Katherine: Hello everyone, thank you for joining us on this needs to be said. We’re here with our friend Paul Contris of Welcov and he’s going to be answering some more business questions for us.
Paul, I get excited when I have the opportunity because so many people are starting businesses, as we talked about in previous conversations, and they don’t know what to do when they’re trying to grow fast. They’re trying to get to where you are like in 10 minutes or even a year, and they don’t understand the patience of it all. I want to ask you some more questions, definitely it’s going to help those that are new in business, that are thinking about business, that are not quite sure what to expect other than the excitement of owning my own business. Okay? Are you cool with that?
Paul: Sure. Yes. Thank you.
Katherine: The first question I want to ask you, what has been a surprising change in how business is done now verses when you started doing business?
Paul: Well, I hate to give away my age here, but when I started in this business, the long term care business was 1983, 84, and man I’ll tell you, we’ve been through some major changes in the last 30 years. I guess for new business owners, that’s what I would say is, the only sure thing is that things are going to change. You really need to expect that and prepare for it. I think one of the keys to success is learning how to adapt to that change. When I started, the long term care business was primarily nursing homes, skilled nursing settings. It was really before the advent of all of the wonderful options we have today in the housing, the senior housing market. Assisted living, independent living. That’s probably been the most significant change is that the industry really transformed how it provides services to the elderly in a very positive way because 30 years ago, really the only place for your mom or your dad when they got to that point where they need some extra help was a skilled nursing setting. They could be there with people who had medically complex conditions, and a lot of times the people who were in nursing homes, it wasn’t really that appropriate of a setting for them and the industry responded with introducing, like I said, assisted living and independent living. More residential apartment-like settings for people who didn’t need 24 hour skilled nursing, RN LPN care.
That really transformed the industry. I remember hearing somebody, there was kind of a common saying back in 1982, 83, some researcher come up with this idea or that extrapolating the numbers over the next 20 years as far as the demand for new nursing homes, and the elderly population, the supply, how it was increasing exponentially and they said you could build one 120 bed nursing home every day for next 20 years and you wouldn’t keep up with the demand.
Katherine: Wow. Wow.
Paul: He couldn’t have been more wrong because back then there was, I think, 16000 nursing homes in the country and today there’s about the same number. Because what happened, they came up with assisted living and independent living and nobody saw that coming at the time.
Paul: But that’s what happened. That’s been one of the big…and then there’s so many other changes as far as the reimbursement, what’s happened with the Medicare and Medicaid systems and that type of thing. I think that’s probably been one of the major changes in the business, the introduction of senior housing options.
Katherine: Let me ask you this, I know that’s your business …with the living skilled living, skilled nursing…you’ve seen many changes and just thinking about what you’re saying, I was like wow because if the other things wouldn’t have come along then of course he probably would have been right. He didn’t see the change coming either, with people inventing other ways for their loved ones to live in different types of facilities. Given that, it diversified things, so that would’ve been…if you depended solely on what that person’s projections were, you really had to be flexible and adjust and land on your feet, In order to be in business for as long as you have, 30 years at least, you’ve had to adjust to some things.
Talk to me about what you’ve had to adjust to and what the learning curves looked like? The reason I’m asking that, as people who are young in their business, when I say young Paul it is definitely young compared to the time that you’ve been in business. Someone who’s just starting out, they’re thinking of quitting their job to start this business and they’re expecting it to replace income immediately. They’re not giving themselves time to learn what’s happening out here. It’s easy to clock in and clock out because it’s already pre-made for you, but when you come out here you’ve got to create it. Create the job, create the money, create the clients, you know you have to do all this stuff. I want to know from you what has been one of the biggest adjustments you’ve had to make over the 30 years? Or some of the biggest adjustments, because I can imagine, every few years there would be a big adjustment. What was the learning curve like for you? Did you have to be quick? Did you have time? What did that look like?
Paul: Well there’s been a number of changes over the 30 years and I’ve probably done a better job at adapting to some than others. There’s probably been some that maybe I was ahead of the curve, saw it coming, made the adjustments and had a smooth transition. I know there was also situations where I got blindsided or caught by surprise and kind of had to play catch up and change something. I think that’s just the nature of running a business. You try to be as proactive and plan ahead as much as you can, but there’s always going to be… I mean the latest thing now in our industry is the affordable care act and health care reform initiatives and it’s totally transforming the payer sources, how we get reimbursed for the services we provide and there’s opportunity there, but there’s also a lot of pretty major headwinds. It’s reducing our length of stay, our average length of stay in our facilities which is reducing our revenue and at the same time, the affordable care act has created a situation where our health insurance costs have come up. It’s great that the unemployment is down, and the country is doing better, but that also means that it’s more challenging to get good employees and you have to pay them more. We have, on the expense side, we have upward pressures on expenses and on the revenue side we’ve got pressures pushing revenue down makes it very challenging.
Paul: Your margin gets tighter and tighter, but at the same time, it’s hard for me to complain too much because I am in a business where the fundamentals are pretty promising. The demographics, the aging of the population, but I’ll tell you it continues to evolve and change at such a rapid pace it keeps you on your toes.
Katherine: Absolutely, absolutely. When you talk about, and I’m glad you said, I’m not complaining but you definitely given us some insight, what to really think about. Because you have those adjustments you want to make, those adjustments, and some people think that if their steps are ordered, nothing should be an obstacle to them. That’s just not how you grow. That’s not how you overcome things and that’s not how you become someone who sees a good opportunity and seizes the moment and I like that you said “sometimes I’m ahead of the curve, sometimes I’m not” and so it lets people know we’re always learning, you end “we’re forever going to be on our toes and our business” because you can plateau and you get bored with that, I’m sure, but you have the opportunity to create something new or to be a part of another experience or another opportunity just to see what you’re working on is growing and doing well and sometimes it just gives another opportunity for improvement. That’s a lot, that is a lot, and I would like to add, that people just be gentle with yourself, be patient with yourself.
What Paul is talking about is 30 years plus. He has a lot of experience ahead of many of us in business so he’s seen where we’re going. He already knows where we’re going. He still enjoys it, – it’s rewarding, and we just need to be patient.
Katherine: We’re going to get there, we’re going to see some of those rewards too, or you could go back to work for somebody, that is your choice.
I’m not knocking it, for those who said I want to be in business, this is my calling, this is what I’m supposed to do, Paul is letting you know, there’s work involved. It will be rewarding, but there’s work involved.
What is something new that has come about, yet you found it was not necessary for your business? Let me give you an example, I don’t want to give away too much of my age either Paul, I still want people to look at me about 21 years old, so I’m going to say someone told me this information. There was a time when we could leave home and we didn’t need our phones, right? You can’t leave your house without your cell phone now, you’ll double back to go get it, but there was a time when you waited to make phone calls when you got home. There was a time when you went to get flowers you had to go to an actual florist, now you can order them online. There are some businesses out there, like your particular business, we can’t put that online, that doesn’t change. So I want to know in your business, what have you noticed that other people might be trying or using that just never became necessary for your business?
Paul: The thing that jumps to my mind, kind of new development in general in the business world over the last 10 20 years that haven’t really impacted our business is the whole outsourcing phenomenon. There’s so many services, manufacturing, that type of thing where business are going out of the country to lower cost settings, and that’s been a huge issue and challenge to a lot of companies. My business, you can’t really do that. We provide the services to our customers, typically they prefer to be in a facility that is close to their home, their hometown, sometimes you want to retire in a whole different state. Not something that can be outsourced. I guess that’s something that wasn’t really necessary for our business.
Katherine: Everything won’t fit, and the reason I wanted to ask that question Paul, is there’s so many things that glitter and shine and we call it the Bright Shiny Object syndrome out here and people want to jump on every new craze. You have to determine if it’s going to fit your business before you jump on it. It may just not work. Paul, I can’t see outsourcing working for your business. I don’t know enough about it, but because you work with people, I just can’t see a whole lot of it being outsourced or any of it being outsourced. There are going to be some things that just don’t fit our business and I want people to pay attention to that in their business.
They want to try something new, every day, and you haven’t given one process enough time and then sometimes you just got to realize, do I need a phone with me all the time? Years ago it was only doctors who were on call and they had a pager on their hip. The rest of us were able to sit through a meal and not be bothered. Now, everybody has their gadget right on their hip, so everybody’s being paged or called or commanded to be somewhere other than where they currently are. Is that really what you want in your business? Do you really want that to have to be the way you do business? Can outsource stuff? If you can’t what are some other options, or do you just need to leave things as they are? I think this is a good evaluation type question because people like to try things but you have to ask “Is this going to be the best use of my time? My money? My talents? My employee’s talent? Their time? How is this going to affect us in the long run?” That’s why I wanted to ask that question, Paul.
I want to say thank you again for being so gracious, answering the questions for the audience here on this needs to be said, because they need to hear from experience how to stay in this entrepreneurial race, how to stay there. People are trying to rush to the finish line and I have no idea why because they’re missing the experience but they need to know that every level of business, every part of what you do, every couple years every year, you’re going to have new developments, things to adjust to, things you’re learning and it’s just important that they know that so they can take their time and really get the full experience.
So I just want to say thank you.
Paul: Thank you, Katherine, it’s my pleasure.
Katherine: Awesome. Now outside of this interview, how can people get in touch with you?
Paul: The website is www.welcov.com.
Katherine: Awesome. Until next time Paul, have a wonderful day.
Paul: Thank you Katherine.