**Transcript was automatically generated by artificial intelligence.**

Carter Schelling
Good afternoon. I'm Carter Schelling, director of Business Development at Martin Health Care Advisors. For the last several years, my video production company has helped Paul create his extraordinary series of video interviews and presentations, many of which were shot right here in this studio. In addition, I'm chairman and founder of a consulting company called 3655 Inc.. And for the last 43 years, I've been helping my business owner clients build extraordinary companies in ordinary industries. And as part of that, I've either participated in or led business planning with my clients for decades. And for that reason, Paul has allowed me to run this series on how to have the most valuable business plan you've ever created, the business plan that will prepare your company to get the best possible deal in today's turbulent market. Last week, we talked about the importance of preparing for your company's growth after the sale. Today, we're going to talk about, okay, where do we start to create this most valuable business plan? By the way, most valuable, most money, best structure, best acquirer. That's our goal. And in fact, normally where I start is I take Stephen Covey's advice and I start with the end in mind, which means normally we'd first talk about where do you want to be on the day you sell your company?

Carter Schelling
How big do you want to be? How good do you want to be? How happy are your people at that point? Or perhaps where do you want to be after you've been with your new acquirer for a couple of years and you're really cooking? I think it's normally important to start with the end in mind and then build a plan to get there. However, this marketplace currently is so turbulent that you can't accurately predict where you're going to be without terrific information about what's outside of your company and around you in the environment, as well as how you compare to your competition. To get more clarification about that SWOT analysis process. You know, the SWOT analysis starts with opportunities and threats, strengths and weaknesses. And our job is to create a strategy that connects our strengths with the relevant opportunities and protects our weaknesses from the relevant threats. That's where we're going to start today. And to tell you why, I interviewed Paul Martin, president of Martin Healthcare Advisors, earlier today. And we're going to cut to that interview now. Here we go.

Carter Schelling
So as I promised, today's guest is Paul Martin, president of Martin Healthcare Advisors. And this is an historic moment because for the very first time, Paul's on the other side of the camera and he is the thought leader being interviewed. So Paul Height on matter.

Paul Martin
Good to see you, Carter.

Carter Schelling
Great. So I've just been telling our audience that this marketplace really upsets the normal sequence of business planning. Normally we start with a goal in mind and then build a plan to reach the goal. Today, the market is changing so quickly that unless you get new outside information about what the market offers, you're likely to create a goal that isn't accurate and possibly even a strategy that won't be successful. How do you address that problem for your clients, Paul?

Paul Martin
Well, you know, first of all, what we do is what we call an outside in assessment on many, many companies. In fact, this year we will do over 5053 outside investments with 53 unique companies. And so when you have that kind of data that we are able to compile, I aggregate and then compare against with new companies that we are doing this assessment with. It provides a significant amount of value to the customer, to the physical therapy business owner, because they're seeing exactly how they stack up with other companies. Now, it.

Carter Schelling
May not for one second that's really important because normally the SWOT analysis of a business plan talks about the company's strengths and weaknesses and almost always is the internal people are the ones who generate that assessment of their strengths and weaknesses. And what you're saying is now, since we're a more competitive world, we have to make sure that our strengths are stronger than our competitors strengths. If we're going to take opportunities away from them. And it sounds like what you're doing is giving us that information.

Paul Martin
Yeah. You know, if you're looking to potentially sell your company in this current marketplace, you are in a competition. So acquirers are going to be comparing and contrasting your data up against the benchmarks. The best companies, because those are the companies that they want to acquire. And so we do that before you get surprised by an acquirer who may wonder why some of your whether it's a metric or whether it's a volume indicator are lower than some of your competitors. So we take that extra step of being able to compare and contrast your information against the benchmarks, against the best companies in the country. And we're doing that most importantly through the eyes of the acquirers, which is a quote we have used before. Meaning, how would acquirers look at your business objectively and where would they see your strengths? Where would they see your weaknesses? And that will then build on what opportunities and certainly what threats you may have.

Carter Schelling
Super. So the other half of the SWOT analysis is opportunities and threats. I opened by saying that the opportunities and threats may no longer be what a particular owner thinks they are. How do you help them address that problem?

Paul Martin
Yeah, you know, when you are working in your business as a physical therapy business owner, many of whom are still treating patients, whether it's a couple of patients a week or whether it's, you know, 40 hours, 40 hours a week of patient treatment, they're inside their business. And when you're inside your business all day or week or month or a year, it's hard to kind of pop your head up and look around to see who is actually around you. And yes, many times we hear from potential clients and clients. We just heard a such, you know, so and so a company just bought another company in my market. And so you hear local gossip. You hear local information that's being passed around. But I can tell you, when we map all of the acquirers in the country and we map it against your business, your clinics, and we show you acquire, buy, acquire where they are now, you are looking along with us. You are looking objectively at where do we fit in here and who do we fit best with. And that's the way on those opportunities and threats for sure. We're able to bring a whole extra layer of information by doing that mapping analysis.

Carter Schelling
That's amazing. You know, I think you told me about one time you told an owner that a large acquirer had already arrived in his marketplace and he said, no, they haven't. You know, they haven't changed the name of your competitor. They're in stealth mode. And he was shocked. And I'm sure that's going to happen more and more in the future as more acquirers allow the acquired companies to maintain their local identities.

Paul Martin
Yeah, it happens in just about every assessment that we do that there is an acquirer who is in or around the market and the owner does not even know they are there. A large percentage of the acquirers in this current market are doing partnerships which, as we have discussed before, keeps that former owner with home field advantage.

Carter Schelling
Yes. Yeah. You know, sometimes most of our audience is our athletes, if they've ever swum offshore, an offshore race or in a triathlon. I remember being out there thinking I was doing fine and I raised my head up and the boy moved like I wasn't where I thought I was. And you're talking about raising your head up in a similar fashion. I think it's valuable, really valuable. Now, do you also, once you've got more clarification about opportunities and threats and strengths and weaknesses, how about combining them into a strategy? Can you help your clients in that way as well?

Paul Martin
Absolutely. And, you know, as we start looking at strategy, you know, one of the most important strategies, if we push this out to when a company would actually partner with another company, is which one of those companies out there may be the best match based on a variety of different factors. So I'm taking a back to that mapping analysis where we're looking at these acquirers. But what round of private equity are they? Are they in acquire that buys 100% of the company and changes the name? Are they a partnership acquirer? Are they a very new company which might offer new benefits and opportunities for your staff? But we use that as the end game. Looking at who may be best out there, it really starts to have a business owner really start thinking about very early in the process. On who may be the best fit for them. And now it's how do we prepare for those acquirers who may be the best fit. And as we look at each of the areas of the business, starting with the operations and getting into the details of those operations in terms even down to what units are their therapists actually charging for, how many units, what is that product? Every how many visits per every new patient are they seeing? And we've coined this as taking, you know, a focus to be on clinical care. So notice we don't say instead of or in place of it's beyond clinical care. And when you start to see how making small changes with your strategies in order or strategies to make these small changes in these metrics, in these operational numbers, it can drive enormous changes in performance. And most notably, bottom line performance, that cash flow, the earnings before interest taxes, depreciation, amortization or EBITDA. And so that's where we're able to build a strategy to prepare them for the right companies out there, as well as driving their performance to improve their value.

Carter Schelling
Right. So that means that even if someone isn't ready to sell right now, if they go through the process, they're going to get a return on their investment because they're going to make more money between now and the time they sell. Yeah. And you're you're saying this process basically more than pays for itself.

Paul Martin
Yes. That the amount of information that we provide in this is is goes way beyond the fee. And then we do this because this is what we do. And we've we have always been in a position, look, we want clients, we want clients like every business. We also have been a part of this profession and a part of this industry for so long that when we do an outside in assessment and the business owner calls us in a year and they've taken our advice and they've done things every once in a while, that happens and we're really happy for them and glad that they took that advice. So, yes, it's it's something that we we've believe that we provide an enormous amount of value in that session and in this work that we do with folks in order to help them prepare for that ultimate decision.

Carter Schelling
Does getting this information on for you take a lot of time out of the owner's life? When does he or she need to prepare for a period of weeks or where they are focused on this and not their job?

Paul Martin
We have streamlined, streamlined this process to a point where now we are able to, under a confidentiality agreement and a business associate via we are able to now be, if the owner allows us literally go into their QuickBooks, pull the reports that we need. There's nothing else we can do within QuickBooks as well as their EMR. We can't make any changes. We can't do any. All we can do is pull reports. So all they really have to do is give us some basic information on some of their special programs. What they do with compliance, just a couple of those things that we need to get and gather the data to put it into the models that the acquirers are using to look at their companies. And then we very quickly after that, we'll schedule a planning session, which could be anywhere from 3 to 4 hours of planning and strategizing with the ownership of that business on that preparation and on improving that business in order to prepare for this extremely competitive market.

Carter Schelling
You make a good point. You know, it sounds like there's a lot of people who have recognized now they're going to sell, but it's such a life change that they're not ready to do it now, but they know they've got to do it and there's a lot of it's not it's not often that owners feel confused and not sure what to do on a strategic level. I think more owners and than ever are in that position that they feel uncomfortable. So it sounds like going through this process will help them sort some of their feelings out and give them more information to proceed whenever they're ready to get the best possible deal for their company.

Paul Martin
It does. And, you know, as you look at the strategies that we would offer to help a company drive that operating performance drive that cashflow, it also then will eventually put them in a position where they have great choices. You know, when your company has no cash flow, which in this industry means it really has little to no value, in addition, it doesn't provide you with any other opportunities beyond selling the business. Even if you wanted to do something unique with your staff, if you want to continue to maintain and stay independent. And it's very hard to compete with the companies around you when you have no cash flow. So what we like to say to companies is let's go on this journey of preparing your company. Yes. For the market, but also to give you real choices and some real valuable choices as opposed to no cash flow. You kind of put your hands up and there's really nothing else to do.

Carter Schelling
Super. That was well said. So anything else you'd like to share with the audience before we sign off?

Paul Martin
Yeah. Not only that, I think that again, as you look at this process of an outside end assessment, it's certainly something that you can do throughout the year. But at the very beginning of the year or the end of this year or very beginning of next year, seem tends to be a really good time to do this because we look at this in one year increments, we're just kind of out of the Private Practice Action conference. Everybody's all excited about moving forward. No better time than to take a little bit of a pause. Get your head up over, look around and strategize and plan for your future.

Carter Schelling
That was very well said, Paul. Thank you. Okay. So this was a heck of an infomercial for our outside in assessment. I admit that. But I got to tell you, we've done more deals than anybody else. We've been in the industry forever and we only focus on this industry. We actually care what happens to business owners in this industry, in this very, very difficult time. One of the saddest things we see is when an owner sells his life's work and it goes badly because he didn't prepare. That's why we created the outside in assessment. This is the preparation we believe is necessary for you to feel comfortable. You're going to finish well by selling your company for the right number to the right partner at the right time. Please consider our point of view about this. We want to help. We're doing everything we can. The rest is up to you. Thanks, Paul. That was great.

Paul Martin
Appreciate it. Thank you, Carter. I appreciate all your help. You bet.

Carter Schelling
And thank you for your time today. See you next week.