In this doctoral episode, Michael Roub, Managing Partner and Consultant of Inflection 360, shares how he utilizes his expertise to provide strategic oversight to support needs of emerging healthcare groups and small businesses that are looking to develop and execute on a strategic plan.
You will discover:
– How true finance function is the key to scalability
– Why treating your healthcare practice as a business is one of the best things you can do for your patients
– Why you should re-write your business plan every year
Episode Transcript
Scott Ritzheimer
Hello Hello and welcome. Welcome once again to the secrets of the high demand coach podcast and I am here with yet another high demand coach and consultant Michael Roub. He’s the managing partner and founder of inflection 360. He has more than two decades of experience in business as a strategic advisor, consultant, corporate executive and investment banker. Now, prior to starting in flexion 360, Michael had senior business development roles at Western dental services and US health works. Now. Michael began his career as an investment banker with Donaldson Lufkin and Jenrette, where he advises clients on a wide range of capital raising mergers and acquisitions and restructuring efforts. And Michael has extensive experience with corporate development, mergers, acquisitions and capital raising. And one of the things I mentioned this, Michael, as you’re coming on, I love the fact that you’re able to specify and dial in on an industry take all of that, and instead of kind of giving the generic advice that a lot of people are faced with being able to apply that specifically to their world. And I’m excited to jump into that, particularly within the healthcare industry. But before we get there, I thought, just unpack the story for us a little bit. There’s so much in there. How did that ultimately lead you to make the leap and become a consultant?
Michael Roub
Well, first of all, Scott, thanks for having me, I appreciate the opportunity to speak to you and your guests. Yeah, it’s it sounds like a winding road, how I got to where I am today, because it actually was never my intention to be in healthcare. But 20 plus years later, here I am. So I backing up started my career as an investment banker, as you mentioned, was always on that CFO, the state and investment bank here moved to a CFO track in a corporation, I did make that jump, I was part of the actually the.com bubble burst, which was my first jump outside of investment banking. And so good company, bad timing. And next thing I knew I was, after a year of that experience, was trying to figure out what my next endeavor was, I go back to investment banking. And I want to say the corporate world. And an opportunity presented itself in healthcare, which I was not interested in being in the space at all. And but it was with a company with the surgery center group that had two locations that were young and looking to expand in. So I came on board and helped run a center and then ultimately build out two additional sites and then was part of a team that ultimately sold it out to a public corporation. So six years later, I was an operations expert in healthcare. Taking my finance background, now I had now I had these two sets of healthcare experience I’d operation experience and my finance background. And that led me to US health works, where I, that’s where all the pieces first made sense together. And I was heading up really business development m&a at a healthcare company. So that’s how I got to it. That’s the start then. But then I did that for a while that I jumped out of the corporate world as I felt a little bit more like I want to be a little more free flowing. And I started working with a variety of just different businesses on some more strategic projects. But then got lured back into the corporate world, again, with Western Dental. Same role, different company, same CEO, actually, as I had a US HealthWorks. And that was the connection. And I did that for a year, only then to realize that what I was really enjoying about before that time in between the two companies was working with a variety of businesses on different strategic issues and challenges, some of it being more tied to my mergers and acquisition experience. Others really that strategy. So I kind of realized I had a tool, a set of tools that gave me some unique perspective on really helping businesses out in the healthcare services sector, as opposed to as much as I want to be held everybody, I sort of like play to your strengths and play to your areas of expertise and sort of dialed in on that space for the last several years.
Scott Ritzheimer
Absolutely. That’s fantastic. So if we then fast forward to now, what would you say is the most important work you’re doing for your clients?
Michael Roub
I think you know, I think that I’ve gotten to work with a lot of clients in all shapes and sizes. And I think that what I see consistently is really smart people doing what they know how to do. Well, whether that’s some are stronger on the operation side, some really get the the people side of their business, but they don’t have all the pieces and they often don’t know what they don’t know. I find that finance pieces commonly that that true finance muscle is most often lacking. So I like to fill that void at times but the way I’ve got to walk into each opportunity is letting me really understand In the business, and how do I almost become a fractional part of the C suite? That’s really how I’ve sorted. So, in one company, I would say, in the last couple years, I’ve been a CFO, others, I’ve been a Chief Strategy Officer, other than the chief development officer, it really and others, another Chief Operating Officer, and literally sort of worn a different at, but it’s understanding what their strengths are, and where there’s a gap, and, and try to work with their team to sort of eventually close those gaps, whether it’s bringing in people or raising their game. Yeah, or so. But I’m definitely in it for the long haul with my clients. I’ve never really, I’ve never liked that three months of that out, it’s more like that. I’m hoping I’m expecting to be here two years kind of working, working with you in some way or another?
Scott Ritzheimer
And what’s the value of that? VE? Because there are some folks who they come in, they do their work, and there is this kind of transformational piece, that’s helpful. But then there’s, there’s another kind of relationship where it’s, I guess, we’re getting into this, what is the value in that? For your clients in particular?
Michael Roub
Yeah, for me, it’s, it’s, it’s my, um, bring you my experience. And it comes from a wealth of channels, you know, and my own my own direct operational experience, and then all the other clients I’ve worked with, it’s really trying to, you know, help them go that next level sought it the trust factor me I think, as much as anything else I because I become a trusted part of that. Almost like a Chief of Staff, sometimes in other companies where that CEO, and I have to have a really dynamic relationship and building out with that team. So I get to really make some tweaks and changes once I’m really embedded in the business that can have some pretty dramatic impact. Or at least that’s my goal, always, we usually get there. And it, but I think without that trust, if it feels just more transactional, if I’m not really building that deeper relationship, it’s harder to get by, and I can give them my insight, but then how do I make it actionable. So I actually not only get to help give input and help, I’ll make it actionable. So that’s been sort of the that’s been the part that’s been fun. For me, it’s unique challenges, but also driving it to the helping drive to the end goal.
Scott Ritzheimer
That’s awesome. Yeah, that’s great. Now, there’s, you mentioned is bid on true finance, I’m actually gonna come back to that here in a moment. But there’s kind of this fundamental thing I want to address with you, and I think you’re going to be able to do it. Well, and, and that is that, you know, we often don’t call doctors or dentists, business owners, or you know, they don’t run businesses, they run practices. And there’s a lot of language around staying away from the language around business. But when I was reviewing your website, I saw he said business all over the place and business owner. And so why is it that, you know, it’s not all the healthcare industry, but a lot of the healthcare industry kind of leans away from this language of business? And is it helping or hurting?
Michael Roub
Well, I think that if you look across specialties, I think that the vast majority are almost all doctors walk into their field within an interest in truly providing care, I have a passion for medical medicine might be Dental, but are actually providing care to patients. So I’d I think they start with that backbone. And the industries have certainly changed a lot my 20 years. But if I go dating myself, I go back in time, I do think it was much more streamlined. Like, I’m a very busy doctor with a very busy practice. And I make money from it. But that sort of happens, just because of what I’m doing. There has been a big shift, I think the massive influx of private equity money into that a huge number of different almost any imaginable medical sector, healthcare services, they’ve kind of emerged. So you’re get the minds now going with, are we what are we building? How are we profitable? They’ll talk to me about EBIT, da, I’m not sure that they always have to really understand it. But we’re then work into what that really means. So they’re hearing all these businesses on the street got acquired on so it’s just changed practice. And now people start thinking about can I expand my locations? Can I be multi site? Can I add other sub specialties. They’re seeing this business minded mindset, which is emerging over the last decade in particular. And so there’s an awareness now that I don’t really think did exist historically, you know, but it doesn’t mean that Nestle have all the tools to think in the best business way met, some of them do, I’m ended, there’s some documents that have just absolutely blew me away what they just innately know. They just get it. They’d be successful, no matter what business they’ve chosen to go into, and others that really need that additional, you know, experience or muscle to help them kind of further their goals.
Scott Ritzheimer
And it’s one industry that I’ve seen a lot more m&a activity and roll up activity happening than than in others and so, is there a threat of being left behind? Is it okay to still be the doctor who loves very busy and has a very busy practice and happens to make money?
Michael Roub
Um, there is that fear of missing out, I see it in the devil on the string, particularly spend a lot of energy there. That being said, there’s a still that number I think it’s like 15% is the Get Current guesstimate of Doc dentists that practice under a bigger group, a group DSO or dental service organization environment. So as much as you see all this massive consolidation, still 80% of field or 80 plus percent of field is still independent, right? But there’s that changing dynamic. You know, I’m, I’m working chairside for years, I have a nice business, but good, I’d be part of something bigger. And I, but a, my own dentists that I go to is an independent, independent doctor and wants to stay that way. And we’ve had, we have talked while I’m sitting there getting my dental work done, or getting a teeth cleaning. And, you know, it’s, I like what I do, I’m successful at it. I may do it at another location, but I don’t know if I want to so I still didn’t most people, they have a successful practice. But I think they have option. They have that chance. In other specialties. I do think, yeah, I think it’s blowing people’s mind that I’m just a, I’m a psychologist and now all of a sudden I’m hot target for behavioral health roll up like this, these things were never why they never would have envisioned this. So I do think there’s like an education process of should I or should not should I care. And ultimately, it comes down to what’s your exit strategy. And I think that’s the biggest piece that doctors historically never had a good solution for other than I’m gonna have somebody buy my practice and take all my patients. And there really wasn’t a huge upside to that, because they were the the sole asset versus buying and selling into a bigger group, there is a there’s a clear path to exit and much bigger financial reward. Now, that’s been the big shift in the industry starting to get familiar with that, and understanding what that can mean to them.
Scott Ritzheimer
I’m glad you brought that up, because it was actually my next question here. And that is what is the key to a successful exit. Now, it’s kind of new rules to the game here. So healthcare industry, in particular, your sweet spot, what’s the key to a successful exit in your opinion?
Michael Roub
Not picking up the phone and saying, I’d like to sell my business tomorrow, I’m ready to retire. That’s like the disaster right up. And that is that historical situation of what I used to be AM, oh, my lease is up in eight months, I would like to sell my practice. Now it’s that, whether it’s, I’d say start thinking five years ahead. But anything three years, two years, whatever, giving yourself some runway, because if you’re going to get acquired by a bigger group, they want to know that they’re the asset they’re really acquiring. In that case, the doctor is going to be part of that, or at least a period of time, a committed period of time. So somebody who’s thinking I want to retire in five years, now might be the exact right time to sell a majority of their business or minority with an option up just so that they’ve now they’ve got their succession plan, they’ve given the committed timeframe, they can actually create lace and continue to create income. And then it’s easy to ride off into the sunset in five years, because they was baked into their deal. And I think that with the way the with the way the world has shifted from the role of standpoint, exactly, as you mentioned. That’s how they have to start thinking about it. So those that are thinking may have had doctors coming like I don’t want to do anything for 10 years, like Okay, great. This is a fun conversation on how much work we’re going to do together. Now. Let’s talk about it. Because I do think it’s great when they’re putting that into their mind and actually starting to think about what their paths forward are and giving time to get their house in order from a financial standpoint. Yeah. Because even that, then they’re mean, virtually any businesses, but definitely a medical practice is usually woefully unprepared for what that really means in terms of a deal. And to Yeah, you can get a deal done. But I used to buy products all the time, that’s really how I ended up on this side of it was recognize how much money was being left on the table by sellers, right? Because it didn’t, they didn’t know how to tell their story and present their financials in a way that would command the most value. So helping them get that path figured out and get the benefits. So when it’s time to sell, they’re really actually already ramped up and going to get the max value. Two is a big part of what sorts zeroed in on when I went out on my own.
Scott Ritzheimer
Yeah, that’s fantastic. Now, you mentioned ahead in the conversation, this idea of the true finance function, and most people missing that, oh, how do you define that?
Michael Roub
Well, I think practices in the healthcare field are used to getting maybe a lease on some equipment. They will have they’ll send their their bank statements and what came out of their record their electronic health record system to their accountant who just does a quick tally, like a bookkeeper and said here’s your books, your financials for the month. It’s just sort of A rinse and repeat no real thought process to it, I have cash, I pay my bills, let’s let that take. And I’m going to deduct as much as I can, personally to get my tax benefit, then that’s sort of like the extent of their thought process largely. And I’ve seen that go on with companies have grown into, like, way beyond the size and scope of death, as simple as they should be thinking, right? It’s just another appreciation of what you know, a little tweak here and there from thinking about the numbers a little bit more how we can actually help you derive some make some decisions. Whether they think they don’t, you know, if they’re not looking at, my supply costs are wildly out of whack on margin compared to other competitors. Like they don’t they just buy what they buy us with the US. Can I renegotiate? I’ve had plenty of practices tell me sign contracts? Like why would you sign this insurance contract? Oh, I didn’t. Why didn’t you negotiate? Oh, I didn’t know I could, like, wow. So there’s, there’s really just, they don’t know what they don’t, it’s just literally lack of information or provide. So I think that’s if I think every medical school program would benefit by adding in at least accounting, 101, finance, 101, marketing 101 Just, you know, just some building blocks. So they could really think a little bit more strongly about their practice as a business.
Scott Ritzheimer
We could probably spend an entire episode on here. So this isn’t a fair question. But do you feel like the average Doctor dentist, health care practitioners coming out of school with the right training, they need to have to run the business that they’re starting?
Michael Roub
No, I don’t and I but I think that’s why there’s been this also the allure of joining into these groups, a from a debt perspective to manage their debt load, you know, pay down their student loans. But I think then they get it can get a little bit more perspective, they joined the right group. So I think there’s been a prevalence of that it’s, it’s a safe entry into the space versus starting off putting up their own shingle and starting their own practice. I do think just by nature of what I’ve experienced in my career, I do feel like, like dentists just seem to be more business oriented than a lot of other medical practices, because they’re not as insurance based, even though dental insurance. So I think they walk into an environment that is a little more marketing, business savvy, required, or they have to learn it faster. Versus training a big Orthopedic Group, and now you’re part of a cog. But all in all, I think there’s a lot of just on the job learning or getting in acquainted with the business side of things. So they don’t, they don’t seem to get armed with that unless they got it in some of their undergraduate studies at all, but usually pretty light.
Scott Ritzheimer
Yeah, yeah. So on the back of that, you know, folks walk into this not knowing what they’re missing one of the things you said they just don’t know what they don’t know. And so, question I’ve got for you and ask this of every guests we’ve had on. But what’s the biggest secret that you wish wasn’t a secret at all? What’s the one thing that you wish everybody listening or watching today knew?
Michael Roub
One thing that I wish everybody knew is that you know it, you need to have a plan. I mean, I think that, you know, the cop and business need to plan like I’m talking about I’m in this sector of this helps, that everyone needs to have a business plan, even if my plan is I’m just gonna see patients, do I want to see more patients? Do I not? Am I happy with what I’m earning? Do I want to do anything differently? And think towards it and work towards a goal, knowing that I have worked on business plans for 30 years now and know that most of them end up being wrong, right? But it’s at least you’re directionally guiding yourself? Like, what where do you see yourself or where do you want to be? And it seems obvious, but I think I think people who are going to start their first business like, Hey, I’ve got a guy concept. They write their first business plan, and they’re done. And I think business plans to be rewritten or reviewed, at least, you know, annually, at least on a cursory level, and so many businesses never like healthcare practice. Don’t think about it like that. And then it really is a business that needs a plan. And the plan could be really simple, but it needs at least you have to know, you know what, what, what you’re gearing towards. So to me, that would be if everyone kind of thought about that, I think it would change the way they do. They view what they’re doing today.
Scott Ritzheimer
It’s so true. It is so true. And I you know, I see that happening across industries, particularly with those who got into the business to do what the business does. Right? They can become so preoccupied by for doctors helping patients, right that they lose sight of the rest of that. And then you see, then you see, especially other folks in the organization start to struggle. One of the complaints from the outside of the industry that I have with is they often have under, you know, trained under nourished staff, right, that are not doctors, and it just it’s a frustrating process for everyone. And so even just from the client side of the equation, saying hey, We want a group of people are all going in the same direction, because we all want to know that what’s important to each of them is the same. And I get a better experience for that. So I think you’re absolutely right. And that idea of rewriting your business plan is, unfortunately, revolutionary. It’s such such a true point. And also, me, there’s so much to unpack in there, it’s good. Just go back and listen to it. Again, I don’t need to reset, just listen to Michael’s, there’s so much depth and in those few short words, but I want to make sure we can connect folks with you more, because I know there’s some folks who are just like, this is exactly what we need exactly when we need it. Before we get there, I’m gonna have you take off your consultant hat for a moment, put your CEO hat on kind of jumped down into the ring with the rest of us, and what’s the next stage of growth look like for you and your business? And what challenges do you have to overcome to get there?
Michael Roub
Yeah, well, because of the nature of how I like to work, where I really am that like, so that add on to a team where I sort of get integrated in, in that capacity, I limit myself because I can only go, like my work with so many clients at a given time. So my, to my own detriment, you know, building it, building the team, the way I would like it, I worked with, I bring, I’m more sort of an independent guy who brings people in on spot things where I need that extra expertise. But I work on project by nature, which I really enjoy. So that means that’s what I want to do. So what’s the next stage for me? Is that the evolution of do I want to broaden the client base that I work with, which would be bringing on some different components in a much more true consistent capacity? Do I want to do that? Or do I just love it? I kind of just love what I’m doing. But then I tinker with it on the side and like, Oh, I wish I had time for X, Y and Z. I could provide the guidance, but I need somebody to do the heavy lifting. So it’s my own. To my own detriment, I I’ve sort of structured myself in a way that I, my and I’m doing I’m happy with what I’m doing. So I want to grow. But that’s, that’s my challenge. And so they’re struggling with my own, you know, alright, so as a CEO, like, how do I want to grow? Or do I like what I’m doing my exit strategy that’s going a different path. I think some of these companies have a deeper tie into so do I. Yeah, my ride dad a whole different way. Yeah. So it’s always just Yeah, but I do think that what I’m doing today, I want to do it three years, one way or another will be different. Just sort of evolved as my ice challenge challenges that opportunities.
Scott Ritzheimer
Yeah. Yeah. So good. So Michael, there’s, as folks out there listening, especially from healthcare industry, just saying, like, this guy gets it, right. Like he just understands my world. And I need more of this. How can I find more out about you and the work that you do?
Michael Roub
On my website’s inflection360.com, not infection, but inflection. It’s all about the inflection point of a business. That’s kind of how I focused on my building. My client base, LinkedIn is a great way to reach me, I’m definitely the way Michael Roub, R o u b out there so easy to track me know that I’m very responsive there. But you still can ping me off on my website, too. And I just love to talk to to executives or business owners and really understand they’re doing even if I’m not the right guy for the long term. I love to just sort of share some insight and help people along on their own paths. So it’s I love to connect with now people across the landscape and talk about what they’re doing.
Scott Ritzheimer
That’s fantastic. Well, Michael, thank you so much for being on the show. It’s just an absolute honor and privilege to have you here and for those who are listening and watching today. You know, your time and attention mean the world to us. I hope you got as much out of this conversation as I know I did. And I cannot wait to see you next time. Take care.
Contact Michael Roub
Michael Roub is the Managing Partner and founder of Inflection 360. He has more than two decades of business expertise as a strategic advisor and consultant, corporate executive, and investment banker. Prior to starting Inflection 360, Michael had senior business development roles at Western Dental Services and US HealthWorks. Michael began his career as an investment banker with Donaldson, Lufkin & Jenrette where he advised clients on a wide range of capital raising, M&A and restructuring efforts. Michael has extensive experience with corporate development, mergers and acquisitions, and capital raising.
Want to learn more about Michael Roub’s work at Inflection 360? Check out his website at https://inflection360.com
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