Transcription
00:00:07:20 – 00:00:45:23
Mara Shorr
Welcome to Shorr Solutions: The Podcast. I’m one of the hosts. Mara Shorr, I’m a partner in the medical practice management company. Yes, Shorr Solutions. Who’s the other host, you may ask? Easy answer. That would be my father, our founding partner. Jay Shorr. Together, we now have an amazing team and clients across the country. Listen as we chat, converse, strategize and commiserate over life in the aesthetic medical industry.
It’s time for you to listen, learn, and be inspired as we help you kick start your practice. Because who doesn’t want a little more help? Welcome to Shorr Solutions: The Podcast.
00:00:54:24 – 00:02:25:21
Mara Shorr
Okay, well, good morning. Good afternoon. Good evening. I am Mara Shorr. I want to introduce this handsome gentleman. Jay Shorr is not only our company’s founding partner, but the last names.
Yes, the last names are the same. Jay and I are a father daughter team. And today we are going to talk to you about the important management lessons that we learned on behalf of our clients. Our clients learned and a heck of a lot of what the world has learned from Covid. With that, Jay, when the pandemic hit, let’s just say that you were working around the clock is an understatement with our with our clients because this was unexpected, obviously, the pandemic.
Now, you have talked about anyone that’s heard you speak before. You’ve been talking about preparing for the unexpected for a long time. But this is truly unexpected. And first and foremost, let’s talk about that some of the different ways as far as a lesson we all learned from Covid about preparing for the unexpected and some of the different ways that people and practices need to prepare for the unexpected moving forward. So let’s go ahead, Jay, open it up for some conversation. Father daughter banter, all the good stuff.
00:02:25:23 – 00:02:27:08
Jay Shorr
And you’re going to get it all.
00:02:27:10 – 00:02:29:11
Mara Shorr
I know. That’s why we love this.
00:02:29:12 – 00:03:58:07
Jay Shorr
Because you asked for it. Truly. Not only am I so glad to be here, we’re so glad you’re here because our main mission is to try and share some of the pearls that we have learned over the past year and a half. So who would have ever thought that we would be in the position that we’re in today? Quite frankly, one country over another country, It’s all identically the same.
The only difference is the span of time that it affects you, the span of time that vaccines can reach you, if you elect yay or nay to accept the vaccination. And lastly, the future of what you’re doing about it. Because as it affects higher ratio of illness, sickness, death, unfortunately, it all affects us at different times. So let’s get after it.
Let me share what I what I have learned from experience, because I have always done a lecture presentation around the world, literally on preparing for the unexpected, Now Mara let off with that. But my unexpected included disability. It included fire, it included tornado, it included hurricane, it included death.
00:03:58:09 – 00:04:12:15
Mara Shorr
It did not, however, include which Jay. This is something that you and I, you know, talked a lot about at the very beginning of the pandemic. It did not include if a deadly virus took over the world and shut the entire world down. That was not something that we anticipated.
00:04:12:17 – 00:04:21:18
Jay Shorr
That was a hundred years ago with the quote unquote, what it was named or referred to as the Spanish flu pandemic.
00:04:21:20 – 00:05:47:02
Mara Shorr
One of the things, Jay that, sadly enough, ties into one of the things you had mentioned, one of the the top things that we recommended before, but I can’t emphasize enough on preparing for the unexpected is making sure that the practice owner has life insurance, that there is a retirement plan. But, you know, protocols for a shutdown. But let’s start with life insurance.
We have started working with practices and you have a I like to say the Jay Shorr emergency checklist that you go through in the very beginning with any client and, you know, meaning the practice owner and there have been some that previously don’t have life insurance. But, we’ve seen practices. Luckily, none of our clients that have had doctors that lost their lives due to Covid, especially before the vaccine.
We’ve also seen that… they’ve had other illnesses. We’ve lost, unfortunately, some clients that have had cancer. We’ve watched as clients have lost their battle with cancer. And so let’s talk about why should a practice owner have life insurance and how do they go about finding and I’m going to say a short version knowing that you’re not an insurance agent, but how do they even go about getting started when it comes to getting life insurance for themselves as a practice owner?
00:05:47:04 – 00:08:17:23
Jay Shorr
Great point, because people usually thought that life insurance policies were only good. So in case you got sick or you just died of old age of any type of geriatric disease. Now, Mara, when you speak about life insurance, the purpose of life insurance can be twofold. One is to take care of your family because there will no longer be any income arrived or derived from the hard effort and work that he or she as an owner was producing.
All right. And therefore, the practice may have to close. Preparing for the unexpected did and therefore no income and at the untimely passing of the doctor, then there’s no income. So this insurance money is… the insurance policy is purchased way ahead of time for protection. That’s why it’s called insurance. I hope not to collect on my homeowner’s insurance.
I hope not to collect on my disability insurance. I hope not to collect on health insurance. I know I will. All right. But I hope not to collect on auto insurance. But I have it. That’s why it’s called insurance. The second main reason and I don’t know what side of the aisle you’re going to sit on if you’re not married or have children.
And there are plenty people, bachelors and bachelorettes who do not have surviving spouses and or partners. All right. And therefore they always feel, well, do I need insurance? Well, I would think maybe. Is there any next of kin that you would want to receive that? But if it’s not going to affect them because of the financial remuneration that you’re no longer able to receive from the hard work of your business.
And if you have a partner in your business and I’m talking about a business partner, not a life partner, then that practice may no longer be able to receive the financial remuneration because of the gross revenues and net profits that you’ll no longer be able to generate, whether that’s for you or your business partner.
00:08:18:03 – 00:08:33:09
Mara Shorr
So, Jay, what you’re saying is that even if there are if you are not married and without children, that it may very well make sense to have a life insurance policy to help your business partner carry on the business;
00:08:33:09 – 00:08:34:09
Jay Shorr
If there is a business partner.
00:08:34:10 – 00:10:42:13
Mara Shorr
If there is a… correct correct. And one of the other you know, now that we’re talking about what happens in the business component of a you know, we’ll say whether it’s business partnership. Right. But when it when it comes to the business, if somebody is no longer with the business, no longer with the practice, not because they have passed away, but because they are retiring and, you know, let’s talk a little bit about that.
One of the key reasons I want to talk about that is that, Jay, what you and I saw was very, very interesting during I will say, this past year, not covered, but this past year, I would say from September, September, October through, you know, of 2020 to date, one thing we saw was that people that had maybe planned on retiring eventually, people that had planned on retiring in the next, I’ll say, 3 to 7 years on average is what we’re seeing.
They have had enough. They quite honestly, they’ve had enough of the rigamarole when it comes to running a business. They’ve had enough of not being able to find great staff because of the great resignation, which we’ll get into separately. They’ve had enough of. The practice is open now. It’s shut now it’s open again now. It needs to be shut down.
And depending on where you are here in the United States, depending on which state they finally have said, I don’t want to anymore, I’m over this. So if you’re a golfer and I just use that as one example of a hobby, you say, look, I want to go spend more time with family traveling. I want to do, you know, I really want to enjoy life.
I don’t want to deal with the hassle that this past pandemic brought me. So we’re seeing more and more people wanting to retire at earlier than they had planned. Let’s talk about, Jay with that life lesson. When should someone start thinking about their retirement plans and their financial planning accordingly, knowing that they’re a little bit different? But that’s one of the management lessons we saw of managing your practice. Let’s talk about when should someone start think about a retirement plan.
00:10:42:15 – 00:13:30:05
Jay Shorr
We had gotten many physician and practice owner requests in the past that, you know, I’m thinking I want to know what my business is worth. We’ve gotten so many of those in the past year, and we’re working with many right now for two reasons. One, I want to know what it’s worth if I want to sell it and B, I want to retire.
And I’ve had like a step up. You know what I thought I wanted to retire. Now I want to retire earlier because I’m really afraid that if this doesn’t go away or I get sick, it will create much more of a hardship because my failure to plan was my plan to failure. Now I’m going to give you and share my personal story, which will lead into why it’s so important.
Back in November of 2011, I was a partner in a leading major dermatology plastic surgery practice here in South Florida. We had three offices. We had a surgery center, and in November of 2011, the medical director was diagnosed with stage four cancer and slowly had to exit out of the practice. Other than an advisor, she could do consults, but she could no longer perform surgery.
Her condition weakened, and in June of 2012, she lost her short battle with cancer and the practice imploded. Now, the reason I bring this up is that medical director was my late wife. Now I want to share with you the importance of all the things that you have to do. Yes, we have life insurance for one another. All right.
Yes, we had IRAs. Yes, we had retirement. But our plan for retirement, excuse me, was five, seven, ten years away. All right. Now, this is in 2012, nine years ago, I wasn’t even 60 years old at the time. I’m 67 now and probably would have been retired now. All right, if our plan came to fruition. But we didn’t have a plan because it couldn’t happen to us.
And that’s the importance of having a plan that you can effectuate at any time or not.
00:13:30:07 – 00:13:38:11
Mara Shorr
Yeah. So, Jay, you say, you know, at any time when should somebody start thinking about creating a retirement plan? As far as…
00:13:38:13 – 00:13:40:00
Jay Shorr
Right now.
00:13:40:02 – 00:13:41:13
Mara Shorr
Does it matter how old they are?
00:13:41:15 – 00:15:45:03
Jay Shorr
No, no. If I want it, if you’re 30, 35 years old, fresh out of residencies and opening up and you work for institutional medicine, you worked as an associate, you worked in academia, and now you want to hang your own shingle, you don’t even want to hear that word retire because now you haven’t even start to begun to work your hardest.
All right. So but I always say to the young men and women, we got to be very careful to at least have protection because the insurance coverage is, while you’re young, are much less expensive. I probably at 67 years old, would be uninsurable. I’m in perfect health, by the way, but merely by the fact that I’m 67 years old.
If I am insurable, the rates would be sky high because going in for a ten or 15 year policy at 80 years old is we don’t insure burning buildings is the line that I always use. All right. So it’s not it’s not just life insurance, Mara. We’ll get into that. It’s also disability insurance, because at least if you’re disabled, you can get financially remunerated.
If you’re not drawing an income or if you have an agreement with your practice, then they will still pay you and that disability money. The owner of the policy, all right, can go to the practice however you want to design it. Now, you asked me a question earlier on is where should you get this insurance? Well, first, you really need to have an estate plan.
If, then what? All right. And that plan, I have a will. I have a power of attorney. I have trustees. I have whatever it is, if, God forbid, something happens to me, will execute my wishes, now.
00:15:45:03 – 00:16:10:10
Mara Shorr
I understand that the terminology may be different country to country, but the concept is the same. So even if the terminology is different country to country, you know, as far as a will versus a living will versus power of attorney and health care surrogate, you want to make sure that you you look into having each of those for yourself as well.
00:16:10:14 – 00:19:36:02
Jay Shorr
And you also want to make sure that the person who is your power of attorney or your trustee is someone that you believe will carry out your wishes beyond having a life insurance policy. You know, these are things I’ve learned. But let’s talk about when you should plan for retirement. The lesson I learned from Covid. So when did you start?
There’s nothing wrong with getting a current valuation so that you can see the progression of your increased revenue and profits when it comes time to want to sell it. And it also allows you in building that plan to make some severe corrections. But don’t do this yourself. Seriously, get a professional who really does it because you’re really running your business.
Not all of you. Most of you like a horse with blinders. You are focused on your practice and not necessarily all of the dollars and the cents and all the chart of accounts in your P&L, the determined ratios. And are you doing well? And yes, your prices or your your expenses increased, which is okay as long as it’s proportionate or lesser than the percentage of increase of your revenues, that gives you profitability because there’s only two ways to profitability, increase revenue and decrease of expense. The end over.
And we want to secure and maintain your profitability and therefore you should have the plan because you can always review the plan, review it again and review it again. Now, those people that are planning on retirement now because they want to sell and we’re helping several right now. The first thing is the valuation. Financial and an evaluation of your overall practice included in an evaluation, I always like to put a valuation.
so we can share the opportunities in the evaluation and put the valuation based on a multiple of gross revenue or a multiple of earnings. E-B-I-T-D-A, EBIDTA. All right. It’s the earnings before interest taxes, depreciation and amortization now depends on which multiple you want to use plus assets and debt.
All right. And you need to plan accordingly so that you can get it in perspective to the prospective buyer. Because Mara and I represent buyers and we represent sellers, but never together in the same transaction because of a conflict of interest. So when we represent the seller, I represent them as if I was representing a buyer because I’m going to be prepared for all the questions that a buyer’s agent could be us, if it was the other side would ask.
And there’s nothing more embarrassing with having faulty and incorrect information. So I always look at the negative sides of your practice so that we can help to improve upon that. So that when a lawyer or a consultant or a financial advisor from the other side, the buyer asks you specific questions. We already have the answers.
00:19:36:02 – 00:27:03:12
Mara Shorr
Always. But then on the other hand, I want us to transition into if you don’t plan to sell your practice and you don’t plan to close down the practice right, if you plan to continue running the practice. So we always knew, but I’m going to say that we really further solidified and implement as one of the other lessons learned protocols for an emergency shutdown.
And it actually caused us here at Shorr Solutions to create just a series of templates and phone scripts and checklists of what happens if the practice has to close down today. What happens if, you know, the practice is going to have to close down in 72 hours? And those are what do we tell patients? When is it that you are rescheduling?
If you are a surgical practice, what our local laws and guidelines saying versus what our national laws and guidelines are saying now, this is just we used Covid as the framework, but here in our in our fine wine country in the past year alone, will, if we use 2020 as an example, but in the past year alone there have been earthquakes, hurricanes, tornadoes, a pandemic, wild fires.
And I always joke that at the very beginning of 2020, there were murder Hornets like what? You know, of course, murder Hornets didn’t cause anything to be shut down. But I joke and I and not joke that we’ve even had our team create protocols for our clients about what happens if an emergency shut down due to loss of power or a natural disaster versus something that power is still going to remain on for example, you know that you know, you’re still able to house your supplies and your product that needs to be refrigerated.
So. Or do you need to find an alternate an alternate home for that an alternate issue? Are you able to remain in contact with your employees or will power go out and their phones might be dead or landlines or not landlines, but supplements might be down? So I really encourage create protocols, think these things through ahead of time the best you can so that either you have that framework there when it happens or you’re about 50% to 75% of the way there.
And I never would have known regarding Covid. So with that, one of the ongoing things we’ve learned is that a strong employee handbook is going to make all the difference in just management moving forward. We have always known, but truly have refined again and again in the past year and a half that every employee handbook should include if it does not already, your social media policies, who is able to post what under the practice’s account?
How were you allowed to share or reshare photos? Are there any defamation clauses that you need to put into place when opinions get very strong and heated and differ? I will say that even if it’s not Covid related, we’ve seen a lot of this when it involves politics, when it involves social movements, etc. So you want to just make sure that you have this outlined ahead of time.
PTO policies, i.e. paid time off this past year was incredibly difficult to navigate, especially here in the United States as far as when our employees paid out of a government pool of funding. If a practice applied when they’re no longer a government pool of funding, what with the PTO policies were before vaccinations, what are the PTO policies now after vaccinations, i.e. if somebody comes down with Covid And so you know which positions and I encourage you to put this in your employee handbook, which physicians are able to work from home and which are not able to work from home, for example, an injector cannot inject at home.
But are there other things that they could do if they were forced to work from home? And what happens again if there’s power versus if there’s not power? So breaking some of these down, what are the work from home policies? What do you need to do to secure your technology? How often do team members need to check in with management?
All of those good things? And then what are your protocols put into place when an employee, a team member, suddenly leaves the practice and suddenly departs? We’ve seen an incredible departure this past year and a half, which is known as the great Resignation, which we’ll talk about just next. And you need to have in place protocols for what happens when an employee leaves that which passwords are changed by whom and when, when it comes to, you know, anything from technology passwords, when it comes to locks, when are you collecting keys?
What is owed back to the practice? What is not owed back to the practice? In terms of uniforms, this sounds silly, but we’ve you know, when is an employee paid their last paycheck? And some of this is guided by national guidelines and laws. Some of this may or may not be. So I really encourage you put everything into your employee handbook.
Your employee handbook is allowed to evolve and change. This does not have to be a document that is only created when you first open your practice. You print out 50 pages, 70 pages, and that’s it. No, this should be a living, breathing document because H.R. guidelines are living and breathing. So we want to make sure all of this is spelled out specially because this past year we saw the great resignation.
We have seen more employees leaving the workforce at a more rapid rate than ever before. And we’ve seen that for a number of reasons. But we know employees will leave at this point if they are not paid fairly, given fair benefits, whatever that looks like to your geographic region. I know that in some countries, you know, certain amounts of leave are given from the federal level and other countries they are not.
So it’s up to the small business, which is a whole other issue that we won’t even get into. But we talk, we look at fair benefits, we look at flexibility and first and foremost respect. But more than anything, the great resignation has left an incredible number of positions open, which means that employees that are great employees now have more choices of where they want to go, and it all comes down to supply and demand.
So with that, I want to thank you all for joining us. And if you are looking for more information, if you’re looking to connect with us, these are some of the best ways is not only our podcast at Shorr Solutions: The Podcast, watch our webinars, sign up for our newsletter and truly connect with us. We always welcome that. So with that, thank you so much for joining us on today’s conversation about the important management lessons we learned from Covid.
00:27:11:07 – 00:30:07:02
Mara Shorr
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So that wraps up today’s episode of Shorr Solutions: The Podcast. If we mentioned any quote, links in our show notes, be sure to check them out for the easiest way to discover your best solutions you can find them. Yeah. In our show notes.
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