Host: Home care is a type of business you hear a lot about in our world of buying small businesses. On biz Buy Sell, you'll see home care agencies for sale. There's private equity and roll up activity in the industry. Well, today's guest Jerome Bullion provides a window into these businesses and explains how he doubled the one that he bought over the course of five years, though he thinks he could have done so faster. There are a few obvious characteristics to home care that are attractive to business buyers. Demographic tailwinds, which is a fancy way of saying that the population is aging so the demand for these services will increase. Recurring revenue since many customers have an ongoing need for care and their super asset light since these businesses really just need people to run. But beyond these reasons to like this industry, Jerome and I spent time on the other big draw, the why Home care is about caring for people, usually elderly who are vulnerable, maybe alone, helping such people directly and also often helping their families who can't themselves deliver the necessary care. And so it attracts people who are in it to care for other people. And that is beautiful. So if you are motivated by this industry's why caring for elderly people, then it seems like a wonderful opportunity and and I encourage you to look into it because when good business dynamics and purpose align, great things can result. Here is Jerome Bullion to tell us about buying a business in home care. Welcome to Acquiring Minds, a podcast about buying businesses. My name is Will Smith. Acquiring an existing business is an awesome opportunity for many entrepreneurs and on this podcast I talk to the people who do it. August Felker is a two time successful searcher. First with a traditional search fund. The second time around he did a self funded search. Today August runs Oberle Risk Strategies, an insurance firm with a dedicated practice group for searchers and acquisition entrepreneurs like you. If you've got a business under Loi, Oberle will provide complimentary due diligence on that business's insurance and benefits program. A great no risk way to get to know August and team. They love helping searchers. They've worked with hundreds. Oberly is a specialty insurance brokerage for searchers by a former searcher. Check out oberly-risk.com O B E R L E- risk.com link in the show Notes Jerome Bouillon welcome to Acquiring Minds.

Guest: Hi Will. Good afternoon. Happy to be there. Thank you for what you're doing for all of us business owners.

[3:02] Host: Thank you for listening. Jerome, you bought a home care agency in Asheville, North Carolina. You were recently to the area having moved with Your family from Florida. Today, that business operates smoothly, mostly on its own. And you've acquired another location in Lenoir, North Carolina, about an hour away. Both of these locations are part of the Visiting Angels franchise. So we've got a lot of ground to cover. Your interesting story, how and why you bought these particular businesses. The world of home care, which is one we hear about a lot in this space, and of course, franchising. So let's start with your interesting story. Jerome, can you start us off with a little background, please?

Guest: Well, as your listener will hear, I am French, so I hope you have subtitles somewhere for some of y'. All. I moved in the U.S. in 2000. It's 10 years now. Actually, this year will be 10 years in 2013. Prior to being in the U.S. i used to be in France and in Belgium and in the UK I used to do banking. And 2008, 2010, was big banking crisis, and I was made redundant and looking for jobs in Europe and couldn't find anything. So my wife, who has an American passport, said, let's go explore my American roots, and we moved to the U.S.

Host: okay, Jerome, so what year is it now that you guys land in Asheville? And how old are you at this moment, if you don't mind?

Guest: 49 years old, 2017.

Host: Okay. And you. The concept of buying a business is obviously not new to you. You were a business broker for a while, and you come from the world of banking, so you're probably sophisticated in the world of buying and selling businesses and the possibilities there. But how. How is it that you decide that that's what you want to do to buy a business in Asheville?

Guest: Buying a business is. I mean, professionally, I always been a bit. Some people call it. I don't know if it's a word in American entrepreneur, you know, trying to entre from inside the business. I always wanted to provide value to my different employer. The problem when you have this attitude is sometimes you. You kind of want to run the show and not be run. So I think it was. I should have actually bought a business way before my 50th birthday. But I was scared. I mean, it's scary. It's stressful, you know, you. I'm originally French. English is not my first language, so, you know, it's kind of somewhere. But, you know, being an entrepreneur is basically jumping out of the plane with someone catching you with a parachute and you say, hey, you know, at the grace of God or inshallah or whatever, and just pray for the best and hope that you Fall. Right, right. So that's, that's what it is about. So I, I decided to do the plunge. So I cold call in that industry because that's where I wanted to be and found a guy who wanted to sell and make a deal and move on.

[6:17] Host: So you decide then that you want to be in the home care space and you start cold calling around home care businesses in Asheville. So I assume at this point you haven't been plugged into the world of search or read by then Build. I mean, I'm not even sure it was published in 2017 or I think it was. Right. This is just you following your own nose.

Guest: Yeah.

Host: I was just at SM Bash, the small business conference this weekend, and there was a, there was a panel discussion about how to approach owners when you're interested in having a conversation about buying their business. Because it is kind of hard to walk in the front door and say, hey, can I talk to the boss? Because I want to buy this business. Or maybe I want to buy this business. So what, what, what did, what did your script look like when you were cold calling around?

Guest: Well, I'm French, so politically correct is not in my nature. So I just, I just called the front desk, hey, can I speak to the owners? They say what is regarding to. I say it's personal, that I can ensure you they want to talk with me. And I can't remember exactly how I found my way there, but I was able to call to. People are always interested. My gift somewhere is this deep, thick French accent. That's probably what gets me through the door because even if I was mumbling something, the person on the phone didn't understand a thing. And talk to the owner. You probably want to talk to that guy. So that's probably how I did it more than having a fun speech. And just after I'm kind of pretty like what you see. So I just say, hey, there is no turning around. Say, oh, I love your business. Say, hey, do you want to sell your business? That's literally how I presented to the previous owner of Visiting Angels. Say, hey, my name is Jerome. I used to be a business broker. I always wanted to be in that field. I would like to buy your business. Would you be open to sell it? And the guy said, well, actually there is never a good time to sell. I was expecting to sell in one or two years, but we can have that conversation and that's it. So on the three or four in Ashley days was not a lot at the time. On the three or four I called One didn't want to sell because she just bought it. The other one wanted to keep the business for her kids. She had several already. It's another franchise slightly different than Visiting Angels because at Visiting Angels we just do home care and the guys from Visiting Angels. So that's it.

Host: Listeners of Acquiring Minds know that for almost any business you acquire, its success comes down to the people and how you develop and manage them as their new leader. Thing is, in addition to management, there is also a lot of process and bureaucratic work when it comes to your new employees. Payroll, compliance, HR technology, hiring, to name but a few. These processes are crucial to get right, but at the same time distract from where you want to be putting your energy in leadership. So Aspen HR is an HR firm and PEO that takes this work off your plate and handles it with the care it demands. Aspen is owned and run by Mark Sinatra, himself a successful former searcher. So Aspen's own leadership understands the HR challenges that searchers have. Post acquisition, the firm is offering Acquiring Minds listeners a complimentary pre acquisition HR and PEO review for your target business. Check out aspenhr.com or contact Mark directly at mark@aspenhr.com Great. And what was the next step? Did you, did you take this gentleman to lunch or talk us through the.

[10:10] Guest: He took me for lunch, right?

Host: That's how it.

Guest: We went with my wife. I mean we met with both wives because his wife was helping in operating the business and my wife was saying, well, I can help you at the beginning. I don't want to do that all my life, but I can help you at the beginning. So we went for lunch together and we cannot start talking around what it looks like, what we need to do. There was also from him educating me about what it is to call to buy a franchise that you need to talk to the franchisor to vetted you. You need to have the right background. For me, it was very new, the franchise area. It's basically you have to be vetted, pass a test and talk with, I don't know, people at the franchise level, but I must say that the folks in Visiting Angels were very, very easy to talk with and make that happen pretty quickly.

Host: And did you have any particular bias about franchises? Like you didn't want it or wanted it or you were just kind of pretty open?

Guest: Actually, I was open. I know that there's a lot of talk, hey, franchises, why you want to pay a fee or something like that. But Olain man, if you want to be in a service industry, you want to Have a brand which is recognized by everyone. Okay. And you with your little pocket cannot make that happen at, you know, at the state of western North Carolina or Leno eor Morton. Where is my rough franchise? So buying in someone who have a national recognized name is fantastic. Then after you look to and we can talk more about franchising but you have to look what they offer and the value for money at Living. The franchise called Living Assistant is just fantastic. So actually I was very lucky because I learned that from other franchisor in our industry that they have a more straight jacket than hers.

[12:06] Host: Yeah. And we are going to get into more of that and how you perceive the visiting Angels franchise, why it's so valuable to you. Okay. So you have you and your respective wives go to lunch and you're feeling each other out. The rough terms of what it would feel like to buy this are coming together and a few conversations and the

Guest: deal just evolves and eventually yeah, we both sign NDAs and it starts sharing exactly what the number was looking like. What did experience, what was the difficulty of the business, where was the business before, where you think it should be. He used to be in a pharmaceutical industry quite high up in one of those Pfizer kind of thing there. So he was a very process oriented guy. But yes. So we just talked about it and he come up with a number. I say I don't agree. I came with a different number but I was pretty generous in terms of two reasons. One, at the time there was only a numerous clothes, you know, there was only a certain number of franchise for home care that was allowed in the state of North Carolina. They took that cap. So the valuation so to speak from gone. So there was that element and the territory is up. The guy we started the franchise here in Asheville was an army ranger and he know how to read maps. So he's done a good job of carving out a nice territory. So that there is. I mean I could do much more than what I'm doing now. Bit frustrated not to be there, but I can do much more. That's what I'm doing now. So I pay a bit. Yeah, I pay him a good price. But you know at the end of the day you can always try to penny counter thing but when there is an opportunity, what is it for you? What is it worth for you? I mean at the time I had no job, no revenue.

Host: Well, certainly any kind of opportunity where there's a cap on the supply and you're buying into that capped supply so you're going to be one of. It's basically a regulated. You know, there's regulatory capture in a way and you're, and you're being able to participate in that. That's worth something now. Sadly for you, I guess that went away a little bit, a little bit later. But you seem to be doing just fine. Thank you very much. So Jerome, can you share any of the numbers around the size of the business or the, the deal and. Or the deal?

Guest: Yeah, well, I body was around I think half a million dollar a year. We above the million dollar amount for this year.

Host: It was at half a million dollars in revenue when you acquired it and now it's over a million.

Guest: Yeah.

Host: Okay. And it was 2018. It was 2018 when you acquired it.

[15:03] Guest: Yeah, I bought it for, in December, I mean for my 50th birthday, so December 31st.

Host: Okay.

Guest: So I don't know if it's 2017 or beginning of 2018 or end of 2017. So. Yes. And I just saw a post on LinkedIn where people say hey, when you buy a business there's a deep and yeah, yeah, they had a huge customer. That was a 24, 7 case. We call that well in our industry. We call them well customer because they're just a big chunk of money. And I, I was not comfortable with this because it was representing probably 20 or 25% of the revenue of the business. So in a way I bought the business. I, I didn't add any bank financing. Okay. The seller issue notes and the rest I bought cash. Um, and in a financing in the notes there was a, some provision in place that customer disappear before three months or six months. And once I was after a year when I was comfortable with the business and there was no, you know, hidden thing like that. I just, I just pay back the no time. Not a big fan of credit. I don't like to owe money. So I change a bit. When you want to go bigger, you have to change. But at the beginning I just, I just. Yeah, we self finance it. A lot of it. And multiple was probably in a high street or Mid Street 3 1/2 probably. And that's it. So we. Yeah, I was the first six months I was. You know if you sit in front of us hose and you get hosed on, that's how I felt for six months.

Host: Drinking from the fire hose. Drinking from the firehose.

Guest: Yes, yes, that was, that was, that was a journey.

Host: Well, let's hear about that, Jerome. So you recognized you were buying a job. So talk to us about what the First, I guess six months, but also year or two in the business. From our pre call, I recall that you were very much working in the business for a while and it took some time to figure out how to smooth out the operation so that you could extract yourself, which is where you are now. So let's kind of get into that progression. Talk to us more about that fire hose in the first six months.

Guest: Yeah. So first you have to know that I am a bit of a. I was, I am still, but I was a bit of a control freak. So if you are a control freak and don't want to change, do not buy home care business. Okay. Because I used to be in finance. You know, you buy bonds and they behave the way it's supposed to behave and pay you back the way supposed to behave normally. Right here in business, in home care, it's not the case. It's just like people who buy business. When you walk into the office, you never know what's going to happen. In home care, it's particularly true. So the first six months was learning the schedule, learning the caregiver, lining the customer, how to hire people. I mean, signing up customer. At the time we were going in people's house and you know, explaining what we were doing. And you know, it's a very, very lengthy process. So that was not very efficient. I think Covid change things was the best personally. But in terms of the way people react now to technology. But at the time it was pretty much. And the business was run. Yeah, it was not run as we run it now. It was more a lot of paper, a lot of, you know, the seller had an old scheduling software that was not even supported by the business anymore. So and all the little thing about, you know, the state regulation when it comes to home cares, state regulation when it comes to payrolls for federal regulation. So there was a lot. And my wife and I were. My wife was doing the schedule and we're trying to learn how to do it. And that was her, myself and an assistant. The owner stayed for a while. He stayed probably up to three months. And then because I was not at the time a director, I had the previous owner stay as an interim director or consultant for a year, which was great because that sometime when I have question or issue, I can always talk to her, say, hey, how did you deal with that in the past? And so something like that. Because sometimes your stories. That's. That's pretty funny. I mean there is stories that I can't see on, on air right now, but there's Some probably someone can write a book because we all face with the same thing when you deal with people and so generally funny. But yeah. So well.

[19:51] Host: Well, Jerome, actually you don't. Maybe if this particular story is one you can't tell. Although I'd love for you to. We're going to spend some time here learning about the home care business because we hear about it a lot. Do give us a story or two or an example or two about some of the craziness that can happen in this world. Paint a picture so people can really get a feel for this business.

Guest: I can give you a story of the beauty of it because there are some beauty of it. One of my. We have caregiver from all ages. Okay. One of my caregivers, 81 years old. So she's. Yes. She's basically older than some of the customer. Yeah, she works for us, I don't know, 25 or 30 hours. Then she volunteer on plenty of charity on a Saturday, on a Friday, on a Sunday. I don't know how she find time for herself, but she's an amazing. She's an amazing caregiver. When we hire her, she had the flip phone. So and we all work out from an app. So flip phone and app doesn't really work. And I tell her, nancy, you know, you probably want to get a smartphone. Oh, okay. So she basically went to buy a smartphone and come back two days later, say, show me how it works and 81 years old and pick up how to use a smartphone and an app. So that's already genius. I love her for that. But the other day, she impressive. She was taking care of a gentleman and he was a veteran because we do serve his veterans. And that's also ambiguous story about that. But the guy was a veteran and she took good care of him. And the family loved her for, you know, helping the veteran. And the veteran was very sick and he was expecting, I think, a granddaughter that arrived. I do believe they gave her the name of the caregiver. They gave her the name of Nancy. The baby was named Nancy after the caregiver because they loved the caregiver so much. So the that thoroughly fantastic. And she came back to the office and she get me cry. I never cry. She said, jerome, I want you to show you something. And she pulled her phone. There was a picture there. The. The veteran passed away and he basically was a picture. Her bishop told her to show us the picture. So she went to say, my bishop told me that I need to show you a picture. So okay, what's a picture about. I was intrigued. And it was a picture of that gentleman looking face to a newborn baby. And the story is waited for a newborn baby to come and he passed away two hours after.

[22:31] Host: Wow.

Guest: Wow, that's. That's amazing. That's the beauty of our industry. So you have people like that. You say, well, it's, it's come to the why that we talked about. Why are you there when I have that, I know why I'm here to facilitate that love and compassion.

Host: And we're going to talk more about that. But actually, Jerome, that reminds me. So when you first arrived in Asheville and decided that this was the type of business that you wanted to acquire, was it because you were motivated by some sort of emotional why or was it kind of purely a business decision?

Guest: No, I sing. I mean, from what I saw around me, everyone who is in that industry, involved in industry as a why. Okay, There is a reason why that is imperfect. And people are people who are on bedridden like that. I lost my mom when I was 30 years old from cancer. And I saw my dad taking care of her and how hard he was to, you know, as a family member, take of. Take care of a loved one. So that was, that's my why. And then in a business decision, it's, it's. I mean, being in the, in that segment of the market, it's, you know, you, you have. I don't have any issue having customer normally. I mean, we, we have more and more people growing older and wanting to stay at home too. So. So the problem in that business is not to get the customer. So that's also for me, uh, being an ex bond fund manager, it was a, you know, it's kind of buying a bond, basically. I know I'm gonna have customer. Okay. The difficulty I found out after probably the first three months is in a business is I need to find caregiver. So when I bought the business, I say, oh, that's fine. I'm gonna, you know, we haven't done that on the segment of customer. And I can. And after three months I say no, I get it completely wrong. The key is to find a caregiver and keeps him not. Not to find customers.

[24:32] Host: And did your seller not communicate that or maybe you hadn't told him or.

Guest: Yes. But, you know, it's always, you know, you, you listen to someone, but you kind of, if you an entrepreneur, you kind of bit of an alpha male somewhere or, you know, an oto, so you listen and say, yeah, yeah, but yeah, he probably communicated to me, but I was not listening.

Host: So.

Guest: But I found out very quickly that in that business we have two types of customer. We have the person who want to stay longer at home, if possible, safely. And we have our employee. Yeah, our customer too.

Host: Well, in our pre call, you said that. And that really stayed with me, that that was kind of an epiphany for you, that yes, you stop seeing your caregivers as your staff, as your employees, which they are technically, of course, but you start started seeing them as customers as well, because hiring and retention is the big bottleneck, is the big challenge in this business. And so when that shifted in your mind to seeing the caregivers, your caregivers as your quote, unquote customers as well, how did that change your behavior as their employer?

Guest: I didn't really change my behavior because I was never. I mean, the way I run my office is a very fast structure. My office, people can call me out if I don't do the thing I'm supposed to do, I push them to do it because we all, you know, it's kind of all on the same boat somewhere. So I need to show example. Even if I don't do something I need, they don't dare really do it. But I would like them to do it more because I have no issue with that. And for my keg, if you're a high, always, you know, when you hear the story of Nancy, I have a lot of respect for what they do. I could not do it. I was a couple of times in a situation where I had to be there for safety for a customer waiting for the caregiver to arrive. And once it was an elderly lady that had Alzheimer's and it was in the morning and I was praying all my heart that she doesn't wake up. Might have been surprised. So no, I think what happened is actually make me realize that the way we were addressing our caregiver needs were not completely addressed. And we needed to. And that's very recent. We changed the whole paradigm a few months ago. So we decided that, I don't want to enter into details, to have a different way of looking at our caregiver and explaining what we do to them and how we treat them and things like that. So there is a whole. Put a whole package and we. I'm looking right now to see how it works. And if we able to have retention. I know that we are one of the good agents in town in terms of revenue, but people will not leave you because of the money. People will leave you because you don't respect them, you yell at them. You don't give them opportunity to grow for growth. You don't, you don't offer stuff that you could offer easily. So I mean, one of the first things I did when I joined the business is I put all my caregiver on Aflac and instead of half, like Normally you pay 50% and they pay 50%, I pay 100% of it, period. It's not a question, of course, and I don't want to start a debate on health scare in the US But I think that was at least a minimum I can do for my caregivers. So I gave them pay time off and I gave them a flag 100% purpose. So it doesn't make you. They don't necessarily realize what the gift is. But I can tell you that I have two caregivers that was not able to walk and both of them get a nice check from Aflac. And they realize after the gift it was because one of them get a check $4,000, another one $8,000 because they

[28:38] Host: were out of work for, I don't

Guest: know, four or six months. I paid them half like 100%. So didn't cost them anything.

Host: And so Jerome, for people who don't know, tell, tell them what Aflac is.

Guest: Aflac is a, is a. I think they call it a cafeteria plan. So it's a supplementary health care that you can pay for your employee Aflac or you have colonial life or you have plenty of things that dedicated to small business where you give them kind of a package of if they injure outside of work and they can get a certain number of. Because in our industry, our caregiver, our employees are not full time. We don't guarantee hours. So because of that, we don't necessarily have the same package that big box company offer. But Aflac is basically there for you can life insurance, accident insurance. There's a couple of things that you can pay for for you. And they, if they want to have some staff themselves, they have access to it at a very, very low price. I think I've got a caregiver who bought a life insurance. I think it's a 20. I can't remember if it's 10,000 or 20,000 or something. She pay $5 a month or 5,$10 a month for it. So it's nothing. So yeah, it's a. It's not health scare, but it's. It can help from time to time.

[30:00] Host: That's great, Jerome. Thank you for that. And Going back to the retention of, of caregivers in, in this industry. It's a industry with a strong why. Most people operating in this business have a strong why, as you said, you know, many of them have had a family situation where they've seen the power of home care or the need for it when it wasn't there. And so they're motivated by a less so than money. I would think kind of intuitively if. If folks are motivated by doing the work rather than money, they'd actually be easier to retain, not harder. Why, why do you find that? Why is it that not the case?

Guest: Well, the people we, we hire still need to make a living, okay. I mean we have several kind of. We have several kind of segments of caregiver, okay. Some of them are, I mean some of them are retirees and they are bored and they want to give back. I mean we have one of our caregivers, a retired pediatrician, M.D. she just do caregiving. And I ask her why and say, well, it pay for my mission trip. The money I won't gain, I give it for the mission trip. You have people who have been working in that industry for many years and you know, they can't work in facility anymore because sometimes facility, it's a lot of hours, but it's hard work and it's hard on the back and the body. So they come in home care when we're not supposed to live more than 25. I mean for me not more than 25 pound. And they kind of, you know, it's supplemental revenue for when they retired. So we have there some nurses, some retire activity director from nursing, something like that. And those guys know how to handle customer and other people. They are industry in that industry because I have to talk to them often because they took care of neighborhood when they were younger or took care of their mother and basically fell in love with it. But they still need to make a living, extra money. And you know, why work for me at 10 bucks if they can work for the other at 13? So we still need to be competitive, right? So there is that element there. And then after you have single moms or moms that need to take care of the kids and pick them up after three or kids call out because the school can't have him because he stopped coughing or he has Covid. Well, you can't work in a regular facility with these kind of people because you get terminated. But in home care we offer that. I mean for me, for my business, I offer that flexibility of, you know, if you Sometimes not good, but if you sometimes have to call out, we understand and we can work with you. So it's not only people are not. People are motivated by money because they need to pay the gas and the thing, but it's a two together, which is important when you have people who are just there for the money. I don't know for other agency, but with me they don't stay long.

[33:01] Host: One of the characteristics of this business too that you're making clear is the scheduling is a big part of it. Any home care agency, they have a full time person, as I understand it, if not more devoted just to scheduling and the nature of the work. You said, at least in your case, your employees are not full time. And so there's flexibility there. But it's also on the other side for your customers, your true, your actual customers, the folks receiving the care, they also all have different needs. Right. So somebody might need three hours every Monday, whereas somebody else needs five, five hours every day sort of thing. And so you're always playing Tetris with these, with these schedules to match your supply with their demand, right?

Guest: Yes, it's a Tetris. It's Tetris.

Host: Exactly.

Guest: You need to practice Tetris first before doing scheduling. It's a good one. Yes, it's.

Host: Well, well, another meta. Let me use your metaphor that you said to me pre call, which I thought was good. It's also a train that never stops running. So there's never a pause because people have care needs. People's care needs never stop. So it's not like at five o' clock everybody goes home. The scheduling challenge is just persistent and there's no pause. No. No respite.

Guest: No, no, it's. I mean when, when you talk about. You asked me the question about working in the business and how I get out and I can revert back to that. My wife done the scheduling for I don't know how many months or a year and I don't know how she did it. I did it six months and I met Larry, which is the owner and creator of our brand Visiting Angels, our living assistant. And he's a fantastic leader, fantastic person. And he said, look at me say Jerome, who's doing the scheduling? I said, me. And kind of look at me say, you crazy or what? So I said, you think I should get a schedule? I said, yeah. And actually it's helped me to step out. I learned a lot of things doing scheduling. Back to one of your previous interview. It's probably important to do especially in small Business to be very hands on at the beginning because you can call BS when people are not doing what they're supposed to do. Say you've been there before so you know exactly what happened. And scheduling is probably one of the most important functions in our. In our business. So yes, it's. So I bought a scheduler and. And actually pay for very quickly. So I didn't. It's. It's part of the thing is sometimes it's difficult. And that was one of my mistakes at the beginning is I was trying to sit on my purse. You know, I didn't want to spend too much. And I was, you know, I was afraid to spend money and not having money at the end of the month for beverfooting like that. So kind of in fear. And fear is never you need to be fearless. And I probably could have done better if I was more investing more in my business and trusting more in my guts and in my brand. So good advice for everyone. Don't have typers. I try to short. I mean, same thing for my team. I pay people, but I don't want them pay too much. And I was trying to penny pinch. And at the end of the day, that's a very bad calculation because I have now a team in Ashley, like touch wood, because you never know. But for the last. For the last year, I was more careful hiring. I spent a month doing three jobs at the same time. I had no one in the office but me. And I was doing everything because I didn't want to hire the wrong people because I've done it in the past, many times, two or three times. I hired wrong people and I basically didn't listen to myself. And I just need. I hire anyone and that will do, and I will train that person. That's not true. That's not how it works. So I hire first my office, who's become my office assistant that's now an office manager. And when we wanted to hire a new scheduler because when she joined there was a scheduler there. We sit down and we just visualize what is a scheduler that we want. What is the experience she wants. What is a female? Is it male? You know, kind of getting a general idea of a good picture of what that person looked like. And we found out schedule camp like that. And she's been with us since and doing great also as well.

[37:34] Host: Well, Jerome, so it sounds like you. You went from being really hesitant to hiring anybody, resistant to hiring anybody because you were overly frugal. And. And as you said, you're a control freak, a micromanager to then once you opened. Oh, and by the way, the metaphor, what was the, the, the expression? Sitting on your purse. That's a French idiom.

Guest: I don't know what it is. But a tight purse or whatever. Oh yeah.

Host: Okay, Well, I like sitting on your purse. That works. So you're sitting on your purse, you're not wanting to spend any money, you're micromanaging. And then you realize that this is madness. And you, you're open to hiring people. And then it sounds like you kind of went through some hires where you had hired too quickly, not selectively enough, not wisely enough. And so you kind of compensated in the wrong direction. And then now you've settled back into a good place where you guys got a little bit more refined in your hiring process and more selective and more patient. And then that was the sweet spot. And now you've got really good people in there.

Guest: And this is one of the reason you need to know how to do their job. Because the day they leave, you can do won't be funny. But people can leave you in a day, say I'm done. Thank you. It's happened to me with the other location at the beginning. Okay. So you have to do it yourself. So that's the reason why you need to know have an idea of how to do it. I'm not just being coming from the top and I have no idea what's going on. On small businesses, bigger businesses is less of an issue. But small businesses, we always have a key person issue all the time because we're not big enough. So yeah, that's also one of the reason why I bought a second franchise is to have kind of trying to add a bigger team like that I can piggyback on each other, which we did. Thankfully. When I had a couple of issues with a new location, my office manager at my Ashville location was able to take some of the burden from me like that I could focus on doing the scheduling there when I looking for schedule.

[39:35] Host: Let's get up to speed. What does a mature office look like? So in Asheville, you're at over $1 million. Tell us how many people are working in that business and then. And then I want to get into the numbers a little more. Whatever you can share. So what does the people look like?

Guest: Yeah, probably between. Yeah, we probably have 30 or we all have the employee. Not 1099. Probably a 30 or 40 on payroll. Some of them are not full time. But the office admin team there is office Managers there is our care coordinator, scheduler, we have a part time nurse and I'm looking now hiring probably a marketer person to go in a community and market our services to rehab center, hospital, things like that. And I'm probably also as well will look at recruiting a person just specifically to hiring. And we have a couple of things up our sleeve that we want to develop. So I'm going to splurge, I'm going to get poor but I'm sure that it will pay for. I mean it will pay for how many will pay. So I'm not stressed. So yes, that's probably what we're going to do. So right now we have and I have two in a Lenoir location too which are an office manager and a care coordinator but they have a less number of hours so they have a bit of free time for themselves. So I need to find them stuff to do.

Host: And that's just because it's a smaller office.

Guest: It used to be a bigger one but the owner didn't drop the ball. But he had other issue family and business wise. And it basically was not as involved in the business as he was when he created it because he created that business from the bottom up which I mean I have a lot of respect for people who do startup. So I basically bought it. Not very, I mean once again I pay a certain price, probably higher than I should have but you know, it's a territory which is just adjacent to me. So it's kind of a no brainer for me to expand there and create a platform because there is a bit of energy between the two.

Host: So you now have these contiguous territories for visiting angels.

Guest: Yeah. And I hear someone in podcast say one day you need to wait a bit before buying your second business. And I think there's a lot of wisdom in that, you know, like you can do all the mistake. For the first one I wanted to buy one last year I missed it and I was for in a business. And our franchiser also asked us to reach certain milestone to be able to buy a second business which also is, is very wise I think like that to make sure that you have enough, you know, knowledge and a big enough office to be able to, to buy a second one and don't get, you know, overwhelmed, don't be a failure because at the end of the day if you fail, they fail. So.

[42:33] Host: Yeah, yeah. And, and so when did you acquire Lenor?

Guest: December 14th. But I told the guy you run the show that the previous owner you run the show until January 3rd because I vowed my family and my kids that I will not spend another Christmas. So. Yeah, so that was, that was for my 50. I'm going to turn 55, so.

Host: Oh, it was, it was this past January.

Guest: Yeah, yeah. It was my 55th birthday, so I don't know, I might be buy another one, but before my 60 probably.

Host: Jerome, can we get into a little bit of just the, the business numbers? So what do margins look like in a home care agency doing a million dollars a year?

Guest: 10 to 15%. If you really run your show very well and very lean, you can probably achieve 20%. It's all a question of size right now. We not where I want us to be, but I can probably. 20% will be achievable in the next two years. It's just a question of volume.

Host: So.

Guest: Yeah, yeah, 15 to 20% is probably a good number there.

Host: Explain to us a little bit about the different types of home care because there's tiers and I mean there can be hospice, I think in some cases all the way down to like no medical, like no medical care at all and everything in between. So how does that work?

Guest: Yeah. So first you have agency who do Medicare and Medicare an agency would do not. Okay. When you do Medicare or Medicaid, you have more regulation. I don't do it. I think for one territory I would like to do it, but there's more constraints in terms of the way you do things. So that the first thing then after you have non medical home care. So basically home care and what we call home health care, which is basically have a medical connotation. It's like non skilled, unskilled. Same thing. We at Visiting Angels only focus on non skilled. We only do non medical home care, which is basically basing dressing, transferring mobility, offering some transportation services, a medication reminder, laundry, lighthouse keeping and. And a couple of other things. Helping to dress and go to the bathroom and personal care and get clean and things like that. So that's what we do exclusively. Okay. When I was looking to buy a business, you have other agency who do both who do medical and non medical. Okay. And with insight, I think the model to be more focused on one instead of two is probably much better. Even so I understand that when you do both, you probably have synergies that work together also as well. But I. I'm more comfortable doing just non medical and maybe, I don't know, maybe if I want to expand or do something else, I might buy just a medical agency because I would not be. I could do that also as well. So medical is basically drawing blood, wound dressing, cutting nails. That's medical. I mean, so you basically need people who have more skill and more expensive, but you charge your services more but for shorter period of time. So medical home health agency might come to give you a shower. They probably will be there for 30 minutes or an hour max. Okay. A nurse might go there to help you with just dialysis or something like that or your wound care. The nurse will be there for 15 minutes. No more home care. We can be there for a whole day, 24, 7. Need be day to night. Okay, so it's a longer shift, but it's a lower cost. Even so it's still costly. It's a lower cost. So that's how it works. And then after aside that you have hospice care. So when people get an hospice, it's basically they've been diagnosed with a terminal Ms. By a doctor who says they have only six months to live. So just for the people out there, it's not because you're in hospice, you're going to die. I had customer wearing hospice and went out of hospice. Okay, so it's not a fertility. All right. Okay. So you have hospice and you have. I think that's one of the main one probably that I know of. I'm pretty much in my, in my silo, so I don't really look at the rest of industry, but that's what I understand.

[47:01] Host: Great. I want to ask about growth and what a larger version of your business could look like if somebody wanted to grow to a $5 million, 10 million dollar home care business. What, what would that look like? Do you, do you have to basically do that inorganically or are the tailwinds such that you could do that organically? Yeah, let's start there.

Guest: You can do it organically. We have a lot of franchisees at Physic Angels that are around that size. 5 million, 6, 7 million dollar businesses. I think actually Larry, we start the branch. The, the brand owner is probably, I don't know what his number is, but it probably very high. But it's in city. But yes, you, you can grow it organically. Bigger than 10 million. That's going to be difficult because as a franchise you have territory. So you probably will need to buy another territory to grow to that side. But I think it's possible to. Yeah, I know that there's one agency in my territory, one city was doing $1 million a year just on that small territory and I've got three or four of them. So yeah, I can. Yes, it's it's all a question of finding the caregiver, but also having the right cultures. Because if you grow with, you know, no culture, then you're dead. So what I did the last four or five years, I put together a platform, platform with a lot of trial and error, with tools that can help me grow very quickly. Okay, if you tell me two years ago or three years ago, can you hire 10 caregiver a week? We say yes, but it's a lot of work right now. We can hire 10 caregiver a week very, very easily without any, without batting an eye. It's not an issue anymore. Can you onboard six new customer a week? You told me that two years ago. I didn't ask the organization for that. Now, yes, I can do six. I can onboard six, 10 customer. We send a nurse because in our state we have to send a nurse and everything else. Yes, I have organized in a way that we can do that. So now I have the platform. So next step is to grow the platform and yeah, organically is probably what I want to do and what we do.

[49:25] Host: And Jerome, assuming you can find the customers, what capacity do you think you're, you're at like this platform that you've built. What, what capacity do you think it could support?

Guest: Oh, right now I'm nowhere to where I could be. Let's go that way. Oh, yeah, yeah.

Host: Okay.

Guest: I'm nowhere. I mean, okay, I can't be at 10 million, but I think growing to 2, 3 million dollar years, to 2 or 3 million dollars is probably feasible within the next 2 to 3 years. Then after, it depends of, you know, plenty of things. You know, it's, I think it's Mike Tyson once they would say everyone has a lot of strategy until they receive the first punch. Right? So something can happen. You know, Covid was a wreck ball in our industry, but we all went up better and longer after it. It reshapes the way we do business. So it's somewhat, it's not a blessing to have Covid, but it help us, you know, it helped the people evolve also as well. So we don't know what kind of cannot, you know, the fact that we had, you know, counting it was detrimental to our business because we couldn't send the caregivers. It was unavailable. So we are losing hours. So there was impact Covid. So it was not all easy. But yeah, I mean, the business, yeah, it's a good business if you have a strong why and not a control freak.

Host: And in terms of the capacity or the market the addressable market for a home care agency, does it correlate basically to the population center? So Asheville is a small city or does Visiting Angels like in the middle of, you know, dc, The DC metro area. There's just, I mean do they allocate territories based on population or based on actual.

[51:14] Guest: Based on population. Based on population.

Host: Okay.

Guest: I think it's based. If I remember they base it on population and possible referral sources. Doctors, hospital, a rehab facility, all those kind of things. I don't know what their recipe is in terms of and it's probably question for them. But I mean what I like with them. People say franchise is a straight jacket but what I like with Visiting Angels is when I listen to people or talk to people who have other brands. We have a good amount of liberty inside the jacket to. You have enough liberty inside the jacket to have fun. Okay. It's not the army there or I mean maybe the army is fun too. I've never been in the army. It's what we say in France. It's okay. It's not very strict and there is things that you need to do, but they are wise. They are wise decision taking by our franchiser in terms of the thing we need to do. I think they make very, I mean from a business stand point of view it makes a lot of sense. Like you have for example an obligation to spend on SEO and things like that. But that makes sense. It's not something that they force you to do it, but some ways they don't force you because if you don't do SEO, you're not going to go anywhere anyhow.

Host: And it's not just about the straight jacket when you're considering a franchise network. It's also about the royalties you're paying and are they delivering value to you.

Guest: Yes.

Host: And it sounds like you, you touched on this earlier. You feel like you're franchise or provides a lot of value.

Guest: We have an intranet and man, I mean there is so much value there. I mean, I mean there is stuff that I didn't need but you know, if you a starter at Visiting Angels, I mean it's all. It's plug and play. They basically map out everything. You just, you know, choose to apply the book and, and it's fantastic the amount of, of intellectual properties that it put in that we have an Internet, it's called intranet and there is so many documents and how to do a marketing plan or what to do us your or which vendor you can tab who have been invited by head office to Help you with a B Z, you know, so how to train your caregiver, how to, I mean it's huge, huge. The amount of data that they furnish is yeah, it's good value for money and the brand is one of the strongest brand in that field in the U.S. so it's also, it's what we buy. At the end of the day your business is going to do between 10 and 20% bottom line whether it's a franchise or not. Because what you don't spend, what you spend on franchising fee, you're going to have to spend it to make yourself known in the community. So you will need to spend more in marketing that with a franchise because they market for you.

[54:08] Host: Right. I think, I think people often overlook, they think of the franchise, the license fee is just a tax. But if it's a good franchise or that money that you're spend paying them, you would be paying otherwise in doing the services for yourself that the franchisor is providing to you hopefully at an even better value.

Guest: For example, they ask you to, to commit to a certain event that you need to go and things like that. It's not five times a year but it makes sense because you meet other franchisees and you can share and discuss what's working with them. So it's also a good system where you're not alone in your little ivory tower and you can talk and speak with those people who basically have the same issues and you and say oh we did that, we did that, that. So it's a, it's a, it's a community also.

Host: And as I said, there seems to be quite a bit of interest in this type of business among people buying businesses and also from private equity. So from larger, better capitalized players. Are you, do you see that as well? Is that something that's talked about from inside this industry?

Guest: Not. I mean I heard it, I read it. I think one of our competitor have been bought by private equity. I don't know what, what's going to happen with visiting angels. I don't think that they want to do that. I don't think that the owner would like to do that or so it's, it's up to him. At the end of the day, even if a private equity buys a brand, they will make sure that we on the ground are happy with them. So it's, it's not like the franchiser is a boss and we are employee. Right. It's like a, it's a wedding. It's like any partnership, they think you don't like and they think you like and you just have to go with the flow. And if you're not happy, you sell your business and do something else. Yeah. So private equity, I heard family office also as well were present in that field. You need to have a very good operator to do that. You really need to have someone who knows the field, know the volatility of the employee. Because we have. It's like the restaurant business. We have a high rate of, you know, people coming and leaving. So yeah, on the paper it's a good industry to be with, but you really need to have good operator to do that.

Host: Well, actually, let me ask that a little bit, Jerome. Let's say in your case, say you, you know, you've gotten Asheville to the point where you. It's kind of running itself. You, you know, it's. I want to call. I don't want to say the P word passive, but it's kind of running itself and you know, then Lenore, you'll get it there. Maybe you have another couple of. Maybe you buy another territory or two and you get them each to 2,3 million. That seems realistic. You say you're now you're at 10, 15 million across three or four territories and at some point you want to, let's say, step out of the business altogether. What does a. An operator look like to do this? A really a strategic operator. Not just somebody who is under, you know, doing the scheduling and doing the hiring, but somebody who you would really feel comfortable moving back to Destin and giving them the business to run while you retain your ownership of the business. What is that? What does that paint a picture of that strategic operator?

[57:39] Guest: It's a question that I'm going to address this Friday with a person who let me with a business because that's actually the question that I have. And he asked me why do you want someone. I mean, you know, you just integrate Lenor, so it should be easier. But I think it's someone who understand the industry is someone which is very, very good with administrative. I'm. I'm crap. That's not, you know, it. It asked me to fill a paperwork. Taxing like that, I just have. I basically have. Can't do it right. So my wife's very good at it. So we very, very compliment each other on that. But administratively, someone who is strong, we can. I never been a guy who like to have follow process and things like that. You know, I think I read the book Traction and I say that's it. That's exactly what I need. I'm happy to do business development, to have the vision to talk with other guys and try to see things and put the vision and we have a strong vision in our. I design a whole vision, we design a whole vision and we want to be the best agent to work for in our territory. That's a very strong statement that we're making. And we work with three big value which are, I mean integrity, communication and professionalism. That's really how we control our decision. So someone who can understand my vision there to be the best agency to work for in my territory. I want my caregiver to say hey, don't go anywhere else, go work with angels, they're the best in town. Because if I have the best caregivers and I've got the best career and then having that person who can basically do the day to day operation, you know, customer cancellation, you know, workers comp. We are just an injured caregiver today. There's plenty of little things every day in the office that you need to tick the boxes and I'm not good at ticking boxes. I'm good, I'm doing this, but I'm not good at following them. So basically someone I can do a list for and hand it over and say hey, here's your week. So yeah, and someone will basically also want to be part of the adventure to grow something big because we really have right now I really have some two agencies that can be much, much bigger than what they are. So it's basically probably sharing also as well part of that growth.

[1:00:00] Host: Great. Jerome, last question. Since you've started this adventure in the home care space, what muscles would you say you've developed and what muscles would you say have atrophied?

Guest: The desire for control is smaller than it used to be. Not because I wanted it because I can't. So that's a good one. A listening skill is probably something that I develop on trying to follow the process. Visiting Angels give you plenty of good tips as a franchisor and I was not always listening. But now I'd rather you know one of the guy I talked to who's very successful business of visiting Angels say it's very simple. We just do everything that head office, we call the head office show us that it works. And I think that probably that maybe more listening skills here. And I learned not to fear anymore trust myself. And that was a big one because I didn't trust myself as a business owner. If you have told me five years ago you're going to end up an agency and you have probably 60, 70 employees. Wow me. Now it's. It's just like, yeah, I want to grow bigger, but I want to have a business where people enjoy being there. That's important.

Host: And anything that you think may skill that you previously had that has not. That's not as strong anymore.

Guest: Yes, very funnily. I used to be good at looking at finance and spreadsheet and things like that. Not anymore. I can, I can still get into it. But I used to be like a geek in terms of a. You can throw me financial and now I'm not even. I don't even. It's not like bore me. It's just like if you send me another business to buy, I will probably dig into it but less intensively than the first one because you get. Instead of going too much into details, you go, you know, when you run one or two business, you know, you go straight to the essentials. So that's probably something that I've developed more is that being able to go straight for it, whether it's hiring person or making a decision. Right now, you know, I need to make a decision about my SEO spendings on both agencies and several people. And at some point it's going to be okay, what's essential and okay, let's go. And that's it.

Host: Jerome, this has been great. Is there anything that I didn't ask that you would want to share with the audience?

Guest: Well, that's funny you're asking that question. I always ask questions to people also as well. Whether it's an interview or someone I talk to or I say always, what is the question I have asked? I haven't asked you that I should have asked you.

[1:03:04] Host: It's a good question, right?

Guest: I don't know. Yeah, it's a very good question. It's a good question too. I. I don't work probably what's next? And the answer is I don't know. As you say, probably. I don't know if I'm going to buy one or two more or if I'm going to buy something different or look for something different or there is a lot of uncertainty. I'm actually looking at a couple of things too. We. We're going back and forth in my wife. Her parents get not getting younger and they're in Europe. So there's a possibility that maybe we've moved to Europe that it won't be now because. So there's a lot of things in Europe right now. So it's. It's a bit More complicated. But I need first to get those two puppy up and running very well.

Host: Well, here's a question for you, Jerome, because we asked this. I. We talked about this in the pre call. You know, you. The way you're talking about your business today, it seems like it's. It's basically quite successful and you're really happy with this. But it, but those hard moments, particularly you know, those first six months and then in learning how to do this business, learning how to schedule correctly, how to hire correctly, how to treat your. Your caregivers like customers was actually quite challenging. Really hard. And what I asked you was, would you do it? Would you do this all over again? Like if you, you know now what you knew then would you. Would you go down this path? And I think you said no, but that your wife would say yes. Or did I have. Do I have that backwards? But one of you was a no.

Guest: My wife was a no.

Host: Okay.

Guest: Okay. My wife was strong. Oh no. What was the strangle for me? Yes. I think I'm where I'm supposed to be. Okay. Being a control freak. I bought the business that helped me not being a control freak anymore or less of a control freak anymore. So I bought my own medicine. So if that makes sense. I bought something that take me out of my ways and destroy completely me. And I would all over the place and helped me construct as a person and a business owner. So I loved it for that. There is probably things I would do different and sitting on my purse would probably. I would probably spend more quicker. I lost time there. I really lost time in terms of, you know, how I should have done things and because I was in fear. And you know, when you're in fear, you take bad decision. And I forgot that I was a guy who decided on a win to go live in the US or move from Destiny to Ashfield. Just following the flow. So I don't know if the flow happened again. I would be more following the flow, whatever it means. Okay. Whether it's home care. But I look at other business. I look at fencing company when I was investing. I look at plenty of other businesses. A boat rental management company that I always wanted to do something that has a meaning. And some of the employees that I have are here because the business has a meaning. They just don't want to be in a business. They want to be in a business that has a meaning. Engineering good caregiver for mom and dad. It's. It has a meaning basically. And we all very, very at the office level, we all Very careful with what happened to our. We communicate on a regular basis to make sure that our caregiver do the right thing and the customer will treat it. That's very important to me and to my staff too. They really. They know that and that why they hired you.

[1:06:42] Host: I'll close with one other little visual that you'd given me in our pre call that this is the type of business where when people are wearing. Your caregivers are wearing their visiting angels T shirts at the grocery store or whatever, people will come up to them and thank them for their service. Do I have that right?

Guest: Yeah. I mean, the whole healthcare industry, whether it's a nurse or PT, OT, caregiver, CNAs, it's not an easy job. You're going in people's homes. Sometimes you're not. You are wanted, but not wanted because mom and dad knows that they have to have a caregiver if they want to stay at home, if they don't, and the family will send them in a nursing home. So there is that kind of. So it's not easy. And to take care of, you know, personal. I mean, cleaning someone, it's okay to clean. I mean, I have done the diaper for my. For my kids, but for elderly, it's not necessarily easy. So, yeah, I have a lot of respect for those guys. They. They're really heroes.

Host: Jerome, thank you very much for coming on and sharing this story. What an adventure. And an adventure with a real why and meaning behind it. Beautiful stuff. Great to hear about this industry. Thank you very much.

Guest: Thank you very much. Goodbye.