Welcome to the TUSK Practice Sales podcast, the premier podcast featuring the industry’s most influential thought leaders, providing the latest insights and trends for healthcare practice owners across the globe.

Kevin Cumbus 

Welcome everyone, my names Kevin Cumbus, President & Founder of TUSK Practice Sales. We’ve been handling a lot of inbound recently and hearing from our customers, especially in the med aesthetic space, about the challenges around employment and keeping team members. It’s the struggle is real, I guess, is the way I would say that. And we’re seeing it not just impact revenue, but valuations, and I would say equally as important, like stress and train like your mental well-being. This is the hardest part of running and operating one of these businesses. So, we really wanted to bring this to center stage today and invite two experts and friends to join this conversation. So, Kipper and Jon, could you both take a quick minute and introduce yourselves starting with Kipper.

Kipper Doughty 

Hi everyone, I am Kipper Doughty. I’m one of the founders of JobSnob. My business partner Bree Black and I started JobSnob about six years ago. We are a medical, aesthetic staffing recruiting company focused really at the practice level, we fill all positions within the four walls of a practice, including medical directors. With the way the industry is going right now, we do a ton of injectors. We have a job board – It’s the only industry specific job board that exists, I believe. You can find that at JobSnob.com we also offer some practice resources outside of our staffing services too, that you can also find at JobSnob.com.

Kevin Cumbus 

Thanks, Kipper that’s awesome.

Kipper Doughty 

Oh and just to tell you my background, that’s probably important, prior to starting JobSnob, I was with Allergan for 14 years, I believe, as a business development manager, I was in the Dallas market for seven of those years, and then moved into the Beverly Hills market, which is where I met my business partner. And I think that experience in itself has provided a great foundation for the success that we’ve seen in screening candidates in this industry.

Kevin Cumbus 

You’ve had a front row seat watching this industry really get built, watch private equity enter it and see the consolidation of even a front receipt for all that. That’s impressive.

Kipper Doughty 

Yeah, I think I started in the industry in 2007.

Kevin Cumbus 

Goodness gracious. Yeah, a lot’s changed.

Kevin Cumbus 

Jon, can you do the same?

Jon Fidler 

Yeah, you got it. Thank you for having me, man. Jon Fidler, with Fidler and Associates, we’re an executive search firm. We basically go out, we work with multi-site healthcare groups kind of came up through the dental world, started working with a lot of private equity groups, and obviously they have interest in other verticals within healthcare. So, you know, obviously med spa is a big one for us. We do plastic surgery centers, we do chiropractic groups, optometry groups, really anything kind of multi-site. We focus a little bit more on the executive level. Kind of easiest thing is to bounce off Kiper’s, we don’t really do anything in the four walls. Ours are really, typically, like a regional manager up through a CEO and work with groups that are at startup and the doctor realizes they have a real business to run all the way up to, you know, groups that have, you know, multiple 1000s locations and help out with some of their senior level searches. So, we, you know, kind of bounce back and forth between all the industries. We’re starting to see a lot of kind of crossover, and they’re all, you know, built pretty similarly. So, look for, you know, folks with strong business acumen. But I came up through the dental side. I came up with Patterson Dental, about nine years ago, decided to spread the wings and see if we can make this work as I love connecting folks, and here we are. So, appreciate you having me on.

Kevin Cumbus 

Jon, thanks for joining. I’ll confess I am a customer of Jon’s as well. Jon is single handedly, brought more talent to my business than anyone else, and there’s no way that we get to enjoy the success that we’ve had without his support, mentorship and candidate selection. So, I guess I’ll start by saying, thanks, Jon.

Jon Fidler 

You’re welcome, buddy.

Kevin Cumbus 

So I was reflecting on a conversation and thinking about my journey as an entrepreneur, because the first business that I built was actually a dental practice, and I spent months in excel building out this, you know, 10 year pro forma, and how the revenue was going to come in, and what the expenses were going to be, and how I was going to depreciate the assets for tax purposes. And I was working on this model, I mean, I don’t know how many 100 plus hours I put into it, because I want to stress test it, and I wanted to make sure that this huge loan I was about to personally guarantee had a pretty good likelihood of getting repaid, because if you personally guarantee a note, that means they can come after your house. So, I wanted to really make sure I knew what I was doing. So, we went ahead and moved forward with the business. It was a fresh start. So, in-cap space and high retail environment, built out the entire thing from scratch. Had the team hired begin spending on marketing and advertising. Actually, had a full schedule heading into launch, and my associate doctor that I’d hired came in and said, “Hey, I’ve got another job. I’m actually going to quit” and left me without a dentist before I opened. I leaned on a dental friend who helped me. He was able to come into the afternoons, and we’re able to see patients for four or five hours a day. But we hobbled along. It was not the miraculous ribbon cutting and balloon ceremony that I’d envisioned. It was hard. And then on down the line I would have team members, again, this is pre-covid team members, come to me that I had spent time and energy and effort on training that we’d hired that were a receptionist at a hotel or were working at Cracker Barrel and just did a great job of customer service. And we brought them into our business, and we taught them the business of dentistry and how to you know, how to answer the phone and how to work with our patients. And then they come to me six months, nine months later, and ask for more money than we believe the job is worth. And I feel like I was held hostage. You know, in multi-site healthcare or healthcare in general, the margins are tough, and you run pretty lean. And I guess what it taught me was everything works just fine, until the people show up, and then it gets really, really hard. So, I guess I kind of wanted to open it up by saying, you know, our audience here is full of business owners that employ a lot of people and do wonderful things for their patients. But as you read the press these days, this has become the hardest piece of the puzzle with covid. It’s gotten worse, because we did see the great resignation. And now wage inflation, now margin compression, and the owners are feeling pinched every which way. For an owner that comes to you, Kipper with that concern, right, I’m losing people, I feel like I’m doing everything I can on the culture side, but team members keep getting poached. What’s the advice for someone who’s finds themselves in that dilemma?

Kipper Doughty 

I mean, I think that’s a real dilemma, and I think that a lot of people are worried about creating offers that are huge and big and they’re the most competitive in the industry. And while that is important to be competitive, I think people lose sight of investing in their management as well, because I think the management in a place can help create a culture that no one wants to leave. And I think that, you know, what we see is a lot of people flee because of toxic work cultures, or they’ve hit their ceiling on growth. But I think the biggest piece of the puzzle to at least start with is, how are we training our managers? How are we training our people leaders to make sure that they’re wrapping their arms around the whole staff and make sure that that staff feels like they’ve got a constant career path as well as a great work environment to come to every day.

Kevin Cumbus 

Yeah, Jon, what are you seeing at your levels in this world? I know we see business developments, guys, CEOs, COOs kind of hopping to the next shiny thing. What’s the what’s the conversation you’re having with the private equity investors these days that are suffering turnover as well in the in the executive seats?

Jon Fidler 

Yeah, I think really, we kind of start with talking to the group and kind of understanding their vision for the right fit that’s going to go into the role. And then kind of the flip side of that coin is talking to the candidates. And, you know, not everybody is on the same path or has the same goals or has the same kind of, you know, things we can leverage as a hiring team where, you know, it’s not like, you know, Kiper mentioned, it’s not always about the, you know, the financial package of what you’re offering, and you’re, you know, $10,000 or $20,000 more than the next role. It’s really about, is it a good culture fit? Are the expectations of the opportunity aligned with their experience? And, you know, sometimes folks get in there and they want to continue to grow their career path. Other folks have kind of gone down that career path, been there, done it, realized that’s not what they want to do, so they want to back up a little bit and get back into, you know, a smaller group and build things. So, I think it really just kind of starts with the communication up front of understanding this is what we’re offering and being secure in it. It’s not going to be for everybody and then finding a candidate that kind of fits that puzzle piece.

Kipper Doughty 

Yeah, I’ll add to that. I think that so many people like get these big packages like that, people are throwing money at them, but you really need to dig a little bit deeper and make sure that that’s the environment you want to be in, because you can throw money at something, but if you walk in every day and you don’t like where you’re working, or you’re not getting the opportunities, it’s not always all about the money.

Kevin Cumbus 

We’re in the process of closing a large transaction right now, and we have an associate standing the way of progress, and the owner has said, well, I don’t want him to be rich and miserable, so maybe we’ll just find a way to make him happy and not rich. So, we’re seeing that for sure, Kipper. When I’m thinking about crafting that job description and really being different and setting myself apart from, I mean, we see your lists all the time Kipper, and the posts that the new jobs that are out there, I felt like, I feel like an injector can get a job anywhere in any major city tomorrow. What’s the guidance for the employer to set themselves apart?

Kipper Doughty 

Well, first of all, we help them a lot with crafting the right job package, so making sure the benefits aligned with what the needs are out there in the market, making sure that the compensation is market rate, just making sure that the entire package is attractive. And then also they have to have, you know, it’s all about brand reputation in the market, and one of the benefits of working with a recruiter is, let’s say you had an employee that left, and they’re creating some negative publicity for your brand in the market. We have the opportunity when we get candidates on the phone to educate them and set that brand right and make them understand why, maybe they’re hearing that at least correct the narrative. And then also growth potential. Just I think the biggest thing is making sure that every candidate comes on board understands their path to growth within your practice.

Kevin Cumbus 

For producers, it’s interesting, when I was in the business of hiring dentists, there was so much debate and negotiation around what percentage of collections they were going to receive, and not enough focus on, look, the business does a million dollars of doctor collections like so you can, you can get paid 35% down the road, but you’re going to have $500,000 worth of production relative to here. So, I feel like there’s, there’s a massive gap there that still needs attention, with respect to producers in these worlds.

Kipper Doughty 

Producers, understanding that they the thing they need to really focus on is how to generate more revenue versus the percentage? Yeah, I agree. I mean, the percentage has to be fair, for sure, but yeah.

Kevin Cumbus 

For sure, but there’s an acceptable range of what’s fair. Then there’s how much production is there out there.

Kipper Doughty 

But I do think that comes back to training, and I think that, you know, if the owners are putting the amount of training they need to into the producers to teach them how to create these books of businesses and how to improve their procedure value per hour with each patient, I think that all comes hand in hand.

Kevin Cumbus 

Yeah, you mentioned something about negative publicity in the market. I want to go back and double click on because, you know, let’s just say this is the world that we’re in, right? You typically sign an employment agreement that comes along with a non-compete, a non-solicit of existing clients, and, many times, a non-disparagement agreement. Right? These contracts are built based off of somebody else’s experience, and the attorney says you need all this stuff in them, and John, we’ll come to you in a second, but Kipper, what are you seeing on the job descriptions today for producers inside of medical aesthetic practices?

Kipper Doughty 

As far as the non-competes, non-solicitations, non-disparaging? I haven’t really seen the non-disparaging aspect of it, which I think is a great idea. I think it would be also a little bit hard to pinpoint who is disparaging you, if it is happening. But we’re definitely seeing 100% non-competes and non-solicitations in almost every state that it’s legal to do that. If it’s not legal to do the non-compete, they’re for sure going to have the non-solicitation in there. We struggle with that every single day.

Kevin Cumbus 

Jon, what about you? Yeah, likewise. And we do see the disparagement quite a bit. And I think, you know, from a standpoint of a group, I think it says a lot about the candidate and the group. One thing, you know, obviously, you know, we all get into these roles thinking we’re going to be there forever, you know. And that’s the idea that everybody starts with, and then it just kind of, you know, you started 100 and it goes to 95 and it goes, and so, you know, it ultimately gets there. But I think, typically at the executive level, there’s kind of an understanding that, you know, if you put 2,3,4, years in, five years in, and you have a great run, and those sorts of things, you know, I’m always of the belief of, you know, we want to hire people that want to grow and get better, and whether that’s at a CEO level, where they go from a, you know, 30 location group up and they get an offer at a 70 location, you know, I think that it says a lot about the you know, relationship and how they work with folks and are transparent, you know, from an employer standpoint and a candidate standpoint or employee standpoint, that, you know, we’re going to be as productive and friendly and all swim the same way for a while. But ultimately, if there’s, you know, something there, and sometimes the employer wants to go a different direction too, it has nothing to do with the candidate. So, you know, I think it’s just kind of starts with that transparency of that but you know, we do see those types of, you know, agreements, and when we’re looking at candidates and we’re looking at groups too, you know, it’s a small world, you know, it’s med spa mayberry, a little bit. I think, from our standpoint, those things are out there in the marketplace. And so, I think you want to do everything you can to manage that. And, you know, we just call them the grown-up talks. You want to have a grown-up talk and, you know, end things peacefully.

Kevin Cumbus 

We’re working with a large number of med spas right now and dermatology practices and plastics that have injectors out. Let’s just call it what it is. And they clearly didn’t work with the two of you before they hired these individuals. And let me tell you, kind of the downstream impact of that, any producer inside of your business is contributing to EBITDA, which is contributing to valuation. And these folks that are investing in medical aesthetic practices are smart enough to figure out the accounting mathematically to get to the EBITDA, but what they’re really trained to do is identify risk and try to point out every piece of risk that lives in the business so they can pay less for your business and for deals we’re representing. One of the first questions we ask even before onboarding now is, “Do you have employment agreements with non-competes for your producers? And if you do not, can we get them in place in advance of going to market?” And for those of you who don’t know if you’re going to put one of those in place, you typically have to pay them additional consideration to add that to the agreement. So, I would just kind of let’s just kind of ring the bell here one more time. It’s imperative, and hopefully the whole market moves this way, where you add that non-compete, non-solicit, and maybe even the non-disparagement agreement language in there.

Kevin Cumbus 

Kipper has it been an evolution? Because I just wonder why so few that we’re working with have these contracts in place? Has it been a bit of an evolution recently, or was it not that big of a deal? Because I never thought about selling my business, and we were always friends that celebrated Christmas together. It was more mom-and-pop relative compared to “All right, we’ve got to maximize EBITDA and we’ve got to sell for 10 times?”

Kipper Doughty 

I think with the entry of private equity, you’ve seen it a lot more to your point, basically for a need, but also because these jobs are becoming more attractive at each different location. So, these injectors are wanting to leave to level up, so to speak. And so, it’s important to protect your business. It is definitely an evolution, and I think it’s in parallel with the growth of private equity within the market, or the infiltration of private equity.

Kevin Cumbus 

Well, let’s talk about private equity a little bit you can I don’t think we can talk about medical aesthetics without talking about private equity. It feels like one of the major drivers of the growth in the industry, frankly. Everything we read shows that, you know, medical aesthetic practices have earned about 20% per year every year for the last five years, which tells us that, man, there are a lot of bad businesses out there. And you got to kind of wonder, like the who like, they can’t all be great. I’m sorry we’re looking at a lot that are not that good. Put yourself in the injectors seat now for a second, what business do I want to work for and why? What characteristics should I be looking for as I’m making my employment decision? There are six people here in Charlotte I can go work for tomorrow, what are the questions that I should be asking the owners thinking about my career trajectory and obviously my income as well?

Kipper Doughty 

Yeah, I mean, I think that’s a great question. I think the number one thing is, you know, everybody has, let’s say you come to the table with a great job offer and a great compensation package, and you’re telling them they’re going to get, you know, let’s say 20% of revenue that they bring in. Well, you’ve got to have a marketing plan and a marketing team and a marketing budget to drive that business in. And if you don’t know how to do that, then you’re going to have an injector sitting there twiddling their thumbs, without the business there to have. So, I think that’s one of the biggest questions I would start with, is, what’s your marketing plan? What’s your plan to drive additional business in for the patients that I’m going to be seeing, what will you allow me to do to drive business in for the patients that I’m seeing?

Kevin Cumbus 

Great, I haven’t thought that that layer down, that’s exactly, that makes perfect sense, right? Hey, what are you going to do to support me? Not just train me like I’ve got the clinical training, but how are you going to make patients appear for me, right? Or you give me the autonomy to do it for myself.

Kipper Doughty 

We see that a lot. We see, on both sides, we see employers who expect an injector to come in and do the marketing for themselves. Well, injectors aren’t trained to do that. That’s not their job. Or vice versa, where they say that they’re going to do the marketing, but maybe they don’t have the budget or the know how to do it. So, I think it’s just an important question.

Kevin Cumbus 

Jon, same question to you with a little slightly different twist, right? You’re working with executives that are getting placed inside of private equity backed groups. How do you tee them up for success, so they come away with more knowledge about like, what the strategy for that business is, what the economic upside looks like where they are, how many days, weeks, years away are they from a possible recap and monetization of equity? There’s a lot that goes into that.

Jon Fidler 

Yeah, yeah. And we just, you know, request, obviously it’s different for everybody, but request, the transparency up front and, you know, we want to make sure that we have the candidate, not only on the you know, piece of paper that they’ve done and, you know, executed and kind of gone through these certain things. But really understand when they walk into this, is it a three year, you know, commitment, and they, you know, then, you know, see where the chips fall. Or is this, hey, you know, we want to grow organically, you know, for the next five to seven and then turn, I think those are different types of approaches, from an executive standpoint, of decisions that they need to make, and, you know, areas that they focus on, and what are they prepping, you know, for the sale or for the transaction. And so, you know, really, from our side, we just ask for the communication to be open. And again, you know, kind of referring back to the beginning of the conversation, it is not going to be the same for everybody. And I think when you get the right person, you have to expose what we’re trying to do, what the vision is and what the timeframe is. And now there can be a million curveballs, you know, in between now and then, or somebody adds an extra zero to an offer, and things speed up. And, you know, there’s all these sorts of things. But I think if everybody kind of goes in understanding where we’re at, you know, those conversations between the hiring and the transact, you know, can maneuver their way. And everybody, can kind of come to an agreement on how to approach it and make those decisions at the time, but really, it’s just kind of setting the stage up front is, you know, where we see the biggest gap with a lot of these hires.

Kevin Cumbus 

Those hires at the executive level of MSOs, they feel a little more transactional, frankly, right? So, I’m going to sign up for a five-to-seven-year core of duty in hopes that I’m going to take, take home some options and equity that vest over time, and ultimately, I’m able to sell those and, you know, come take care of my family, right? So they everyone I know who’s in that world really thinks about really five to seven year sprints, yeah, relative to Kipper and I think I wonder, with your team members that that’s not on their radar at this point, although we are seeing some providers start to get equity in transactions if they’ve deemed to be like, if they deem to be too important for the business, like you have to find a way to keep them happy and engaged and aligned with the other shareholders.

Kipper Doughty 

So, for the first time, we’re seeing an equity component to some of the offers that are going out. And it’s not incredibly popular, but it’s definitely a differentiator.

Kevin Cumbus 

What does that look like? Just give us a thumbnail sketch of what that could look like for a seasoned injector.

Kipper Doughty 

I mean, yeah, I’ve seen a lot of different deals, and it really depends on the size of the business. Obviously, 1% of 5 million is different than 1% of 20 million, you know, it depends on the size of the business. But we’ve seen everything from, you know, half a percentage upfront, and then you grow each year the longer you stay with the company. It really incentivizes retention, and for someone who’s like a great injector to stay with that organization. So yeah, we’ve seen sort of a tiered structure. If I have seen anything.

Kevin Cumbus 

I feel like the IQ, deal IQ, valuation IQ, of the medical aesthetics industry has really ramped up. There’s great conferences and content education, but as that knowledge gets disseminated throughout a practice, you’re going to have more and more looking for that little piece of equity that you know could be very meaningful to them and their families. I can see a world in which providers all get a piece of the pie here.

Kipper Doughty 

Well, where it’s really important is in states where a nurse practitioner can be their own medical director. So, you need to incentivize them to stay with you, and that would be an equity component.

Kevin Cumbus 

Yeah, yeah. And Jon, how common is it at executive leadership level, where, if I’m, if I’m a private equity group, and building an executive team for a 40-location group, how far down the org chart will I be offering equity?

Jon Fidler 

So, you know, initially, it starts with the C level team, you know, the senior level leaders, or, if you’re, you know, maybe a little bit smaller, and they don’t have a C title yet, there’s at least a clear path to that. You know, those are typically things that candidates want to know. You know, I think we have a study of, like, 83% or 84% of, you know, equity options don’t, you know, mature and happen, because either somebody has left or, you know, wherever it ends up. And I think what it does, though, from a standpoint of, you know, a candidate, it obviously makes them feel like they have an investment in the team, and creates a long term relationship and investment from them, just to make sure that they are, you know, working in the best interests, you know, of the group and the timeframe that they’re allotted, and making sure that they have the largest impact. But, yeah, I think it’s definitely something that folks, from a candidate standpoint, you know, want, and you know, it’s, it’s always part of the negotiation, especially at the senior level, you know, going down. I think it just kind of depends on the size of the group and what the standard is, you know, as Kipper is, seeing this with injectors and producing employees, I think, from our standpoint, what you wouldn’t want is a senior level leader coming in at, you know, a Senior VP, but there’s no C suite, and then finding out and you know, producer has something, and then you don’t, you know, it may cause a little bit of a rift. So, I think it probably vary, you know, by group, and it becomes more common. I think, you know, just the percentages and those sorts of things will, you know, correct themselves.

Kevin Cumbus 

I’ve been thinking about the evolution of consolidation in these two industries, right? So, John, we you and I both have a long history of dental and have expanded into all these newer industries, and med, spa, for one, just feels like it’s early innings relative to dental. And one of the things that dental struggled with was finding great executives who know how to build systems, implement systems, effect change, lead, manage, guide, understand multi-unit healthcare, understand, like, how do you talk to a dentist? All of those things in here. I mean, we’re in a front row seat now for private equities investment inside of the medical aesthetic space, and my guess is there’s not enough homegrown talent inside of these practices to meet investor demand. So, my question to you is, where do I find that talent? If I know I need to get a controller or an operations person, maybe it’s a CEO, maybe it’s a Director of Operations, covering 12 locations. Where does that talent come from?

Jon Fidler 

Yeah, yeah. I think with kind of the evolution of private equity getting involved, they’re looking at it more from a business perspective than, you know, in an individual industry or segment of the industry. So, you know, a lot of times there are folks out there that understand, you know, that work in a med spa setting, or working with a multi-location group that’s at a smaller group, so they can kind of step in and, you know, you just trust they have a higher ceiling, and can kind of handle going from, you know, 10 offices to 25 I mean, it’s a big jump, but they understand how it works. So, there’s a learning curve, maybe on the leadership side, but not so much on the business side. You know, I think this side of the industry, on the med spa side, is going to benefit being a little bit behind, you know, in all honesty, because you’re going to find folks that cross over from, you know, different sorts of healthcare. There’s a learning curve with any new, new role for anybody, whether it’s the culture learning curve, whether it’s, you know, how they’re structured, or the processes, it’s going to be different anywhere. So, I think it opens up, if you’re open to different multi-site healthcare type world, that learning curve will be a little bit shorter. They’ll obviously have to learn the lingo and kind of how things flow. But we’ve seen a lot of success in that, and then we still see folks going outside of that to any kind of multi-site type of environment, whether it’s retail, whether it’s hotels, whether it’s hospitality in some form or other. So, you know, I think as private equity comes in, they’re looking at it more as a business, and so they’re open to those other sorts of verticals kind of coming in, but definitely, kind of the direct crossover is always the easiest. But, you know, it’s opened up the funnel quite a bit now that we’re looking at a business as a whole.

Kipper Doughty 

And I think within the practice, we’re seeing that with practice managers and on the marketing side of the business as well. I think that, to back you up, that if they come from a luxury brand, and they know the luxury world, but they have a bit of a knowledge of medical aesthetics, it’s an easy transition.

Kevin Cumbus 

That’s really interesting. I hadn’t made that connection. We’ve talked a lot about private equity and kind of the value that can be created, the equity associated with it. Kipper, do you find candidates sometimes have a preconceived notion about any group backed by private equity, relative to private practice, let’s call it, and kind of what, what is their what’s their feedback to you? What’s their interest level? Do you have some who say I only want to work for private equity backed groups for the following reasons? What do you hear from candidates?

Kipper Doughty 

I think I hear the opposite more. We work with a lot of private equity backed multi-center groups, and there’s a lot of education on our part, because there, there are some multi-center groups who have not been successful at bringing on multiple franchises. And I think that, you know, reverberates in the market. And so, I see it more where people are more prone and more comfortable working with a single shop versus multi-centers. So, we have to do a lot of education around why they’re successful, how their culture is, what drives their business, how they’re going to invest in you and show them the upside of it. There’s a little bit more of hesitation around the multi-center, just to give us a thumbnail schedule, what’s out there of the open opportunities you have today? How many, what percentage of that is independently owned, and what percentage is backed by private equity?

Kipper Doughty 

I mean, I’m guessing here, but I would say probably 60/40, private equity.

Kevin Cumbus 

60/40 private equity backed, yeah. And as they consolidate more locations, they become a larger portion of the market. And they recognize they need to pay for great talent creation, and so they’re coming to you.

Kipper Doughty 

Well, and of that 40% there’s, there are a couple who are looking at being private equity backed, but they’re the main revenue generator, so they’ve got to have someone that comes in and helps kind of share that revenue.

Kevin Cumbus 

Yeah. Jon, and same question for you. I’ve never asked you this question before, but you work with all sorts of independent group practices and private equity groups for the open listings you have right now. What’s the breakdown between private equity backed and independent?

Jon Fidler 

Yeah, I would probably say right now for us, it’s probably the flip. I’d say probably 40% are private equity backed. We get a lot that these, you know, kind of emerging and mid-sized groups that are still private, you know, they’re planning on going there. They’re kind of, you know, we see folks come to us when they’re structuring their team so we’re kind of early in the gate, and then we kind of honestly work ourselves out of a job, you know, we will bring in their human resources team, and then, you know, they would obviously have a team to go out and source on their own for kind of that middle growth period, and then they’ll come back to us as they’re hiring a senior level executive as they prepare for a transaction, and that’s typically the feedback they get. But from a candidate standpoint, that is something that we definitely see a difference with candidates. When they say, “Hey, is it private equity backed?” I mean, that’s one of the first questions they ask. And, you know, again, it’s different for each group, you know, there are the, you know, I was at a meeting last week, and they had said something that you really don’t think about either, where it’s like, is it the production, private equity, where they’re about the numbers, and this is what it is. And that’s kind of like the, you know, I guess reputation sometimes that over overshadows a lot. And then you have people that come in and they, they change out that word production for care, you know, they’re, they’re producing more care, you know. And so obviously, it all kind of leads to the same thing. But, you know, that is one of the first questions we get. And, you know, I don’t think there’s a negative to it. I think it depends on the candidates. Some folks have had really good, you know, changes and transactions, and it actually has helped them with support and infrastructure underneath them, and the investments back into the team and the group. So, you get folks have had really good experiences, and then, you know, it’s kind of like anything else. You get some folks that maybe didn’t go so well, and so they’re a little gun shy of it.

Kipper Doughty 

Yeah, we sell the security of working with private equity a lot.

Kevin Cumbus 

Yeah, it’s like you’ve seen one MSO, you’ve seen one MSO. They’re all different. And oh, by the way, leadership normally rolls out every five to seven years, and cultures can change, so you kind of forever have to have a fresh perspective and be curious about these groups. And frankly, that’s what makes our job so fun, because they are ever evolving. From cap table perspective, from a capital perspective, from a cultural perspective and a strategy perspective. So, it always keeps it interesting, speaking with leadership, seeing kind of what direction they want to head next.

Kevin Cumbus 

I know you probably both make a lot of phone calls with seasoned leadership at the executive level, any interesting feedback from them about talent, how they’re with their strategies around growing talent, keeping talent, training talent, anything unique you’ve heard from some of those leaders that you think our audience could glean from you?

Kipper Doughty 

So, we work with a lot of these multi center groups who have their own HR teams, so we’re kind of an extension of their HR teams. And there’s a lot of reasons for that, and many benefits to them of having us on board with them. We’re seeing a lot of them, more than I have ever seen do signing bonuses, to really kind of attract people.

Kevin Cumbus 

Interesting.

Kipper Doughty 

Yeah.

Kevin Cumbus 

You’ve got to compete somehow.

Kipper Doughty 

Yeah.

Jon Fidler 

Yeah, yeah. I think feedback we’re getting is, you know, these groups kind of come in and, we sit and kind of have our deep dive call with them and see exactly where the pain points are, and those sorts of things. And then, we try to provide a little bit of experience, a perspective of what we’ve seen, of, you know, things are running well, they’re just, you know, growing and, they need help to kind of, you know, whether just, you know, add a person to kind of manage certain aspects of things, if it’s running well, typically, they’re a little bit more open to recruiting folks from outside the industry. You know, they can bring in, maybe a fresh perspective, and they’ve got some, bumper room, I guess, to, make some mistakes, or maybe bring something in that doesn’t work perfectly, but, usually, if there are some, gaps that need addressed ideally, then, you know, we’ll, we’ll get folks from the hiring side that want somebody directly from the industry. So, I think it just kind of depends on where they’re at and in their growth process and how they’re, functioning on the day to day. But that’s, kind of the big thing that we’re seeing is, if they’re open to folks from outside of things, nobody’s going to tell you, it’s running terribly. But at the same time, you kind of pick up on some things that, you know, maybe need somebody that’s kind of a plug and play that’s been down this road before, and can, can bring some best practices in.

Kevin Cumbus 

Yeah, and now reflecting back on running Mundo, kind of three years in, we’re doing 1,500,000, I am CEO, Chief Marketing Officer, CFO, head of human resources, chair side, psychiatrist. I, you know, I’m getting it’s like, it’s a never-ending job. And then after debt service and doctor compensation. I think I had two nickels to rub together, even at that revenue level. And all I really wanted to do was hire an operator, right and I didn’t have the cash flow to support it, but I wanted I just, I felt like I needed help. You know, you’re working in a different stratosphere than many folks are, and really where many people strive to be. I’m curious, in your experience, is there a typical first hire at the executive level? Is there a revenue number I need to be at, or a location number I need to be at, or a profitability number I need to be at before I need to be calling you and thinking about what the next right hire is for me?

Jon Fidler 

Yeah, I think it’s a little bit different for everybody. I mean, we’ve gone into, you know, I would say operations is typically number one, because it’s kind of a Swiss army knife, you know, approach where they can kind of do a little bit of everything, and, you know, serve as Kevin doing, you know, wearing eight different hats, but it’s basically off of the ownerships, you know, table. So, they’ve got somebody else worrying about it. So, I, you know, operations is probably 60, 70% of the first hires, you know. But we’ve also gone under these, you know, groups that are at 30 or 40 locations. It’s still privately owned. And, you know, the owner, Doc, and maybe a partner, you know, investor, is doing a little bit of everything. And so, they enjoy the operation side. So, the operations is pretty buttoned up that, you know, they’re tired of the clinical side and, really enjoy kind of the business side of things. And so, everything’s in line. But and then maybe they would go after a financial person or a marketing person that they’ve outsourced, through third party vendors that way. But I would tell you, the operations is always kind of number one on our list. And if you know, you look at our opportunity list, that’s the majority of things. But, as they grow, those sorts of things differ. And every group different streaks we’ve gone into some, you know, need a VP of Operations, or I need a COO, like, okay, well, I think your operations are great, but your numbers and your reporting system are pretty terrible. And so, you’re getting some false numbers, so it makes the operations look bad. So maybe we need a finance person to come in and kind of tighten that up. So, you know, we’ve gone into some certain, you know, searches, where we think we’re heading down this route, and then as we uncover the onion back, it switches more to a different department. And so typically it’s either operations or finance.

Kevin Cumbus 

I love how you don’t just take their word for it, right? Because I do think, as leaders, we’re living inside of our business, and we live in a bit of an echo chamber. And we can convince ourselves of something that we need, and you need an outside voice to ask some hard questions of you, to really make sure that what you think you need is what you need. So, I love the front end.

Kipper Doughty 

Yeah, we do a little bit of that as well. Everyone always comes to us and tells us they want to injector with a book of business. So, we have an initial intake call with each client before we started a job, and we really dive into what exactly do you think that means? Do you think that means that they’re going to have patients who they own that are going to come with them? Or do they just need to have the capability of building a book of business. So, we sort of realign what the definition is for each of our clients of a book of business.

Kevin Cumbus 

Smart. Because that book of business is coming from another business owner.

Kipper Doughty 

But also, if someone’s going to take a book of business with them, they’re going to take it from you as well, once you fire them. I mean, so.

Kevin Cumbus 

Yeah, that’s phase two.

Kipper Doughty 

And really, most injectors just don’t own their patient base, the practice does. So, it’s one thing if someone is very popular in a market and their patients say, hey, I want to go figure out where that that injector went, that’s definitely one thing. But I’m a firm believer that if an injector has the skill level to build a million-dollar book of business at one practice, as long as you give them the right tools at your practice to do so, they’re going to be able to do it again.

Jon Fidler 

Yep.

Kevin Cumbus 

We’ve spent a lot of time looking at healthcare jobs, because with the great resignation after covid, we lost some incredible health care providers that had decades of wisdom and knowledge that were paid a reasonable wage and now have been replaced with people with less experience, that you’re paying more for. And what we’re seeing is, because the wages are going up, there’s this new movement to go into hygiene school and go become an injector, because there’s an imbalance, right? There’s not enough supply to meet demand. Kipper, where do we get to equilibrium? How long is it going to take where and can there be enough injectors to meet demand when the industry is growing at 20% per year, compounded annually?

Kipper Doughty 

Uh I don’t know where we get to equilibrium. I’ve seen it upside down like this since I started in the industry, even as a rep. There’s always been more demand than available talent. I think that many organizations are doing a great job training injectors and putting them into the market. But one thing about training an injector and putting them into the market is that it’s not as simple as other industries, where you train someone, train a professional in one training, then they go into the market and they’re excellent after that first training, it requires some years of experience, and it’s sort of a building block of experience that this, these injectors have to go through to where they get to the point where they’re considered a really great injector. So, there’s such a slow growth to get there. But we always talk to a lot of our practices about always building bench strength. You definitely have to have your “A” injectors, the ones that are really tenured in the industry, they know how to build the business, but the best thing you can do as a business owner is to build that bench strength.

Kevin Cumbus 

Smart. Jon, are you seeing any trends as well in the executive levels? Where the demand for executive talent, specifically med spa, which is growing like a weed, like, is there enough talent to meet the investment opportunity?

Jon Fidler 

Yeah, I think so. I think it depends on their approach and what they’re open to. But you know, where we’re starting to see over the last 12 to 18 months, like you said, with the great resignation and all these sorts of things, before we would only approach folks that were employed, and you keep your “A” players and all those sorts of things, I think, with private equity coming in, maybe bringing their own executive leadership team, you know, obviously those folks have gotten them to a place where they’ve created something that’s valuable and, you know, warranted. And so, we’re starting to see, you know, I probably had more phone calls in the last six months with folks that, I’m kind of sitting there like, how’s this person not have a job? Or they’re riding out their non-compete, you know? So, they’re getting to the last two to three months of that. So, they are “A” players. They’re just on the sideline waiting their turn to get back into the game. And so, we have seen a ton of, you know, influx of just really quality senior level leaders that have been down that road before and kind of waiting the game out and enjoyed their payday. And, you know, maybe looking for something different. I think, you know, we get folks that what they’re looking for evolves as well. You know, they’ve kind of been down that road. Now they want to get back to, they’ve gone through the transaction and, you know, had a successful exit. And so now they want to get back to building something so I see a lot of groups out there that are, you know, a smaller, emerging size, kind of cut themselves short a little bit on that level of talent they think they can recruit. Because these folks are now wanting to get back into, they’ve had a good payday. They’re financially successful. They want to get back into building something and kind of duplicate it. So, I think it’s been really good for the senior level leadership that it’s opened up this huge opportunity for experienced folks to come in and, you know, kind of minimize some of the learning curves.

Kevin Cumbus 

Yeah. I mean, we’re beginning to see boomerangers, right? That leave one industry go to another. Maybe it’s working at an earn out, but maybe it’s, it’s an elevation in skill set title, and then try to get that same title and skill set applied back to the industry that they spent the first 15 or 20 years their career in it feels like there’s an abundance of opportunity for someone who is committed to you know, either the leadership side or the injector side. Jobs abound in this space, and I do think we have to thank private equity for that.

Kipper Doughty 

I agree.

Kevin Cumbus 

It feels like hiring is the biggest challenge we’ve had over the last 12 months. Will it continue to be the greatest challenge over the next 12 to 24 months? And if it is what’s kind of a practice or to do, or one thing I could work on in my business to counteract what the future might hold for me?

Kipper Doughty 

I mean, I think it’s, again, at the management level or at the ownership level, it’s investing in your employees. I really do.

Kevin Cumbus

Get a little tactical for me. What exactly, what would that look like? Give me, one or two examples of that.

Kipper Doughty 

That would look like, providing enough of a CME budget that your injectors are able to go to the classes that they want to go to, in the meetings that they want to go to, bringing in some advanced level training for them, and not just relying on on-label training you really want them to advance their skill set, and also back on the on the management side of things, I think people forget about the managers. I mean, we’re guilty of it too. We’re actually doing some personality tests for our team just to help with broadening their skill set. You know, I think that people forget to invest in their managers. They are the people they run the show with the people in your business. So, teach them how to motivate, teach them how to do work performance reviews, teach them how to set the great culture that you want.

Kevin Cumbus 

That’s awesome. Thanks for those examples. Jon, same question to you, man.

Jon Fidler 

Yeah, no, I always think people are number one, you know, you get people in, things get messy, and those sorts of things. So, I think from an ownership perspective, just kind of, you know, being secure and kind of bettering yourself as a leader, you know, a lot of times, I think, you know, especially on the clinical side, they get into these things, and they’re successful sometimes despite themselves. You know, they’re producing and taking care of things. They’re profitable. And then you kind of see what’s next. But some folks aren’t ready for that next level. So, I think as leadership, at smaller, privately owned groups, is just continuing to evolve there. And it’s same thing, you know, getting better with the communication, getting better the leadership style. And there’s, you know, ways you can do that, by attending courses, or talking to Kevin, listening to a Kevin Cumbus podcast, or things like that, so.

Kipper Doughty 

Way to throw it in there.

Jon Fidler 

But I’m with Kipper. We were up in Dallas at an operator’s event, which is very rare to find. You know, you find these big industry events, and it’s all the owners and private equity groups and everything, and I can’t tell you how much that resonates with the candidates or the employees that are there, that they actually get to sit down in a location. It was limited to 50 operators. They get to bounce best practices off each other. What struggles are you having? You know, what do you see upcoming? And AI was, you know, the topic that everybody was talking about, and how are we going to adapt to this? And so, I think giving them a little bit of encouragement that they’re going to have decisions to make. They’re the ones kind of, you know, they’re the boots on the ground and seeing what’s coming at the ground level and being prepared for that. I think, you know, it just creates such loyalty and investment from the ownership side.

Kipper Doughty 

Yeah, I agree.

Kevin Cumbus 

That’s awesome. Sounds like those are well spent, invested dollars for any business owner, really think about the operators, the managers, and make sure that they have everything that they need to continue to grow and learn, develop, train and be that level of support, and frankly, is a little bit of infrastructure between you and the in the business itself. This has been awesome. Kipper, I know we’ve got a lot of people out there that need an injector. How can they get a hold of you?

Kipper Doughty 

They could get a hold of us by emailing us at [email protected], or logging onto our website, JobSnob.com or JobSnob.net either one and hitting the contact button.

Kevin Cumbus 

Easy, even

Kevin Cumbus 

Easy, even I can do that. That sounds like something I could do. Jon, how about yourself? How can I get a hold of you if I need a new operator, Regional Director, CEO for a private equity backed group?

Jon Fidler 

Yeah. So [email protected] and our website is FidlerandAssociates.com. Pretty simple contact, and it’ll go to everybody, but, you know, email directly industry events. I mean, we’re pretty well connected, so happy to take referrals, or, you know, anything that folks have. I mean, feel free to reach out, or cell phone, whatever, whatever you like. We’re not picky about how folks reach out, but, you know, we’re, we’re happy to help on an ownership side and a candidate side too. You know, we, obviously, we get paid for the placements, but a lot of candidates, you know, hopefully they’re not going through the job world and searching for jobs all the time. So, they have a lot of questions, too. So, we’re happy to help, help out both sides.

Kevin Cumbus 

That’s awesome. You know, you got the right heart, and you’re in the right position for the jobs that you have, and your fingerprints are all over this industry, and you have created more great outcomes for business owners that have decided to work with you than most other consultants and service providers in the space. So, it is a real privilege and pleasure to spend some time with you all. Thanks for making time. I look forward to seeing you all out on the road.

Kipper Doughty 

Thank you for having us.

Jon Fidler 

Yeah, thank you. Alright, we’ll see y’all.

Kevin Cumbus 

Incredible, run with those guys.

Kevin Cumbus 

The big takeaway for me, from Kipper’s perspective, is you don’t have to compete just on compensation, but you got to invest in your people. You have to invest in your people and little things like making sure they have a budget that they need and encouraging them to use that budget and better themselves. And I think the risk and the fear as a business owner is that you’re going to train them so well to where they can leave you. But I that’s coming from a position of fear and not abundance. And the way to come to this, this challenging employment world that we’re in today is come into it with trust, and come into it say, “Listen, you’re important to me. I want to make sure that you’re getting all the skills that you need and that you’re challenged each and every day, and you have an opportunity for advancement inside this organization. Let me plot that out for you to set the expectation for what that could look like.”

So just really interesting feedback and kind of reflections from Kipper and then from Jon, you know, scribbling down frenetically some of the things he was saying, but one of the numbers that blew me away is 83% of options package packages don’t vest in these private equity backed deals. So, what does that mean? I mean, you’re that they’re not staying through the vesting period in the businesses, and they’re not employed when the deal ultimately happens and that second bite of the apple occurs. That’s not a good statistic. That just speaks to the job hopping we’re seeing and the lack of investment in culture and people. It would be my wish these two things get solved and improved. I think it’s just as humans that have to work to make money to support our families. We really do want to like where we work and feel like we are a part of and are given the autonomy for decision making and conflict resolution. I think private equity has done a lot to fuel growth, and sometimes growth is unsustainable without layering and culture. And culture takes time, frankly. So, it, you know, it’s a little bit of a double-edged sword on that front. But it, you know, I’m sure you, you have similar thoughts as well, about the feedback from these two unbelievable folks. But if you’re in the process of building and scaling a team, you need these two in your corner so Kipper, Jon, thanks again for making this an incredible podcast. Appreciate it.