these numbers, but the, the compound annual growth rate of the business from 2020 through 2023 was negative 21.5%.
So the sellers were completely checked out, you know, their lifestyles were met. They had no interest in growing. They just wanted to sell. Um, so it did, yeah, you know, basically a million. By the time we bought a top line, bottom line, a three year average was 340 4K on the ebitda. By the time we bought it, the year prior, it was like three 10 and it was falling second deal.
Um, you know, about 4 million top and eight 50 K to the bottom. Again, it was falling not as bad. Um, 6% a year.
Super interesting. I mean that, you know, both businesses were, were declining. I think people have probably a lot of thoughts on that. You know, a lot of people will look at a declining business and they'll be like, I'm not touching that.
Um, how did you get comfortable with that?
I have, uh, unreasonable confidence in myself. Not that I'm anything special or have any special skills, but that I can learn things and can identify. Um, you know, I'm a problem seeker. I'm looking where are problems like the Terminator and I identify it and then I look to solve it.
And I try and instill that with all the folks I work with. I tell them every week we have to find more problems. If we find the problems first, we'll never be beat. But if other folks find problems in the industry, in our business, we're gonna lose. So we can't afford that. Um, and also. At least in the first business, I had to hire a manager for the first business.
The seller was the clinical manager, which is a role required by CMS to be certified. It has to be a nurse or a healthcare professional. I'm not one, so I knew I had to hire one. So I hired a person, uh, his name's Ralph St. Fard, and he is, I mean, I can't overstate how incredible he's, so, I knew that us together we're both kind of learning machines that we could figure it out.
How did you know, I guess even, you know, during diligence that there wasn't some, some huge problem, um, that was leading to this decline that was not, not solvable, you know, you didn't come from the space, uh, versus something that you were like, I can turn this thing around.
Yeah, that's a great question. Um, so they had, um, a CMS recertification during, when we were doing our diligence, so.
Basically they passed that. So that let me know that the business was compliant. So there was no kind of compliance issues. And then again, developing that relationship with the seller, um, you know, being socially literate and understanding people, being able to read people, you know, folks are being honest or maybe, um, being elusive if you ask certain questions, you have to ask sellers really hard questions.
Um, but I asked, you know, why is the business declining? They didn't say we're lazy, um, or we're tired or we're all set, but what they did tell me, um,
I could kind of put it together.
That makes sense. Um, no, that's super interesting. What kind of prompted you to go from much bigger deal in the second one?
It made a lot sense being in the same industry. About an hour drive from the first office, largely the same business operations. So it kind of just made a lot of sense on that front. Um, of course, bigger numbers. That looks cool too. And we're here to grow. Like I said, it's easier to buy revenue than create it.
So this just made a lot of sense going back to that philosophy. Um. I mean, we put an offer in a couple weeks ago on a business that's almost four times the combined, uh, size of the couple businesses we have now. So we're always looking for great opportunities. Of course, like, yeah, that's why we're here.
Um, but yeah, it, it just made sense on the operational side as well and I figured, okay, we can likely finance this. Um. If it was a challenge, they made us work for it. But, uh, I knew that if we could kind of overcome the challenges and get the thing done, that it would be, um, you know, one plus one equals three.
And so far it has been.
I'm curious, you know, when you, when you closed the first deal, um, obviously you had to learn the business, you brought in a new manager. Um, were you growing it organically at all? Were you like, okay, I need to go buy more revenue. I need to go make another acquisition, grow this business.
And you know, how soon after you bought the first one, um, were you going out on the second search again?
It was both. It was, we gotta grow organically and we also have to. Acquire. Um, so kind of first things first. We knew we had to stem the losses, right? So negative 21.5% is like nauseating. So disturbing.
So, uh, we had to, we had to stem that. So the first year we owned it, we grew it one and a half percent. So basically we flattened it out. So we were able to pump the brakes on the fall. Um, we're in year two here. Our, what, two year anniversary was two weeks ago. Um, things are looking on the revenue side, like.
Where they should. Everything's really bright now, so we're just trying to capitalize on momentum and push, push, push. As far as how soon after the first acquisition, I went back to searching, uh, I was signing NDAs, so I came in here on a Thursday, Saturday morning, I was signing NDAs and I went to do a site visit like four weeks later outta state.
Because I had to capitalize on the momentum, like keep it moving, keep it moving. The big theme of my life. Um, and again, just the, the overall focus and the genesis of all this was acquire businesses. So that's what we gotta do.
What and what's your day-to-day? You know, what was your day-to-day like when you bought that first deal?
You put the manager in, but were you still very involved day to day? Um. So you're doing that and basically going after the second one immediately?
Yeah, I was here every day. Um, maybe that's a little hyperbole. I was here six days a week sometimes that, uh, I have a sleeping bag here. I use that a lot. I, but again, I knew it was just like, I, I more or less see myself as the engine and the fuel.
I gotta show up every day and, and fuel people up. Um, it's just, yeah, we were, we were all on go. Like, so like the hedgehog gotta go fast. So, um, but again, it brought me like great joy. I'm not ashamed to say it, but I don't like, have a life. I'm not cool guy or anything. I just like to work and I tried to get a hobby.
Um, I started taking horse riding lessons last year. Uh, which was super helpful because for an hour every other week I was forced to not think about this stuff. Uh, when you're on a horse, you cannot think about anything else. Um, so that was like very helpful. It was quite stressful. Um, you know, 2023 and 2024.
Uh, but other than that I love thinking about this stuff. So, um. Even the, the admin staff are, why do you have a sleep bag? Are you really gonna sleep here? I said, yeah. They said, why? You're not, you're not gonna be here six days a week. Why would you, you'll learn about the depth of my love.
I mean, there's nothing better than loving what you do.
And it sounds like you found that, which is uh, which is incredible. And uh, you weren't kidding when you said you had a lot of energy still. So,
yeah, I honestly thought I would not have this much, like when I was younger, I figured probably around 35 things would feel different, but it's happy to report. Um, 35 and then since then, I'm 39 now, like now it gets better.
I'm really curious, you know, with your previous jobs, were you working this hard as well?
Yeah, so I'm just a workaholic, I guess. But I would like unofficial record. I set at the restaurant when I was working, it was like a, in the restaurant itself, uh, I worked 60 days in a row. Every day was a double, except Thursday that only work, uh, eight hours instead of 10.
But I had like customers like asking me to take a break, like, please. But I couldn't. I mean, you know, I, I got goals. I gotta set records. You gotta have fun.
Wow. I love that. Okay. Very cool. Um, no, I'm super curious. You know, first year you were in the business and you managed to, to kind of, uh, stop the business from declining.
What, what were some of the things you did?
Our philosophy was to be humble and to look for the obvious places where we can get victories. Being humble just means. Not knowing everything. Not knowing anything, learning from the folks who are already in the business. Um, as I mentioned before, we kind of learned that where we need to focus our attention has to go to the nurses, both the nurses that we have currently, and how to bring more nurses into the fold.
And then focusing on the referral partners and how we can be more visible for them, more helpful for them. Um, kind of the, the non. Uh, sexy stuff is just like learning where we can cut costs as well. Um, it doesn't really take a lot of talent. You just kind, kind of look at the line items and see what you're paying too much for, what do you need, what you don't need.
Um, we also, so there's an interesting nuance in the business where, you know, we have to submit, uh, documentation for the visits and once those are approved by the insurance companies or the. Public payers, state or the government, they will reimburse you. But if the notes aren't up to snuff, they can claw that money back or not reimburse you or not continue the the, um, the service itself.
They can modify the service. Um, so we kind of created a, a QA department. We hired someone to run that process, and that wasn't obvious kind of through diligence, but once we got in the business. It made a lot of sense. Worked so hard to get these reimbursements. We wanna make sure we keep them. Um, it forced the caregivers to really step their game up.
It was very difficult for them because they never really had this pushback before. They just would submit and it's all good, but we hired a good one. Uh. She does a great job. So it forced everyone to raise their game. And this was really in preparation to take Medicare cases. So the business was largely, or still is largely Medicaid.
Um, but Medicare gives a, a higher margin on their reimbursements basically when it's all said and done. So we knew that in order to grow to the greatest potential in this business, we'd have to basically get Medicare ready. So we, once we realized that, we started that process immediately. And, um, you know, it's paid some dividends now almost, you know, two years later.
Super interesting. Tell us more about the nuances between, you know, the Medicaid versus Medicare. You know, why does one pay more? Um, you know, how are you getting more Medicare cases?
Yeah, this is like what we're learning right now, how to get more Medicare cases. So, um, Medicaid, um, you basically get like a prior authorization from the insurance company and doctor's office that says, you know, these are the visits we think, um, will take place in this next 60 days, like the frequency of visits and the content of the visits.
And you go and do an assessment. The nurse, um, largely agrees with, with what's been sent. Um, there may be some kind of pushback or maybe need more services, et cetera, et cetera, but largely it's a smooth process. Um, and those are paid per visit and it, you know, it's a cap rate, public pay, and most of the insurance companies follow the, the Medicaid reimbursement rate on Medicare.
Basically you have, um, a certain time period in which you have to provide services based on the referral. The requested services, but the agency and the nurses determine how frequent that patient needs to be seen. Mm-hmm. And so you kind of play more of a determining factor in the total reimbursement you receive based on how frequently you go see, uh, the patient and how therefore how frequently you're gonna be paying the caregiver.
Uh, the major requirement for Medicare is that the. The documentation must show improvement over time.
Interesting.
So it's, yeah, it's a little bit, um, a little bit more, I would say intellectually challenging. Um, which is great. That's what we love. Um, myself and the management team, like I said, everyone's very, everyone's, you know, very intelligent, but.
Has the ability to learn and wants to learn, which is the most important thing.
That's great. And what are you finding, you know, is working to, to, to getting more Medicare patients and you know, building those referral partners that are driving you guys more?
Yeah, this is the Rubik's cube we're, we're looking to solve currently.
Um, so we kind of understand the, the Medicaid front and developing relationships for partners there on that side. Um, again, that seems quite obvious. Um, even though we have two locations with largely the same business, the community context are a bit different. So there's kind of different kind of community health organizations.
Um. That we work to establish relationships with. Um, again, that seemed like fairly obvious, the Medicare one. We have these discussions every week. How do we get more cases? Um, you know, they're gonna be coming from hospitals instead of community health centers. And all of the larger agencies have like full-time basically salespeople in there, in the hospitals, on the floors interacting with people.
So I. My favorite part about business is like finding a way to be different from all the competition. So we're still trying to basically deconstruct that. Um, but we're likely to hire someone who has experience, um, both as a Medicaid, I'm sorry, Medicare caregiver and as a kind of business development role.
Um. I've been having conversations with this person for 14 months now, and I think we're finally gonna hire them next month. So we're quite excited for this.
So interesting. So it's just a salesperson literally on the floors of the hospitals, just making sure that. If there's awareness that you exist. Yeah,
exactly.
That's my understanding. So again, we're, we're here still willing to learn and figure out our angle that we can be a little bit different and, uh, really capitalize on on that difference.
And how do you, you know, given that this is, you know, you don't really control pricing or you do more with Medicare in terms of frequency, but how do you feel about sort of the direction, you know, we're headed and whether, you know, your margins are gonna get squeezed and things like that.
Like what's your, what's your perspective?
Um, my perspective I would say is, uh, fairly unsophisticated. I think that like. We understand the business is prices are caps, it is what it is. Um, but there's a lot of industries where you could be successful, where that's the case. So we don't see that as a deterrent.
All the sims, I look at, uh, slight tangent, they all say how, oh, you know, you have one of these businesses you can offer private pay and that's how you expand. And yeah, theoretically that's true and that's fine, but I don't think it's maybe necessary you can expand within the constraints of, of the public paid business.
You know, my general approach to business is like that, of, uh, historical warfare. And so I think that, like I said, we want to make sure that we beat ourselves, that we find our issues before someone else does. Because if someone else does, then we're gonna lose that battle, maybe the war. And that is not an outcome.
Uh, we don't exist to achieve that outcome. So. I know they're cutting the Medicare rates this year in Massachusetts. The Medicaid rate is supposed to jump next July. About every three years they revise it. We had a nice little town hall with the state a few months ago and apparently like, you know, adjusted for inflation, the reimbursement rate has gone up like 2% since 2005, which is pretty uncool.
So hopefully they gave us a nice boost this year. Um. But I think that just kind of comes with the territory. I don't, I don't really let the macro things worry me too much. I really focus on what we can do in our position to strengthen our position.
No, that's, uh, you know, do what's in your control. That makes a lot of sense.
And you spoke about the private pay a little bit on, on a lot of these sims, you look at how, how difficult is it to expand until private pay? Is that actually, you know, a real sort of, um, opportunity? Or is this something that, you know, brokers list on Sims and just like as another checkbox.
Think it's certainly a checkbox item.
I think there is some reality to it. Um, but it's a totally different, um, line of business. It's more of a customer service business where you are actually interacting with the patient and likely their families as well. Maybe a little bit their doctors, but the patient, their family is really the primary contact.
Whereas in the public pay, the doctor or community health professional or community health organization are kind of the primary contact. Um, we have, we have taken some private pay, um, patients and clients in the second acquisition, um, kind of small experiments. So far so good. I think probably moving forward, private duty nursing is gonna be a massive opportunity.
Um, I know, or at least I've heard kind of the, the major growth space for that now is with folks that come out of cosmetic surgery, right? So these are folks that kind of afford cosmetic surgery and want a little extra help recovering in their homes, and so they're willing to pay, you know, a healthy amount for a nurse to just provide that post-op care.
The niches out there. That's so interesting. I love that. Right. Um, that's, that's fascinating. And with the two businesses that you acquired, you know, have you integrated them much or do they run completely separately? Have you approached that and how are you thinking about that as you make additional acquisitions moving forward?
Yeah, so this has been totally fascinating. Um, from the outside looking in, it would seem that they could be integrated, uh, quite a bit. I kind of approached that initially, maybe the first a hundred days. I was thinking about that. That was the lens through which I was looking at everything. Um, and then I read a book called The Outsiders and uh, I think the subtitles eight Unconventional CEOs and how they approach their businesses talks about Warren Buffet, John Malone, a host of other really successful.
Folks, decentralization was the word repeated most often in that book. And I just kept reading it and highlighting it, and highlighting it, highlighting it. And so I started to, you know, use that lens, look at the businesses, and it, it, you know, after reading the book and, and kind of operating day to day, it made a lot of sense to keep things decentralized so they could kind of run a step, uh, standalone entities.
Um. You know, we can centralize some operational things, you know, use the same service providers for a few of the services, same software systems, things like that. But, um, there's actually like quite a bit of nuance and, um, I wanna like honor and respect that. So that's, that's kind of where we're at right now.
Moving forward. I think, you know, we're here to just really discover best processes wherever they exist. So if we continue to buy larger agencies, I'm sure there'll be some processes and systems in place so that we can apply to the smaller ones. And, and we thought that was gonna be the case with the second acquisition to number one, but really it was much more, um, uh, kind of, uh.
Uh, lateral in both ways, which has been like, again, fascinating. Like you can never, you can never sleep. You have to stay on your toes because, uh,
you
know, it's a dynamic
world. No, that's, uh, that's, that's interesting. And with these two, how do you split your time then? Are you going, you know, in person, into both?
Uh, how does that work?
Yeah. Um. Yeah, split my time. Some days I'm in both offices. Um, but that's rare. I usually just pick one. We'll go for a couple days, hit the other for a couple days. Um, there's no kind of ahead of time. I was like, you know, writing it down, trying to figure out, uh, run, running, running, all the programs.
But, uh, just kind of, uh, do it intuitively. Now go with the flow as it were. Uh. They're, you know, an hour apart, but sometimes the weather's different. So sometimes I'll go where the sun is.
I love that. Go where the sun is. And what do you think you, you're gonna do once you, you're, you know, 3, 4, 5 acquisitions down the road?
You know, how do you see yourself really, really splitting your time? Um, or do you see yourself maybe being less day-to-day in each.
So I think the, the hope goal and all the work is being done to not, um, to not be needed anywhere day to day, but to travel day to day, everywhere anyway can return to my nomadic origins, um, as a living being.
But, um, again, no one cares about it as much as I do. I know that. So a lot of my job is cheerleading. Slash leadership. But I love that. So I mean, I'm, yeah, I mean, I'm sure some workers are probably sick of me, but I come in really hyped every day. Um, kind of like Steve Balmer sometimes, but not all the time.
But yeah, I mean, I would love to be able to kind of travel around at whim and pop in and say, what's up? Solve problems onto the next, that's, that sounds wonderful to me.
That's great. That's, that's, that's the dream. Um, you know, one thing we we didn't touch on yet is, you know, you mentioned obviously all, all the challenges with labor given that your clients really are the nurses and you know, with the public pay.
How are you guys differentiating yourself there? Like, how are you, how are you, uh, how are you hiring and retaining? What are you seeing sort of working there?
What we seen working. Yeah. I'm not sure we know what works. Um, we just try our best to be very sincere, um, and establish, again, personal relationships. The businesses now combined, you know, there's a lot going on, but still, I think we have to emphasize really being compassionate with these folks. Um, both the managers are nurses, so they do have that ability to.
See eye to eye with the nurses and really empathize with them. Um, you know, I let them know that this is very personal to me when I, when I meet the new caregivers we bring in. And so I also let them know that I'm very clear on what my job is, and that is to create more value for them and capture more opportunities for them.
Um.
You know, incentives, this and that. Like again, we're, we're capped on pay, so we try and offer a competitive rate. Um, and I just tell everyone, like, be as friendly as possible with all, all of the, all of the folks. Like if, 'cause we just have to be better than the other agencies. And I think the politeness maybe isn't there 24 hours a day with.
Admin staffs and some of the other agencies. And if we can just separate, like, make a little bit of a difference, I think that'll, that'll keep us where we need to be and allow us to grow the way we need to. Um, but again, just dealing with people, so, I don't know, don't take the disappointments like never too high, never too low.
I think is, is a really important way to approach it because, um, it probably all balances out in the end.
No, that's a lot of wisdom there. I, I'm curious, and we didn't touch on this, but looking back, you know, on the two acquisitions you've already made, any, would you have done anything differently? What are you gonna do differently on the next one?
First one would not have put down a good faith deposit. Absolutely not. Um, other than that. You know, I guess the easy answer is do more due diligence. You don't know what you don't know. So, but again, in this game you can't eliminate risk. You can try and manage it and mitigate it, but there's always gonna be some.
Uh, so I think the only thing differently I would've done is not put down the good faith deposit.
Okay.
That's pretty good. Just, just learn so much that, um. Oh no, there is one more thing I would've done. I did not have a line of credit for the first business, the SBA, uh, the bank we used didn't offer them, so we got a working capital loan with it, but not a line of credit.
I would advise getting a line of credit.
Great advice. Uh, totally agreed there. Um, final, final question from me today. I wanna be sensitive of your time. Devin is buying a business, everything you, or buying two businesses now, everything you've expected it to be?
Yeah, I mean, it's been unbelievably
amazing, like,
uh.
Freedom, autonomy, the ability to learn every day, the ability to deal with stress. I mean, I do enjoy dealing with stress, like that's how you grow in life. So, uh, I'm game for it. Uh, getting to work with like great people and yeah, just building these relationships with the people I work with, um, has been like really rewarding.
Of course, getting like to honor my grandmother has been incredible. It's literally been. Everything I thought it would be and likely more. I had pretty high expectations. They've all been met. Uh, have they been exceeded? Yeah, I guess so. I think I can say, yeah. Wow. And you're, I mean, I love it. Even on the worst days it's been like better than anything else.
That's incredible. I mean, I, I love hearing that. Um. Look, any, um, any final words of wisdom, Devin, for, especially I guess for the first time buyers out there who are maybe watching this?
Yeah, I think, um,
there's always gonna be some risk. You cannot spreadsheet or model risk away. It's important to be informative, you know, what can, you know what is knowable and then be comfortable with what you know to make a decision. But. The name of the game is Focus and Endurance. It's really difficult, uh, almost as if the universe maybe doesn't want you to acquire a business, but you don't have to pay attention to that stuff.
If you're focused, stay focused, stay focused, stay focused, um, and eventually you'll get there.
Great advice. And actual final question from me, Devin, if people wanna reach out, where can they find you?
Yeah, LinkedIn's, um, the best place I think my handle is like Devin Fitzgerald. Dash 1 0 1 is the link, but you can search Devin Fitzgerald.
That's, uh, the best and the only place actually.
It makes it easy. Devin, thank you so much again for your time today. I know you have two businesses get back to, so, um, really appreciate this. You know, I certainly learned a lot. I'm super excited to see where this journey takes you and we'll have to do this again a year or two from now and, uh, see, you know, what other businesses you've acquired.
Uh, but yeah, super, super excited.
Yeah. Helen, thanks so much. Um. You made it so easy and fun. So I appreciate that. That's been great. You do a great job. Um, thank you. I'll get back to work, so when we reconnect, I have some more good news to share and more lessons learned. For sure.
Please do. All right, well thank you so much again, and uh, we'll be in touch.
Sounds great. Thanks Alan. Take care.