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So can you talk about that As far as your backstory into coming into the health field and what made you transition your family's trajectory from being a healthcare worker to being a healthcare.
The trajectory was started with my mom.
Wait, she was the first one to make the pivot into doing something entrepreneurial in healthcare. She started a nurse staffing firm or what they call nursing agencies, so I was helping her out with that, and that's what got me. Like that early exposure to, you know, being entrepreneurial in healthcare, my mind was still on, Okay, I got to get go into a healthcare profession. They were thinking that all
of our kids were going to become doctors. My brother is a physician, and another one of my brothers as an MRI technologist as well. So a lot of us went straight into healthcare because that's what was drilled into our heads. But as I was going through school, I started to focus more and more on the business side of things, eventually opening up an expansion of the healthcare company in Long Island. And I was using school and using that experience to kind of build and improve the business.
She was working at a nursing home and they were using what they'd call agency nurses, and she was like, well, why don't I just start when I want to start an agency and get my friends from other hospitals to work for me and be one of your providers.
And that's where that company started.
But my mom has like zero computer skills, So when it was time to create the documents, it was me making the documents.
When it was time to.
Create spreadsheets, to do the invoicing, to manage quick books, anything that was on a computer was me, right because I was the kind of computer geek of my household. So I was like, Oh, Carl, I need this, Can you know how to make this? Could you get get it out of the computer. So it was always me and my mom working on that side of the business.
So when I went to college, I ended up expanding the business into Long Island, and every lesson that I took that I could kind of like learn from to bring that knowledge back to the business, I did, and I ended up studying health technology and management with the concentration in radiology radiological studies, and that was to become an X ray tech and a cat scan technologist and
an MRI technologist. And I chose that path because I wanted to have flexibility in when I worked, right, because there's certain positions in healthcare that are twenty four seven and there's some of them that are only like nine to five, and I didn't want to choose a career path within healthcare that would narrow me down to work in nine to five, because I knew I needed to have the nine to five the business hours free to
expand on my business. So that was kind of the reason why it chose x Ray because it's you know, their x ray techs are working all shifts, they're doing cascaing at night, or they could flex into MRI. So I thought that that was going to be the best fit for me. And plus I knew that I would have work as well. And I never you know, and this is a message to anybody who's thinking about going the entrepreneurial I never like to not have.
A guaranteed income from somewhere.
And I felt like, if I'm if I can work nights and I could work weekends and use all of my free time during the day to folks in the business, then I'm going to do that. But I'm never going
to sacrifice the potential to earn. And that's one of the things that is pretty special about about healthcare is because you know, a nurse could work, you know, three three days a week, three thirteen hour shifts or three twelve hour shifts, be full time, and then have four days a week you know, on a nurse'ssalia at that four days a week to focus on whatever else.
It is that focused on whatever else they want to do in life. So it's like you can be a real estate entrepreneur, you can work another job if you want. It's like, you know, it's pretty flexible out and so
let me ask you this. As far as the healthcare industry is something that pretty much is recession proof, there's a shortage just like the only especially nurses, there's the only profession I think that is extremely on demand right now where everybody else is firing people and it's like they can't find enough nurses, especially where we're at in New York. So as far as that is concerned, right for an entrepreneur, because we don't get in the business model of it, how did you like, what was the
steps for you to start your home is it? I don't a misquote. It's a home nursing service home long term nursing service.
See licensed home care service agency and then New York they call them.
Link says and chops. It's two types actually, But.
It started first as a staffing firm, which is very simple. Our staffing firm just need to incorporate yourself. You need to have a contract that says that you're going to be providing you know, contracted services, a rate sheet that says how much you're charging, and you're in business literally for less than a thousand dollars. You could start out a nursing agency, right because and it's it's actually mislabeled as a nursing agency because you're not you're not taking
a percentage of the wages of that employee. So like in New York City, you could get a license to be an agency through consumer Affairs, so and that's a very easy process, but that's because you're charging a fee to the person that you that you're getting the job for.
Right.
A staffing firm is different because those people work for your company and you're assigning them to work in a hospital, in a nursing home or something like that, and you're charging the hospital a fee, taking your cut, and then paying your employee. So it's not by definition an agency, but they just refer to them as agency nurses because that's what the terminology is.
Where did the idea for the staffing agency come? Right, So you're doing X rays, you deviated from the plan of being a doctor. Was it from the influx of people coming into the hospital and seeing that there was a shortage.
Where did the influence come from?
It came from my mom.
She just saw an opportunity for a money grab and she was like, well, if I know several nurses myself, and I'm a nurse, so if I could start this, then I could just pull my friends together and we could provide services to these you know, understaffed hospitals and nursing homes. So that's where the idea came from. I got to give her that. But being exposed to that at fourteen years old made and seeing what the numbers were made it like, okay, this is a no brainer
for me to kind of expand on that. But while we were in the staff infirm business, she also was like, well, since we're doing well here, there's an another side to this business, which is home healthcare. And I see those companies and she worked. She would work, and that's my mom is I guess pretty genius. She would have worked for them to kind of learn how they maneuver and get exposed to like where they get their contracts from, how what's the money flow. And then she was like,
all right, let's look into getting a license. So while we're in high school, we were working with a license. A license didn't hit until two thousand and one. But the staffing firm business was going well. I had expanded to Long Island. We didn't do anything with the nursing agency, I mean with the home healthcare agency. It was just sitting there dormant. But something cool happened, which is New York State stopped issuing the licenses, right, They capped out the licenses.
So we start getting phone calls to buy our license.
And the phone call first was fifty thousand dollars, then it was one hundred thousand dollars, then it was two hundred and fifty thousand, there was four hundred thousand, and.
We thought about selling it just to fuel the staffing firm.
But it was like, wait, if we're getting offered four hundred care for this license.
To operate, there's money here.
So what was What was the reason that New York State decided to stop issuing.
Ze same reason why they're trying to scale back the agencies now. It's just too much oversight. Right, So there's more than two thousand agencies in New York, right, every three years, we get surveyed by the state and they have to send three nurses to your agency to review your medical records. So to do that to two thousand agencies, you need a lot of you know, personnel, So it gets out of control every now and then where it's
just too many people to monitor. So they're actually trying to force a consolidation within the industry, shrinking the number of licenses that are out there.
So it's easier for them to maintain oversight.
So all right, so in a sense you have the company where it's like a middleman. In a sense, staffing is actually really big. We haven't even to talk about staffing on this podcast before. But so you recruit, you recruit people for job pretty much, and staffing you could do any you could do staffing in any type of it, staffing, naf staff and stuff like that. And then you you charged the hospital and they pay you and then you paid a difference. How lucretive can that make?
Is there?
What's the profit margins on that?
It could be as much as fifty percent because it depends on what the hospital is willing to pay. In home care, the profit margins about eleven to thirteen percent because it's getting Medicaid dollars and the margins are small there, just like the margin for a hospital is only eight percent, right, hospitals are a functioning on eight percent margin. Or with staffing itself, it could be as high as fifty because it's it's how desperate are they for.
Staff and what are they willing to pay?
But usually you're charging like a thirty percent markup over what you're paying your staff.
That's kind of so fifty percent the best case scenario. If they give you two hundred, you give the employee one hundred.
And you say, and you're taking one hundred.
Yeah clean, it's like if if if that's what they negotiated, right, So with the nursing comp it's usually about thirty percent over because the hospital and the nursing facilities thinking well, what do we pay our nurses?
What about matching their payroll taxes?
Right, that's another expense their workers comp and their healthcare expenses plus PTL. So when you're trying to you want to come in as close to their price or their overtime price as possible because they're either going to mandate their staff to work overtime or they're going to use an agency, and if you come in for like a dollar or two less than what that figure is, it's now a saving to that facility and they'll be interested.
So you could charge like thirty to fifty percent above because if it's at fifty percent, you know you're hitting the time and a half money, right, and they're still going to they still may be short, so they still may go with you, even though it's equal to their time in a half number, and that doesn't include the workers comp and taxes that they're going to have to pay as the employer.
So undred thousand offer for the license, did you guys decide to sell? You decide, you know what, we got something great here, let's hold on to.
It, hold on to it. And at the same time the market crashed.
So in the staffing business, right you have a contract that says, all right, you're gonna pay me forty five dollars an hour for an LPN nurse, and I'm going to pay them and we're going to provide the service. But what ends up happening is that you have the terms that maybe every thirty days, every sixty, every ninety, so you're front running the payroll until you get reimbursed on your invoice, right, you're not getting paid weekly from the nursing facility.
They don't pay out weekly.
So right before the market crashed, we were growing pretty aggressively and we had line of credits to float that money. So just like what's happening right now in this crash, the banks pull back on those line of credits, so we couldn't even provide as much services anymore. So it's like, well, what are we going to do because now we can only.
Provide like thirty percent of our services.
And that's why we're even flirting with the idea of selling, because it's like, if we've sold this for four hundred K, that helps us, you know, have more buffer money.
But then we thought like, well, the.
Home healthy's get paid less than nurses, so let's just start spooling up that side of the business, making you know, smaller spread, but we can grow this beyond and people are thinking about paying you almost half a million dollars for the license.
There's got to be some money here, and that's where that paper took place.
Is that true just for New York State or was that something that was happening throughout the country where licenses were being ceased.
Oh no, no, no, that's that's New York state.
Like right now in Florida, where I am and expanding on my new venture, there isn't a moratorial licenses. I'm applying for a license right now. Some states, I think Michigan doesn't even have a license to operate. You could just start a home care agency without any oversight, which is kind of nuts to me because New York is heavily regulated. California, of course heavily regulated. So you know, short answer is that it depends on your state.
So a friend of mine in Ohio, he has a health clinic and he was kind of explaining it to me, and it was it was crazy because he was saying, like with the healthcare industry, the common mistake that people make is that they think that they actually have to be in the field to actually be, you know, an entrepreneur and like open a type of business. But you
don't have to be a doctor. You don't have to be a licensed doctor to have these type of business right, like that you have like you're not a licensed doctor, right.
I'm not a licensed doctor.
But in most states you have to have a licensed person like either a nurse, or a physician on your founding team if you're gonna if you're gonna do a license home care agency, but as a staff and firm, you could turn around and start one tomorrow.
So your mom would Your mom filled that role, right, she was the nurse.
So that's that's how it worked.
So you know, if you're thinking about getting into this business, like I get increase.
All the time on my channel where it's like how do I start? How do I start?
So I started showing them step by step this is how you do it. So step one, if you're going to go and become a home care agency, you've got to just research your Department of Health website and find out are the issuing licenses, what is the application process, and what are the rules and regulations right, because those regulations are going to dictate what your policies are and how your policies need to be drafted, and you're going to need to develop your policies when you're applying.
It's actually pretty a pretty.
Grueling process because you're doing like man like four hundred pages of policies, your forms that you're going to be using to do your assessments. It's pretty intense, but you could also hire a consultant to help you with that. Like right now in Florida, since I'm in a much better financial position than when we started the home caurgency before, I'm just paying a consultant to handle the entire application process and working on building my team while while they're
doing that piece, rather than physically typing. But from the staffing firm perspective, you just need a you can get like a boiler plate generic staffing firm contract. Pull that up on Google, determine what area you're going to focus on, if it's going to be healthcare or nursing, and then decide what your.
Rates are going to be.
Make sure you're you're cushioning in at least thirty percent spread because your payroll taxes are going to cost you close to like ten percent, and then your worker's comp is going to be around six to seven percent, so then you're only going to be left in like twenty So at least you charge your thirty percent markup if
you're going to do that. But the process, you know, once you get licensed is all about what relationships you build and executing on your marketing strategy so that you're finding.
Those those patients.
But on the staffing firm side, the process is call the nursing home, called the hospital, speak with either the administrator or the director of nursing and say, I am a staff infirm.
I'm looking to gride services. Do you need coverage? Best time? Summertime? Why?
Because people are going on vacation. They're going to be short, right, So that's when people are going to be desperate. They'll say, hey, you know what, sure, you know, send us over your send us over your contract and we'll have a reviewed. The first contract that I got when I expanded in Long Island took me about maybe two weeks of phone calls.
I just literally downloaded National County.
Nursing Homes and I just picked up the phone two years old alone.
Call it cold calling.
You created the contrast yourself, or you sat down with a lawyer. How did that process work?
Oh?
She took my mom took a copy of the contract that her nursing home is using, and I just retyped it all right.
Well, in the next segment, we want to talk more about the business and also about the acquisition that you guys. I know you were saying off camera that somebody had offered you some money and you looked at that, And because we'd like to talk about stories like that on EUYL because these are things that the general public does not know and isn't privy to. So yeah, we're going to talk some more in depth about the healthcare fail
in the next segment. All right, So in this in this segment, we're gonna we're gonna talk some more about some actionable items. This is what everybody loves EYO for. So you have two different businesses with the staffing firm and the nursing But first I want to talk about staffing so for people, because you said that's that's probably like the more practical thing that really anybody can can do as a staffing firm. And like I said, staffing firms are big on a variety of different levels, not
just the medical. All over, staffing firms extremely big and pretty much is just bridging the gap where somebody needs work and their employees that are skilled to work but they don't. They got to come together. So the staffing firm job is to find the qualified employees and match them with good employers. So what are some steps if somebody wants to start their own staffing firm?
I'm going to try to break it down as simple as possible. If you're going to be starting a staffing firm, the first thing that you're going to need to do is get your hands on just a basic staffing contract.
Okay, get a contract.
Review that contract, and part of that contract is going to have a feed schedule, right, This is what you're charging for the positions. Right, So if you're starting with nursing, start with a feed schedule for urns, a feed schedule for LPNs, which are licensed practical nurses, and then for nurse aids, because those are the most utilized workers in a nursing home or in a hospital.
Right. So that's one thing that you want to have. But you're going to do your market.
Research next to know what is a nurse commanding as far as salary, what is an LPN commanding as far as salary?
And the nurse aid right, so that you know what you're supposed to be paying.
Out specific to each state that you're in, specific to specific to the state that you're in.
Specific to your region.
Even in New York, New York City is going to charge higher rates than Buffalo, right, So you have to just research your local market just to know what does it? You know how much are you going to be paying, because that's going to dictate how much are you going to charge because.
You obviously need to cover that.
You're going to need to cover payroll, you need to cover a worker's coup and then you're going to need your profit marginal right, So I advise that whatever the local rates are, charge a minimum of thirty percent more or you know, as much as double, because it depends
on what's again the need of that position. So once you have your contract set, the next thing that you should do is obviously incorporate yourself, right, either go to the LLC route or the corporation route, just so that you have an entity and some sort of barrier between you and liability. Right, that's the purpose and also the tax benefit. So make sure you go out there and incorporate yourself. You could do that on legal Zoom. I use a service called Blumberg Excelsior. I'll send you guys
a link. You know, I like working with them. They're quick and they'll set up your corporation within a day or two. They'll even apply for your tax ID number, all the things that you need to be recognized as a business right, and that cost in New York is going to be anywhere from like three hundred if you're doing a corporation to like almost two thousand if you're doing an LLC because of the publication fee that's associated with that, because LLCs have to publish that they're coming
into existence. So once you have your contract and you have your entity set up, and you have you know, open up a bank account and the entity's name, the next thing that you should do is probably hire a few people right to get your application. You can pull up any generic application online, but you're going to need to get an application so you can actually on board and have a pool of providers, nurses, nurse aids, LPNs, whatever you're going to be hiring.
And you know, once you do get a hit, you're going to be able to staff.
You don't want you don't want to get into contract to provide staff.
And you got the staff right.
So I think if you're a healthcare professional, it might make the most sense of staff yourself be one of the people that gets dispatched, so at least you know that you could fill in certain gaps if you get that immediate call that you can work that shift yourself.
How many people? How many people are you putting on the team to start? We're doing like two or three including yourself, So you've got a four person.
Team in if you're starting a staff infirm, Yeah, I would at least three in each position that that you're marketing. So at least you have, you know, some depth to your.
To your staff.
So we have r N LPN and then health Day so that would be nine people.
Yeah, gotcha.
So how do you because like there's a shortage of nurses right now New York and there's like they're like begging nurses to come from all over the country. Right, So this is like a perfect if somebody had a staffing agency for nurses right now, it'd be perfect, But like, how do you find the candidates?
Like, I'm track talent, Okay, So first you've got to just public. You're going to post on whatever you can indeed, LinkedIn Facebook, jobs wherever, threads list, just post that you're hiring. And the thing is, people are nurses.
I know. Most nurses I know are working two jobs. Right.
They're usually the top earner in their households, especially in our community.
They're working two jobs, sometimes three jobs.
So they're always looking for jobs, right, because one, their jobs exist and they're always looking. But if you dangle a carrot, like higher rates than what they're normally getting paid, then that also attracts them. So let's just say the average thirty but you're paying thirty three. Then nurses who are working for some other agency or they'll give up their part time job and work with you for a little more money. So you make it a smaller spread, but you're attracting the talent that way.
But what what is what makes a candidate qualify? What are the things they need? I'm assuming experience or maybe not in this type of crisis.
Even experience.
Uh.
Licensed, they need to have most most people in healthcare need to be licensed, right, So our answer license LPNs are licensed. Nurse aids have a certificate. Home health aids have a certificate, so they obviously need to be meet
whatever the guidelines are for the state. They also need to have an up to date physical which shows that they're immune to beesels, monks, Rubella rubiola, chickenpox for oursella, that they also are TV negative so they can't have active tuberculosis, and that they're what's called you know, safe and fit to work okay, so that physical needs it's done annually. All healthcare workers working in direct contact with patients have to have an annual physical, so their physical
needs to be up to date. But every nurse and everybody in the field knows that. So either they're getting the physicals done at the job and they could get their physicals from their job, or they just get their
physical from their doctor. But once they have that, they have the application, they filled out their W two forms or the ten ninety nine forms if they're or W nine's if they're going to be ten ninety nine, and they have their medical clearance and you have a copy of their license, that's what you would consider a profile.
For that for that nurse.
Of course, their resume helps, but most of the time they're not even asking for the resumes.
Because they're so behind.
It's just like, does this person have at least one year's experience typically is what they're looking for, so you would also look for that.
But sometimes you might have a new nurse who has maybe.
Eight years experience as a nurse aid that understands how things move in a nursing facility that they'll be willing to take as well.
Sometimes they orient them at the facility.
It really it's really a case by case, but at minimum physical license or certificate and.
Identification and you know eligibility work in the United.
States, are there terms after you you find a candidate that they have to stay with the company for six to twelve months or does that exist in this in the staffing aguencry you if.
You have that agreement with the worker, and usually within the contract you have like a provision that they can hire that person after one year if they pay you x.
Percentage of that person's salary. If not, they can't hire that person.
So it's also a way for them to kind of vet and recruit talent to a certain extent.
So that in that sense, right, let's say that they made one hundred thousand, if they want to hire them after the year, you take a percentage of that, so you like, maybe I get five percent, so that's fifteen fifteen thousand if we make it one hundred earners.
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Yep, okay, gotcha, Okay.
So to staffing, how lucrative is staffing?
We pivoted to home care.
We're doing about a million year year in revenue and like the net margin is about twenty percent, so you're seeing two hundred grand profits.
It see enough to earn.
On It wasn't it wasn't what it's what it was for for like how it is for home care. But we never got to the point like as far as size that we did with the home care agency.
So pivoting to pivoting towards home care, So home care is more is way more lucrative in your opinion, No.
They're they're I think I think they're equally lucrative.
It's just that the the funnel is different and there's a larger barrier to entry. So you know there's with that, of course, there's money, right, there's fewer view there's fewer providers, and there's still a need. So we were able to scale that aggressively because you know, a home health aid only needs to train for eighty hours right to get a certificate, and that means that there's there's a lot of them out there, so we're able to scale up the number of people that we have faster than a
bunch of a bunch of nurses. To get three hundred, four hundred nurses, it's a lot harder to do than to get three hundred or four hundred home healthy.
So to be a home health aid, to be a home health aid, what do you have to do to become.
It's an eighty hour course, so it's you know, body mechanics, how do you care for a patient? You know, making sure that the water isn't too hot so you're not burning a patient when you're giving them bath safe technique at home safe technique.
Anybody can do that as long as they link up to work in the United States yep.
So that's actually when we're talking about the business side. But that's actually a job opportunity I guess as well for people that might need work right yep.
And in New York they're making anywhere between fifteen and twenty dollars an hour.
And the qualifications are like training program, that's it.
To training program and then also physically background check, background check.
Yeah, so all right, so you guys scaled that up pretty pretty aggressively, and then you were saying that you got to offer to sell the company.
So right now we're doing like for twenty nineteen, you did about just under twelve million dollars in annual rev and I got a mailer right from somebody who was like.
Are you looking to sell?
So I was like, let me, let me, let me entertain this and see what numbers are throwing around.
Right.
So it was actually an agent who who a burgers and acquisitions agent who broke his businesses. So he sat with me and he was like, we could get you fifty percent of your annual revenue and I was like, all right, so talking about you know, between five and six million dollars sale based on where we were at that year, I was like, all right, cool.
So they brought in I'm not sure if I got to.
See the terms and conditions of the contract, so I'm not going to say their name, but they brought in a publicly traded home care agency that was acquiring agencies like mine, right, and they reviewed our case mix and.
How much money were we making, and they made an offer.
That was consistent with that so it's like, okay, I was my trader background. I started looking up the financials of that company and looking at how they were organized, and I saw that they were trading at.
At sixty times.
Earnings, right, they had a sixty pe And I then looked at how many cases they have, and they have like thirty thousand lives.
In the management in the country. And I was like, all right, well, we have.
Three hundred patients, so we would just need to get you know, one hundred times larger, right, And what would that take?
How can we do that?
And I was like, well, they're trying to buy us at like five times earnings, but they're trading at sixty. This is a this is a dope brainer. They brought in another company as well, not not not not the public trade company, another another suitor, and they're like yeah. I was like, what is your strategy here, which's the what's the game plan?
The guy was like, we've.
Already taken another Uh, we've already taken another company public. All we do is aggregate companies and go public. That's that's our model, right. It's like we've done it in fashion and now we're doing it in healthcare. So they were trying to offer me four times earnings, and I know that the publicly traded company is trading at sixty.
So it's just a matter of getting financing and going out there and gobbling up smaller and mid sized agencies so that you get the numbers to go public and then you're gonna you're gonna make twelve x return on what you just bought, because all you're doing is buying functional agencies, putting them under one umbrella, stripping back duplicated jobs, like you don't need a bunch of CFOs, you have one CFO in your company, right, so they just aggregate
and go public. And I was like, you know what, maybe we shouldn't sell, right, Maybe this is not the direction to go in.
Maybe the direction to go in is emulate.
That model and start thinking about, you know, expanding the business into different markets and expanding the business in a way that you know, we're on a trajectory to go public. And that's what I'm doing now with eight book.
So you turned down six million and to scale your own business.
Yeah so so so all right, so eight book? What is what does that include? As far as you're new So you said that once you got that idea.
Yeah, our mission at a book is really to just streamline the discharge planning process because hospitals. Hospitals are under pressure to discharge patients quickly and make sure those patients are readmitted. But what happens when somebody has pneumonia, goes home, doesn't pick up their medication, they don't know how to take their medication, they're not following a good diet, They regress, they relapse, styand up back in nursing facility. When that happens,
the hospital gets penalized. So our mission is to streamline that process so that hospitals are discharging using our software solutions right discharging to home care so that immediately we're picking up that patient, servicing them, making sure that someone is there to pick up the medication, take care of them, making sure they're not falling at home, making sure they're not regressing so they don't trigger back into the hospital
and trigger that penalty, and by doing that, refunneling ourselves with a lot of new referrals so the hospital solving that hospital's problem.
The hospital gets penalized is like a fee or a fine that the hospital gets.
That's not a fee or a fine they will subtract up to three percent of their top line revenue.
For penalties on the following year.
So let's just say the hospital is making one hundred million, right, the hospital margin eight percent, right, so they only make an eight million dollars profit.
Medicare will penalize them three percent on.
Revenue and reimbursement, right, but their operation costs are still going to cost them that ninety two million. So from going from one hundred million to ninety seven and having an underlying ninety two million dollar, you know, cost to provide services, they're only making five million. That's that's almost forty percent loss in their bottom line if they get penalized.
How many patients would it would it take for like a hospital get penalized for something like that kicking.
It's it's like ratios, So it depends on how many bets they have, how many what disease processes, because they're targeting six disease processes, pneumonia, heart failure, cabbage which is bypass surgery, complete joint replacement surgeries. So those are the ones that are like the high risk because they're expensive to take care of, and it's you know the mentality of the government is we're paying you to fix them, fix them, you get what I'm saying, Like, fix them,
make sure that they're healthy. But at the same time, we're only paying you for four days for this hospital state because that's the national average. So what is the what is the hospital doing They need to get them out or is they losing money and they need to ensure that they don't come back. So our company is focusing on that transitional care and converting into long term care for.
Those who Yeah, you're helping making sure they don't come back, we help.
Them to make sure they don't come back and saving their reps.
Gotcha?
And so what's the business modecle? You said, like eventually you want to take this public? Right, So how is this different from Avalanche?
And like what do you see?
How did you replicate what you saw the larger company do to you and how are you going to implement that? And like really scaling aid Book is it to acquire other small sized companies and bring them under the umbrella of aid Brook or Okay?
So for me, what I because I've been trying to push my partners in the home care company an Avalanche, to think about things on a larger level. Always That's always been the case, right. I always wanted to push the business further. And what I realized is that they were going into business for the freedom that you know, owning your own business allows, right, you can take vacation when you want, do what you want. And they were comfortable with what we're making there, right, So they weren't
looking to push. They do want growth, they do want to make more money, but they're not willing to adjust their habits and mindset to run multiple locations to expand into different states. They're not They're not there. So the first thing that I'm doing with aid Book is assembling a team that has industry knowledge and working in public companies. So what I'm doing at aid Book is focusing on talent that has worked in publicly traded companies and just
building our infrastructure with that mindset. So not only are we going to be using technology as and solving that problem for the hospital to be a driver of growth in our business, but we will entertain, you know, acquisitions as well, because as we get close it makes more sense to so let me let me put it this way. I believe that our software and aligning ourselves with the hospitals will allow us to grow by you know, one hundred patients per month.
Right.
If I'm growing by my one hundred patients per month in one city, then I need to set up in another city and grow an agency by one hundred patients a month by employing the same software, the same marketing team to do that.
Right.
So, if I'm going into a new state, rather than go through this lengthy, you know, licensing process, which for Florida is going to take me four months to have the license and then another six months to get Medicare approval, what I could do when I'm going into a new state and better capitalized.
I could just start buying.
Smaller mid sized companies at five times earnings and just point our marketing engine to them and scale them up to two thousand, three thousand patients per per an agency per state. Once I get to like twelve fifteen thousand lives in the management, I have something that I can take to the public market, or once again, step to a larger conglomerate and say, look, we're growing at a thousand patients per month.
We don't see an end in our funnel.
You're growing by acquiring companies right at five times earnings. If you just buy our system that's already functional and fully aligned with the hospitals, then you're going to grow at this rate in perpetuity, right, So why wouldn't you want to buy this? And at the same time, I'll still be on the track to take the company public. So for me, the most important thing is an initial
team that has that experience. So I've already coached some talent from Toperware, and now I coached one person from h Emory the hospital system in Atlanta, And these are people who are interested in being involved in a startup with this with this trajectory in mind that within five to seven years we're going to exit and to exit big, and we need to function this way and just replicating systems with that that you would come to find in
a public traded company. So you'll see that most publicly traded companies are you know, will have one of the major accounting firms doing doing their accounting or at least
doing their audits, like PwC for instance. So from from day one, our accounting structure has to be on point, right, because that happens if you if you notice, like when you're looking at like startups that are trying to go public, they some of them get jammed up because of accounting, you know issues is because they didn't have their structure right and now they got to get they got to spend two or three years getting their financial straight to
then take the company public. So by building from from the very beginning with the mindset of this is this is how accounting is done in pubularly traded companies. This is how much money is allocated to marketing spend versus revenue. Having all those details and people who are familiar with those details being on your team from the beginning is what you need. And also you're going to need money
to support that. A lot of one of the mistakes that we make, as you know as a community is we'll start our business with too little money with our friends, with our family, and they're not skilled to take it to a certain point.
And then you don't even have the discussion of what is the vision.
For the company, Where are we trying to go, what are we trying to do, how are we trying to get there? Are our visions aligned, are values aligned? And those things you need to send you need to set them from the beginning. If you don't. You're going to be building a company on a shaky foundation, or you're going to build a company that you know at a certain point it can't grow anymore because your your foundation is in set.
Yeah, that's big. Well, obviously I've heard vast sets under management. I never heard of lives under management before, but makes sense if you're in a medical field. So yeah, I mean that. Like you said, I mean you just outline your vision. And I think that that's important for entrepreneurs, whether it's big, small, middle whatever. You have to have a vision. And it's like you already kind of have
an idea in your mind. Nothing ever goes according to plan, but at least you have a roadmap of where you want your company to go. And that's more than half the battle right there. I think a lot of entrepreneurs are just winging it, winking up and just trying to figure it out day to day, like they're literally living day to day, and times like this it just really exposes that. And now you're in a financial crisis because
you never really had a business plan. You just had you know, figure it out mentality as you go, and that can only take you so far.
Correct, It's it's a and the thing, I'm lucky.
Really, I'm lucky, like just like like like.
Like the VC dude that was just from Black Star Fire, Yeah, Kwame.
When I was watching, I was like, this is like my story, right because his father's a physician.
He's helping out at the office, he's learning and he's watching and like.
Having that that information coming into your mind from that young you start to just like you say, I think you say something. If you start looking at a yellow car, you start to notice more yellow cars.
Right. So if I am ready I'm looking at okay, my mom's staffing business, and I'm now I'm in the staffing business myself. You start and I'm working in hospitals, you start having your eyes open to where's the money moving, how's it moving? So certain things that will go over your head don't go over your head anymore immediately. Right. So it's the same thing.
But what I see with a lot of people is that they either they don't have much, you know, entrepreneurial experience. They get it later in life and they start just winging it. The best thing that you could do is you know, here what one do like a business, a business template or a business model, right just look just google business model and youtubeer a business model video. It walks you through how you should be thinking about your business. The very first thing is what is your value proposition?
What are you offering?
What problem are you fixing or what need are you addressing? What what is that in your company?
Right? So at eight book, what is our value proposition?
We're dealing with this problem that hospitals have of patients being readmitted, and that's the problem that we're trying to solve. And we're going to monetize that by solving that problem and by being the service provider to those patients.
How many how many states are you operating in right now?
Right now? Well, New York and then what's eight book is going to be Florida?
Florida.
And when I'm thinking Florida, and I'm thinking, like when you said you want to grow your your clients by one hundred per or thousand per year, you're in a state with the largest population, well the oldest population.
In the kind of was that done intentionally?
Actually not really, because Florida, like in New York, we're dealing mostly with Medicaid managed long term care right as the payer Florida has a cap on how many waivers they put out. Right, it's a red state mostly, so they put out you know, they do less spending, so a lot of the people here are self paid. But I liked Florida because you know, I'm going to be living part time in Colombia. So it's a good midpoint between Columbia and New York. So, and it has the
international airports. The weather it's good, So that's why I chose. I chose Florida. But I'm going to be expanding into every state that has, you know, a thriving home care community like come care infrastructure, so Florida, North Carolina, Texas, Atlanta, or Georgia, Pennsylvania, California. So those are states that I would be willing to enter because I know that the home care infrastructure is good there.
You haven't, ladies and gentlemen. So on the last segment, we're going to talk about your software system. That's actually something you're a lot going on. We're going to a time on time your software system, and then we're going to bring home with everything yet you got going on now, So yeah, all right, so we're going to talk about your software system. But before one quick question about your company, So,
how do you raise money? Because I you know, it's probably a lot as far as the expenses to run these type of organizations. You say you have to pay up front, then you get reimbursed on the back end. So finance finances is always the biggest hurdle for any business for the most part. So how do you how do you raise money? How do you have money coming in on a consistent basis to float your operations?
So in.
Looking at the staff and business, that started with five thousand dollars five K and obviously that's under capitalized, right, That's what ended up happening, is that all right, we're limited to how much services we can provide. Some people waiting a month to get paid because we were getting paid on a monthly basis. So first was like the most traditional people, you go to a bank, you apply for a line of credit, right, but that's only going to be if you have business history, right and that
they feel that you're credit worthy. But with time, those lines of credit it was tapping. For one case, it was tapping friends and family and that's usually where most people start with either basic credit cards or getting money from the bank, right, but they're not lended much and
it's not enough to really turbo charge your company. It wasn't until I was trading stocks and building, you know, a tech company that I started to understand that starting with some family money is schools fight's you know, it could get you started. Starting with little credit cards and
make money is enough to get you started. But if you're really gonna try to expand your business, you're going to have to raise money from institutional investors, right, from VC firms, from angel investors, and their entire business model is to identify solid companies, pump money in with the intention solely to scale them.
Right.
That's a little different than starting from scratch, right because if sometimes all right, so in the world, in the in the startup world, right, and it's not just tech startups, because any obviously, any industry could be a startup. But in the startup world, your first objective is to develop an MVP, right, your minimally viable products, and that's the
first thing that you need to finance. Right, Prove that you have a product or service that the market is in demand for, Prove that you can monetize it.
That's the first thing that you should raise money for.
And if you're gonna do it with your credit cards and with friends and family money, that's the time because you don't you don't necessarily have to go out there and form a business. You just have to prove that you have a product or service that people are willing to pay for. Once you can prove that with this product or service, it costs, you know, ten thousand dollars a month to operate, but it generates fifty thousand dollars
of money like annual profits. Once you could prove that relationship, that money in doing this thing produces money out at a multiple larger than money in. You can take that that that little company to market and start raising money from angel investors and venture capitalists.
And there's gonna be different.
There's gonna be different levels of them, right, there's gonna be there's gonna be like Brooklyn, what is it Brooklyn brids Right, Charlie Charlie O'Donnell is the guy who hits that fund. He likes to deal with companies that are at that seed level, that first investment usually five hundred thousand million in capital. Then there's like the series A, Series B and so on and some so there's some VC firms that only get in at that pre like
like two hundred million dollar minimum. Like, we don't look at any company that doesn't require two hundred million dollars or more. Right, So it's all about what where we're trying to go. But the first, the first that seed funding of that that anywhere from half a million dollars to like one one point five. There's there's VC firms that specialize just that. Then there's VC firms that specialize in and then different sectors. Some are healthcare focused, some
are technology focused, some are industry agnostic. It really depends, but you need to have some sort of traction, some of proof that your business is growing.
And I learned that by doing.
My tech start up because I was like, all right, I know, I'm gonna need money to fuel this thing. And in going to like tech startup meetups, listening to the conversations, going to pitching events where you're actually you know, competing to raise money or you are even just practicing you're you're pitching, you hear what they what the VC firms are interested in.
What's the cost to acquire a user? What is that user worth? How much?
How much does it cost to acquire a user, and what's the lifetime of a user? What's the value proposition here? That they're going to ask you those questions and sometimes you need to be asked that question, so you can go back to your computer Google what the hell they're asking right, and then you end up start you end up creating what they're asking for. We need you to
look like this. They you know, in the startup world that we talked about the hockey stick, they want your growth to be the hockey right, gradual growth or if you just look at the that's viral right, look at COVID nineteen right, that's truly the definition of going viral.
You look at the curves. What were the numbers, and then it's.
Exponential that they're they're looking to see that you're on that trajectory, that there's going to be that level of absorption. So once you start looking at vcs to answer that question is how do you raise money? How do you get the money? Once you start looking at them, it forces you to become, you know, a builder of a business because they want they want your business to succeed, but they can identify that you're on shaky grounds, so they want your foundation to be tight. They want your
team to be tight. They want there to be traction, they want the market size to be large enough. And those are the things that they're interested in.
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