Healthcare executive with 30+ year of management experience. Healthcare Leader and Entrepreneur | ex-IQVIA | ex-Deloitte | ex-United Healthcare | ex-Aetna.
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Ronald Skelton 0:06
Hello and welcome to the how to exit podcast where we introduce you to a world of small to medium business acquisitions and mergers. We interview business owners, industry leaders, authors, mentors and other influencers with the sole intent to share with you what it looks like to buy or sell a business. Let's get rolling.
And now a moment for our sponsors. I want to highly recommend you get acquisition Aficionado magazine. Every month acquisition officiate auto magazine brings you tactics for business buying and selling you won't find anywhere else learn firsthand from industry leaders who share their success stories featuring in depth interviews and stories from leading figures in the business acquisition industry. This multi platform mobile magazine speaks to acquisition entrepreneurs wherever they are in the journey. And I want you to visit acquisition aficionado.com today. Hello, and welcome to the how to exit podcast today I'm here with Scott wits, God is the president and general manager of triad clinical trials, which he acquired through the ETA model. And I just glad to have you here a lot of the people we have on our show, we get a lot of advisors and people who teach this and or people who have done, you know, deal after deal after deal. And like, true acquisition entrepreneurs that that's what they're gonna do. But I honestly the reason I'm excited to having you here today is I really think you aligned with a lot of our listeners, they were in the field, they decided they wanted to buy something. And then they did it. And I've listened to one of the other interviews. So I'm really excited to have you here. Scott, thank you for being here today.
Unknown Speaker 1:47
Go enjoy it if I can help inform and motivate other folks. I like that I wish I'd found somebody like me before I did this, I would still do it just a lot more intelligently.
Ronald Skelton 1:59
That's cool. So all right, let's let's kind of get into this. So you were in the industry now correct me if it's okay to correct me at any time during this if I read something wrong or have something wrong, you were in the industry that you chose, prior to acquiring this, can you tell me the kind of the How did you come about that? Okay, I'm gonna buy myself a company, how did you come to the How did you come to the decision to make the switch from, you know, employee, consultant, worker to owner,
Unknown Speaker 2:26
right. Probably happened a couple of different times, in when I finally made the decision, it was a combination of really understanding the motivations and my trajectory on the, you know, big five consulting consulting path, and what I wanted for my life and what my wife and I wanted for our family and our in our kids. And I think, you know, as I, we are a big moment for me personally, was when I entered Deloitte as a as a partner, that's a very rare beast. They're, they're very selective, they're very tough, they do their best to make you go away, if you're too stupid to quit, and then they started having a real conversation with you. Life Life Changing organization really loved it. I was probably in over my head for a while to be honest. But, you know, very, very good idea of where I would be able to go and that world, it was good. Certainly more than I'd ever hoped, coming out of grad school. But I felt I could do better. I also found that as you move up in any organization delights not unique to the senior politics get far more intricate, and far more deadly. You have to spend more time than I wanted to thinking about who you need to take out and try to figure out who's trying to take you out. When really I love the client work. I love working with the teams. I love sales and business development. And so at that point, and you know, as you move into that world, your compensation goes up noticeably. They gave us a financial a couple of financial planning, seminars, and hey, don't buy the boat. Don't buy the lake house. Just figure out where you're going first. And so my wife and I sat down had a conversation like, well, we're not going to buy a house, we're not going to upgrade we certainly could have. But we started to bank the difference in income and bank all the bonuses knowing we were going to do something like this at some point. And we were probably four or five years later when this opportunity presented itself. So it was a combination of having made that decision. Ensuring I had resources to get started are having serious negotiation and then finding the right opportunity.
Ronald Skelton 4:35
Now what had you decide to buy versus build a lot of people are just entrepreneurial and I even catch myself still time sometimes you run out of school, start landed some customers in this field and build something out. And you just watched your thought process. I know why I don't want to do it. I'm 50 That's a lot of energy.
Unknown Speaker 4:54
It's a young person's young person's role. So I was never entirely against Starting something. But having worked in healthcare and for some really entrepreneur organizations, I knew a lot of work colleagues and friends who went out on their own who were at least as smart as I was maybe even had a better work ethic and failed, just simply failed. In health care, a lot of strengths is a big chunk of the economy, it's not going away. Once you're in you're in, but the uptake for a new health care provider or health care entity to take you on is an unproven unknown entity is extremely low, you really need to have a five to seven year plan to hit critical mass. And I you know, through the interview, you mentioned in some way or the postings, I'm working with a number of folks who are thinking they're going to build a clinical trial site or by clinical trial site. And, you know, I just very transparent about what we did. And as I looked at starting another consulting entity or technology company, you know, all the successes make the news, but the 15 failures before that don't. And, you know, once you failed, once or twice, you've depleted your IRA and 401k use up your, your your HELOC, and your kids are hungry. And you know, that's lots of good people ended up in very difficult circumstances for that. So we really focused in on acquiring something that existed understanding that, you know, nobody sells a perfectly good fun to run highly profitable business for no reason, you know, your your, you are acquiring somebody else's problem and somebody else's drama, at some level, we were just very careful, I was very careful in vetting, the things that came on the market. And at least tried to convince myself I can handle the problems and drama that they came with, they would not reveal or didn't see is problems. And I think we made a very good choice. In doing that. I probably I went down pretty deep dives on about five different companies. Some were services based and were technology based. And your profitability was good. As I was looking at them, I would have just off all this is a toss off, start talking to the owner about what was your retirement plan? What are you going to do after this. And unless they had a really well defined plan that involved in being in another part of the country, just not touching that, you know, particularly the small business, the brand is often so intertwined with the founder and the owners that you know, you can't they can't sell that. And I've we've looked at other acquisition targets since then I get down to it. And the owners put themselves all over the website. Sometimes it's a physician Doctor, this doctor that as like, as fabulous, but now it's just me and nobody's gonna like me as much as they like you. So we've we've shied away from those, and we may not do another acquisition, who knows. But those were the things that we weighed all kind of kind of big picture at the next level. I knew from one of my roles it quintiles a big pharmaceutical research company, that the demand for clinical trials is not decreasing. You know, I'm, I turned away work. Now I cannot sign another contract for six or seven months, because I just don't have capacity. And that's another problem to solve. But, you know, once once we were out there, once I was out there and engaged, you know, finding business is the is the least difficult part of this, this, this piece of the world. And I always know I can go get revenue.
Ronald Skelton 8:25
I get it. Let's just talk a little bit about the search. Because you you said it didn't happen overnight. And, you know, were you using like a broker? Were you visiting all the online? You know, just the typical online biz by cells? What was your process to locate the targets you were looking at?
Unknown Speaker 8:42
Yeah, mostly it was biz buy, sell. I think that's where we found this one. And then, you know, there's a couple of companies out there, you probably know the names far better than I do, but they'll have listings on their website. And they're not on there or not as good or whatever. So I would random I'd like to tell you is a systematic structured search. It was not, it was kind of episodic. And man today really suck. I'm gonna go find my own thing right now. And I'd spend all night searching the boards and that particular drama would pass and you know, spend another year just slaving away for somebody else's bottom line. But just getting on those bulletin boards and with the websites, set up the notifications, have an NDA and a high level financial disclosure, scan and ready to send off to a broker. You know, just engaged in them and you know, brokers, you don't really need to have any education experience or capacity for others to work to become a broker. There's so many of them out there.
Ronald Skelton 9:42
I was just talking about that yesterday I wanted to show is just like a lot of states. Some of them are require a license. I moved. I'm going to California now but I was in Tulsa, Oklahoma. And when we first got this, a friend of mine said I'll just go buy a brokerage and you'll have lots of leads. And I was like, just do that we did the research and sure enough he could and now he's eligible. broker didn't lead just don't come in like that. So I kept telling him, you know, that's not how that works. But uh, you know, you gotta market still, you know, the same marketing, you know, the same marketing goes. So I still not a bad decision for him Don't get me wrong, but he bought it you know he bought a brokerage and he's like, you want to be a broker? I'll make a business card for you. Like, you know, I was like, yeah, don't want that. So did you own businesses before that you come straight from consulting world where you were working for other people into owning your own.
Unknown Speaker 10:28
So it was pretty much just a dive off the cliff. So in the, you know, Deloitte, you're a partner, you're an owner, mostly, you still reported to, you know, the senior partner overlords, who drive and dictate policies and procedures, but at that level, you own revenue acquisition, you own hiring you own career development for your teams. I mean,
Ronald Skelton 10:55
as much as you were pretty rounded. And a lot of guys, I talked to getting into this space as acquisition through entrepreneurship, and they just got out of college, or they are still working for somewhere else, but they've never, never owned it so much as a lemonade stand. And the one thing I kept telling them, and I think, I think you really were addressed this, and here's what we're gonna, we're gonna I'm gonna ask, but it's financials are more important than anything, if you don't have the experience, to you know, that, like in doing turnarounds, and growing businesses and doing startups find something that's so financially strong, it's yours to mess up. Right, it's up, it's running a great cashflow. It pays all the bills, it doesn't have any months where you know, the last three years you're analyzing, it doesn't look like they pulled money out of the pocket to keep it going. You want something super strong, because you gotta have it. You gotta have it running up and doing what it does. While you're where you're going through your learning curve. Where you really concerned about like how strong the financials were, so that you could adjust to being the owner operator.
Unknown Speaker 12:03
I was and I may have been overly conservative, to be honest. I'm very confident my ability to fix problems, that's what you do as a consultant, figure things out, build business relationships, you know, I've never not been able to go find a new client. So those those were my skill sets. That's what I brought to this. You know, what I didn't have and we still struggle with a little bit is it kind of the, you know, the final attunement of a professional CFO or controller who manages cash flow better tracks these things. But when we when we looked at the business, we looked at the financials, the remarks the gross margins were ridiculously high like this is not believable. So I asked for some more information and really what had happened as the this business evolved to do clinical trials, you don't need a lot of infrastructure, you can rent the clinic you can rent the equipment you don't really invest in computer systems because the pharmaceutical companies turn on all the systems you need to do data entry and patient management they ship you all your lab kits and supplies you know the the upfront overhead can be extremely low. And until very recently and still 80% of our business is done on paper you come in for a clinical trial visit we open up a eight inch binder this had your last five visits and your next five visits we go the the 15 page chart and blood pressure and assessments and the doctor comes in and talks to you and writes and signs I mean it's 1975 here most of the day so the woman that started it, you know she she did a really great job and building the brand and developing a patient database and having good pharmaceutical company relationships but everything else was manual. You know, she did payroll by hand with the calculator and the the booklet with the withholding tables and if you remember that
Ronald Skelton 13:55
let's just walk through this a little bit like you're scrolling and there's a reason I'm doing this because I'm curious you're scrolling through biz Buy Sell what caught your first eye like what when you see in this particular deal the one you own now, would you can you remember it? Can you go back and remember it? Was it the numbers what what caught your eye and made you want to investigate this one? A little bit more?
Unknown Speaker 14:15
Yeah, so I think is a general process. I do this every time but I still log in because we're thinking we might buy something else in a related or who knows. But I would sort of set the standard parameters for cash flow, geography, an industry and I kept my search pretty broad because I was open to other industries but healthcare I know the best. So I went through and that was the posting was clinical trial site for sale and I've been working in healthcare long enough and then we're working quintiles, which is a big research roll up. i In I had done some consulting in big practices around clinical trials go out. I know how this works. I feel comfortable like figure it out. And I know that most pharmaceutical companies have a hard time finding enough sites to do the work the way they want it done. So while I was very comfortable in the industry, I would find it interesting. And you know, we for what we spent, we probably could have opened up 15, Dunkin Donuts, but I'm not that interested in doughnuts. And if I am, it's not good for my health. So, you know, to kind of weed those things out, is it a good fit? For my knowledge base? Is it something I care about? I've been in healthcare for many, many years do many regime changes and regulatory form Obamacare. I've worked with small HMOs, and physicians and big insurance companies, I care about health care. And I really do, you know, when I was just a young group rep with that, and I was a lot of small business owners who, you know, were great people running a wonderful businesses, but completely hamstrung by the cost of health care. A lot of empathy for the average person stuck in a very complicated system. So I get excited about the work and the research we do over and above the business aspects. So those things kind of came together. And then looking at the financials, I was comfortable enough that I could let go of corporate America with savings and an SBA loan to buy the line of credit. It's working for working capital in figure this out. And, you know, within very broad parameters with a lot of a lot of comfort margin.
Ronald Skelton 16:26
So you found you found it on the on a site you liked what you're saying, you started diving into it? What was what was the link to the process? Was it uh, did you guys go quickly through it? Or did it take six or eight months to negotiate? Like average? Or what would you what would you say the process look like to you from the day you made that first NDA sign in, start seeing some numbers until the day you like, you know, showed up at the front door with the keys?
Unknown Speaker 16:52
Right? Yeah, so So thinking back, it's a bit of a blur, but I want to say it was late May or early June of 2016. Actually, when I saw the site, I had been in contact with a broker, you said, somehow, we missed this listing, he already had three interested people come out to the clinic and meet and meet the the owners and chat. And, but they were not healthcare, and they were your people looking, he says, a lot of people like you are looking to buy your job you you want out of corporate America, and you're gonna buy something profitable. And I he brought me out, and we met with the owner. After hours, I think I made her really comfortable that I understood the industry, that I really cared about research, you know, yeah, I need to feed my kids and going through college, and I want to have a nice car too. But I care about this, I want to see a new Alzheimer's treatment, or you got a treatment come to market. And she felt very comfortable. I think what put her over the edge is that because I had walked in the halls of Big Pharma and negotiated with the big, hairy, obnoxious egos that I think she struggled with, you know, as a single mother without a college degree, you're dealing with guys like me on the side of the table, I think it was probably one of her big pain points in the world, like that was not going to be an issue for me. Like you can bluff meal you like, we're gonna, you're gonna share your cards, and we're gonna do business or not. So I think all those things combined made her made it comfortable that we were the right people to buy it. So at that point, it was less about negotiation was about due diligence, we used an SBA loan. And, you know, the broker had a guy, which, you know, helps because they had pre approved it, SBA had done a initial scan of it, but it limited my ability to go look for additional financing or the financing options. I would say the biggest chunk of it was really getting the SBA paperwork, right. And getting our corporate structure, right, the actual negotiation of the of the pricing and the terms wasn't that hard. I was pretty sure without trying to communicate it that there was going to be a long time before something this ideal for us was going to come along. So I wasn't going to lose this over $100,000 or $200,000 on the price. And I think they sense that so I kind of put myself at a disadvantage. I didn't once we were committed, I didn't really have a walkaway point. Which if you ever wanted to talk about negotiations in general, different podcasts, you know, that's you need to be able to stand up and walk out and not look back. And if you're not willing to do that, you're you're not going to win the negotiation. You have to take what's on the table and then that's where we were. So yeah, I would have the due diligence probably wasn't deep enough and I took a lot of things at face value. Obviously the biggest wrinkle we ran into was cash flow and accounts receivables. In this business, we probably only invoice for about 20% On the revenue, those are specific specific tax tasks. Much like any other healthcare entity that sees patients, you get paid per patient visit and what goes on in the visit. And so the patient comes in, we do all the visits, we enter all the data into the computer system. At some point in the next 30 days, the pharmacist who reviews all the data we put in there, they'll ask us questions follow up, issue back and forth for a week or two. And then probably 45 days after the visit, they put it in their system for payment, and it's still your 90 day payment cycles are still pretty common here, which can be stressful. And you haven't really there was no financial system in place. So she, the woman actually had taken a ruler and a pencil and a piece of poster board and had hand drawn a spreadsheet for each study. And we're marking off each visit. And it was hand ticking off visits. One the remittance advice from the pharmaceutical company, she didn't really have a good handle on what receivables were. And they were much lower than they had they had presented. And I think to do over again, I would just do more time on due diligence, and linking that receivables number, anything they've represented about cash collection, and cash management and cash flow to some variable that gives you a little bit to fall back on. I mean, I'm not gonna say it was outright fraud. But it was was wildly misleading in a way that I did not expect.
Ronald Skelton 21:30
You already answered my the question I was leading into from that is like, as you are going through the process, you know, you liked it at the beginning, at any point, did it start to change? And you start looking at this and going okay, well, there's some information here I wish that had known was that the was that the account receivable? The only gotcha or is there a lot more? What were the lessons learned? What would you do differently? On your next acquisition?
Unknown Speaker 21:54
Yeah, I think the biggest lesson is just really a much more thorough and transparent financial due diligence, what is the performance, you know, what happens and I've been involved on the healthcare side, and lots of mergers and acquisitions and a lot of stuff until you've, you've actually signed the paper, if you can see all the financials, what happens implicitly, or explicitly, explicitly is the sellers is juicing the business, you know, they're doing everything they can in the year to six months to try and private transaction to drive down costs, and build up revenues. So that your margin or your multiple because it's your price on a multiple cash flow, the bigger the cash flow, every dollar you get in, in cash flows were three to $4 on the on the price, or the incentive to cook the books is as high, the bigger issue is, is just, I call it cat you know, burn rate, you know, you're consuming the your fundamental goodwill, or your ability to deliver on contracts ahead of time to advance cash flow. So, you know, on a couple of contracts, she was over committed, and didn't really have the staff and equipment on board to, to, to do the work to deliver to the to the end of the contract. And it really under invested in a couple of things within the in the clinic that we had to go back and fix. And so again, I won't say it was outright fraud or intentional. But in you know, you can we I like to drive a stick shift. And so goodwill was when you jam that thing down the third, you're very attacking the red line. And you know, that's a great moment. That's where the car feels the best, but it takes its toll and you can't do that all the time. Well, that's what that's what a good seller with. Probably the advice of the broker is actually doing, you know, so there's a lot of fender wind addressing just kind of say, well, we'll take that as a given and we'll we'll a lot 10% of the price just for this airball capital consumption is the term that consultants will use for that kind of behavior. And then let's get down to what the real fundamentals of the business are and price it like that. The SBA loan officer did not want us putting an earnout in there which is a common way of dealing with that. He said we end up in a lot of he said she said court fights that don't go anywhere. So we're not we're less likely to approve your loan if there's an urn out in it or any sort of owner financing because that's the same thing. Right? So that's I would do that and then you constantly need to gut check. is Do I really want to do this? Am I is this going to be my life? Do I am I that committed is my family that committed to this thing? And if you have it sometimes you're gonna answer now you're gonna have panic attacks and there's gonna be I'm not doing that this is I must be insane. You know, and if you're not experiencing that at some point You're not thinking hard enough to be honest.
Ronald Skelton 25:02
Did you hit that point of what the hell have I done? Did you did you have that spot? You know, anytime? Yeah, yeah, the first year probably sold
Unknown Speaker 25:10
several times several times you can talk about those they were they were instructive and painful. Grab a tissue, we go over some of those. But the, but I never wavered on my conviction that the market was strong, very confident my ability to pick up a phone and get enough meetings and call set up to find new business. And that's where I am. And if you're going to be an entrepreneur, again, you know, you watch TV, it's a bunch of well dressed skinny people with great haircuts, having earnest meetings in their, in their office in their well designed architecturally significant offices. And that's it's probably 5% of my work life, you know, a lot of it is finding new business and finding clients and overcoming objections and getting out there and negotiating contracts. And that kind of stuff that is not glamorous, and not usually done by, you know, good looking people with nice haircuts, you know, that you really have to that business development piece, and that cash collections got to be a passionate part of your day, just like whatever your craft or your skill or whatever brought you to that business, I always wanted to bring it up. You know, we've done some gout studies with these revolutionary new infused proteins that have fundamentally cured gout for a lot of people. And it was a couple of young guys who are genetically predisposed to gout, who couldn't work in their 30s. And they went through a study and they're still got free, as you know, I've gotten emotional letters from all those guys. And like that, that is just, you know, so great.
Ronald Skelton 26:44
I got it. So now is the point of the story here, we've, we've we've looked at for business, you found something, you've acquired it, you found a few things in there. One of the things the entrepreneur and he's not going to let this slide, you mentioned that your cell cycle, like from the day you close the business, you know, see a client to the day you put money in your bank was sound like it could be like 120 130 days, it was at what was the Soul Cycle, when you got it, were you able to fix that at all?
Unknown Speaker 27:13
A little bit. But I found a better way around it. A lot of this particular when you're dealing with a big global pharmaceutical company, who ain't we've done some big Alzheimer's studies where we're one of 600 sites across the globe. And when you're a fortune 50, CFO, you're dealing with a $2 billion clinic, I mean, we're not even a rounding error. So they say, well, the financials of this, say, we're going to pay you every 180 days, take it or leave it. And so you take it. But as I go through work through my overhead numbers, and how we structure payments and upfront costs, I build in a probably 100 Day collection cycle in and then you know, put an additional 2% in overhead to cover the cost of capital. So I can I can fund that. And then suddenly, I'm not stressing about cash, you know, I've got enough money to maintain a line of credit. So I keep the business operating until we get cash, they always pay, you know, I've never well, that's not true. Almost always they pay you. They've never, once you've honestly done the work, and they're happy is complete, they're gonna cut you a check for the full amount, they're not gonna hide the neck of the snowball, that's, most doctors are always fighting with Blue Cross about this and that we don't we don't have that. Right. And if we're even even when there's a contract in place, if we find out it takes more effort to do a particular procedure, or it's harder to find patients, you know, I've almost always been able to reopen up negotiations on the contract and get our costs covered. But it's you have to find creative ways around that. And the fact that I don't whine about cash collection cycles, or send them nasty grams every couple of weeks when I'm waiting on a check makes us a little bit easier to do business with than other sites. And I will tell you, it's a you know, it's a game changer. But it does make it easier for for us to maintain cordial relationships with financial financials get tight.
Ronald Skelton 29:18
It's so critical that a lot of entrepreneurs don't even like, you know, especially new entrepreneurs out out of school, they don't get that if you've got 120 130 180 day cycle from the day you do your work to get today to get paid. You have to become an expert in cash flow management businesses, most businesses don't die. And I've done a lot of research on that most businesses don't die because of there was a bad idea bad market fit fit a lot of those die off fast, right? Unless you've got some VC backing stuff to hold you through a float to try to create a market fit. There's die fast, but the companies have been around two or three years there. They die because of cashflow management more than anything else. Right. And you're stepping into This new, it's yours now, to have the foresight to look at that and go, Okay, I'm gonna have to put a system in place to manage this very carefully. I'll say kudos to you, man, that I have a knee jerk reaction. If you told me I'm looking at something, you told me It's 180 Day sales cycle from the day I do my work to the day I, I close, I want to know how much cash reserves the company has, and how we're going to hold them there. Right? Because that's my biggest concern is like, you know, you know, and I don't have a lot of cash laying around. I'm a real estate investor by previous trades. So I've got a house buying addiction. So there's a bunch of money later on, like, I want to put it to work. So I'll go buy another house with it or so.
Unknown Speaker 30:40
Yeah, I think we probably have a little over probably over a little too much cash reserve, just in that's just part of my fundamental nature, it gives us a lot of flexibility and going after, we did have a bit of a niche in our world, those clients are a little longer to develop a bit harder to work with. But it pays off down the road if you've done it well. So we probably are sending out a bit too much cash day to day, but I'm reluctant to put that out to work. I can't get my hands on it if we need to cover a month or two. Until that that happens.
Ronald Skelton 31:15
And you almost have to for what you're doing there. There's talk about you got my curiosity, I heard Gallatin heard old timers and stuff, what's the coolest thing you've ever done a clinical trial and to help out with alternative sounds pretty cool. A lot of people are impacted by that.
Unknown Speaker 31:29
Yeah. Think the the GAO was the most compelling one, just from the just a moment of it. And you know, this was, until very recently, very healthy guy working out all the time, good diet, I've had very few health issues just because of age, they're coming up. But you one thing in general, that the best thing that happened to you that was unexpected was the connection I've developed with our patients didn't occur to me did just didn't cross my mind. But then the first year or so I did some patient recruiting myself calling people out of the database or somebody to respond to a Facebook ad and you're on the phone with people. And you know, a big swath of America is not well educated, they don't have basic health, nutrition information. They don't they know they have diabetes, or they have gout. And they have heart failure, but they don't understand the underlying drivers of it. And if you're on Medicaid, or you don't have health insurance, and a lot of people come into clinical trials Don't you know, you're you're kind of a lost soul, a very complicated world. So you're getting to know these people hearing their stories. And they've gotten particular because it's so painful, it's so debilitating. And then on these, it's bit of a technical issue here, but a lot of new drugs are infused proteins, and they're very complex, and your, your immune system doesn't like them sometimes. So you can go into anaphylaxis very quickly. So when we're doing gout studies, we have the patients here for six to 12 hours in the clinic. And, you know, we got in the habit of you, we do the dosing and the assessments in the morning, they're just hanging out, we're drawing blood EKGs, and that kind of stuff. But you know, lunchtime, we'd have would sit at the common table in the work room with the patient, the staff, and just everybody, I'll bring him lunch for everybody to get to know everybody and hear their stories and all of that. And then again, there were a couple of guys, there were farm workers from way out in the country. And we're always we're all North Carolina, and you know, they were a little overweight and their diet was horrific, but they probably burned 1000 calories a day, but they both had gout and they couldn't work and they just weren't able to feed their their kids. And so being able to you know, put them on the study drug and monitor them and you know, and this was the first time they had really spent time with a physician to learn about gout you know, they've been hustled from one free clinic to another where they got the best of those clinics could do but you know, when you come to my clinic clinic for clinical trials, the doctor wants to spend an hour with you talking about the stuff please do it we just build a pharmaceutical company for that you know, so that is your probably the best unexpected thing that that happened is the My my my connection my emotional connection to our patients and how they're treated and what we can do for them
Ronald Skelton 34:25
so I feel free if you if you're working with stuff that can put people in that situation the amount of care you have to give them and watch over them you're going to build a bond with him because that when that happens like that all like they wouldn't let me do the allergy treatment you weren't like that was too low of a dose that was just too risky. If you're gonna go into into shock like this, this is not for you. So luckily if something happened over the years and you know my allergies are nowhere near what they used to be. There we've had
Unknown Speaker 34:51
that happen several times are one of our physicians is an ER doc and we the first time we got through it was fine. But we were unhappy if we were not. So he came in rewrote our policy, or we call it severe adverse event, your fusion reaction. So we built a crash cart, we had the fire department come out several different times walk through the building. We know down to the 15 seconds of these three signs, these two drugs are injected, we get the oxygen we call 911. And the second time it happened, within four minutes, that patient was in a EMTs gurney and within 12 minutes they were in er, in the local hospital
Ronald Skelton 35:36
for political lives moves so fast, you go from, hey, I got bumps on me. I can't breathe, you know, for me and my throat swelled shuts what the? I just, they that's why they read they read it to know my throat and know, my lungs. And, ya
Unknown Speaker 35:51
know, my our medical director, Richard Montgomery is a retired ER doc and he's the coolest guy in the planet like he sees it. Yeah, I've seen a couple of young guys die. You know, peanut reaction, and we just didn't get here in time. That's not happening here.
Ronald Skelton 36:07
At home, it sounds horrible. But at home, I hit myself with an epi pen. I keep children's Benadryl on on the liquid. And I'll down the damn thing. Because you know, I'm like right now, I usually live remote. Wyatt, I'm living in the Redwood Forest of California. I think it takes 25 minutes for an ambulance to get here, at least.
Unknown Speaker 36:26
Right? One thing to keep in mind is that in general, the epi pen hit only lasts 15 to 20 minutes. And if the underlying causes resolved, you're gonna go back in and apply access. So if you've ever hit that pan, I've encouraged you to get to the ER,
Ronald Skelton 36:38
yes, I mean, that's exactly what you. So anyway, sorry, we went off on a tangent. I have a personal relation to that. And it's not fun.
Unknown Speaker 36:48
Well, that was I think that was the one time I saw a really profound like a doubt on my wife's face about what where I had taken us, as I had to call her and said, Hey, by the way, this patient we had today with anaphylaxis, and they're in the ER and yeah, so it's like we we came back, we talked to the scientists developing the drugs and our physician was great said, Hey, this is this is a risk. You know, we when you're doing research or when you're on the cutting edge of medication and therapy, there is some risk, and that's all in the consent. And, you know, but it's still it was a very discombobulating moment from an probably would not have had in the donut shop.
Ronald Skelton 37:30
Right? Some people allergic or certain things in there. Oh, but the going back to the business side of it, how do you secure protect yourself from something like that? Is there insurances you have in place is there? I mean, I know there's disclosures and all that other stuff or waiver, you risk waivers and stuff people sign when they do clinical trials, but there's still some risks associated with like, you know, I don't care what that guy signed if one of those guys dies on your floor, his family suing you.
Unknown Speaker 38:00
Right, right. It works better than you would think. You know, for a while malpractice was the kind of a media darling and there was a lot of Sturman drug and you know, there. I'm not saying that system works perfectly, but in general, you will kind of under FDA regulations and federal legislation. You know, the pharmaceutical companies are largely protected. We're certainly indemnified for any drug related adverse event or damage. Even if it's indirect, we did have one patient who was on the same route study, but the drug is we deliver it with some immunosuppressants and she got a UTI infection. They got what severe was hospitalized for that we were indemnified against that as long as we follow the protocol, and we do everything to the letter of the protocol as it's written, and we're obsessive about that. We're just obsessive about not screwing up, which is why you can take two hours with a patient. You know what, I'm not rushing you to any visit because we cannot have a mistake. We store the drug appropriately, you get the informed consent signed, you spend time talking to the physician before your dose, you know, if your research study the academic medical center, you might talk to a nurse or an internist and hear you talk to the doctor about the risks. And so there's really no legal liability there. As long as we've done everything right now, if we have not handled the drug properly, or if we've missed, dosed or missed information, then it comes a bit grayer. But I've got a blanket, professional liability policy for clinical trials that just covers any licensed provider who does work for us for the required amounts we've not even when this guy went into anaphylaxis, you know he called and we covered his deductible and coinsurance Sure, medical company for Um, sort of a company reimbursed us for that, you know, we sent him a stack of Chick fil A gift cards, you know, just to, you know, instead of worrying about this, go go have some meat, you work around that stuff. And it's less of an issue, we feel very comfortable. And, you know, because we don't do treatment outside of clinical research or malpractice premiums is actually quite low. And again, we're just we are emphatic and diligent when it comes to protocol adherence, documenting deviations quite screen very carefully when I hire people into the clinic, because most nurses and a lot of medical assistants, they see 30 patients a day, their paperwork, sloppy, it's just gonna get done with the end of the day, it may be right, it may not be right. And in that environment, that's fine. Here, it's not.
Ronald Skelton 40:47
And that paperwork, right? Oh, gosh,
Unknown Speaker 40:50
I've had to let a few really good people go because they just didn't, you know, one hand, we've hired a couple of grizzled, old ICU nurses who, you know, if you were sitting in that Gurney, that's who you want, making sure you don't die. But their stubbornness, and an approach to work just doesn't work for us. And that's just a quirk of the of the business is not to comment on any any health providers capabilities.
Ronald Skelton 41:19
You know, it's culture to like, you know, you have to figure out what your environment, what works best for your environment, and make sure you have the people that are willing to play that way. Let's let's we're running out of time, I just realized what time it is here. Let's talk a little bit about what what's the future look like for you guys? Are you gonna grow through acquisition at some point? Or do Aqua hire at least you know, maybe acquire other trial clinical trial companies to have to staff up? Or what's your thought process on?
Unknown Speaker 41:51
So? It's? Well, good question. We're, my wife and I are having a philosophical discussion about this right now. We're at a crossroads with our medical director who came with the business. He's retired. He's fabulous. He's probably done 300 clinical trials. He looks like he stepped off the set of the TV medical show, it's great demeanor, you know, but he's retired, he wants to start traveling. And so we've got to find a new medical director, we have a couple of opportunities to grow the business, we've looked at a couple of sites. There, there's always two or three for sale somewhere in the country, often in Los Angeles, or Miami. Because Trieste in times of York City, I'm reluctant to get myself into a situation, I've got to travel weekly, again, just for quality of life. And who wants to do that? That's a human. Yeah. So that that kind of visit we I got one of my son's is up at UNC Asheville, in the mountains, and there was a coffee shop for sale, the cool little downtown area, talking to the owners trying to figure out how could this be another business? I'm not serious about it. But if if it worked out, right, I would look who would not love to own a coffee shop. And in a college mountain town, I mean, it's you can make a movie about that. I there is a one thing we may end up doing, I think the two most logical things are to acquire adjacent land and build another building and find some investors. I got to find the right investors, though I don't you know, most VCs and private equity folks would just even if they know health care, they don't know clinical trials. And this doesn't work the way you think it does. And I've just got talking to some family offices, who do real estate based lending and that kind of stuff. So if somebody could give me two or $3 million, and come back and not bother me for four or five years, and then come ask me some questions at that point, that's the investor I want. I hadn't done that one yet. But that's, that's that would take I'm in negotiations with two other academic medical centers to stand up a business development entity to take over there. They're not as good as I am at finding new clients, and getting new new studies and new biotechs on board. And a lot of that comes I think, just from my many years of knocking on doors and business development, and understanding that no, not to be rude. No, doesn't mean No, no, he's just not right now or no means you haven't convinced me you're really ready to do this. So that may be what we do rather than expanding because there's no you know, the the regulatory overheads minimal. That's work. I really love that I think I can build a good business around that. So it's either going to be an expansion of the current operation and on a different footprint. Or it's going to be the creation of a, you know, a services based entity that you know, that serves as a vendor to companies like ours, and I'm well off connected, it would be easy to find new clients.
Ronald Skelton 44:54
That would be brilliant if you did the service based one because then you're gonna foot in the door. You could almost groom them to be an acquisition of yours later, right? If you looked at it, you could bring on clients, help them, improve their business processes, and then groom them into something that would fit really well into what you did such a hard shift when you when you made that final, final acquisition of the entire entity.
Unknown Speaker 45:18
I like that I thought about that. But that's great.
Ronald Skelton 45:22
All right. What can I do myself for the audience do for you? I heard kind of an ask in there, if you know anybody out there that does real estate investing and wants to be a very passive investor in a clinical trial. Maybe there's one one thing, but what can we do Is there anything out there that, uh, you know, a resource or person or anything that my audience or myself can do to help you move your game forward.
Unknown Speaker 45:47
So me personally, if there's any place, you can post my website, so I can build some backlinks, we're starting to build a organic lead generation engine. We are right now, if you Google paid clinical trial within 10 miles of the clinic, we come up on top, but we want to show up in a Google search for somebody who's researching Alzheimer's symptoms for their dad. So they would consider clinical trials as an option in that. So that very tactical and happy to do the same. But more broadly, anybody who hears this gets go sign up for a couple of clinical trial sites, get your name in the database, and be seriously considered and seriously consider entering a clinical trial, particularly if you're female, or African American or Hispanic, because those folks are, those demographics are poorly, badly underrepresented in clinical research, and it has an impact on our overall health care. You know, most people, they don't think about it, because you know, it's scary, it's a new medication, very safe, very, not completely safe, obviously. But you know, very controlled, very monitored, you're gonna get probably some of the best health care you've ever had. We spend hours with our patients, we need to know everything that's going on. And we know particularly as we were doing Alzheimer's treatment, now we have two or three people a day in you who have mild cognitive impairment or moderate cognitive impairment, their life, quality of life is declining rapidly, or families are very concerned. And there's nothing to treat that that others a few things Eurosceptic manage symptoms. But we've picked three and negotiates with a fourth biotech that had interesting new compounds that have, from a biological and science standpoint, the power to modify the course of that disease, and we need people in the clinical trial,
Ronald Skelton 47:41
I think I was reading reading something that I'm going to butcher this I know I am, over in Australia or somewhere where they're using. They're saying that one of these, like I said, I'm not a medical guy. It's either Alzheimer's or dementia, it causes a coffee cost calcification of certain spots in your brain, the receptors, and they're using electrical stimulus to break that up, and a different way. And they're actually having huge results in that. So I love that there's, there's just a whole diversity of both medical medications, procedures and stuff like that you guys do just the medical side of it, do you actually do procedural side stuff, too.
Unknown Speaker 48:21
We don't have a procedure room or you know, infection, the appropriate infectious field control to do that type of stuff. So we'll work with local doctors and local clinics. And we're looking at device studies. Now, where you new we've got a new doc working with us. He's a well known urologist. And there's a whole bunch of new devices out there for treating urinary incontinence and bladder control. And so we're starting we're starting with that, you know, we're looking for a couple of things that we're one drugs that are procedures or therapies that address an unmet need are things that do it better. You know, there's a there's a bazillion different hypertensive on the market now, but we're working with a biotech company that is working on a once a year or twice a year injection to control blood pressure. And you know, the biggest issue with blood pressure is people just stop taking their meds, you know, compliance and adherence. And if we can do a shot once a year versus a beta blocker every day, far fewer people are going to die of heart attacks and strokes. So you know, that's, that's the type of stuff we're looking for.
Ronald Skelton 49:33
I'm absolutely guilty of that. When they put me on blood pressure, my blood pressure is fairly high. And there were other issues and soon as we've cleared out all the issues after going through scan after scan, like there's nothing physically wrong with your heart. You have no blockages and everything like that. That blood pressure medicine was making me feel ill so I just was like, Okay, I'll, I'll run with high blood pressure. And, like, you know, we talked to the doctor, he says there's no real risk 15 years from now. 10 years From now, probably, you know, you're gonna wish you're taking that all the time.
Unknown Speaker 50:03
Well, that plays into dementia vascular. So there's Alzheimer's, which is a chemical process. And there's vascular dementia, which is, you know, the damage to high blood sugar blood pressure does to your brain. That's, that's the one that's most addressable. So I'd encourage you to speak with your doctor and try it. There's lots of new therapies out there, I'll send you a link to this clinical trial, you may want to try it
Ronald Skelton 50:25
out. We're actually over our hour, but then I can talk to you forever, there's just you're in an interesting, you're not only did you choose something that will make your money, improve, prove, you know, to provide for you and your family and your and generations to come if you build it, right. You've also you've got something that's making a difference in the world. And not everything does, like I'm interested in coffee, roasting companies and stuff like that. It makes a difference. I guess it keeps some of these guys from murdering people. Some people are really grumpy with other coffee, but not in a, that's in a joking sense. And in a real sense, you're working in an area that makes a huge difference in the quality of people's lives and the longevity of people's lives. And they're, you know, again, kudos to that. Because not, you know, not all of us can, can can work in that space. But I really like what you're up to. So
Unknown Speaker 51:16
I appreciate that we I feel very lucky to the day's hard day's work, because it's a very complicated business. My wife thinks I was insane. And she makes me the devil chaps might have been a better call. But I never doubted that it does feel very good to be in this pot. Thank you.
Ronald Skelton 51:31
Yeah. Well, we're at an above the hour and I didn't plan plan for you. I didn't prep you to tell you we could go too much over that. So I don't want to hold you here all day, because we could talk for a lot longer. But is there any, like if there's anything we missed, I could like mentally wish that we would have talked about this so that the world would know. Are we leaving anything out?
Unknown Speaker 51:53
I don't think so. But you know, for anybody who's listening to this down the road, if you want to shoot me an email, or just chat about your thoughts on becoming an entrepreneur, whether it's clinical trials or not, I'm happy to share and chat and be informal resource. I can't get seriously involved in a sort of time commitment way. But just three or four people found me through the other interviews where they'll call me and I'm looking at this deal or just thinking about that, and just, you know, how would you handle it? How would you react and I enjoy that. I would say the one thing that I miss, you know, not being a Deloitte or a Quinta quintiles is kind of that that peer group where you can just talk about these things in a non intimidating open forum way. So when people reach out to me through through things like this, it's personal satisfaction. I like to help but I enjoy it. I mean, it's a part of my brain don't use much anymore, because I've changed my role. And that's, that's really the only thing I miss. From those days, I missed my delta diamond double status when I have to fly because I got it said the back. But you know, that's those are the only two things I really miss about.
Ronald Skelton 52:58
I used to work for a government contracting world for big, Lockheed Martin auto set, and traveled so much, I got a lot of the free flights and all that stuff with those guys. And I don't miss the travel. Matter of fact, I like to travel now that I like to go might get off here and go drive over to the beach, right? My idea to travel now is I'm going somewhere, I'm really going to enjoy being there. When that's the reason it's worth the trip. Yeah, I do appreciate you being here today. Again, thank you for being on the show. If you ever if you ever need anything reach out to me, I'm willing to help. And the other one is we have a a mergers and acquisitions kind of hang out like a networking thing. If you get in the acquisition mode, you want to ask a group of people questions, a lot of people from my show, join that we do it twice a month. So it's posted on LinkedIn and some other places. So if you get over your work, you know, and we talked about sourcing and all kinds of cool stuff. So if you if you get in that mode, where you're looking to acquire again, join in with our group and hang out with us a little bit and we'll help each other out.
Unknown Speaker 54:03
I appreciate that. I will put that on the list. Alright. Thanks. Have a
Ronald Skelton 54:07
great day. Thank you guys. That's the show. Hey, it's your host, Ronald Skelton. I want to thank you personally for watching the show today and invite you to call our new hotline 918-641-4150 That's 918-641-4150 Call us and tell us about our show, ask questions, suggested guests or even tell me about a business you have for sale and we'll reach back out to you. Again that number is 918-641-4150 call our hotline leave us some information. Thank you. I don't want to announce our new channel partners the ITX marketplace since 1998 ITX has created 5 billion in value by selling more than 225 it businesses in 20 countries. IDX works exclusively with it enabled businesses generating between 5 million and 30 million who are ready to be sold will eliminate decision makers who are ready to buy for over 25 years ITX has developed industry knowledge that helps determine whether a seller is a good fit for their buyers before making the match ITX mergers and acquisition marketplace we are partnered with has a proprietary database of 50,000 plus global buyers seeking it service firms managed service providers, Microsoft service providers software as a service platforms and channel partners with Microsoft Oracle ServiceNow itself and the Salesforce space. If you have an IP enabled business, you're ready to sell. I want you to visit the I T exchange net.com/marketplace How to exit that link will be in the show notes visit them now. The investors and entrepreneurs professional mastermind. The investors and entrepreneurs professional mastermind combines that our traditional peer to peer mastermind introduced first in Napoleon Hill's famous book Think and Grow Rich with accountability partnering where your peers help you ensure that you set goals take action and get results. If you want to scale both hash roadblocks and achieve success faster than you might think it's possible, I suggest you take a visit over to tiepm.com That's T i e. P m.com. And check out the investors and entrepreneurs professional mastermind