Home Care U - The Keys to Operational Success from a Leading Franchise (Pt. 2 Dustin Distefano)

Episode Date: October 29, 2024

In part two with A Place at Home's co-founder, Dustin Distefano, we uncover the secrets to operational success in the home care From tactical strategies in finance, sales, recruitment, and care to coaching franchisees through plateaus, Dustin shares invaluable insights for long-term business growth. Tune in to learn how they’re setting up for success over the next decade and the challenges they've conquered along the way.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 back everybody to Home Care U. It's great to be with you. I hope you're having a great Wednesday. Quick introduction, I'm Miriam Allred, Head of Partnerships at CareSwitch. Quick reminder for everyone that's listening to this live or the recording afterward, we've got links, resources, transcripts, episode highlights on our website at careswitch.com backslash homecareu. So I know a lot of you listen to this on Spotify or Apple podcasts or wherever you get your podcasts, but know that we've got some extended resources on our website at careswitch.com backslash homecareu. So without further ado, I'm really excited to be joined by Dustin DiStefano, who is the co-founder of A Place at Home. Last week,

we had Jared, his co-founder, on, and we've got Dustin back this week for another episode to kind of dive into their operation and talk about all things home care from a franchise perspective. So Dustin, I know we got the extended introduction from Jared last week, but I want to give you a little time and place to introduce yourself, talk about your background, maybe share kind of your side of the story of starting the business and talk just a little bit more about yourself. Yeah, thanks. Thanks for having me on.

To go back, I think we're at 12 years now and we started thinking about a place from about 13 years ago. So I'll skip my younger days and go into my professional. I started my career in England, actually. I was in telecommunication sales over there and I sold small businesses. This is back in like 2006 or 7. So Tony Blair and George Bush, I think, were the prime minister and president. And when I went over there, I got my first sales job, didn't know I was going to be good. Every time I got on the phone, I had an obstacle in front of me. They had to get over that I was American. Long story short, I turned out to be the top salesperson in that department.

So that's kind of my background. When you talk about home care, I pretty much was the sales, marketing, and I would say visionary. Going into coming back from England, I moved to Arizona and I got a job with Enterprise. So I learned my sales techniques and abilities in England. Well, Enterprise Rent-A-Car has a very good management program. So it taught me how to manage and run a business. After that, I went into travel nurse staffing. I got married. I worked for Enterprise for like six years. And then I got married to my new wife and then moved back to Omaha. I was living in Arizona at the time. I moved back to Omaha to start a family. And when that happened, I got demoted. And then I was working for a manager who I knew I was a better manager then. And I couldn't do it anymore. And all the meanwhile,

I had some things happening with a great grandmother of mine in rural Iowa, Audubon, Iowa, if anyone would be familiar with that. But it's a very small town. And she was at 92 at the time. She lived a big 102. And she was a farm lady, very stubborn, smoked Virginia Slims until she was 92. And she was forced essentially into a nursing home because there wasn't any family around. I mean, no one lived there anymore.

I think the closest family member was in Carroll, Iowa, which maybe was an hour away. And when she got moved in there, she would run away. She would get out. And I saw my aunts, my uncles, my cousins all getting calls from work, having to go up there. I mean, she did not want to be there at all. And the sad thing was she actually, you know, rural communities, there's a nursing home in one rural community and it services like a 30 mile radius of all those other rural communities. Unfortunately for her, her house was a block away from that community. So that's where she would go.

And so seeing her go through that, she wanted to be at home. And that got me looking into home care. And then Jared told you his story. We've been childhood friends since fourth grade. And we started looking at home care options, looking at a franchise. I actually applied to be a home instead business performance coach in which I'd not get the job. And then I use that as motivation to say, okay, I think I could just start my own. I don't need to work for a home care agency. I'll just start my own and learn it. And then me and Jared started it. Did it for four to five years and then started thinking about how to scale. And that's when we got into franchising. And then fast forward to today, I think we just signed three more locations in the last two days. And we're up to about 60 plus territories and about mid 40s and owners. So it's been it's been a ride. Awesome. Thank you for sharing all that. What a great story. I personally love the way that all people come to home care. Everyone's

background is so unique and so special and so like individualized. So I love hearing your story and what brought you to home care. So today I want to talk about, kind of pick your brain on what is top of mind for you as you coach these franchisees. You are very much on the ground floor talking to these owners and operators and helping them through struggles and challenges and plateaus and all sorts of things that they're encountering. And so I really want to just kind of unpack some of the key areas of operation and ask you, you know, what they're doing right, what they're doing wrong, where they're wasting time and money and just kind of, you know, jump through a variety of topics. So before we get to that, I want to just hear from your perspective. I asked Jared this as well. You know, what's been one of the more challenging parts for you as a business owner, as a large corporate owner?

What have you struggled with? And then on the flip side, I'll ask what's been the most rewarding. So let's start there. You want to do the rewarding or struggle first? Sorry, let's start with the struggle and then we'll get to the reward. All right. I think the biggest struggle I've had, we've had some growing pains, right? The first 15, 20 locations, 20 owners I was very in tune with. I probably have newer owners on here listening right now. I'm probably don't want to hear this, but like once we got to 45, my biggest struggle is how do I keep everybody connected, right? Because the thing that we live

by at a place at home is everyone's bought into everybody's success, right? So my job, I say as a CEO, is to drive the relations between our organization, the headquarters, and our coaches and our staff, but also drive the culture and the relationship between the franchisees and make sure everyone's bought in to everybody's success. And I think my biggest struggle is how can I personally stay connected when we get to 100 or 80, 60? And really figuring that out has been a struggle of mine because I feel I care what people think a little bit too much sometimes, I guess you would say. So if I'm not calling one owner more than I'm calling the other in my mind, I'm like, God, I got to do this, that and the other. So I'm sorry, I'm getting really

good at it. We're doing more of like conferences and webinars and roundtables where I bring everybody into a meeting and then have a conversation. So that started doing well. Other struggles that we've had is just everyone has different personalities. As owners, you think everyone's going to operate the way you want them to operate. You think they're going to operate the way that you would operate. And this is not true. And that doesn't mean they're not successful. Some of them operate differently and they are successful. When I say differently, it's not that they're going outside of our standards. It's just they market differently or they target different people in terms of marketing. And trying to hone in on it to keep them focused on the task at hand

can be a struggle. But I think we brought on some really good coaches in the last year. We've added three coaches, 30 years plus of experience in the last six months. And all of them are, well, one of them comes from franchising. The other two were former franchise owners of competing brands. And I thought that was going to help me out a lot. So when you talk about something I'm proud of, like when I brought those two people, Shane Thompson and Tiffany Dutcher, and then Jennifer Axelrod is our first coach. She was with us for over a year now and she's learned home care. So she has that one year of experience home care now. She's this business. I've done this before. And it really connects with the new owners, right? They can't really like hide and say, well, you know, when you tell a coach, you've never been in my shoes. You're not. No, I have been. Right. So let's talk

about how we're going to get you out of this or move past this. And I think that's been our biggest success in the last month is bringing on those coaches and adding that clout to our brand. Awesome. I love to hear you talk about just like the diversity and leadership. Again, that's one of the things that I love most about home care. But what also makes home care operations so interesting, everyone comes with a different background, whether it's sales and marketing, whether it's healthcare, whether it's something completely unrelated, teaching, legal, you know, coaches, like I think I've not met at all professional violinists. I've heard, you know, people come from all these backgrounds, then they come to home care and they offer something so unique. But I see the challenge that could be for you as, you know, a franchisor, how do I kind of reign these people in, use their strengths, but coach and teach them,

you know, some of the fundamentals of home care. And so I think that's actually a perfect segue to get into these topics because I want to hear really how you coach and train them on some of these things. So let's start with finance. Actually, that might be an interesting place to start, but running the financial financials of a home care business can be relatively complex. It can be new to people. Margins are tight. There's all these nuances of home care finances. So what are some of the things... Let's start with early owners. Say you're bringing on some of these new owners. What are some of the first things that you tell them when it comes to healthy financials for a home care business? Don't cut rate. That's the first one.

And it's hard for me to say that, right? A lot of owners come in, they're not earning a paycheck, and they're like, I got my first client. It's 40 hours a week, Dustin. My rate's 32. I'm going to do it for 26. And I said, don't. No, do not do that. Because what it does is it starts to kill your gross margin. So how we teach it is there's three buckets. P&L is very simple, right? Some of those make it very difficult, but it's very simple. There's income and there's gross profit. Your gross profit is after your cost of goods. And our cost of goods and home care is our caregiver wages and payroll taxes and for RN directed care states, our ends. And so where we want our owners to be is at 50%. Right now, our average location is 49.3. I hone in on that every single week. I do a weekly update to the owners. I go through numbers, our total receivable counts, our expenses averages, and I say, we're at 49.3. When I started doing that weekly update, it was about, I would say about a year ago. And I do it every Monday. And we started off at like

45%, but we honed in on let's get to 50, right? And so now we're up to 49.3%. But that's step one, like on the finances is focus on your growth gross because there's not a lot of controllables underneath, right? You have your rents, you have your insurance. For franchise systems, you have your royalties and you have your admin wages. Other than that, there is not a lot of skin you can cut to maximize your bottom line. There's just not. So to do it simply, this will be a little quick lesson here. You have 100% as your income. Then you take 50% off in wages. Now you got 50% left. And we want you to be at 15% or 20% to 20%.

But let's just say 15% net profit. So subtract that off. That leaves you with 35% for everything else, right? And then our royalty here is 5.5%. So take that. That leaves you at 24.5% with a brand fund of 1%. That's 23.5% to cover rent, insurance, admin costs, which is usually between 8% and 10%. And leaves you nothing.

So then you got your advertising, right? And marketing. What happens in a home care agency is when things get tough or they get tight, what's the first thing to ever get cut? Marketing. It's the easiest thing to cut, but really and truly it's like one to 2% of what you, so what you need to do is you need to focus directly on your gross profit. You're at 40% when you should be at 46 on a million dollars. So your million dollar agency, getting that 6% back in is $60,000 right there. Right. So it's like, that's how we teach it. Like we keep an eye on it for them. This is great. You're like gas to the floor already, which is fantastic. You said, I love where you started, which is like, don't cut

rate. I think that alone is just like so important, so powerful. I don't actually have like scheduling and hours on this list. So I want to kind of work it into finance here. When I hear rate, I also think of like hours and shift duration and like structuring hours because oftentimes people jeopardize rate for maybe shorter shifts. What do you coach or teach regarding like structuring hours and schedules? So I like the three to four hour minimum when I start. I mean, that's one thing I always tell as a marketing effort. When we get into marketing, I explain that for new owners. Go find the home care owners that have been around for eight to 10 years,

because I guarantee you they're turning down people who want four to eight hours a week. They're turning them down. So what you want is that it's another man's, one's trash is one's treasure, right? Mentality. Go and get all those that you can. That's one's trash is one's treasure right mentality go and get all those that you can that's going to get you started right and then we want to work you to those minimums or at 16 hours 20 hours a week minimum we'll get you there but what you need to do is you need to pick up as much as you can because those clients can grow if we're going to go under

three hours i do a visit rate like i justify and is a care visit. And I would probably, I don't want to say gouge it, but it's going to be about the same cost as a three-hour shift. Anyways, maybe a dollar or two less. But really, it's what I'm saying is if we come for 15 minutes or we come for two hours and 15 minutes, you're getting charged $125 for the visit, let's say. But what that does is allows us to pay caregivers. Here, you can go for 15 minutes, you's say. But what that does is allows us to pay caregivers here. You can go for 15 minutes. You're going to get 50, 60 bucks for that 15 visit. And that makes it enticing for them to go. But normally when they hear that, they're just going to go to the three-hour anyways. Yeah. I love the thing that I want to point out about what you just said too,

is working with other agencies. That is such an underutilized lever, I think, still in home care, which like you said, another man's trash is another man's treasure. Some of these larger, more sophisticated agencies in your market are probably turning down the shorter three to four, maybe five or six hour shifts. So go partner with them and make sure you can pick those up. When we're talking about margins, you talk about your gross margin rate. Are most of your owners heavily private pay, exclusively private pay? What's the payer breakdown for most of your franchisees for context? It's a good mix. We're pretty heavy in the VA. I think last I checked, we had 200 vets across the United States. Some are bigger than others. And then some states do Medicaid,

Medicaid or Medicaid waiver services. Don't have anyone on Medicare Advantage right now. We do have some going through like in California, we just got approved through Humana for a location. It's something that's on our radar this year that, you know, when we get into where we want, I think one of the questions later, you're going to ask me where we see ourselves to keep us going in 10 years. I do feel strongly that Medicaid waiver. Actually, I did a podcast yesterday called the Home Care Coaches Corner. We started where I talked about VA, Medicare and Medicaid and where it's going to have to go. So there's my own little plug there.

But I think that we have to start getting into Medicaid. We have to start looking at Medicare Advantage. And the VA is now a lot of people are getting on VA, but I would say it's like 60-40. Okay. Okay. Yeah. Just curious for kind of context of this conversation, what the breakdown is so people can understand. What about beyond gross margin? You talked about simplifying the P&L. What are some of the other most important business health metrics that owners should be focusing on? Budget. You got to know what, I mean, not to go back to the P&L again, though, you got to know when your break-even is, right? If you were to ask me, Dustin, what's your break-even?

I could tell you that usually with a single owner break-even, this is a franchise and they have to have office space and they have to have this and that. If you're a home care owner on here and you start out of your basement by yourself, you can start a home care company probably 5,000, 10 grand. I started with $5,000. But that was also 12 years ago. But if you're going to have to get brick and mortar, a little executive suite and just start, a break even is about to 20,000 a month. So I will, and if they hire a person, right, a lot of our owners will hire a second person right out of the gate and need payroll so they can do out and do marketing, which I highly recommend anybody

doing, like trying to do it on your own is really hard. So helping them figure out where their break even is so that they're managing their budget is probably number two. And then number three, not to add a third, if you're not going to do your books, hire someone to do it. When you talk about a struggle I had, I used to look at my P&L and books and schedule and billables every single day. That was my coffee time. Have a coffee, see where we're going. When I got into franchising with Jared, I just assumed people valued that stuff. And I was wrong. I was wrong. I didn't even keep an eye out on it. People's books would all of a sudden become an absolute nightmare. And they'd spend tens of

thousands of dollars to get it fixed by CPAs. If you just do books 20 minutes a day or 15 minutes a day and you can actually do it, you'll be fine. But if you want, if you're not going to pay attention to those because it's not your top priority, you can hire a company to do it. Right. And they're like 250, 300 bucks a month. So I'm glad you slid that in there, because in my opinion as well, it's table stakes. You as an owner are responsible for the bottom line, for the P&L. And even if that's not your forte or your expertise out of the gate, either learn that, develop that and or bring in a CPA, but don't totally offload that function. Make sure you are still heavily involved and aware of what's going on. And it sounds like

you have a similar mentality. Just out of curiosity, do you all help with that at the corporate level? Or do you put the owners in charge of that? And, or it sounds like you maybe recommend people bring in CPAs. So I don't bring on CPAs. I don't think you need a CPA to do bookkeeping. But we did make a decision a year ago. We partnered with a company and i actually started it with jared it's called senior services financial and so we require all of our owners to at least do 12 months minimum right out of the gate and we charge about 300 bucks a month and what we do is we go through your monthly expenses we sit down with you have a meeting say tell me

what this expense was for this one and let's categorize it's not just doing the books it's actually teaching them but then we reconcile their accounts, their credit cards, their liability accounts, their balance sheets. People have loans. So a lot of people will make a mistake on loans and say, all right, here's my principal and interest payment of $4,000. I owe $80,000 and they put the $4,000 to the liability. But what they didn't do, a quarter of that's principal, the other is interest. The interest is a business expense write-off, and then it messes up. So there's a lot of different little nuances when you get into balance sheets, and that's a topic for another day,

but that's what we just said. We're going to do it for you for the first year, but we also wanted you to teach you and want you off. We don't want you to use this afterwards, but again, it's not something you want to prioritize. Just let us do it. And we'll send you your P&Ls monthly. Out of curiosity, can people that are not part of the franchise system take advantage of that? Or are those two things combined? No, they can.

Okay. Absolutely. I asked because there might be people listening to this, that that would be relevant to people that are independent businesses that would benefit from that. The bookkeepers we hire have aren't. Some may be like, I don't want Dustin to see my P&L. He's a competitor, right? I would say that. But I don't really pay attention. I mean, I pay attention to my owners, but the bookkeepers are

not employed by the franchise. It's a senior services company, senior services financial. It's ran independently. And those bookkeepers are on the roof. Yeah. I ask again, because we've got a lot of people listening to this. And again, this is a really specific, important area of the business and people may need support, you know, in that area. So good to be aware of. We could keep talking about finances all day. It sounds like this is, you know, an important topic, a hot topic for you. But I do want to keep going here because you're already referencing sales and marketing. And I want to hear, you know, what you coach and train in these areas. So let's go, let's go towards sales. The first question I want to ask you early days, you know,

came with a sales background. And so you knew how to conduct yourself, how to, how to do sales. A lot of these owners that may not be a strength. So are you training, coaching them up to be good sales reps or do you encourage they hire a sales rep early on if that's not their strength or what are you talking about there? I don't like hiring salespeople in this industry. If there's any salespeople on here, I don't, I mean, as an owner of the business,

you're gonna do the best selling and if you're not comfortable doing it, you gotta get comfortable doing it. So I think that's our first step is we got to make you uncomfortable. Because if you're not comfortable doing sales, it's tough, right? So the first thing we have to create is confidence. You can sell anything if you have confidence. So when we come to training in Omaha, we just had training in Omaha last week.

We do a lot of role plays. And what does role plays do? It creates uncomfortable because it's weird, it's awkward. And if I'm your role player, I make it awkward as hell, right? I'm going to throw scenarios out at you that you're not even going to know how to respond. But I don't need you to respond to it, right? What I need you to do is just see your line of thinking so that I can help coach you on it. So many people want to go in. This is where the biggest mistake is, is when you start a home care agency, so many people want to go in and be able to solve all their referral sources problems, right? Home health, hospice, post-acute rehab. They want to go in and know

exactly what to say and how to solve their problems. Your first meeting, do not do that. You don't need to do that. Your first meeting needs to be humble. You just need to go in and say, hey, I'm new to the area. Tell me how you've worked with me before, home care agencies before. How have you worked that? And then let them talk. Everyone likes talking about themselves, right? So if you let them tell you, and then it literally, it creates a dialogue between you and that referral source, and you didn't do anything. You literally just asked questions and sold yourself because you're showing an interest in them. You're not telling them how you're going to fix their problems. No one likes you to tell them that, right? But they're telling you how you can help fix their problems. So let them do the

talking. And then after that, take that info back and then create a calendar of when you're going to stop by again. And you just got to massage and mold that relationship. So I'd say that's the biggest thing that we teach is you don't need to go in there guns a blazing, throw a pamphlet in their face and tell them you do home. They know what home care is, trust me. And if a social worker doesn't know what home care is, you're probably not going to get a referral anyways. Right? So they know what it is. You just got to get them bought into you. And so how do we get them bought into you? And that's what we really focus on. And that starts with people's whys. I literally, when we come into training, we make them tell us their why like 15 times. We were at dinner, actually this last one, we're at dinner with, again, make it uncomfortable, right? So they can

get used to being uncomfortable. We took them to dinner. It was a nice steakhouse. We're having a little wine, having steak. It was great. And I just popped out and I said, Jocelyn, tell me why you wanted to do this. And she's like, what? I'm like, go ahead. And in front of everybody at the table. And she did it. And she did fabulous because she didn't overthink. She got put on the spot. She didn't have to sit and out think herself. She just naturally came out. And that's what you have to do in sales. You just got to be natural. Don't go in there scripted, prepared. I mean, be prepared. You got to be somewhat prepared, but you don't people do that is actually asking, I like what you first said, which is ask them how they've worked with home care agencies before, and then lead them on to what worked well, what didn't work well, you know, like let them tell the story and then you can create like the solution based around what they

say. I think that's kind of like a small nuance difference in how a lot of people are approaching these referral sources today. That's really, really strong. And I also love what you're saying about getting them uncomfortable. You know, these people that are starting these home care businesses, there's all sorts of uncomfortableness, you know, throughout their role in their journey. And so you like pushing them to get uncomfortable is great. Awkward. It's awkward. I was going to say, I think you should actually record those role plays

because there's probably a lot of really good learning in that. So just throwing that in there as a tidbit to maybe record those and use them to help train and coach. So when you talk about like technology, we use Firefly. You see my Fireflies on here right now, right? So we do our entire training week recorded on our screen. So they're watching.

I actually, to add a little bit more to this, is during a role play, I went on and G-chatted my entire system and gave them the link to log in and listen. And without the owners not even knowing, and all of a sudden you start seeing people pop up to watch them. And it's like, just roll with it. Don't pay attention to it. And all of a sudden you start seeing people pop up to watch them. And it's like, just roll with it. Don't pay attention to it. Just focus on what you need to do. Right. And they killed it. That's amazing. I think that just, you know, my own here is just like one of the benefits of a franchise system is just that camaraderie, that learning and benefiting and growing together, you know, being able to rub shoulders and get uncomfortable with one another, because that's really applicable out in the field when you're doing this, especially in sales, which is what we're talking about here. I know you're saying, you know, owners should be heavily involved in sales. Do you, does that ring true throughout

the growth of the business? Should the owner always stay heavily involved in sales? Or as you grow in scale, do you think it's okay to offload onto sales reps or directors or managers? Or is there always a part of sales that the owner should be involved in? I think what you need to do is you can hire salespeople, but you got to hold them accountable. I always say, and again, I won got to hold them accountable. I always say, and again, I won't offend anyone out here. I always say home care salespeople who are hired can be really, really good at looking really, really busy, but accomplishing nothing. Right? And so you got to create those metrics. I mean, we as a brand have a scorecard that our coaches go through our owners every single week.

So as you scale to a point where you have maybe a director or field supervisors or head caregivers and salespeople, you got to make them accountable to their metric, right? But you don't make their goals. That's one thing you need to know too, is you need to sit down and say, what is your goal this month, right? What are your billable? We're at 400 billable hours a week. Where do you want to be? Well, I want to get it to 420. And in my mind, I'm like, what? But I'm not going to say that. I'm going to say, tell me why. Why do you think that?

And then again, it's just let them answer their own questions. And then you just got to spur it. But if you're going to hire a salesperson, you just got to hold them accountable. That's where a lot of home care agencies falter. This gal is 10 years, been to 10 different agencies and I'm like, eh, red flag. This one gal, I like the younger, not to be ageist, but someone with zero experience who just has a passion to want to get into this. I can take personality and I can train them how to sell home care. I always say there's three things that make you successful in this business. You got to be likable, you got to be coachable, and you got to have grit. That's three things. That's the only three things you need because

you can't coach grit, you can't coach likability, you can't coach coachability. But if you have all three of those, even as salespeople, as franchise owners and salespeople, if you have all three of those and you could take criticism from me, the owner, right? Constructive criticism, then you can be a successful salesperson. But if you can't, and you hire a salesperson who comes in and says, I know so-and-so at Home Health AYZ, I know so-and-so at Hospice, all they're doing is bringing what they did over here and brought it over to you and are accomplishing. So you just got to be careful on who you hire.

Yeah, it's really tricky hiring sales reps. We've talked about sales a lot the last couple of months on the podcast, and it's a really, you know, challenging topic bringing on these people. Like you said, you know, do you bring on new, young, fresh blood or do you bring on these people that have all the relationships in the community? Like there's pros and cons to both. One really specific question I want to ask you, we're using the term like sales rep, which is fine and great for this context. A few episodes ago, someone was talking about, you know, not calling them sales reps, calling them maybe business development or various other roles. What's your take on

titles and roles for sales specifically? Yeah, I like community liaison is one. We've shifted ours. And when we talk about the 10-year plan, we've shifted ours to be more clinical liaison to put a little bit more healthcare spin on it. It's the liaison between your agency and the clinics. So the home care, home health, the hospice, the post-acutes, the community liaisons kind of come to office more like a marketing, like I'm going to get involved with the Alzheimer's Association or Parkinson's Association and all those associations. That's a great community liaison. But those are probably the two titles that I would use. Okay. Yeah. I like to hear that because again,

we use like sales and marketing interchangeably in home care. And sometimes that bothers me because they're different things. But I also think we can get away from calling them account executives or sales reps. I think community liaison, I really like clinical liaison or business development. I think there's just stronger, richer titles that help them in their role and help them potentially in the community as well. The last question I want to ask on sales, speaking of like sometimes like the sales

marketing hybrid and home care, how much focus should agencies put on referral marketing, like boots on the ground sales versus or and or like online digital advertising selling? Like what level of importance should they be putting on both of those? Well, I see my director of marketing at headquarters is on here. So I gotta be careful. She loves digital.

But I think referral marketing, you gotta be heavy referral marketing. You can do digital. There's three buckets, right? You got direct referral marketing word of mouth. You got digital advertising and SEO and PPC and all that stuff. And then you have your paid leads, your place for moms, your agent cares, your caring.coms. And I always recommend doing caring.com, agentcare.com. You got to be patient. And what you put into those is what you're going to get out of those. So when you talk about the sales and marketing people, here's the difference

between sales and marketing. They want to take, it's a slow race, right? They're going to post their ads. They're going to drive in leads. Then you have those pesky salespeople who call caring.com. They don't answer. And they're like, I don't get instant gratification. I'm not following up. I want instant clients. So if you're going to do caring.com and agentcare.com, you have to work those. It could take months, right? I always tell people, if you're going to do those, you want one of two answers from that person. You either want them to answer and tell you to leave you the hell alone, or I would love to talk to you, right? You don't just give up. And those that don't give up will have a higher close rate. You know, some of our owners who don't give up are 15 to 20%.

You're like, Dustin, that's terrible. I closed the biggest client. Me and Jared closed the biggest client in the history of a place at home on a paid lead. And it was a two assist, 24-7, both rates in rural Nebraska that we had 16 caregivers there during the week. I think the case was like, he lived for like a year and three months, an old fertilizer farmer. And it was, I think we did like $400,000 on that client. So that paid for my lead gen, the rest of my business, right? But you got to work those. You can't just pick up the phone, text them, email them and say, all right, they'll call me when ready, right?

SEO, PPC is a slow game. It's a slow game and it's really hard to measure success. It's really hard to know what you're getting out of it, right? Unless you do multiple things to guide it, but then it's expensive too. It can be really expensive because the problem is we're all putting a bunch of money into this pay-per-click and the SEO on it. We're cannibalizing each other, so it just dries up the cost of it. We do pay-per-click, and I do believe in it. But it's a slogan, too. You got to be able to... Again, remember when I said if the first thing to get cut is marketing, you'll go three months and you don't know how to measure it and the success. And you just spent four grand a month or five grand a month, and you're like, that's it, I'm out. Well, that was $15,000 flushed down the toilet because it's a slow game. And then referral marketing, hands down. I mean, you got to go out and build relationships and get direct leads. Your chances of closing those leads from word of mouth are way higher. Your chances of closing a lead from a referral source is way higher. It's just, you got to focus on that. So you can't just build a home care company off paid

leads and digital. This is super, super good. If you had to break those down into percentages, what would you put them? Referrals at 60, digital, how would you break down those percentages i'd probably do like 70 15 15 15 because because the thing is i feel like you're gonna get a lot of leads through caring.com and agingcare.com and it can be expensive i think it charges like 70 bucks a lead now um so you'll have a bill of seven eight hundred dollars a month but then on ppc and se you're going to spend two, three, five, whatever, however much budget you put behind it, honestly, but you'll have a better success measuring the aging care and caring.coms, right? But you will have a 10 to 12% close rate on this. But again, you get a big client, I mean, and it pays for itself.

Yeah. I love the success story of the fertilizer person. You know, that, that alone, like you said, pays for itself. So going back to like break even, you need to know your break, even on these referrals and do your best to track your, your marketing spend, albeit, you know, challenging, you really got a laser in there and track that. And I love what you're saying just about like the short and the long game, you know, I come from a marketing background. And so I just think of like funnels, you know, you've got to feed that top of funnel with marketing and brand awareness and advertising, and then like funnels, you know, you've got to feed that top of funnel with marketing and brand awareness and advertising. And then you get things, you know, lower down in the funnel that convert. And so again, there's just the long and the short of it, the pros and the cons. But I like what you're saying that just you really do need like

a well-rounded sales and marketing machine and don't jeopardize one for the other, but just figure out what that looks like for your business and just track everything as best as you can to make sure you're not wasting money in areas that you might be. So really good segment on sales. I want to transition to recruiting if we can. I know we're moving hot and fast here, but I want to get all your takes. Recruitment is a struggle. It has been probably maybe since you started 12 or 13 years ago. And now here we are in the labor market that we're in. Recruitment continues to be a challenge. What are you hearing from your owners? What's working for people right now? Well, we made an investment on behalf of our owners two years ago, I think. And we brought on a company called Apploy. I don't know if you've ever heard of them.

And we actually pay for it out of our brand fund for our owners which is an applicant tracking system um and essentially you you got to be organized if you want to do successfully yet it's where you start right organize yourself uh applicant tracking systems are great otherwise you're jumping from indeed my cna jobs to to glass door to monster if that's still around career builder if that's still around and CareerBuilder, if that's still around, and then local ads. Employee and those applicant tracking, there's other ones too, Hireology and stuff like that.

They all bring it into one hub, so you're working it directly through there. So first do that. I would highly recommend that because that'll, and then you get your data, right? And track which budgets, you know, some people just throw $500 at Indeed to get a hundred resumes and I'm not going to knock Indeed, but I'm sure everyone on here

would knock Indeed. That's like paid leads, right? And then taking it further, when you do get somebody from Indeed, like the first thing I tell people to do is you have that caregiver on the phone. Hey, we're doing an interview and I'm pretty sure everyone will like you. Can you take your resume off indeed? Because they're getting four or five calls a day. They're getting text messages, emails every single day. And so you got to try and drive them, A, to take it down. But B, you have to create an advantage for them to come to that interview. And I think that's a lot of people. There's like a sticker shock when you first, for first time owners. I get it all the time. Like no matter how many stories I can tell

you about caregivers, right. And in an application process, they go in and like, I got 10 interviews set up. I'm like, okay. And then they do them like hour on hour on hour. And I'm like, at the end of the week, I'm like, you spent 10 hours. How hours how many showed up three so you wasted seven hours so i'm actually a big fan of group interviews just but have a three o'clock on on tuesday and thursday book as many interviews as you can you get 12 interviews and all 12 of them show up at three o'clock that's a good problem to have but if half of them show bring them bring them in and then do a focus group style interview. Save your time, right? And so I know that's not what you asked me, but that's kind of, it just starts with your process. Yeah, no, this is great. Great. Starting

with an applicant tracking system, getting organized, building in a process. What area are you seeing your owners struggle with the most? Is it sourcing applicants? Is it getting them to show up for interviews? Is it getting them to that first shift? Like, you know, what stage are we struggling the most with, would you say? I would say get it. The applicants from the numbers in our employee system, we're getting applicants. I think the biggest, hardest thing is to getting them to show up to interviews still. Right. I mean, it's it's a sales game. Again, if you don't know, like I was in travel nurse recruiting and I'll tell you, travel nurse recruiting really helped me because, again, it's the same concept.

I'm calling nurses who are on a 13 week contract and they're getting calls and we all know when their contract is going to end. It's like a shark's game when when nurse staffing was travel nurse staffing was a big thing. Right. And so it's the same thing. You've got to understand an excitement. And then when they show up, treat them like gold when they're there, right? And once they show up to that first shift, I always tell people again, it's uncomfortable, right? So moving on to the next page to retain them once they start, you got to be able to go to that first shift. A lot of our owners go to the first shift and meet them. One, if they don't show up, at least you're there, right? That's one fail safe. But two, you're showing the caregiver, hey, I want to make sure that you are comfortable when you get there. It's an uncomfortable situation for maybe even a first time caregiver

to just show up to a random house. They have no idea what it's about, which is another thing. Give them an orientation on the client and the caregiver or on the client, on the client and the house they're going into. So I think it's just I always say it's all in the finite details of your of the caregiver experience that's going to help you through that. If you're just going to be like, I'm going to post a job, I'm going to do interviews, I'm going to hire them, then I'm going to place them. You're not you're nothing but a staffing agency and you're going to struggle. You have to put in little extra details. I mean, one thing our owners do really well is they do an about you page, right? They learn about their likes. And then when they go into the home, there'll be a little random acts of kindness. Like we'll put a bag of Cheetos in a client's

house because we know their favorite chip is Cheetos, right? So that's moving past recruiting into retaining, but it's all those little things. And then reviews is huge. Tell your caregivers, be proud of your reviews, go read these, right? Yeah, this is really good. I want to ask one more question on recruiting before we talk a little bit about retention. The recruiting question I have is, how do you differentiate? And like follow-up thought to that is, I think we were competing on pay for a while, but I have this kind of like hunch that we're moving away from that a little bit. You know, wages have increased across the board. We still got a ways to go. We're still struggling to compete with the Chick-fil-A's and the Costco's and the Target's. Don't get me wrong. But I think the best of the best caregivers, I think it's more to it than pay, recognition and training and career development. Would you say that's the

same or how do you stand out other than pay or is pay still number one? 100%. First thing I'll teach owners on recruiting is if the first question when you ask, do you have any questions on the phone interview? And the first question is, how much do you pay? They're not going to be with you for two weeks. Right. So that's a filtering. That's a red flag for me because every care, every good caregiver that you meet has a story kind of like owners. They all know that you don't do this because you want to be financially stable and, you know, home care anyways. Right. You do it because you want to be financially stable, you know, home care anyways, right? You do it because you have a purpose. Those are the best ones, right?

They don't have to be CNAs. Some of the best caregivers are companions who are 60 years old who took care of their grandmother, right? And the other thing is don't judge anyone by the cover. You know, I've had people who couldn't spell the word cat, right? Who cares? Don't judge people on their people get infixiated on resumes and experience i'm telling you right now caregiver resume is as good as what's the words written on the paper like it's you want to look at the person where i where i like to separate us where i like to teach and have our owners separate themselves is the culture

they're coming into. And what is culture, right? Like when you say culture, it's the details that I'm going to put into you. Like, I'm not just going to call you to ask you to do shifts. I'm going to call you to see how you're doing.

Right. I actually genuinely care about you. When you come on board with us, I want to know about your likes, your dislikes, right? I want to make sure I'm placing you with people that you're a fit. Are you allergic to cats? Are you allergic to ducks? A lot of things get made, but there's mistakes made when you take somebody, you don't ask them what their allergies are. They're allergic to cats and you throw them in the cat lady's house with eight cats. She's not coming back, right? So like you got to learn and invest in them as a person.

I think the best story that I ever have is I talked to you about Danny earlier. She's been with me for 10 years. She's my right hand. She was my caregiver. She was a caregiver of mine. And we moved her into scheduling. Then she moved in. I taught.

Me and Jared got her QuickBooks certified. I said, what do you want to be? I want to be in the franchise with you. I said, great. I need you to be able to teach people things. And now, fast forward to today, she trains all our owners on QuickBooks, P&Ls, and balancing. She was a caregiver with a high school diploma. I just told her, if you invest in me, I'll invest in you.

And if you can create that kind of culture with your people, with your caregivers, Shane has me beat one of my coaches. He has me beat. He actually developed a caregiver from Homestead into a franchise owner. And I'm like, dang it, Shane. So now I'm trying to sell Danny on buying a franchise, but she won't do it. So she might one day, but like, those are the things you have to do is invest in them, invest in their training, invest in their development, bring them into the office. Don't have the mindset saying, if I'm going to take you out, if I take this caregiver out of the field, it's going to hurt my business. No, it's going to help it immensely, right? Because they're going to come in and be on a higher level and they're going to control those care plans and those caregivers going into the

senior's home. So don't hold a caregiver back because you fear that if you take them from a client, they're going to be really mad at you and say, don't do that. Like give them opportunities and they'll go a long way with you. This is so, so good. None of what you just said can be overstated. So I appreciate you just kind of running down that path. I quick, quick little side note, I have had the opportunity to be interviewing caregivers across the country as part of this panel that I'll be doing in Seattle next week. But this alone, career development, I talked to caregivers that have been doing this for 20 years, 15 years, 10, 2, all of them talk about development and growth opportunities. Even those that have been doing this for 20 years, they're still looking,

they're looking for more. They love the care. They love what they are doing. You know, they feel driven by what they're doing, but even they talk about, you know, kind of like yearning for something more. And so back to my original point, I think pay is important. Don't get me wrong. We need to compensate these people accordingly, but we need to give them, we need to give them more. We need to give them opportunities. We need to give them ways for them to reach their potential. And so that really is the type of recruitment culture that you have to create. And if you have that in place, retention becomes easy. When you've got all of these things that we're talking about in place, people will stay with you for years and years and years. That's not fictitious. That's not some fantasy world.

There will be employees that will stay with you for years. It's just getting all of these things in place early on. So I know we kind of went long on the recruitment and retention, but that was fantastic. Any last things that you would share that come to mind for recruitment or retention? I mean, I think we covered it all. You just got to, again, you got to put money into it. You got to put you into the caregivers as well. You can't just be a nine to five job because, hey, home care is not nine to five.

We all know that. So you got to really build that caring culture to be successful with it. Absolutely. Be available to them. You as the owner, you as the office team. Great boundaries, for sure. Absolutely. Make sure that someone is available to help them whenever they're working.

You know, somebody in the office has also got to be working, you know, in a sense. So making sure someone's available to support them around the clock. I know we've just got about 10 minutes here. I am debating skipping like nursing and care. That was another area that I want to focus on. But I think I want to spend the last 10 minutes on leadership because that is such a huge element of being a successful business owner is becoming a good leader and developing yourself as a leader, but that's easier said than done. And so I want to hear you talk about how you coach these owners

to be good leaders, because some of them may not come to home care with leadership, like on paper experience. And so they have to like develop that and become that. So how do you create and shape good leaders? Well, it starts with our training. Like some people are natural leaders and I love those honors. That's a little easier. But sometimes those, I'll tell you the demographics of people that I've seen. Salespeople who come in, do really good at sales, not very good at leadership. Why? Salespeople are selfish people. They want to go out. Now I'm not saying that in a negative, they just, their job is to go out and sell and bring everything in, right? So what lacks is the ability to like lead people. They're just going out and doing that thing.

So salespeople tend to struggle. So we have to start teaching them from the very beginning. Starting with, you have to create habits as a home care owner. One thing that we preach, for example, putting in caregiver unavailability. What do good schedulers do? Usually good schedulers keep caregiver unavailability in their head. They know exactly who can go to what and who can go to where. But you as a leader have to operate that if you got hit by a beer truck tomorrow, that it wouldn't miss a beat tomorrow. Does that make sense? And so we have to teach them that,

hey, it may not seem important. You only have two clients. Put in the caregiver unavailability. Make sure that you're doing first day phone calls in front of your team. Make sure that you're doing X, Y, Z. I'll give you one example that I used to do. My team hated me for doing it, but it worked was we use home care polls for our quality assurance program. I used to put stickers on their computers that said, would you give me all 10s? And I expected my team that every time they had a client or caregiver on the phone, when they went to hang that phone up, they would say, hey, Mr. Johnson, if you got a survey tomorrow, would you give us all 10s? And if I didn't hear him say it, I'd go to them, I'd say, call them back. But they'd also always hear me do

it. It's the day of age old saying, do as I say, not as I do. Right. That, that that's leadership is I'm going to do it too. And just, and I'm going to expect you to do it. Right. So you have to practice what you preach. That's step one. And then step two is how do you organize yourself when you have a team? Right. Like we've seen some owners struggle with their first couple employees because they're so fixated and they're so fixated on growing the business and they walk by. Have you ever done like a drive-by tasking? Right. They come by and say, hey, can you call this client by the end of the day and talk about this? And then they walk off and the person's

sitting there like, what? I don't even know this person. I just started yesterday. I don't even know how to use my phone, right? Take your time and develop them, right? We try to help them out at headquarters for their team members. We host roundtables where schedulers can meet other schedulers. We got to be careful because of joint employer issues. We can't look as if we're a corporation. So we just lead roundtables and webinars and we drive conversations. We just did today.

We had one of our one of a really good sales developer out of the Woodlands, Texas, who is an employee of Adam and Trista Johnson, our franchise owners down there. She's their employee. And then we asked Adam, can we use her and then teach other salespeople why she does placement so well? She does like two or three placements a month on top of bringing in home care. And she said, yeah, sure. Why not? And she gets on. And when our coach, Tiffany, her and them had a conversation with other salespeople to learn how she does placement. And so like, we try to drive it from the top down. Like I said, we were brought into everybody's success and I do it here. Like I try to drive the relationship between our franchise owners.

The owners then have to try to drive the relationships between their inner office staff and the inner office staff has to drive the relationships down to the caregivers. And if you can't do it with your office staff, you can't expect your office staff to do it with the caregivers. And so that's how we start training leadership and pushing them. Super, super. Yeah. Great, great points. A lot of things that you called out are sticking out in my mind. One of those being just like habits, forming really good habits and really strong processes.

You can't really be a successful leader if things are haphazard and chaotic, like things have to be organized and structured. And that's where people will thrive and thrive in the organization and under your leadership if there's order and processes. The other thing that I like that you started out saying, you know, salespeople don't make strong leaders.

I think we need to get you up on stage toe to toe with someone to talk about that because I think that's really interesting. Doesn't mean it's like the law or the rules. It's not the law. I mean, I'm sales and I like to think I'm a good leader, but I also struggle. I will say I struggled, right? I assume people should just know. And I had to learn that I had to take my time with people, but, and some of our best leaders are salespeople. So I shouldn't say all, but. No, no, no. And that's the underlying tone here is that there, there's no one persona that makes a good leader and there's no one persona that

makes a good home care leader. And I know we're close to the end here, but you all have brought in a lot of diverse owners, people that don't have healthcare experience, people that may be from outside of the country. You all have brought in some really diverse owners. Has that been an intentional effort or what's kind of the backing for that? And what has it brought about for your organization? I don't think it's intentional. I think it's just in our development process. We were pretty strenuous. It takes about 90 to 120 days to get you to the finish line in our development process with Mitch and Jared. Jared, my partner, oversees development. I'm more of the operations side

of things. And it just, like I said, we don't need you to be a nurse, a PT, an OT, an administrator, what have you. We just need to know that you care, right? And so we first start off by seeing, are you care? Are core values your care? That's important as leadership too, is create a core. If you don't have a set of core values, you have no direction, right? Because your core values gives you the direction, your mission, your vision, and all that, right? And our care statement is compassionate, accountable, respectful, and ethical. And during that development, does that new owner or prospect show compassion? Do they actually want to do this for the right reasons? Because who the heck wants to do this for the wrong reasons? Accountability, right? Do they show that they can be accountable

to this business? Home care, there's this big push in franchising years ago, right? Right around COVID. We work with a lot of brokers. What brokers are real quick is they basically make connections and they give them to us and we pay a fee, right? Just like real estate, right? And we get all this big push from brokers that say, is this a semi-absentee, absentee business? And usually I would fire back and say, tell me what business is. Because if I had that business where it's 100% absentee, like literally tell me what it is. I'll go and buy it. Why not? Right. It just doesn't happen. So you have to have, you have to be accountable to it. And then respectful. You got to show respect to Mitch. You're not, again, you have to be likable to be successful in this.

If you're not, if we don't like you, like you're not going to be liked by anybody else. And that a hundred percent ethical. If you're showing any signs of things that you've done in your past, like, no, we background check all of our owners. You got to be a person that fits our core values. And I think Mitch's process just weeds it down to those that care. And we've created a very diverse owner set from all. You said we've got people from all over Africa. We have African owners.

We have South Asian owners. We have Korean owners. we have a lot of owners from different backgrounds. And you'd say, how are we going to be successful? Well, all they got to do is be as coachable, right? And we'll coach you how to do it. So it's not like we recruit diversity, it just naturally happens through our process. And then we talk about how we're going to make them successful and put them through our process. And then we talk about how we're going to make them successful and put them through our coaching. Really, really good. I'm glad we got that in at the end there. There's so many benefits to having diverse owners. You think of the caregiver population, how diverse, maybe one of the most diverse populations in any industry is the caregiving population. And so

this diverse ownership can resonate with and empathize with and relate to this really diverse caregiver population, which I think is just, you know, a great match and a great room for opportunity. So I know you've talked about it. So I want to make sure we get this in here. What are you doing now to set a place at home up for success the next 10 years? What's top of mind? Yeah. So top of mind right now is we're really pushing. There's a, like I said, we did a podcast yesterday on this whole topic. So I'm going to just summarize it. But if you want like the full vision, go and listen to it on our YouTube page at Place

Home Franchise. There's a plug. Yeah, but that's it. That's a promise. But here's then what we want to do is home care. 12 years ago when I started, we were the redheaded stepchild of health care. We weren't, we were sit redheaded stepchild of healthcare. We were sitters, companions, private duty. We have to get away from that because right now with VA benefits paying us

good rates, Medicare Advantage plans starting to spark, Medicaid waiver in the 80-20, and don't ask me about 80-20. I'm not making an effort to really know it because it's four or five years away and it's going to change a hundred times over. So don't waste your time on that. Educate yourself, but don't like boil into it. But with everything shifting that way and the big, big shift to care at home, community-based care, like we have to become, we have to become contenders, right? For example, I would tell you right now, like in WellSky, we use WellSky, there's a program in there called Quality of Care, which can measure changing conditions and hospitalizations. If you're using those effectively, you can create data sets to take into the clinical to say your outcomes of the impacts that you're having. And that's our biggest focus right now is that we have to become, if you want to become serious contenders in healthcare and not just be the sitter company,

you have to collect your data. And so you have to know when there's a change of condition, don't overlook that because if a home health or a post-acute rehab or a hospice company or a hospital overlooked a change in condition that was marked down or charted by a nurse or a hospice company or a hospital overlooked a change in condition that was marked down or charted by a nurse or a caregiver, if they overlooked that, they'd be in hot water. They would get penalized by Medicare. They would have all types of stuff. For us, it's easy to do because we're private pay. So if you want to get in the conversation with healthcare, everybody has an, not just a place at home, but the entire industry has got to have quality measures and start collecting data because that's what's going to drive us 10 years into the insurance companies, the Medicare

Advantage plans. You have to be able, everyone says like, we can save so much money in readmissions, $26 billion in added costs in readmissions I saw the other day. But how do you affect that really? So tell me how you, Home Care will say, we can impact that number. Show me how you can impact that number. And if you act like that and you start practicing like that, you're going to set your agency up for success in the next five, 10 and beyond.

Because that's where it's going. So that's my preach for the end of that. Really strong finish, Dustin. Don't take this the wrong way. I've listened to you on other shows. I've seen you on webinars. I'm not going to lie. I think today was one of your strongest, and I'm glad that you brought the heat. You brought the education. I know you've got owners listening, so maybe you felt a little social pressure, but lots of great information today.

I really appreciate you just running with the punches as we've talked about a lot of different topics, but I think you should pat yourself on the back. This has been a really great session. So thanks for coming prepared. Thanks for being here today. I'm excited to see you in Seattle, a lot of great things in store for home care. And, you know, I get, I get chills when we talk about the next 10 years, because, you know, I still think we're just warming up. Like we've got so much ahead of us and we've got our work cut out for us, but the opportunities are just, you know, over the horizon. And so we've got to get there. So thank you. Thank you for being here and great, great session. Yeah. And real quick for the HCOA, that's the last thing I'll say is like,

don't depend on other agencies to advocate for the industry. Advocate for your industry. Be involved in those conversations because if we're not involved, I said this yesterday, if we're not involved, you're depending on some bureaucrat to make a decision when they have no idea the impact it's going to have. So you got to be involved. You can't talk about it. You got to be about it. And that's kind of my motto. I love it. I love it. Advocacy. It takes every single one of us. This industry is not very big, you know, comparatively to other industries. And so we've got to advocate for ourselves, for our clients, for our caregivers, for our communities. It really starts with one. So we'll go ahead and wrap here. Dustin, thank you again. Fantastic session. Thank you everyone for

joining us live. I know we're a couple minutes over, so enjoy the rest of your day and we'll look forward to seeing everyone back same day, same time next week. Thank you. 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.