OMG We’re Getting Acquired. What Happens to Me?

Andrea Watkins (00:04):
Well, hi there. I am Andrea Watkins, and if you're listening to this, while juggling three patient calls, checking in a couple patients, taking a payment, selling skincare, and trying to catch your doctor in between procedures, you might be working in an aesthetic practice.

Blake Lucas (00:18):
And I'm Blake Lucas, and this is Practice Land. This is not your doctor's podcast.

Andrea Watkins (00:24):
All right. Hi, this is Andrea. We are here on Practice Land, not your doctor's podcast today, and we have Bill from Aesthetic Brokers. We're going to be talking today about what happens when the doctor sells the practice.

Eva Sheie (00:38):
And I'm Eva, and I'm Andrea's trustee, co-host today on Practice Land. And I met Bill last summer and I was stunned that there was anyone in the world who existed like Bill because he helps the doctor when they go through something really scary, like selling their business, which I think would be scary if you're anyone in business and you're deciding to sell your business because it's your baby, right?

Bill Walker (01:02):
You just hit it spot on. It is a very emotional and very profound experience. It's the single most important business event that they'll ever have in their life. You get one shot to sell your practice, right? So you want to do it right. We love helping the owners and the founders do that.

Eva Sheie (01:19):
What do the staff tend to feel or think when they find out that this is going to happen? How do they react?

Bill Walker (01:25):
So I have seen the entire spectrum of staff and providers, emotional roller coaster across the board for sure. Some of the best outcomes are driven by a genuine trust and confidence between their owner, founder of the practice and them as an individual that has been working for him or her for years. And so the communication upfront is the number one, I think, determinant for a successful transition, because these providers, these doctors, these nurse practitioners, the PAs, they genuinely care so much about their staff. You said it best, this is their baby. They want to make sure, I think one of the first questions that I get asked in an initial conversation is, how's my staff going to be taken care of? I want to make sure they're taken care of.

Eva Sheie (02:20):
If they don't ask you that, do you notice?

Bill Walker (02:23):
You do. ,That kind of carries over early on in our exploratory conversations for them is you can tell when somebody's truly invested. I heard a great quote from the CEO of Merz just earlier today who talked about early in his career, what is now described as extreme commitment. I'm a firm believer in that, and you can tell the extreme commitment in the owners right away, and that's one of the key indicators.

Eva Sheie (02:51):
Why do doctors sell their practices? I mean, it probably sounds like a dumb question, but what are their motivations for doing that?

Bill Walker (02:58):
I see it across the board and they're all justified. You have to have a smart off-ramp plan when you're on the highway. You just can't run 75 miles an hour weaving in and out of traffic for endless amounts of years. You've got to have a good game plan. And a lot of people, that's the primary driver is like, okay, I want an exit strategy. A second is they'll sell the practice. And one of the hardest things, one of the most entrepreneurial things that you see, I say hard, I mean rare, I should say, is they have the vision and they understand without anybody helping them kind of see behind the curtain what a true partnership with an investor core looks like for growth. And so in the process of selling their practice, they end up growing the practice because they're wanting the capital to back them to do a de novo second location, a third location, a fourth location, whatever it may be. They may do something extremely well. They may do like Orville Redenbacher, they do popcorn the best, but then they want to start offering additional services and that costs capital expenditure to invest in that. And they don't want to alter their lifestyle. They want to partner that's going to back them, so those are other reasons why they'll sell.

Eva Sheie (04:16):
Do you think not wanting to alter the lifestyle would also include like, I don't want to let people go or I don't want to hire people or I mean, how does that affect the people who work for them?

Bill Walker (04:26):
For the staff, one of the number one things that I've seen over the last probably three or four years is the increased cost of healthcare and benefits. It is really, really challenging for these individuals who had a vision, started this practice, grew the practice with their team, just indescribable trust between them, and they're like family. And over the last three, four years, it has gotten harder and harder to figure out, one, how do I compensate them for what they're really worth and continue to grow their salary and continue to grow their bonuses, but also how do I afford healthcare for them? How am I going to provide these benefits? Because you just can't do it as an individual a lot of times in today's day,

Andrea Watkins (05:13):
In my experience, there's a huge spectrum between where people are and how long they've been in the industry. But if you're thinking the cost of benefits and everything, plus of course their compensation and any incentives, you also kind of as a business owner, I would think, would struggle with how do I make sure that they're fairly compensated so they can afford the cost of just being alive and having rent and all of those things. And do you find that sometimes the folks that you work with and the doctors that you partner with, are they ever struggling just to feel like they're providing that for their team?

Bill Walker (05:52):
So I had one of our clients, we kind of go down a long-term path with them. It's usually a year process for them to get to the finality stage. And along that path, we had an owner where they had a major provider end up leaving the practice unexpectedly that significantly impacted their ability to make payroll.

(06:14):
And it came out of pocket on their credit cards for two months to make payroll because they're so concerned about their team, making sure that they need to be taken care of. That kept them up at night, I can tell you every single night. But to go back to your point about what are the things that you think about and what should you be concerned about and not be concerned about as a staff member, when your doctor, for example tells you, Hey, I'm selling the practice. First, I would say you're not fired. Most of the time what you'll find is that investors are buying the practice and investor core that look at it as an investment and they look at it as a good investment or else they wouldn't have put up the capital and the money to go that route. And I think one of the resounding things that I've seen the majority of the time is you hear people say, we don't want to change anything about the staff because we're buying into this successful vision.

(07:12):
So that's first and foremost. Second, when you have a large investor pool that has the resources and the installation to withstand economic highs and lows, that gives them the flexibility and the comfort level to invest in better benefits because they want to retain the best possible staff. And so you tend to see over time, much better, much more enriched benefits packages for teammates. The third thing I'll say is on the flip side of the coin, which is there is inevitably going to be a small amount of change that occurs. And change management is paramount. And that goes at the practice level and it goes at the company that's coming in to support the behind the scenes efforts. It's accountability on both parts. And so those who have a growth mindset versus a scarcity mindset, it's usually the tempo that's set by the owner, the doctor that expands the fold, makes people feel welcome, makes people feel safe, and so they're willing to go out and do the extra. And that growth mindset is what benefits everybody the most I've seen in the staffs. They know that they're taken care of. They know there's no way their doctor would do a deal that would impair them, let alone hurt them. As a result, you tend to see the highest success rates for those teams.

Andrea Watkins (08:37):
I like that. My biggest takeaway from this conversation is definitely when there is a deal that's done and maybe your doctor sells a practice as a person that's on the team, you can actually have a little bit more security and hope for the future because there's more substantial for the benefits, maybe even for training, for helping them grow. Would that be a fair statement of how that partnership works?

Bill Walker (09:02):
It's very well stated. I think too, another thing is that it's the story that comes to mind when you say this. You can tell, you can tell so early on, because we end up working with some of the key staff members. You'll inevitably have the doctor, let's say, or the primary care provider owner of the practice, they have a key right hand or left hand person and they trust that person. They're like, okay, Bill's team, Aesthetic Brokers, needs access to our data. They want to look at stuff. And you start working with that person and instantaneously, I can tell you when I start working with that key right hand woman or key right hand man, one of the first things that stands out is the story about a practice in Texas that the individual, I'll say, we'll call the individual Debbie. Debbie says, our doctor went to hell and back for us during Covid. I will follow that man into fire. And you're like, this is a rockstar practice. If you've got somebody giving a testimonial like that on your team that's like he stepped in and said, don't worry about it. Everybody's going to be covered with their salaries. No matter how long this thing lasts, I will go into my retirement account to take care of you. We will figure this out. Don't you worry. Your families will not be impacted at all. That practice is an amazing practice and we see that a lot in a lot of our clients.

Andrea Watkins (10:25):
Would you find that out prior to or after a deal?

Bill Walker (10:29):
It comes out usually with those key players, it comes out fairly early in our process because we're going to partner up with the doctor and the key leaders to strategize of the best way to go to market for them, to drive the most value and the best bidding process to get the maximum value for their practice, get 'em the better deal. And so those people that you're dealing with a great core group of individuals and that the practice is a thriving practice. Here's another thing too, okay, so you're talking about basically having support to get through the process that we do. And I'll say this, we deal with such highly intelligent individuals. These are people who, one, were successful at business, two, were at the apex predator of their acumen for being a care provider of whatever their specialty is, and they, three have the drive to kick down doors, flashbang grenades, and accomplish the mission of whatever they're seeing in front of 'em as an obstacle.

(11:28):
The question I always ask is, yeah, you can figure this stuff out, but do you have the time? Do you have the extra 15 or 20 hours a week that you're going to dedicate to this stuff to make sure that it's absolutely correct and to make sure that you're going to get the absolute best deal possible? It's a matter of saving time and it's peace of mind knowing that, look, I'm not walking into a room, you're not handing me a scalpel. You're not handing a needle. I'm not going to be able to do that. Right? Well, do I have the capacity to learn it? Yes. And so I think about that with the successful practices. The same way that they look at their staff, they have the ability to do the unicorn magic that their staff members do, that the team does, but do they have the time? And so that's why those team members are so valuable to the practice, whether it's in the hands of a single owner or a group of investors that says, we're investing in that team because they're really good. They're really good together.

Eva Sheie (12:25):
I want to ask you a change question, Andrea. So if you were back in practice managing a team and you knew this was coming along and it was going to happen, how would you go to them and say, I need to tell you guys something. How would you set their expectations?

Andrea Watkins (12:39):
Definitely come at it from the perspective of this is a really great thing. Our doctor needs an exit strategy. So if he were to not actually partner with someone, we wouldn't have jobs, first of all, right? Because if he just went retired, we wouldn't have roles. But really embrace the positives that we would be getting with the partnership, which would be the solidity, the foundation of having a bigger group to support us. I've worked with a few larger practices that are private equity backed and they invested a significant amount of money for me to be able to go and create systems, create process, implement the right software, the lead management software lead loop that I use in my coaching business to be able to elevate all of the people. We identified for the volume they had, they were overworked. We needed to hire, I hired four people for that practice.

(13:38):
So the data that we were able to gather from, yes, there's change management, that is so critical to anything that's new, but through that we identified you need more help, you need more resources, you need more support. They had the money to be able to pay for the resources to actually help the team do a better job and have a better day. They were not, oh my gosh, I never got off the phone all day. I couldn't even use the bathroom, which is what they were prior because for the number of new patient inquiries and phone calls and everything they were getting per day, they didn't have enough people upfront. They didn't have enough patient care coordinators. And so with the resources of private equity, you can actually start tracking and identifying those things and then get the tools, the resources, the people in place to help your team actually have a better experience at work.

Eva Sheie (14:25):
I keep thinking of a surgeon I knew and loved very much who I worked with for most of my career. He cared about his staff the way that you're both describing. They were all family. They'd all been there for decades. Like the one who'd been there the shortest had been there for 17 years.

Andrea Watkins (14:39):
Oh, wow.

Eva Sheie (14:39):
She was the new girl, right? And he did not sell. He just retired and he left so much legacy and so much value behind. For whatever reason, he just didn't see another way forward other than just saying, I'm closing the doors.

Bill Walker (14:55):
Well, so to your point, this is a problem in today's society. So Andrea talks about the cost to just exist and be, right? And so you take practices that have done exceptional over the course of the doctor's career or the nurse practitioner's career or whomever, and they grow, because the idea is you want to grow, you've got to grow. You get to a point where you start to have a staff and you get so successful that, to your point, who's going to take that practice over? Because I will tell you in today's day and age, it is likely not going to be an individual physician that comes in after medical school debt.

Andrea Watkins (15:35):
Exactly.

Bill Walker (15:35):
And says, I'm going to stroke a check that is going to pay you what this is worth as an individual. It will not occur. Once you get past the mom and pop size and you become a viable, professional, well run organization that can employ staff and create in the world, create job opportunities in the world for people, that handoff is incredibly important for them. It has to happen. And so partnering with the right culture, partnering with the right investor core will drive enormous success and growth for them on their deals because it's early stage. But more importantly, when we're talking about for the listeners today, the staff, you see the staff have the opportunity to excel and thrive because of that early expansion, it opens up opportunities for them to fleet up within the organization at a national level. And so you'll have a kick ass operations manager at an individual practice or is managing two practices, and she is like Tory Burch sandals on kicking down doors, crushing life for their doctor, and then all of a sudden that talent, I've seen it, that talent is recognized by the investor core a few months later to a year later and they're like, Hey, could we get you a bigger set of Tory Burch boots and have you tackle something else?

(17:00):
And they grow in learning, they grow in a career, they grow in compensation, and now they're managing and leading and directing a dozen, two dozen practices. And that is a real story, and I've seen it multiple times.

Eva Sheie (17:17):
I like how we're compensating with footwear. This works for me really well.

Bill Walker (17:23):
I see a lot of footwear at these opportunities and it's all impressive.

Andrea Watkins (17:27):
I love what you're saying about the opportunity, not just within the practice. I mean, what you just said truly for me was a complete aha moment.

Eva Sheie (17:36):
Me too.

Andrea Watkins (17:36):
Because I never even considered the opportunity that it also provides based upon just being part of a larger group. You have the stability and you have the opportunity that is provided when the office is sold potentially. And so if you're someone that's very motivated and making a career out of being a leader in aesthetic practices, your visibility skyrockets when you're a part of a group as opposed to just being a part of one practice.

Bill Walker (18:07):
Yes.

Andrea Watkins (18:08):
That's incredible.

Eva Sheie (18:10):
I've heard upside in this entire conversation. All I've heard is upside.

Andrea Watkins (18:14):
And it's things that we wouldn't really consider

Eva Sheie (18:16):
For staff, is there ever a downside? Do they weed out people who don't belong? That's not different.

Andrea Watkins (18:23):
I think it's not different from any other professional organization. What I will say is there's always going to be a story that is out there that is an unimpressive event, a boo hiss, thumbs down emoji. There's going to be that those stories exist because there's bad experiences, but in large part, it really comes down to performers are going to get recognized for their positivity, contribution wise, and they're going to get rewarded. And for those people, the vast majority of people in the practices that are doing really fantastic work, it's a benefit to them to have somebody with a third party eye that's just one step away from the practice that says, Hey, this other person isn't helping you out like they should I feel like. And you guys are doing all this work, let's make some performance improvements. If that doesn't work, maybe it's time that they're not a part of a high performing team like you guys.

(19:21):
Yeah. What are those keys when you're evaluating teams and you're evaluating the folks that are in the practices that we're partnering with? What are the key performance indicators or what are the attributes that you're looking for within the administrative team that are going to be those things that you're going to want to elevate and you're going to want to encourage?

Bill Walker (19:42):
It's a three legged stool. There's often three legs to a stool for anything. In this, it's your technical acumen. Be really good at what you do, right? Be proficient at your technical acumen, number one. Two, it's tactical bleed over proficiency. So by tactical bleed over, I mean, can you answer the phone, book an appointment, even if you are a care provider? Can you do an initial consult sheet introduction and explain to a new patient that's coming in at the front desk, what are the treatment areas that you're looking to improve about yourself? What would you like to improve about yourself? And being able to articulate that to the primary care provider that's going to see them in the treatment room. And three, be a good human. If you're a good human, you want to help the team because you've got a bleed over growth mindset to learn a little bit more about everything in the practice, but you're not the expert in every single field. And then you are an expert in your part of the pie. Those are superstars. I'm team them.

Eva Sheie (20:50):
We're describing one of my favorite administrators just now, and I tell her, I give her so much positive feedback every week because she has a really, really tough job. My favorite thing about her is she absolutely admits when she does not know how to do something And how could you know how to do everything?

Andrea Watkins (21:06):
You can't.

Bill Walker (21:07):
That humility is really important. I would tell people too, it's very common in a zero defect generation that we expect everybody to be perfect at all times in every ways. One thing that I have learned by trial and error and baptism by fire is this, just say, I messed up. I'm sorry I messed up. Because most of the time it's like just a half a heartbeat of ass chewing that leads to, okay, I'm just grateful that you're like, I know I messed something up. Let's improve that. And you see that in the practices that are really strong. There's people like, oh, darn it, I messed that up. I'm super sorry. And the answer from the doctor is usually like, that's okay. That sucks. That's okay though. We'll figure it out. It's no problem. And I guarantee you that those kind of personalities that say, I'm sorry, I messed that up, they learn from whatever it was, and they're like, they're not going to do that again.

Andrea Watkins (22:09):
Exactly. And I think that really needs to come from the top. It's a cultural thing where people feel safe.

Bill Walker (22:14):
You've got to allow for the rebounds so that you can put those rebounds back into the bucket for points. If you don't allow for a rebound, that ball is going to go out of bounds and they're gone. They're checked out. They don't want to participate anymore because they feel like, I'm not living up to somebody's standard or I'm going to be shunned for this.

Andrea Watkins (22:32):
Or there's too much fear if you try something and miss, whereas it's always going to be an opportunity. Having that mindset of abundance, I just think it's so important and critical that it comes from the top. And your culture will be created that way so that people are not fearful because when people are fearful, they're not going to come to you like that.

Bill Walker (22:51):
Think about this too with, I'll say this as an example for aviation. You want people that when you're up at altitude can fly the plane with you. You want them to feel empowered to fly that plane. What you really care about is can I trust them for me to get up, stretch my legs, go in the back and come back up. I'll be there for the takeoff, I'll be there for the landing. That's some more complex stuff. You want them to feel comfortable to call you and be like, Hey, this is a takeoff for me. This is a landing for me. I need some guidance here. Can you double check my work on this? Did I put that in the system correctly? Did I code that correctly for you? Did I order this vendor for a refill for you correctly? When they know that they're outside of their comfort zone, that they're not afraid to ask the question, that's what you want.

Eva Sheie (23:38):
Do you have a "She did what" story?

Bill Walker (23:41):
She did what?

Eva Sheie (23:42):
She did what?

Bill Walker (23:43):
Oh.

Andrea Watkins (23:43):
She did what?

Bill Walker (23:44):
She did what? Oh, man. Let me think of a, she did what? Gosh, I would say there's a practice and the operations manager or office manager, I forget the title, they had a patient that could not go out in the sun because of their treatment. They knew the clients very well in this practice. And then the client is looking at their phone and they're like, oh, crap, I've got to pick up my kid at soccer. So they were like, you go home. Stay indoors for the next few days and I'll go and pick up your kid at soccer so that you're not standing out in the sun for a half hour. And so they picked up their kid and drove 'em back to their house. I thought that was a really cool, she did what?

Andrea Watkins (24:33):
That's incredible.

Bill Walker (24:34):
I didn't expect she did whats to be

Andrea Watkins (24:36):
So positive, I love it.

Eva Sheie (24:38):
And did the doctor notice that she did that and reward her?

Bill Walker (24:42):
Yeah. I mean, I got the story from the doc.

Eva Sheie (24:45):
Oh yeah.

Bill Walker (24:46):
That was kind of cool.

Eva Sheie (24:48):
Amazing. Thank you, bill. This was really, really good.

Andrea Watkins (24:51):
Yeah, incredible. I think I learned so much that I would not have known.

Eva Sheie (24:55):
We're just at the beginning of practices being acquired in plastic surgery. So any of us who've been working in plastic surgery, we're all learning together what's happening.

Andrea Watkins (25:06):
The foundation stability and opportunity that the partnership can provide for the staff is something that is really important that you guys get the word out about. Because I think instantly change is always hard, and people in those roles are going to have fear and look at the negative that they've heard in different industries or private equity, the big bad wolf or whatever. And so these little points of all that will actually be available for them, it's incredible.

Bill Walker (25:38):
Something that's like a tertiary order of effect that may not get talked about a lot. It's a subtlety, but what I've seen in more recent times is starting to occur. There's a realization specifically in the plastic surgery, cosmetic surgery space where investors are looking to mitigate risk. And so they want a second surgeon on staff. And so a lot, especially in this past year, I've seen, is an uptick in recognition by the doctors that they want to bring a junior doctor on board. And so I think for what it's worth, that senior doctor, the founder, is going to plan their exit and they're going to leave the practice. But what you can feel good about at the helm as like an XO of the ship, the executive officer of the number two of the ship, you're going to start to see, I think some more secondary physicians coming on board practices either in preparation for an exit strategy or as part of the succession plan. And I think that is really comforting for them because they're going to probably be like-minded or else the primary doctor is not going to embrace their presence in the practice around their people and around their patients. And so that's another comforting factor too, that I think as this industry continues to progress and grow and mature and develop, you're going to see a handing of the baton. And you should feel good about that because that physician was likely handpicked by your doctor. That's what I predict.

Eva Sheie (27:12):
We can't let it go, cuz you've made too many military references now.

Andrea Watkins (27:15):
Yeah, the tactical, I'm like you

Eva Sheie (27:18):
Kicking down doors, throwing grenades, and Tory Burch shoes.

Andrea Watkins (27:23):
First of all, we're safe. We're in a safe space. Right?

Bill Walker (27:27):
You're very safe.

Andrea Watkins (27:27):
Yeah. What's your background? It must be military, clearly.

Bill Walker (27:32):
Yes. Okay. So I was a Marine. I was a Marine pilot. Loved that opportunity.

Andrea Watkins (27:36):
Incredible. What'd you fly?

Bill Walker (27:38):
I flew Ospreys at the tail end of my time. I started out with jets and helicopters and then ended up flying Ospreys tilt rotors. So transformers, you get to take off like a helicopter and land like a helicopter, but you convert out, transition out into airplane.

Andrea Watkins (27:56):
Wow. So what were you carrying in these things?

Bill Walker (27:58):
You carried troops, primarily troops. You can do supplies. You can carry weapons. We have weapon systems on board. It was a great once in a lifetime opportunity.

Andrea Watkins (28:08):
That's incredible. And for how long were you doing that?

Bill Walker (28:10):
Off and on for 20 years. I had a short stint out of the cockpit and did a ground tour as they called it, a J Tac where you call in airstrikes as a pilot on the ground. And that was a great experience. Gave me, I got to see the world. I got to serve the country, got to work for two different presidents at Marine One, which was awesome experience. That was super cool, to be at the nation's capitol.

Andrea Watkins (28:33):
Did you fly the presidents?

Bill Walker (28:36):
So I flew V 22's, which was the tactical aircraft in support of POTUS and VPOTUS, and that was an incredible opportunity. That was very cool. And I'll tell you one of the best things about that whole gig is you get to live in DC in the winter when there are no school lines. So if you want to take your kids to go see any of the Constitution, the Declaration of Independence, all of these key items.

Andrea Watkins (29:01):
This was the coolest thing.

(29:02):
All the landmarks.

Bill Walker (29:03):
All the landmarks, you don't even have to wait in line. You walk right up, and I'm literally from me to you from the constitution.

Eva Sheie (29:10):
That's a pro tip right there. Take your kids in the winter. Yeah.

Andrea Watkins (29:14):
Yeah. And the coolest thing about one of the coolest jobs I've ever heard was being able to go to landmarks in Washington DC. I would think working for POTUS and V POTUS would be.

Bill Walker (29:24):
It was awesome.

Andrea Watkins (29:24):
Yeah.

Bill Walker (29:25):
I mean, that was bucket list too, right? It was incredible. We got to go to the White House for Christmas party with West Wing, and yes, we were very, very fortunate.

Blake Lucas (29:33):
Got a wild customer service story or a sticky patient situation? Send us a message or voicemail if your tail makes it into our "She did what?" segment, we'll send a thank you gift you'll actually love. Promise no cheap swag here.

Andrea Watkins (29:45):
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