Home Care U - Navigating Q4: Year-End Planning for Your Home Care Business (Steve Weiss Pt. 1)

Episode Date: October 7, 2024

It's Q4 and everyone should be thinking about year-end planning. Steve Weiss, CEO of Home Care Evolution, and industry recognized thought leader and sales expert is here to share what a successful year-end business plan should look like. We'll also talk about the upcoming election, policies and trends that will impact home care, and how to future-proof your business during these turbulent times.Enjoying the show? Send me a text and let me know!Learn more about Careswitch at: careswitch.comConnect with the host on LinkedIn: Miriam Allred This episode was produced by parkerkane.co

Welcome to Home Care U. We've got a lot of people waiting in the waiting room for our live session today. It's great to be with you. Thanks for your patience as we get set up and ready to go here. I am Miriam Allred, your host, head of partnerships here at Care Switch, and this is Home Care U. I'm going to give a quick little introduction. We've got a lot of new listeners to the podcast over the last couple of weeks. So quick introduction, Home Care U is an educational podcast for home care owners and operators. And the tagline is nobody went to school to run a home care business. So we're bringing the education to you. Every week we cover a the home care industry to deep dive on

operational topics that you all are in the weeds on day in and day out. We're hopeful to make your lives a little bit easier by bringing you some of these insights. So Home Care U is brought to you by CareSwitch, the company that I represent. We are an AI powered operating system that replaces your agency management software. So if you're looking for a better scheduling platform or your contract is expiring by the end of the year, or you're interested in saving hours on manual tasks with AI, reach out to us. You can learn more at careswitch.com. Regarding today's session, I'm super excited. We've got the one and only Steve Weiss. He is the president and CEO of Home Care

Evolution. He's also known as Steve the Hurricane. He has built probably the most recognizable brand in home care, and it's my pleasure to know him. He has been an owner and has been in your shoes. He's walked the walk. He's talked the talk. He has now trained or coached probably over a thousand owners, operators across the country by way of his services and also his bootcamp. So if this is the first time you're hearing from or meeting Steve, it's my pleasure to introduce you to him. And if he's a welcome or a recognizable face, I'm happy to bring him back to you. So Steve, thank you so much for being here. Thank you for having me, Miriam. This is exciting. I'm looking forward to it. And thank you for the compliment too, the most recognized brand. We worked really hard, 12 years to create this Hurricane Home Care Evolution brand. And

it's been an incredible ride with YouTube and social media. Now the magazine, like so many different things that we do, but it's all about helping you, the home care agency owners, help them, the seniors that need our care. Amazing. A lot of people will be listening to this in audio format, but I wish everyone could see here. Steve is in his home office with a large logo hurricane behind him. I wish you all could see it. But why don't we start there, Steve? Introduce yourself, talk a little bit about your background, your days as an owner. Maybe talk also a little bit about the Hurricane concept for those that don't know kind of the background story. Give us all the details. Sure. So my name is Steve Weiss and Steve

the Hurricane is my professional name. It is trademarked that way. When I went to start the company, I wanted to trademark the company and I didn't have what was necessary for that, but I did have the nickname Steve the Hurricane for seven years. And I used that when I grew my own home care business from 05 to 2012. And so I was actually able to trademark that. So Steve the Hurricane owns everything, right? And so that's kind of how the Steve the Hurricane to be. And Hurricane Marketing Enterprise is the icon and everything else. My background is I did start out as a director of business development for a home care company. It was a very small company. When I first started,

we had 16 patients on our census. And quickly from 05 to 09, I grew that company to having over 100 patients on our census and annual revenues exceeding $5 million in revenue. The owner of the company made me his business partner. 2011, we sold that company and that's when I officially exited the business. And then I started Hurricane Marketing Enterprises. Now DBA Home Evolution, and we've been running ever since. And it's been a wild ride. I'm truly blessed to be able to say that we have clients internationally now. So it's not just a North America, United States business, but we have clients on every continent except for Antarctica. So if one of these days, maybe somebody down in Antarctica wants to open up a home care agency, we can help them too. Amazing. Amazing. Thank you for that introduction.

What an incredible background and such rich experience from, you know, being in the agency yourself to coaching and training agencies all over the country. So you and I sat down a couple of weeks ago and talked about what topics we could cover on this podcast. You are very well versed in a lot of different topics. And one of the things that we landed on that we want to cover today is thinking about year-end planning. Here we are in October, you know, believe it or not, we're in Q4. A lot of businesses are thinking about how to kind of wrap up this year, you know, from a strategic lens, you know, look at lessons learned and start to prepare for 2025. So this week, we want to talk about year end strategic planning. And then I'll

have you back again next week. And we're going to talk about sales strategies for 2025. Your bread and butter is referral marketing, rates, closing, all things sales. And so we're gonna, part two, we'll be thinking about sales, you know, as you gear up for 2025. So a little preview of what we've got going on here. So let's start there. Let's get into the mind of, you know, back when you were running your business and how you think about year-end planning for the businesses that you work with. What does Q4 typically look like for a home care agency? And what are the things that are top of mind as you're closing out the year? I love it. And so it's interesting when I,

when I be being from the agency owner standpoint, I always had this plan for the next year instilled in me, my business partner, Brian, he started the company years before I came on. I always had that entrepreneurial background. And we used to start our year-end planning in November, which is the middle of Q4, right? And that's when we would start planning it. So it's very timely that we're having this call now or this doing this podcast now. What I find that was a bit alarming to me when I became a consultant is that a lot of people really don't plan for the new year, or if they do, they wait until the week after Christmas between Christmas and new years. And that's when people start planning for the new year or they wait till

January and then they start planning their goals for the year. And, and that's a big mistake. You know, most people wait until it's too late to start planning for it. And something that I tell all of my clients regularly, especially during this time of year, is best years ever, record-setting years don't just happen. They're planned, and then you go into the new year with your plan, and then you start to execute your plan, and you can course correct throughout the course of the year. Something could happen, unforeseen circumstances, things beyond our control. Anything can happen, and you course correct. But if you don't plan for the year before it starts, you're not going to have an explosive revenue growth. You're not going to have an explosive revenue growth. You're not going to have an explosive patient census growth. You have to plan for it. And in planning for it, this is where you have to really do a good job of understanding your KPIs, those key performance indicators,

which I'm sure we'll talk about in a couple of minutes here, and knowing where my business is right now today. Like when I look at fourth quarter for going into the next year, I'm planning next year. Well, this is my time to start tracking and doing that self audit and looking at all of my KPIs and determining how am I finishing this year and where can I improve into next year? I'm glad you called out mistake number one, which is waiting until January or February to do your planning. I see that all of the time. And I think it's natural to wait and think like, oh, at the beginning of the year, we're going to gear up and plan. But like you're saying, it's too late. And for a lot of businesses, January is a crazy time for people personally,

professionally onboarding new clients, caregivers, like January is usually a pretty tumultuous, busy time for owners and operators. So there's no way you're going to make time for planning. So really be looking, like you said, October, November, before the holidays roll around to make all of these strategic plans. So let's think about this through the lens of like that meeting or meetings that take place to do the actual planning. What should the team of like that meeting or meetings that take place to do the actual planning. What should the team bring to that meeting? What should the owner bring to that meeting? And what should they expect of their team to make sure you can have that productive

strategic planning meeting? I love it. So I'm a big believer in the Home Care Pulse. Now I think it's activated insight benchmark study and all of the KPIs that are mentioned in there, and there's quite a few, so you don't need the full benchmark study. But there's specific ones that each staff member should be responsible for. Example, recruiter should be responsible for the recruiting statistics, those KPIs, specifically the number of people who applied for the job, the number of people who we interviewed for the position, and the number of people who advanced through orientation and started working for us, even if they only worked one day. Those three KPIs all are very vital for our success as we're looking on the recruitment side of the business.

If I know that in 2024, we had 200 applicants and we interviewed 100 out of those 200 applicants and 50 out of the 100 started working for us. That means I now know that I had 50 caregivers start working in 24. I want to grow the business by 25%. I know I need 25% more, which is about 65 caregivers. So then I can reverse engineer. I can set up goals for my recruiter for 2025 so that she now brings in 250 applicants as her goal for the year, 125 interviews, and 65 caregivers progress through. That's going to give me the growth on the caregiver side of it. From the sales and marketing patient census, it's the same exact thing.

How many people inquired about our services? How many of those people did we actually meet with to do a consultation to discuss services? And then how many of those people did we actually sign and begin starting care, even if it was only for one day? By knowing those numbers and the metrics, that helps me to determine the revenue that was brought in. That helps me to determine the revenue for the year. And if I want to get a 25% growth, I take the numbers that we are already performing at and multiply it out by 25%. And then I can incentivize my staff members to bring in more revenue for next year and set an entire business plan for the year around 25% growth

because I know those KPIs. So having those KPIs, and there's other ones too, doing audit on our office staff and making sure that we don't have a position of need, or what are each of the job functions that we have, scheduling, recruiting, care coordination, managing the patients and the caregivers, right? Sales and marketing, operations, right? What are the areas, the departments within my organization, and who truly, and this is a subjective thing, but who truly is maxed out? Because if my scheduler is maxed out, I'm going to have a hard time getting growth, so I might have to bring in a second scheduler or maybe hire a virtual assistant for the main scheduler so that the two of them together can manage a schedule and that will help me get the growth. So we have to look at all areas of our business, but predominantly patient acquisition, caregiver acquisition, and operations. If I know the KPIs for those areas and financial will say as well, that can help me to set goals for 2025.

Yeah. So I think the key there is expectation ahead of this meeting, which is everyone in the office has these metrics that they've been responsible for and reporting on throughout the year. The beauty is bringing all of that data and information to the strategic planning meeting and outlining historically what just happened over the last eight to 12 months, learning from it, like you said, you know, and then setting goals for the following year based off the historical year. And I like where you were just getting, which was identifying where the hiring needs are in the office. You know, say that this recruiter is maxed out, you want to look ahead to 2025 and

start to account for or budget for a new hire because of the data and the statistics and the goal setting and the anticipation for the next year. So I think the key out of the gate is to make sure everyone comes prepared to deliver kind of an overview of their metrics and then anticipate goal setting as a team. That goal setting is really important. And you were just throwing out this number of 25%, which is great. Yeah, I just use it as a round figure.

Yeah, and it's less, it's probably less straightforward than that in a real business. You know, maybe certain departments can grow 25% year over year, but others, you know, may not be able to, how do you, how do you set goals as a team? And what does that conversation typically look like? So I love what we're saying here, because this is great. And this, this is the stuff that I go

over with my top level clients, the members of the home care elite Academy. And I'm so proud of them like this, the, you heard me talk about the beginning here, the magazine, right? In last issue that we had, the third quarter issue that came out, one of my clients who bought an existing business, Patrick and Carrie Gray, they gave six tips or six lessons they learned from buying an agency to somebody who's selling or someone who's looking to buying, and it's beautiful. But the reason why I'm mentioning them is because they're people who I've helped who doubled their revenue in 2025 from what they did in 2020. I'm sorry, 2024, what they did in 2023. And the reason why is because of this type of planning that we're discussing right now. You can really grow your business 50%. You can double your revenue in a single year i have clients who all the time but with it comes exactly what you said the expectations understanding each person's role and then as you said seeing where your shortcomings are now to plan for the hiring of it you know you're not you're there's no way you're going to be able to double your business with the exact team

you have today because you're talking about double the workload. They physically cannot do it. You have to plan for the hiring of it. But a lot of folks miss that. They don't think that way, right? So it can be done, but it has to be strategically rolled out. So if I'm looking to do something crazy, say I have a $2.5 million business. That's a good business, but I has to be strategically rolled out. So if I'm looking to do something crazy, say I have a two and a half million dollar business. That's a good business, but I want to make it a $5 million business this year, right? That's literally double the business. It can be done if I have say six staff members, I don't need 12 to get it to double, but I might have to go from six to 10. I might have to go from six to nine. That's very realistic. When do I hire? That's part of my planning for the next year. And then what are the key positions that are going to get there? So as I'm looking through

with those KPIs that we spoke about before, if I'm looking at sales and marketing and I find that sales and marketing is bringing in more inquiries and more business than we can handle and staff. I don't need to. I'm not going to stop sales and market. I'm going to have them keep going. But that's going to be the last position I add because it's already overflowing. Right. But on the flip side, I find I'm turning away a lot of business.

I don't have enough caregivers. Maybe it's time for me to bring in the recruiter in January. If I want my recruiter to be able to bring in 50% more caregivers or double the amount of caregivers we brought in last year, and she's having a hard time doing what we're already doing, that might be the position of hire that we need to do right away to kick off the year because that'll be the gasoline over the flame that gets us to the bonfire that we're trying to have for explosive business growth. Does that make sense, Miriam? I know I kind of danced around, but there's a lot to be said there. This is really good. A lot of home care feels reactive. We're reacting to what's happening. And I think one of the takeaways of

strategic planning and doing it properly is getting on the offensive. It shouldn't come as a surprise when you need to hire a recruiter because you've anticipated this, you've planned on this, you've seen what's happened the last six to 12 months, and you're anticipating what you could see in the next six to 12 months. And I think that's the other important thing with planning is looking back at trends. You know, home care, you know, isn't a perfect bell curve. Typically in your growth, there's ups and downs, there's plateaus. Home care is one of those unique businesses where it's not all, you know, up all the time. It's there's bad months, there's plateaus. You know, we experience a lot of, you know, ups and downs and plateaus in home care. And so that also shouldn't come as a surprise to

you when you're two, three, five, 10 years in business, because you can look back at previous years and say, wow, February is a really slow month for us. Or wow, July is a really slow month for us because people are on vacation or coming out of the holidays. You can see all of the trends and you can anticipate that. And then you can also start to put in plant into play strategies or tactics for when we are slow or when we are hitting that plateau. Okay. Here are the strategies or the tactics that we're going to deploy to make sure we can come out of that. Like we did the year previous. So, so identifying and seeing trends again, shouldn't come as a surprise to these owners because that

they've done their planning correctly. Any thoughts on that, of looking backwards at trends and preparing for things? Absolutely. And you hit the nail on the head because it really takes a proactive mindset. Like when I think about what is, again, the activated insights benchmark study, right? They break every single agency into revenue brackets, and then you have the $5 million and beyond group. And they call those folks the masters of the home care business. Every master that I work with or every customer that I have as a client who's an agency owner, who I helped grow to a master level and high master level over 10 million in revenue. Every single one of those folks has the proactive mindset.

They started with the reactive and, oh, scheduler quit. I got to get a new scheduler. Oh, this happened. I got to do that. Like very reactive, but it's in that, I want to say like two to $3 million range is when the business starts to transform and the business starts going from more mom and pop small business to more corporate structure with systems and processes. And again, it's proactive strategic planning that leads to the results where they get crazy growth, like we're discussing right over here. So I think I answered your question with it, but you were talking about the proactive nature and that that's so, so very important.

Absolutely. I'm curious from your perspective, the numbers, the growth goals vary pretty widely. I think for some businesses, they're looking at a 10% to 25% growth rate, but we also read these success stories of 50% growth year over year or 200% growth year over year. Any indication that you've seen of what kind of healthy or realistic growth goals are versus what's really possible for these maybe more proactive owners? What's kind of the range or what is a healthy growth metric for different size businesses? So I will say everything is subjective based on one factor, and that is the risk tolerance of the owner, right? So what do I mean by that? I have literally helped clients go from $10 million in one year to $30 million in the next year. $30 million, that's 200% more than

what they did, right? And then that same client go from $30 million to $60 million the next year, right? I've done that type of thing continually. But the risk tolerance is there where if I want to have, say I'm doing $2 million and I want to have a $4 million business and double my revenue. Well, I have to understand that in order to generate $4 million in revenue, it's going to cost me in the ballpark of like $3.2 million, right? Because all of the wages to the caregivers, all of the staff plus new staff that I don't have, all of the marketing and sales that I'm doing plus the marketing and sales that I'm not spending money on and other area, a new office and all these other things. So to go from 2

million in revenue to $4 million, yeah, I'm going to spend a solid $3.2 million. That's 1.2 million more than I generated last year. That's a lot of risk tolerance. Some people will take out a loan for that. Some people have the resources. Some people won't spend money as it's coming and they'll reinvest the money into the business until it gets to that point. There's many different things that factor in here, but you have to take a look at what is your risk tolerance. What are you willing to invest in? What are you willing to spend to get to the level that you want to? So the same exact $2 million business, maybe for that person, they want to grow by 25%. That's 2,500,000, right? It's 500,000 more. That might be more palatable for that person to take in and say, okay, in order for me,

I did $2 million. Assuming a 20% profit margin, $2 million, I spent 1.6. I want to do 2.5, I got to spend two or 1.8, however the math works out. 1.9, $600,000, 2.5, something like that. So I'm going to have to spend more money than I spent this current year. But at the end of the year, I should also have 500,000 in additional revenue that I didn't have and my profits should go up. The margin staying 20%, the overall profit should go up. That allows me to continue to reinvest year after year. Does that make sense? Yeah. We don't talk a whole lot about this, I think, in home care, which is this risk tolerance.

And I think every owner that's listening to this, every owner that's listening to this, that's kind of some self-reflection. It's maybe that hard look in the mirror of what do you want out of your business? And what are you willing to risk? What are you willing to invest? Like you're talking about at these different growth stages, you're going to have to most likely invest or reinvest into the business. And that's not always easy. I like what you mentioned a minute ago about, you know, these mom and pop businesses going to more of a corporatized business. I think that's a huge distinction in home care is a lot of people start this business, you know, with a spouse or with a purpose and, and, you know, they build it up to maybe a million, 2 million, and they struggle to overcome that plateau because they're struggling to turn it into more of a lot of this, the KPIs, the growth planning, the year-end planning, the strategic planning for the future.

It really is, your business can become what you want it to become. We see crazy growth rates in this industry because there are really ambitious people that are willing to be a little bit risk-minded and make the plunge, take these risks. And so one of the questions that I wanted to ask you was around, we're talking in terms of like year-end planning for potentially the next year, but what do you coach or advise businesses in regards to

longer-term planning? Three years, five years, 10 years, how should people be thinking about even longer-term planning? So that's a great question there. And again, that depends on the individual. I find that there's a crazy stat I read somewhere. I don't remember exactly where it was, but the average American starts their primary business or their first business at like age 40 to 42. Like that's the average American, right. And so depending on where you are helps you to determine what your long-term goal should be. Just because the average is 40, 42 doesn't mean that that's when everybody starts. I have a lot of folks who started a business at 55 and their goal is to retire in 10 years. So the 10-year plan is to scale this business,

grow it, show significant revenue growth year over year for the next eight to 10 years to exit the business and sell it, and then that's my retirement and make several million dollars in one lump sum while making money to sustain and support myself during that time. Somebody in their 30s, they might have a 10-year plan where it could be two-part. Maybe they want to use this business as a launch point to get into another business. Home care is a great business, but it's also a very stressful business, right? So there's pros and there's cons. It could be something where people could use it for five to 10 years, flip it and sell it, the 30-year-old who's now 40, and maybe they get into real estate and they get into a different type of business because now they have this resource to use it

as a stepping stone into a much larger career, a different type of a business entity, venture capital, who knows, right? The future is not yet written. The other aspect of it is somebody who's younger may want to have multiple businesses. I myself, I have four businesses. Home Care Evolution is my primary business. This is the one that I spend the majority of my working time on, but I have an investment business. I have a virtual assistant business. I'm actually the chairman of the board for a rum company. It has nothing to do with home care at all, But I divide my time up doing these other revenue streams because home care evolution has an executive director. Home care evolution can run independently of me. And so for the person who's in their 30s or 40s, they might want to grow their business to a point

where the business can then run independent of them, keep the revenue coming in, show up, run meetings and stuff, and then go and start other businesses. So I gave you like three different scenarios, but the long-term goal really has to do with what is the owner's goal and vision for their life. Like, again, this is your business, run it the way you want to, so that it can help you build the life that you want to live now and in the future. Think back to when you were first hired in business development, if I remember correctly, did you, when you were first hired, have a good understanding of what the owner's mindset

and long-term vision was? And the reason I ask that is, should owners let their team, their whole team, or maybe, you know, directors and above, you know, do they let their team know what their long-term plans are? Or, you know, it's kind of on like an as-to-needs-knows basis. At what point should owners let their team in on bigger picture goals? That's a great question. So when I was at Care Choice, my initial thought, first of all, the reason why I signed up and I joined Care Choice I received four offers and I decided and slept on it over the weekend that this was the one that I wanted to take because not that it was the most amount of money, but I liked what we were doing in providing care for the elderly. It kind of hit home a little bit personally. I'm also a minister. So like that whole aspect of helping people just appealed to me because of my

religious training. But then I also liked the fact that it was a small company where I worked directly for the owner. And I said to myself, if I play my cards right here, one day I might own this company. And so sure enough, the rest is history. Lo and behold, that's what happened. I would say to better answer your question, when Brian started talking to me about his exit strategy and his plan, it was around the time when he made me his partner. So it wasn't something that he opened up with me. He didn't hire me with this whole thought of exiting the business and everything. He didn't tell the staff that. He waited until I was about to become his business partner. Then he made me

his business partner. Then we made me his business partner. Then we came up with our exit plan together. There were some personal factors that I won't get into that he was going on in his life that he wanted to address and take care of. We put this exit plan in place. Any owner who's thinking about exiting the business, I say you only include your key personnel, like that key person, executive director, director of business development, vice president, someone very, very high up with you. And you can come up with a plan together.

They're a part of it, et cetera. Or wait until you're ready to sell the business. When you are ready to exit the business and sell the business, you go through the process of selling it. And this is very important. I've helped many people exit. You heard me talk about the article, right? This was the buyer's perspective. Well, the lady who owned the business was also my client and I helped her sell it to these people who bought it and wrote the article, right? And we're still working with me. You wait until you have a buyer. You wait until you're in due diligence when you're looking through finances and they're looking at the operation, they're looking at the, and then they're going to start to conduct their interviews of your key

staff that are going to be transitioned over. That's when you tell your team, why do I say it like that? I say it like that because it's very important that people tend to do it too early when you do it too early then the natural nature of of human condition is to fear change right it's even though the only constant in life is change right like every the way things are today i guarantee you will be different tomorrow, right? Change is the only constant in life, yet everybody's afraid of change, right? So as soon as you say, I'm thinking about selling the company, most of your staff freak out. People may quit and jump ship. And then all of a sudden you create a mess that you have to deal with.

Instead, you wait until you have a strong buyer. Now, the buyer could always back out. But if you're in due diligence, they've looked at it. They've made you an offer. You've signed NDA. You've already gone through all this process, and now it's time to start interviewing staff. And then you tell, you let your staff know, hey, listen, I've been shopping the business around. It's time for me to exit.

However, I found an owner who wants to continue, who wants to expand, who wants to grow because that's why people buy business. They don't buy a business to go out of it. They buy a business to grow, which means more opportunity for you as the staff with the new owners. And they would like to interview you one on one and meet with you in the next two weeks. That's when you do it. Because then all of a sudden, instead of people getting scared and freaked out, oh, I got to find a new job. I'm going to be fired. No, I'm not. They want to meet me. They want to interview me. They want to grow the company. That could be more opportunity for me, which is all, those are all true statements.

Those are everything I just said. That's all true statements. You're not lying. You're telling the truth. And then the staff get an interview and then yeah, maybe somebody doesn't work out. And then that person quits, but it's only one person where everybody else is on board with it. And a lot of times the staff aren't, nobody's stupid and nobody's saying you have to think that your staff is dumb. They can see the writing on the wall. They know when the owner is checked out, they know when the owner isn't engaged the way they once were. So for them, often it's going to be a blessing in disguise because they're like, this is great. This is wonderful. A new opportunity. Good. I'm so happy for you, Miriam. Go and enjoy your retirement. And I'm looking forward to working with the new

company. And I'll be real, even myself, when we sold CareChoice, I stayed on with that new company for 15 months, not 12 months. I had a 12-month contract. And the only reason why I left the company was because that company was getting sold and being bought by a big, giant conglomerate. We got bought by a $100 million company. The $100 million company was getting bought by a billion-dollar company. And I was actually in line to go from a regional position to a national position and they did a hiring freeze. And when they did the hiring freeze, I'm like, you know what? I got the nest egg from the sale of care choice. I've always wanted to start my own business. If I, if I got to wait six months, another year before I could potentially get an impress new

people, I'm not, I don't want to do that. I'm going to stop my business. And that's why I left. So it had more to do with what was going on personally within the company. That's why I left. Otherwise I might still be with that company as a, as a, as a CEO at this point with my level of experience. This is, this is really good. I'm going to tie it back to strategic planning. I asked you about three to five year planning and long-term goals. No, I think this is really important for people to understand. When you're hiring office staff, they need to have some level of transparency into what they're getting themselves into and what the owner's goals and mid to long-term plans are.

We talk a lot about turnover in this industry and it even happens in the office. And if people don't feel confident in where the business is going to be in two to three to five years, likely they can't see themselves in that business. And so from your experience, Brian, the owner at the time, maybe kept some of this close to the belt and it was on that kind of needs to know basis, which is fine. But I think the flip side of that is expressing more transparency to your team and to where do we want this business to be in five years and how do we get it there? And then people can start to visualize the future, which helps with retention. If you can see where the business could be in three years, it's more easy to see the goals and the growth and the potential of getting there. And so, you know, speaking just from my own experience, I've worked for a lot

of executives that have given a lot of transparency into what are our three to five to 10 year goals. And that has helped me visualize, okay, here's the growth and the potential and the opportunities for me to grow here. And I think in home care, these businesses that we talked about that are really successful, they're really proactive and really transparent. You know, we want to be a $50 million home care business in 10 years. That starts today. That starts with the mindset, the processes, the systems that we put in place to get there. And I think there's this level of motivation for the whole team to want to work towards those lofty goals with the potential of growth and opportunity for them.

So all of what you said is really useful because I think people do need to think more about the future and also key their team in on what that future looks like and how do we get there. And that translates into all of this strategic planning. The other topic I want to talk about is the financial aspect of planning and just how important budgeting is and thinking about finances. What's your take on that? What are some of the KPIs around budgeting and finances and how should you be thinking about closing out the year to then anticipate the next year? Yeah. So that's a great question. When it comes to budgeting and finances, I always like to have my clients focus on a minimum of 15% profit margin. That's huge. The industry standard right now is very low. As per the benchmark study, it showed that... I love the benchmark study. Again, we talked about how there's different categories and the middle tiered category were folks that have a $2 million to $3 million business. And if you look at that tier and you look at all of the expenses on the P&L statement from it, it showed that the industry standard profit margin is 7%. And 7% of $2 million is not, it's not even, it's not even 200 grand, right? That's like $175,000, $165,000. That's not a lot of profit. And so I try to get my clients to build their goals around

a 15% profit margin, and then work with them to get it to a 20% profit margin. Some of these things have to do with adjusting prices. Some of these things have to do with how we're managing the patients and having minimums. I always talk about a 20-hour minimum regularly, finding nerd patients, et cetera. But to the budget and the finance, you have to make sure that you're meeting your margins and you don't let your margins dip below that 15%. That's when you start to run into what I call danger mode, where if something catastrophic happens, like a pandemic, crazy stuff that we can't predict. Those are the things that businesses with under 10% profit margins, those are the things that cause those businesses to close their doors. So by focusing

on a 15% margin or greater, that's going to allow you to weather the storm. Also, by focusing on the 15% or greater profit margin, that allows you to set aside resources to reinvest in the business. So let's take the same exact example, a $2 million middle of the pack as per the benchmark study business. A business with $2 million in revenue at 20% profit margin is netting a profit of $400,000. For the owner, the owner can take 100 grand out of that $400,000 and reinvest that into the business for the next year. That could be advertising, marketing. That could be a position that we need to fill that we don't currently have.

That could be different means of recruiting, trying something on top of what we're already doing. That could be buying a new office space, which then helps the business to expand and grow. There's so many things you can do. Raises for your staff, because I know your staff are all asking for raises. Everybody's asking for a raise. You can give somebody a raise and six months later, they're asking you for more. You can do that and still have $300,000 left over for yourself, which is plenty to live off of when you're living a comfortable life. But when you do that a hundred grand reinvestment, that can be what gets the $2 million business to the two and a half million dollar business. And then in the next year, now you got 500,000 as profit, right? And you could take $150,000 of it and reinvest that in the

business for the next year. And you made $350,000 yourself, which is a $50,000 increase over the year before. And you have the $150,000 to reinvest, which now gets you to $5 million in the year after. And that's how I help my clients manage their finances. Focus on the profit margins, take a percentage of the profit margin, i.e. over 10%, 15% to that 20% margin and reinvest that back in the business. And what are we going to spend it on in the new year to get the business to continue to grow? And I do this year after year after year for all of my clients. When you say you're saying profit margin, I'm assuming you're referring to net profit. Is that correct? Okay. After all the expenses. Yep.

I was just going to ask that. But not including your BMW car payments and other stuff you run through. If you go out with your wife on Friday night and she's an employee and you're writing that off, you're eating your profits. So you could do that, you could do that, but that's part of that 20%. I see home care businesses that focus on gross and home care businesses that focus on net. Obviously, you're talking in terms of net profit. Do you see value in focusing on gross or should businesses really be lasered in on net? They should be lasered in on net, especially when you're thinking long-term because again, the exit strategy, when you go to exit, it's all about the net. However, gross is

also important because when you're looking at gross, in order to get the net that you need, your gross has to be adjusted as well. So most people consider gross everything that you make after you pay your caregivers, right? And the industry, I think, is very, very crazy to be operating at like a 60% paying caregiver and a 40% gross profit. That, I think, is crazy. It needs to be closer to 45%, 50%, which means that you usually have to adjust your pricing. And I know a lot of folks have a hard time adjusting their prices. And people even right now are listening and probably thinking like, you know, my clients can't pay this. And I have a hard time getting people to pay my current rates. You need to know how to sell. I literally just wrote an article that's going to be in the fourth

quarter issue coming out where I'm talking about the presidential election and what the state of the economy is and how it's going to affect our business, if you don't know how to sell, you're going to have a hard time. When I think back to what you and I were talking about at the beginning here, I came on in 2005 at a home care agency. That's when the recession started. And I sold that company in 2011, right in the middle of the recession, right? But we grew from 16 patients to over 100 patients on our census during that poor economic climate. How did we do it? We did it through strong marketing, having referrals come in, which we'll talk about next week in the next lesson, next podcast, right? And then having strong sales conversion processes, practices sitting down where

I would meet with the client and they would sign up 19 times out of 20. So even though people were unemployed, unemployment was record high. The economy was bad. The Dow Jones was low, a quarter of what it is today and all this other stuff or whatever. So unemployment was low. People weren't spending money. People were watching every dollar. They were still signing up for services with us enough so that we could take our half a million dollar company and turn it into a $5 million a year company in four years. We were able to do that in poor economic climate. How? Strong sales and marketing. So when people have a hard time with, you know, I can't raise my rates or I can't do this, I can't do that. I say, well, what are your sales practices like? What are your marketing practices like? If you don't know how to close when you have to be able to close, like they have the need. Mom is bed bound. She can't get out of bed. She needs help. They're going to get the help. They're either going to get it with you or somebody else. Why not be the one to do it?

You just need the practice and you need the sales skills to be able to do it. I think that what happened during the pandemic and the reason why the margins keep shrinking is a lot of folks during the pandemic, we kind of got, I don't want to say lazy because we had to bust our butts in so many different ways. But from a closing perspective, it was easy because there were so many people who needed care and everyone was calling and they'll just pay whatever because they have to get it. And caregivers, getting caregivers was the impossible task at that time. So it was like everywhere they called, everyone was turning them away. Now there's fewer people turning clients away because there's fewer clients calling. And it's like, well, what do I have to do? And people forgot how to sell. So it's kind of gone full circle from 2019 to 2025.

This is a good preview for next week. I know you get super ramped about rate setting. And I think you're right. A lot of people rose, wages were rising really quickly, but the client rates didn't grow accordingly. And so we'll talk more about that next week. And that's your gross versus your net. The gross profit margin decreased. So therefore the net profit margin vanished. Exactly. Exactly. So the question that I want to ask you, because financial planning is such a big part of strategic planning, think of the maybe small to mid-sized owners that you're working with. What mistakes are they making when it comes to finances? Are they not tracking expenses? Are they not outsourcing the CPAs? What are the mistakes

that you see owners most often making when it comes to managing the financials of their businesses? So the biggest mistake that I see that the smaller agencies, I'd say under 2 million, right? So a half a million dollar, a million dollar, a million five, et cetera. Biggest mistake that I see when it comes to managing their finances really has more to do with they are not delegating properly to the staff that they have. And so as a result, they're kind of just spending money on everything and anything they can to grow because they're burned out. I'm very sympathetic to the $900,000 a year business owner who's working their butt off. They're working 80 hours a week.

They're so caught up in the business that they can't focus on the business. And so it's just as something comes up, they're like, here's $1,000 for this. Here's $1,500 for that. And then they're spending quickly to try and make a decision because they're just treading water to try and keep their head afloat. And so this is where I say the financial challenge comes from a lot of these owners are not delegating properly to their staff. And maybe it's good. Maybe they don't have the right person. There is that. But I find that if I have a scheduler and she has been properly trained on managing the schedule, let her manage the schedule.

If I have a recruiter and she's been properly trained on managing the recruitment and bringing in caregivers, she's got great stats. Stay out of her way. Let her do it. If I have a business development professional, Jennifer, who's out there bringing in referrals every single week and killing it with referral sources and bringing on new business, stay out of her way, let her do it. So that I can then start to look at instead of me trying to be involved in everything, I have each person doing what they're supposed to do. They send me reports. There's reports that I'm getting daily. So it keeps me from going crazy and I can go to sleep

at night because it's all mental chatter. We can't go to sleep. I don't know. Oh, I got a case that has to be staffed. But if I get the report from Debra and Debra says, oh, you know, I'm working in this case. I'm going to work on first thing tomorrow. I have three caregivers lined up. I can sleep tonight knowing that Debra is going to do it first thing in the morning, right? So the reporting is very important, but then I can focus on what I have to do to scale and grow this business and truly work on the business versus in the business. It is very difficult to do that. It's easier for me to say it than it is to execute, but that is the biggest challenge. So financially, things can get easier when I'm properly delegating and trusting the people I'm delegating to do their job correctly and report it back to me.

Then I can work on the business and manage the finances and make decisions financially that will allow me to scale and grow. That's the long-winded answer to your question. This is really good though. I think a lot of new owners fall into this trap of micromanaging and that's where the burnout comes from. They're micromanaging the entire team and they're fact-checking or double-checking every decision that they're making. And I'm tying everything back to strategic planning. This is where that comes in, is you set budgets for every department. Here's what our recruitment budget is.

Here's what our sales and marketing budget is. And then it's less of, okay, here's this one-off decision or here's where we're gonna spend that money right this moment. It's no, we've talked about this. We've planned for this. You can be empowered to make a decision based off of the budget and the planning

that we've done. And then if there's outliers, you know, bring those up to the owner, but, but it's all within the constraints of the plan that has been set during this, the strategic planning. And so I love what you're saying of just empowering the team, establishing those lines, and then, you know, holding, holding to the plan that was established. I'm curious. Can I add one more thing to that? Yep, go ahead. Because that was fantastic there with it. And also too with the budget. And this is as we mature as the business owner, and as we develop a stronger relationship with our staff, we'll give them budgets, but then we also will plan in an extra

1%, 2%, 3% to try something new. Because think about what I just said, 1%, 2%, 3%. 3% on a million dollars is $30,000, right? So I've budgeted to try something that we've never tried before, but I don't know what it's going to be yet. But then I can go back to the recruiter and ask her and she may say to me, Steve, I really want to try CareerPlug and we're not using CareerPlug. Okay, well, that's $1,500 for the year. Okie dokie. Yes, I wanted to do CareerPlug. Or my business development person may say, I really would love to go to this conference

and have an exhibitor booth there. It's $2,000. All right, well, that can come out of my plans over expenditure, but I'm now trusting and empowering the staff member that I've built the relationship with to come to me with a, with a way to help improve their performance. And then I'm just giving it the green light. Like those are things that come when I'm not micromanaging, but I'm delegating and I'm empowering. Those kind of things do come up. And those are the things that do lead to, you know, if I get three staff members that all come to me at different points over the course of a year those things that I'm approving, that $15,000, that can be the 500 grand or the 750 grand revenue growth that I was looking for. And who did it come from? It came from my staff. And then I give them a nice big bonus or something as an

appreciation. They're happy. Business grew. We hired more staff and we're on to the next year. This is year after year after year. This is how we scale and grow our businesses. Exactly. This comes down to that goal setting is budgeting in for growth within these goals, which is really important.

Like you said, innovation is born when we're, you know, stretching and pushing and empowering the team to make decisions and try new things. And a lot of that comes down to these budgets that can kind of ebb and flow and grow with the business. I don't, I don't want to get too far down the political path here, but we are in a really unique year where we are coming up on an election and you've lived through elections, recessions, you know, you've kind of seen it all. What's your two cents on what owners should be preparing for regardless of the outcome of this election when it comes to anticipating what's coming next? So it's so interesting with everything that's happening. And, you know, depending on who you talk to is the end of the world, right?

And, oh, no, everything's going to change in 34 days or whatever. And the truth of the matter is, you know, I've been around since 1980. I've had about, you know, 12 different presidents or 10 different presidents in my lifetime. And every president has pro things that are great and every president has things that you're just like oh i can't believe this right but for 2025 what we really have to take a look at is what are the things that i have control over and let go the things that i don't have control over no matter how we look at it next year, we will have a new president, right? One or the other, right? We're going to have a new president

next year. Now, how can I prepare for it? Well, take a look at what is happening right now, right? So depending on who you speak to, the economy isn't that great right now, right? Everything is very, very high. You know, incomes are high, but cost of living is even higher, right? So it's basically like a negative effect, right? So because of that, well, what can I control? Well, if it's tough, what has worked in years past? I just talked about the recession from 2006 to 2012 or however, wherever it was.

You got to have strong sales and marketing during that time, right? So I got to have strong sales and marketing in a down economy. What else do I have to focus on? Well, getting caregivers is always a challenge. A lot of folks are talking about the Gen Z and the challenges that the Z generation brings to the workplace. They're very different from millennials. They're very different from X and baby boomers, right? So they're a challenge to work with.

Well, instead of looking at it as a, well, I just I'm not going to hire Gen Z and just write off a whole segment of the population. Instead, look at what successful businesses are doing in hiring Gen Z. Example, a lot of businesses that hire Gen Z where they're very successful, they have a strong company culture. And I talk about culture all the time. Company culture comes from mission statement and core values. Every time I have somebody who's a client of mine who says, I can't get caregivers, I can't work with caregivers, it's so hard to keep caregivers, et cetera. My immediate question I ask them is, Miriam, what is your company's mission statement? And then Miriam, you'll look at me and be like, and then you kind of stutter, stumble through telling me some version of your mission statement. That happens all the time. And I'm like, well, that's the problem right there. This is your company's

mission statement and you don't even know it. And then I say, well, what are your core values? And then the owner has to think for a little bit, whatever. I can tell you right now, Hurricane Marketing Enterprises, Home Care Evolution. We exist to help service providers find those in need of care. And our ultimate goal is to help these service providers increase their census, revenue, and profits. That's my company's mission statement. And I have 10 core values. The first one is integrity. The second one is results first, substance over flash. The third one is teamwork. The fourth one is excellent communication. The fifth one is less is more, right? And I can go on and on and on. I know these. You could call my office right now and ask my staff, hey, tell us any three of your

core values. Off the top of their head, they can name three easily. You could ask anybody, any of my coaches, what's our company mission statement? And they all can tell you. My coaches are in Florida, Virginia, California. One is here in New Jersey. I got another one in Iowa and I have a coach that lives in Canada. They all know the mission statement. They all working very well for us. Why? Because it's the company culture. It's the why behind what we do. So when it comes to caregivers, if we create the culture and the why behind what we're doing is dictating it, meaning our mission statement, our core values, or if you're people who are familiar with the EOS system of doing things, right? They call it a core focus. That's your mission statement and

your core value support, the core focus. That's how you hire. The Gen Z, they work at places where they feel valued. They work at places where it's beyond me, something, a purpose bigger than myself. That is very important to them. So I can control my company's culture and work on that to hire Gen Z. That's going to help my recruitment, right? So no matter what's going on in the country, no matter who's in the Oval Office, I can control those two areas of my business that I just said. And it goes further with finances and everything else, but I can control those areas. So depending on the economy, make sure my sales and marketing are sound. Recruitment and retention, make sure my company culture is,

everybody's dialed in to the core values and the mission statement. Those are the things that are going to help me make an impact next year, no matter who's making policy for us to execute. And also lastly, remember that the first hundred days, not much is going to change. So I don't expect many changes to come.

Don't freak out in January, right? Stuff isn't going to start happening until the middle of next year and beyond. Take it in stride. I love the soapbox of culture and core values. That resonates really well with me. And I hope everyone listening to this, again, maybe that hard look in the mirror of, can you look in the mirror as an owner and state your mission and your core values? And I don't know the numbers, but I think a lot of people would be hard pressed to be able to vocalize that so articulately

as you've just done. This might be a little bit redundant, but the last question I wanted to end on, I feel like maybe this is a buzzword, but future-proofing your business. You know, as we end the year, as we're up against this election, as we're thinking about the future,

what beyond maybe values and mission should owners be thinking about when it comes to future-proofing their business? What else do they need to dial in to be confident that they'll have a growing, successful business in years to come? I think when it comes to future casting, future-proofing, and setting your business up for success for the long term, it's going to come from a key position. And that is having an executive director. An executive director is a luxury position.

And I say that because it's not one that most businesses have. I say wait until the businesses are over $2 million in revenue, $3 million in revenue before we bring in this executive position. It's a high salaried position, but it's somebody who's almost like an owner of the business without being an owner. You do some revenue share with the profits so that this way they're focused on growing the business, but they share in the responsibility that you have running it as the business owner so that this way you'll be able to spend more time working on the business and

dealing with the adjustments of the unknown that come up. That's how you future-proof it. Think about it in a much higher level for like a big giant multi-billion dollar company. You have a CEO at the top and a president at the top. The president runs the corporation. The CEO plans for the future and guides the direction that the business is going in. The same thing applies at the much more macro, I'm sorry, micro, micro level in my small home care business. As the owner of my home care business, I am the CEO guiding where the business is going, looking at industry trends, what's coming on the horizon. How can I embrace artificial intelligence, integrate that into my business? How can I do this and do all these other things while I have the executive director who's managing the day-to-day operation,

making sure everything is staffed, making sure every case is fulfilled, making sure referrals are coming in, et cetera. By having that additional position, that will allow me to focus on whatever challenges or abundant opportunities may come. And that's when you think about your SWOT, strength, weaknesses, opportunities, and threats. As the owner, you should be focusing on the opportunities and the threats while your executive director is focusing on the strengths and the weaknesses and the day-to-day. Steve, this has been so good. You've taken this in different directions than I anticipated, but it's been everything and more. This has been so, so awesome. A couple of people have already reached out and asked how they can best get in contact with you. Is it through your website, through email? What's the best way for people to hear more from you? Definitely through the website. If you go to

homecareevolution.com, that's the best way to find us. You could sign up for our magazine for free there. You can watch the Drink of the Hurricane videos that I've been putting out for the last 12 years and access them through there. You can have a consultation. We can get you going right away and make 2024 finish strong so that 2025 is a record-setting year for you. Amazing. And your bootcamps, do you have one coming up or when's the next bootcamp that people could look into? There's one next week, which is in St. Louis. And then we are announcing it next week at the one in St. Louis for Orlando, Florida, the 19th, 20th and 21st of February. So there's one next week in St. Louis. And then there's one the second half of February in Orlando, Florida.

Awesome. I have yet to attend one myself, but I know they are electric. And so if anyone's looking for a really high energy, high impact event to attend, I'd say put these boot camps on your radar. So Steve, we'll go ahead and wrap here. Thank you so much for coming prepared to this conversation. I think we've touched on a lot of topics. There's a lot of nuggets here for people to dive into and re-listen to. And we'll look forward to our next session where we are going to dive into sales, your bread and butter, referral marketing, rate setting, closing tactics. We're going to really get into that. So we'll look forward to that. Thanks for being here. Thanks everyone for listening live and we'll be back same day, same time next week. That's a wrap. This podcast was made by the team at CareSwitch,

the first AI powered management software for home care agencies. If you want to automate away the menial of your day to day with AI so that you and your team can focus on giving great care, check us out at careswitch.com.