Helping Healthcare Scale
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Helping Healthcare Scale
From Grunt Work to Growth: Leadership Lessons in Healthcare with Jeremy Wright
Are you curious about what it takes to scale a healthcare business effectively? This episode features Jeremy Wright, the CEO of Princeton MedSpa Partners, who shares invaluable insights into his journey from management consulting to running a growing medspa network.
Wright dives into the intricacies of building a strong organizational culture, emphasizing the importance of aligning a diverse team under a unified mission. He believes that the core of any successful healthcare organization is ensuring that employees feel valued and connected to the company's goals. His approach includes starting with open conversations, allowing team members to express their concerns and ideas, thus fostering a more engaged workplace atmosphere.
As he discusses the growth strategies for the medspa industry, Wright sheds light on how systemic operations can be placed to streamline processes, cross your operational hurdles, and ensure consistency across multiple locations. He points out the necessity of creating robust systems that facilitate better data management, enabling informed decision-making which can significantly impact profitability.
Tune in to hear not only the personal experiences of a healthcare leader but also actionable advice for anyone in the industry seeking to replicate such success. Don’t miss this chance to enhance your understanding of healthcare scaling, leadership dynamics, and the role of a strong corporate culture in achieving your business goals.
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So you need to hire people that are entrepreneurial, that will get their hands dirty, that will build relationships Many of the things I've already talked about but there's no one that's actually done it in this industry. So then you're looking sort of to adjacent industries. I have a strong bias towards people that can execute. When I have people to my team, I want them to be able to say I'm going to work on this and I accomplished it. There's a lot of execution to put together a business like this sort of one step in front of the other, and that's probably what I value most on my direct team.
Speaker 2:The goal of this show is to help healthcare organizations scale by leveraging real estate strategies and interviewing high-level healthcare executives in order to pull out lessons learned along the way. If you'd like a free site selection analysis from our team, visit us at wwwreuniversityorg and drop us a line.
Speaker 2:Hello everybody, welcome back to Helping Healthcare Scale. I'm Austin Hare. I'd like to welcome our guest today. His name is Jeremy Wright. He's the CEO of Princeton MedSpa Partners. They currently have 13 locations all over the US and their goal is to acquire one location a month for 2025, which is a very awesome, very ambitious goal. Jeremy, thanks for coming on. Yeah, thank you, austin. All right, so I know you're part of Princeton Equity and you've been working as a CEO here since March of last year and so obviously this is not your first stint. You have quite the background in M&A, in just business in general, acting as the CEO and systems and all that kind of stuff. So like maybe kind of explain how did you get here, like where did your journey start? And that'll help. I think the audience kind of wrap their heads around this.
Speaker 1:Yeah, I probably have a little bit unique background for medical, so just go sort of way back. I started with a management consulting company called Alex partners, working on as the youngest person in the company and that actually made me really popular because I was the only person of about 200 consultants to throw grunt work at. But it gave me a lot of exposure to pricing and footprint optimization and setting up GNA structures, changing distribution centers. I worked on a lot of weird projects for about seven years and that made a really good stepping stone into the operations side of private equity, which is very similar, similar kind of work.
Speaker 1:And as my career has progressed, I've taken a lot of intern roles. I've had a couple of chief operating roles. I've had at least five chief financial officer roles about a couple of chief operating roles. I've had at least five chief financial officer roles, about a couple of CEO roles. So I've kind of carved out a niche of merging companies together and there's a lot of work to that and kind of come up with my own process that I follow. You know, really really for every acquisition and my last P firm I wrote a little manual on sort of post-merger integration for operations and finance.
Speaker 2:Yeah, I love it. So, okay, well, let's dive into it. Like I know we were talking off camera, just about the things, what really goes on behind the scenes, because I think that it's really I don't know, you know, cool and sexy to talk about, like the arbitrage of, like buying companies that call it a four or five, six, multiple. You sell them at a eight, nine, 10, 11, 12. Right, and it sounds great. And also, like we're talking about if you can time the market well, like you can be in and out real quick and you can look like a genius, but that really, that really comes down to luck, for lack of a better word, and so I've definitely seen acquisitions where it's an arbitrage opportunity.
Speaker 1:You just try to buy up a lot of small players and sell them as quickly as possible. Don't put them together, don't turn it into a business, just try to be in and out as fast as possible and I've seen that been. People make wild amounts of money and I've seen that fall like wildly on its face and to your point. It's all about are you lucky enough with the timing? And it's a model I don't believe in. So to me you've got to build a legitimate business and when markets are really frothy you've got high multiples, easy access to debt.
Speaker 1:You see people pursue that strategy but you can't. And in a frothy market sometimes you can sell those. In a frothy market people aren't interested. They don't care as much about what with quotes around it quality assets but in a down market people care about quality assets and what a quality asset means is a company that's like a legitimate company, has real earnings, can continue to produce those earnings. People care about that if it's a harder market and we're definitely in a harder market so people care about quality assets. You have to do the hard work of building an organization and turning it into one business.
Speaker 2:Let's talk about that. What was in the manual that you wrote? Let's go through and maybe deep dive and try and talk about some of those bullet points as much as possible.
Speaker 1:So I sort of always start with I would say I start with people, maybe more broadly sort of the culture of an organization. So just a simple analogy if you're in a canoe and the one person in the canoe with you isn't rowing in unison, you don't go very far, so you've got to get people to come with you. So I just sort of always start with people and you start with building relationships. I intentionally show up at any company that I'm working on Another company I have this sort of broad. Although I'm interim CEO of this company, I have a broader role at the P firm I work for and actually touch multiple companies. So just as a simple example, I started working in an oil change business here about 10 months ago and the first thing I did is toured a bunch of oil change shops with the CEO and we changed oil in some cars. It's a good way to build a relationship Getting your hands dirty, yeah.
Speaker 1:So I had a mentor years ago and he compared business operations a little bit to being a general, and he's like as a little bit to being a general. And he's like you know, as a general you could march off into the forest by yourself and you will die, and you will die 100% of the time. Leadership is about getting people to come with you, and I've always liked that quote and it sort of makes me think about how I approach business. So when I was tasked with taking these med spas 13 different med spas, I guess when I started we were 10. In my sort of six, seven months here we've acquired three, bringing it up to 13.
Speaker 2:When I started with these med spas.
Speaker 1:they were distinct independent businesses and there hadn't really been work to turn this into one organization. So let's start with the culture of the organization, because by myself I can't do everything and there's about 200 people in this company and I need them all to work with me. So first step is a roadshow, showing up at each location and talking to people and understanding their concerns. You put a face to a name and you show people that you care. You can get a lot further by starting with a decent relationship.
Speaker 2:Yeah. So I think that again, it's probably underrated. I think all of this is probably underrated because you would think maybe from surface level, outside looking in, it's okay, these are med spas, so they kind of know how to operate the business and it makes sense to do a roll up. But when you really dive under the hood, like they could all have they I mean I know they all have different ways of doing things I mean even from like how you run your payroll or how you do your front desk, like just the systems and the operations and and that sort of thing. So I mean, how do you go about getting all these? Independent? You know 13, or in your case it was 10. Now independent, you know 13, or in your case it was 10, now it's 13, totally unrelated organizations to start growing in the same direction.
Speaker 1:So here's like a good example of what happens if you don't. If you don't, you just sort of leave all these organizations by themselves. You have key people that have been running the business and they they feel like they don't have good communication. There's this entity that's off on its own. I'm going to use a different example.
Speaker 1:In my med spas, immediately before med spas, I was running a company that cleaned swimming pools about 6,000 swimming pools a week. So we had six locations that had been acquired and there was no central organizations. We bought six different swimming pool cleaning businesses. There's nothing to fold them into that hadn't been built. So you leave all these little organizations by themselves and eventually you don't even know the people. The sort of morale is deteriorating. They wonder what this organization is that asks them questions every once in a while and you just have key people just slowly leave. And if you haven't built a way to manage a business and you slowly, slowly lose key people, you see performance fall really quickly. So that was very true at the swimming pool cleaning company. So you really do have to get your arms around these businesses so that you don't have this turnover problem. You can actually mitigate it.
Speaker 1:I'm sort of running this med spa business Zero. I guess I've lost two providers, but that was like our decision and we've had almost no turnover whatsoever. And part of that is having like a good culture. And if you don't have a good culture you're definitely going to have a turnover and you're going to lose key people and you'll lose the key people without having a way to manage the business because you haven't built that. So after I started this sort of listening tour, manage the business because you haven't built that.
Speaker 1:So after I started this sort of listening tour, I think one of the most important things that I've added to my toolkit that I'm going to continue to do I started a town hall.
Speaker 1:We called it a town hall series and every month I present to our practice managers like what we're working on sort of at the corporate level. We're thinking about the systems, we're thinking about the compensation models, we're thinking about the products that we might introduce. And then I essentially find a willing participant in one of these locations interested in being for lack of a better word the guinea pig, and then I go test it, make sure that it works, and then I come back and I present the results to everyone, but I'm effectively taking everyone along with the journey instead of saying, now we're going to do this. And bringing everyone along on the journey makes it a whole lot easier to implement all of these systems, all of these processes introduce new corporate roles or recruiter or director of HR sort of taking central control of marketing, like all of these things that would be maybe controversial if I haven't done the work to communicate and build a relationship becomes a whole lot easier.
Speaker 2:So it sounds like a big part of it is just like I don't know how you would phrase it but preemptively telling them what you're planning on doing before you just kind of say, hey, this is, this is the new way.
Speaker 1:So we want to try this. We're going to try it over here and we're going to let you know what happened. Then we come back and we're like we've now implemented this new operating system and now we have a cleaner email and text messages to customers, we have online booking, we can run memberships. We have all these capabilities that are hit and miss at every single location, and then pretty soon everybody wants a new operating system. So things that would be very difficult to get a lot of pushback on an organization become a lot easier if you're helping people understand why you're making the change, how it's going and really just bring them along with the journey.
Speaker 2:Yeah, that makes a ton of sense. Nobody likes being talked at or talked down to. So yeah, of course it makes sense to give somebody I don't know if it's a level of ownership, but at least it's a level of respect, right, like saying, like, were you respect you enough to tell you what we're planning on doing and be transparent with you about the results? And oh, these results are really good, right, it just. Yeah, you hear it. It becomes commonsensical in hindsight, but a lot of times it's hard to arrive there. How would you describe your culture? Maybe in one or two sentences?
Speaker 1:Particularly coming from a situation where it is 13 spared companies. I want people to feel like they're part of the same company and we're all trying to achieve the same results. After the town hall, I started to introduce monthly business reviews with each client. So we're talking, I've got, I've now started to develop a corporate team, so I've got operations, accounting and marketing and we're meeting with each practice each month and talking through like real, real issues or opportunities on the ground. So we're in it together.
Speaker 1:And after I've introduced these sort of monthly business reviews and started to introduce revenue targets, then put incentives behind the revenue targets. I want it to be a performance-based organization that is all trying to achieve the same goal. And then my sort of, after all of those steps, so to continue on this sort of culture route, the people I hadn't communicated as much with is our providers, which bring our revenue. So I've sort of now created a similar series of that town hall that's focused on providers or provider forum, keeping them updated and it's less frequent, but I'm telling them where we're going with this organization, how it's doing, where they fit into it and where we're trying to go as one team.
Speaker 2:Yeah, I love it. I love the werewolf examples too that you bring up. And the second point that we're talking about was the people, right? So number one is culture, Number two is the people, like building a team. So it can obviously very much overlap here, but kind of related, but maybe you just share insights on that.
Speaker 1:At the corporate level. When you start with a roll-up like this, there is no corporate team, so you have to build it from scratch. You take an industry, just like my swimming pool cleaning business that I was running, where it hasn't been aggregated. I think the med spa industry is something like 4% or 5% aggregators and the rest of it are effectively kind of like mom and pop businesses.
Speaker 1:So the vendors aren't set up for aggregators, the systems are not built for aggregators, and you can't go hire a team that's done this before because no one has done this in this industry. So you have to look at adjacent industries and, unlike a more corporate business, you need to hire people that are way more entrepreneurial because they're carving sort of a new path. That's never been and it's difficult. There's probably. I think I would say that we have sort of four legitimate competitors that are doing similar type activities, and each of us are. We're not really competing against each other because there's, you know, 95% of this industry that is independent, but we're all trying to go down and create one business from scratch here. So you need to hire people that are entrepreneurial, that will get their hands dirty, that will build relationships, Many of the things I've already talked about but there's no one that's actually done it in this industry.
Speaker 1:So then you're looking sort of to adjacent industries. I have a strong bias towards people that can execute. When I have people to my team, I want them to be able to say I'm going to work on this and I accomplished it. There's a lot of execution to put together a business like this sort of one step in front of the other, and that's probably what I value most on my direct team.
Speaker 2:And when you say adjacent industries, are you talking like dental?
Speaker 1:That's exactly dental, but for some functional roles that matters a whole lot less. I mean it doesn't matter if an HR person has worked in an adjacent industry. It doesn't matter if a controller has worked in an adjacent industry. In this case, my HR person has worked in MedSpot. My controller had never worked in any medical field.
Speaker 2:Yeah, yeah, it makes sense. At least it'll maybe overlap like a little bit of overlap. Right, it's different because it's a totally different industry. But that's what I was thinking in my head. It's like, okay, dental has kind of done this similar type of thing. It's like a similar, it's healthcare. You know, it's a smaller footage, square footage, kind of footprint. You need providers no-transcript.
Speaker 1:There was a lot of COVID money and people got their COVID money and they got a lot of med spa type services and with that a lot of providers like nurse practitioners that were Botox injectors, sort of left clinics they worked at and created their own little solo practitioner suite which significantly increased the number of locations in this industry. And now there's a little bit of a pullback and recently was at an Allergan meeting in Los Angeles so they talked about how their total filler business is down something like 5% year over year. It's the first time Allergan has ever seen any numbers that were down.
Speaker 2:Oh ever Wow. Is it because providers leaving and starting their own clinic, or just?
Speaker 1:No, there's really two things there. There's a little bit of a post-COVID money and the sort of Kardashian look even the Kardashians are moving away from which is, oh wow, there's a desire for a little bit more natural look. Oh, that's the filler business.
Speaker 2:I mean it's crazy, cause like 5% doesn't really sound like a lot, but if your margins don't, if your expenses don't change that much, then that's like you know, if you're operating 20% margins, that could be 25% of your profits. That's right. Okay, so we talked about culture, talked about building a team, and then the third thing is putting the right systems in place.
Speaker 1:So how do you yeah, how do you think about that I've spent a lot of time on systems and systems aren't necessarily very sexy. Now sort of an compare it to.
Speaker 2:I can I can see people's eyes glossing over right now.
Speaker 1:Oh yeah yeah, I compare it to like if you're building a house and you're having site work done and you're having utilities connected, like that's just not interesting at all, but it is the foundation and for that reason it really is important, and it's really important if you're trying to scale quickly. So the way I'm thinking about systems is I want systems that I can have 10 times the number of locations and I'm still happy with the systems.
Speaker 2:Yeah.
Speaker 1:So when I think of I was just going to say, take the selection of them, the implementation of them and getting the full use out of them, all of those steps really importantly. So you know, we, we started with a one payroll system. You just imagine you 13 different systems, but everyone processes their own payroll, don't know what people get paid, don't even necessarily know what their titles are, don't know what the commission structure they're on. That's the system. That's where you start.
Speaker 1:So there's a lot of work to sort of unwind that, fold it into one organization so you can manage it.
Speaker 2:Yeah, well, you said 200 employees across what was 10, now 13 locations, so on average about 20 employees per location that you got to go and dive into and figure out what's their payment system, what's their incentive structure, all this kind of thing. Yeah, I guess that's just step one location was on their own QuickBooks.
Speaker 1:They have very different charts of accounts. I couldn't have told you what we spent on marketing because people code it differently in each individual system. Now we have one accounting system, which also means I can provide results back to our practice managers. They can sort of be part of understanding what we're looking at and why we care about it. And then after accounting, we moved on to purchasing sort of took away I don't know 20, 30 credit cards across the system. Couldn't tell you what we spent money on. It was on a bunch of credit cards. Now we have much better control of that and we gain vendor pricing because we've consolidated it. We have corporate accounts.
Speaker 1:I mentioned the challenge of taking an industry that hasn't been aggregated. These vendors are not used to aggregators. So you tell them you want one account with multiple locations and some of them look at you sideways and you say I want to be able to manage my inventory. I don't like this environment where is reigned with free product, because I can't manage it and they're like but that's what we do. We get free product.
Speaker 2:Yeah, and you're like they want you to have like one different email address for each location. Right, like there's no master way to have like one different email address for each location, right, like there's no master way to have multiple locations on one account.
Speaker 1:So I'm about halfway through consolidating our operating systems, which will give me very consistent metrics. And now I'm starting to work on the more sexy part that everybody wants to talk about, which is like our inbound leads in sales and marketing. We sort of develop, you know, likely a call center, and I finally, before we spent money on Google ads, you know, beats me if we converted the customers or not. I couldn't tell for the life of me. I could call clinics and ask them is this campaign working or not? And he's like, yeah, I think so. I think someone saw it. And now I've gotten to a point where I know which ad they hit, the path they took whether it's calling us or they went through our webpage or filled out a form and how often we converted them, which then allows me to spend more on specific channels and specific campaigns, just in a different universe than we were.
Speaker 2:Well, you can't make good decisions without good data. I mean, how do you even know what levers to pull if you don't know what these levers are attached to? So well, okay, A couple of broad questions. What was the most unexpected part of growing this business?
Speaker 1:Our customers really have loyalty to specific providers. So I would compare that to one like high-end salons Someone goes to a hairdresser, they don't go to a salon and there is a real art form to sort of metastatics. You take filler as an example. I think I underappreciated I just don't before I worked in the industry I sort of think of women inflating their lips, but filler is really used to drive symmetry in the face and the people that are really good providers I mean they're artisans. Almost nobody has a perfectly symmetric face and you can use filler to correct it. So people are very loyal to these providers and their importance to this business is probably first and foremost.
Speaker 2:That's good If you could go back to when you were starting. What advice would you give yourself when you started as CEO in this?
Speaker 1:That's good. I think I just tell myself that this was more work than I expected.
Speaker 2:Yeah, I feel like that's always the case, right Like you have to tell yourself, at least as entrepreneurs, that you're going to make twice the money in half the time, or you would never get started if you knew how hard it would really be.
Speaker 1:I've got a few people that I moved on from because they just weren't good at executing, and I would have moved on from them faster.
Speaker 2:I could build my team a little faster. Well, is there anything that you wanted to talk about that we didn't get a chance to talk about? Yet I don't know what else to talk about. I'm sorry. No, you're good, okay. Well, I think that this has been really great. I loved how we dove into the weeds. We talked about specifics around culture and people and systems and all that kind of stuff, and so if anybody who wants to read what's a good resource for people who want to learn more about what you guys are doing.
Speaker 1:Princetonmedspaupartnerscom, our website, and we're definitely interested in acquiring more med spas. I love it. So we've got a contact form on there to fill out. So hopefully in the last six months we've sort of done an acquisition every two months. We'd very much like to do an acquisition every month. Okay, I've been focused on the foundation. There's only a few more months of foundational work here and then all of our focus changes to just pure M&A.
Speaker 2:Yeah, yeah, I mean, it sounds like you're the guy to handle it too. Thank you, all right, well, jeremy, thanks so much for your time. This has been awesome, really appreciate it. Thank you. If you need help finding the perfect location for your practice or you're ready to invest in commercial real estate, email us. Podcast at leadersreecom R-E as in realestatecom.