Your Only Competition Is Yourself

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Your Only Competition Is Yourself

Picking The Brain Of Bill Knight – Owner Of 20+ Clinics

I’ve got a friend from my network by the name of Bill Knight. Bill is the Co-owner, Cofounder of HealthQuest Physical Therapy in Michigan. They have over twenty clinics out there. He’s been successful. They do things right. I wanted to pick his brain. I don’t have a path to go down on this podcast because we cover a number of topics. I simply wanted to pick Bill’s brain on his experience and what he does successfully at his clinics to continue to grow and expand because I believe they were planning on opening up a few more clinics. The projections are great for their company overall. In general, I wanted to see what they’ve done right, what they’ve found to be successful and allow them to continue to grow.

I’ve had a few discussions with other physical therapists, as they’re looking to expand and grow and open other locations, those owners that I’ve talked to not only on the podcast but outside of the podcast, have been successful with expansion when they’ve brought on partners in those other clinics. If you’re looking to expand and open up another location, consider what you can do to make that person, that clinic director, a partner and have a vested interest in their success. I’m seeing that pattern both from my own experience and the guys that I talked to. That partnership is a way to go if you’re looking to expand but even outside of that, Bill has a ton of stuff that he can share. Thanks for joining me, Bill.

Nathan, I appreciate the opportunity to get on here to speak to you and to other professionals alike regarding my experience and what has allowed me to move into a situation where I can not only help others in this incredible profession both patients and other employees alike. Also, to take the profession and optimize the opportunities for my family as well.

You’ve got a ton of experience. I don’t have a particular path to go down. I know there are certain things about the business that I want to know and talk to you about. Before we get into that, do you mind sharing with everybody about your story, where you can from as a business owner and whatnot?

I have been a therapist for years. The first ten years of my career, I’ve worked in private practice for another practice owner who, at the time, was planning to bring the key staff members onboard as partners. I and my co-founding partner, Stuart Siegner, were two of those employees. At an all-staff meeting instead of discussing that any further, he told us that he had sold the company out from underneath us. We had put a good amount of our early professional career into that and planning that to be our future. When that happened, Stuart and I decided to go ahead out on our own and venture into this private practice thing and take that risk.

That was how long ago?

That was years ago. We started in 1998. At the time when we discussed that, we had also come to a mutual agreement that if we had the opportunity to help others, we would help others along their journey to ownership as well and not do what was done to us. Our model has gradually developed from that perspective and from that view.

It’s been a rosy scenario ever since?

Our first clinic did exceptionally well. I knew a ton of orthopedic surgeons in the area. At that time, nobody was doing their own PT in doctors’ offices, so we had more business than we could ever have wanted. We didn’t understand how to run a business. We didn’t understand anything about marketing. We were overflowing with patients. We opened two additional clinics at that point to handle the expansion. The bottom starts to fall out when all the groups of orthopedic surgeons in this area started opening their own practice, which then caused our model to crash. We were essentially in a state of panic and not knowing what to do. How do we save what we had created, which now at this point, created a new lifestyle for us?

It forced us to look at what we were doing and to come to the realization that we don’t know anything about business at all. We were trained to be physical therapists, to be clinicians and we were great at that. That’s why we had the business we had. Other than the people who are already loyal to us, we were getting far less from a referral source than ever before. When things were coming in, we did not know how to economize, hunker down and make it through that tough times. What we did was we looked at do we want to take the time to go back to school and get MBAs to figure out how to run a business or do we want to look at something more specific? We found a group within the profession that trains exclusively physical therapists and the whole business model side of running a practice. We started that in 2003. We were a little slow initially implementing the things that were recommended. Once we did, things started to take off.

I remember from talking to you in the past, you got to a point while you’re at three clinics and with all the changes that came on, did you have to scale back the number of clinics that you had at the time?

We never scaled the clinics back. We were close to closing one of the three. We were able to work through that. We were able to implement a lot of the strategies that we learned. What happened and what would happen with any profession is things are heading in the other direction and things started to turn around for us.

If I remember correctly, your specific numbers were such that you’d gotten down to a hundred and something visits a week?

At one point, our busiest clinic, we were seeing about 350 visits a week. The other two clinics were around 200. We were seeing about 750 visits. When it got to the point where it was bad, we got to one week where we were at 158 visits between three clinics. At that point, we were panic-stricken. That’s what drove us in the direction we did. Things turned around pretty rapidly when we started to learn and implement some of the strategies again that we had learned through the training.

What would you say was one of the most important things that helped turn you around? Was there one particular action or thing that you did that you can look back on and say, “When we started doing this, things started to improve?”

The number one thing was putting the focus on active marketing, developing and understanding what marketing is, and all the different areas and elements of marketing that are there. Implementing that, understanding that people aren’t going to come to you that you have to develop relationships. You have to network with physician groups and with the community at large. That was a big thing that helped to drive business to us, to understand that we needed to know what was going on. That concept of tracking everything, statistically analyzing things and then planning accordingly on what steps need to be taken to improve.

Prior to the decline, you weren’t tracking statistics as closely as you started doing after the fact?

We were not tracking much anything before the decline started. We were seeing patients as much as we could. We tracked a few things but not that much. I had a person who worked with us early on that had some accounting backgrounds which helped. She helped us a bit from that perspective. Relative to understanding all the things that you need to track to know what’s going on, we weren’t doing a whole lot of that early on.

As you started implementing that program to track statistics so you could act accordingly to help those statistics improve and that helped out a lot.

When you put a statistic on and track anything and put the focus on it, if you’re taking ownership of it, it’s going to improve. We identified what objectively needs to be tracked on each position in the organization and started to do those things. As we did that, people started having a clearer picture of what they needed to do, what should be occurring. Lo and behold, things started to turn around for us.

I want to come back to your program on what you do to ensure productivity amongst your staff in regards to the marketing that you did at the time. A lot of effort back in those 2000s could be spent focusing on physicians and physician networks. What we’re seeing in the APTA statistics is the number of physician referrals has declined significantly over the past few years, some 50% or something like that. Have your marketing efforts changed in the last few years whether it’s social media or direct to consumer?

It’s changed. We still market our physician groups very aggressively. We have three full-time physician marketers. A physician still accounts for about 34% of our total referral source. We learn the difference between internal and external marketing. We’ve put a focus on internal marketing and got the employees to understand, to buy into the fact that it’s everybody’s responsibility to market and to draw business into the clinic.

You say 34% is physician referrals. Have you been able to track how many repeat clients?

The other big thing is we track the two together as far as repeat patients, previous patients as we call them, and referrals from family and friends from those patients. That accounts for the greatest number. That’s probably still about 42% of the business that we have and that stays strong. The remainder of that is outside community marketing and efforts through the school systems. As time has gone on, our marketing program has matured and become much more sophisticated. We brought on a social media expert that has handled and taken care of all of the social media marketing that occurs basically taking over our web page, our website and do tremendous things with that. We worked with the staff on doing videos and encouraging them to get out into the community and market and promote. That’s been huge for us. She’s done a fantastic job.

Have you been able to track your ROI on someone like that, your social media expense and web page work and stuff like that? Have you been able to track what your ROI is on that?

We have not isolated exclusively to that. We’re doing more and more of that. I don’t have a number to say this is exactly what our return on investment for that is. I can tell you that it is significant. Our growth continues to increase year after year. We started developing strategic plans. Initially what happens is you develop a strategic plan. You’re not sure what that is. You develop it. It doesn’t become anything. We’re to the point now where we develop it and we go back to it on a quarterly basis. The strategic plan has been a huge aspect of the entire plan. Focusing on that, understanding where we’re at in regard to that and addressing accordingly, I can tell you that all of the partners’ expectations on the social media site have been exceeded from what we’ve received on that. I can’t give you a number, but I can definitely tell you it’s an important aspect of your marketing program. If people aren’t doing it, they’ve got to get on the ball with that.

Who’s involved in your strategic planning out of curiosity?

The way our business model is set up, so we have a management company, which is the core of the umbrella. That management company has majority ownership shares in each one of the clinics that we have. We have partners that are part of the umbrella company, the management company. Those partners also act as consultants. The consultants or one of the partners will meet with the director owner at each of the clinics and together will develop a strategic plan for that clinic. We also have a strategic plan for our umbrella company that’s put together by the owners and our VPs within the organization.

You’ve been so successful. How many clinics do you have now?

Legal entities, currently we have twenty. Within those entities, we have outside what we call satellite facilities. If you take the satellite facilities into account, we have 24-ish. Things are going well from that perspective. It’s a model we’ve put together that when you get the structure, the processes, and the systems in place, it makes it so much easier to duplicate that process over and over.

What would you tell someone who’s starting off as a clinic owner, maybe they’re in their first year of ownership? What advice would you give them in this environment about developing a practice in getting started off? Any words of advice?

We are all trained as a physical therapist to be clinicians. We take great pride in being good clinicians. Most people who are ready to go out into private practice they understand at this point that they’re pretty good. They’ve pretty much mastered this whole clinical treatment side of the game. They have a strong affinity to that. They are drawn to that and want to continue to do that. If you are developing a practice, you need to understand and own how much you don’t know. Learn as much as you can and then get the infrastructure in place. The sooner you get the good infrastructure in place, the quicker your business is going to expand and grow to the point where it’s stable. Your life is going to get back to some form of balance. What I’ve seen in a lot of practice owners, and I know what I did for so long, was that 60 to 80-hour work week was a regular drag in every week after week after week. You’re in a mode of coping with what you’re doing. Oftentimes, it’s very disheveled. When you get a structure in place and systems and processes in place that goes away. That’s what I would stress with somebody is don’t let go of the fact that you’re a strong clinician. Don’t lean on that as your strength and not do all the things you need to do to get the foundation in place for your business to take off.

You need to become a business owner at that point. Not necessarily a master clinician, but if you want some stability in what you’re providing and what you’re doing. You feel confident in the service that you’re providing to patients that you need to take ownership as the owner and as the leader. Get some business acumen in place. What would you tell those same owners that might have a ton of competition around? Whether it’s a hospital-based network coming in, what would you tell maybe even yourself back in the day when you had all that competition come?

It’s what we talk to our junior partners and people who are coming on to partner with us on a regular basis is you’re not in competition with everybody else. It doesn’t matter how many people are in the area and how competitive that area is. If you have the infrastructure in place and you’re doing the things you need to do, your business is going to grow. That’s the great thing about this profession. We are scratching the surface on the number of people who take advantage of this profession and moving forward that’s going to grow more and more and more. I know early on people worry so much about somebody opened up across the street or down the street, “What am I going to do?” the hospital system. They’re so suppressive with their physicians and not allowing physicians to refer out. You need to have a plan. You need to understand that plan, be consistent with that plan, and continue to work it. If you do that, everything is going to fall into place for you.

One of the benefits that I see from people who are starting out in ownership is that there’s a capability of moving off of something that’s not working out. When you have a clinic or two and a number of physical therapists, changing the direction of that bigger ship can be difficult. When you’re small, you can be a little bit more flexible. You can accommodate the needs of the community a little bit better. You can make changes to the policy and procedures, take feedback and immediately implement them and stuff like that. There’s an advantage there when you’re young that allows you to make changes on the fly almost.

You make a great point there. You need to have the time to be able to analyze and look at what programs that you’ve developed and you’ve got implemented. If they’re working, continue to work them. If they’re not, don’t be afraid to make changes. I’ll give you an example. Years ago, things were grooving well for us. I looked at and idealistically thought I want this organization to be part of the solution to the epidemic that’s occurring in this country with obesity and the lack of movement that’s progressively worsening. Those are the biggest timebombs as I see them. We focused and put a lot of money and attention into these programs not to say that it’s not something that’s not important. The reality over time was that while it’s good, it’s a great distraction to where you need to be. It wasn’t paying the dividends for us from that perspective. We were a little bit slower than we needed to be to pull the plug on those programs. Having done that, you get refocused on what you need to be and you grow and build on the cash cow that’s gotten you where you are. From a business perspective, that’s the one thing I would recommend to everybody is stay flexible and don’t be afraid to make changes if you’re not seeing the outcomes that you’re looking for. To see those outcomes, you’ve got to be tracking. You’ve got to understand what’s occurring.

The important thing about your story is that you followed that. This feeling you had a little bit of a passion to do something good. You have the capability of doing it. You implemented it, but you also recognized that at some point, it wasn’t fulfilling its purpose or might have taken your eyes off of the catch down and what’s keeping you alive. Pulling the plug on it was an equally courageous move.

What we’ve done on top of that is starting to look at people in the communities where we’re at, they’re doing a great job with that already and partnering with them to assist back and forth. What that’s created is a flexible partnership where there are referrals back and forth, which has helped our business in the long run on the PT side. We’re helping not only the people we’re referring to but the people who are being referred to experts that have developed a program. From that perspective partnering with other people and networking as we have talked about is a good idea.

The cool thing about that is you’ve found people who are the experts in that. You guys were trying to become some of that, but it distracted you from where your core business was. Now you’re able to partner with experts and support them in what they’re doing. I don’t want to be judgmental, but they’re probably doing it better than you were or at least you like to focus on that.

What you run into is not only the networking with that particular group that does a better job producing a better product than we were able to. The collateral networking that occurs within those groups is significant because instead of now doing this all ourselves, the collateral networking to all the businesses that they’re working with has expanded and allowed us to expand with them. To become a viable force against the physicians and against the hospitals within the communities. We are well-known and well-ingrained into the community. That networking model has paid off.

Impressive how your goal to make that part of your clinic eventually became a goal for you to support the experts in it and have now that’s paid off in networking and referrals. It’s most definitely a bigger having a greater influence on the community. I want to go back a little bit to the productivity of your company because to get as big as you are, and people need to be productive. I know you shared with me in the past a little bit about your productivity expectations out of physical therapists. Could you share with me a little bit about the program that you use to ensure and have an agreement with your physical therapists as to their productivity?

There’s a two-part response to that. From a marketing perspective on the model that we use, we essentially look for therapists who are more entrepreneurially driven that understand what that requires. We have transparent communication with them on all levels such that they understand your performance could dictate opportunity in the future to have your own clinic and to partner with us. That in itself has been a significant recruiting tool for us. The other side of the picture is what does full transparency, communication and expectation mean? It allows us to identify those people that are not afraid of performance and helps to weed people out. We have this program called The Fair Exchange Program. When we bring a physical therapist or a PT on, we explain to them their entire cost to the organization which will be their salary, payroll taxes, benefits, vacation, personal time coverage, professional development, and educational development costs.

What we do then is we look at that and expect to get 3.8 times that number in production or in visits. We have a formula that we use for that. If they get more benefits if their cost on that overall package rises a bit. They have to work a little bit harder to see their minimum required the number to have a fair exchange. Once the fair exchange is met, let’s say your weekly number is 60 visits that you need to see to get a fair exchange. If you’re averaging 65 visits a week, your five visits per week above what you needed to be. At the end of each quarter, we look at how many visits above the number that you need to see are you. We pay them 25% of the total dollars of that are brought in on those visits. It’s not a bonus system. We call it a flexible pay program. They have a guaranteed base salary. They have a flexible pay program where they can earn more money based on their productivity.

They’ll have a smaller salary but based on their productivity, that other portion of their “salary” could vary depending on the productivity.

We’re competitive in our area on how we pay people based on a starting salary when people come in. The difference between what we do and what a lot of companies do where companies give regular raises that have nothing to do with productivity. That increased income that they earn is truly earned income. What it does is it weeds out those people who don’t want to work hard. They don’t understand that the private practice entrepreneurial model. It also identifies those people who can thrive in this environment. Those are the best people to partner with because they understand and know what it takes to develop a practice that’s going to thrive and represent the brand of, in this case, HealthQuest the way we want it to be represented.

You found that sets you apart as one of the employers in the area. Do you find that that physical therapist now gravitates towards you? Is it like a recruiting tool?

It’s a definite recruiting tool because now what happens is we hire people on and people from one class talk to the next class and they talk to their friends. We’re blessed in this area to have three universities that have PT programs so we do not ever have a shortage of students between PTA and PT programs. We have multiple students that run through the organization. They learn about the organization. They go back and talk to their classmates about it. It’s become a destination location both for the clinical internships but also for people who are interested in private practice. They now understand this is an opportunity. It’s much easier to recruit and to hire.

I’d assume your retention is probably better as well because you’re getting those people who are a little bit more motivated and understand the model already.

It’s funny you bring that up. I try to look at research and a lot of different areas. There were some studies that came out years ago that indicated that if you can find a way to maintain interest and attention in an employee. You can get him to stand with you for three years. There’s an 80% chance that employee will still be with you after ten years. The question is what do you need to do to maintain their interest that first three years so they’ve dissolved that habitual pattern working with you? What we did was we started to look at different things and we developed a professional development program within the organization. The professional program is a three-year program. Once they have several the courses they need to take and they go through a lot of different specific learning and many internships within the organization. When they finish, they receive a $5,000 bonus. They’re motivated. They’re going to learn and develop as a clinician with the $5,000 tag at the end that will benefit them. We benefit knowing that if we can get them to stay on for three years, they’re much more likely to stay with us. Do we get people who jump ship and move around as everybody does? Yes, we get some of that but I don’t think we get nearly as much as a lot of people do.

That program is not only professional development in terms of continuing education, but it’s also leadership development?

There are two tracks to it. The initial track is clinical. In the clinical development program has several different markers that they need to hit. Within our organization, we have a lot of very experienced, well-trained clinicians, some that do continuing education courses on their own. They teach ongoing continuing education and they do weekend continuing training where people can come in and practice developing their skills. We have that side of the program. Once they finish that aspect of it, they move on to more of the business side, the executive training that goes along with that program. It helps some people who aren’t sure if they want to be an entrepreneur. It helps them identify, “Am I interested in this or am I not?” It also helps us identify people who are going to be big players and people we want to partner with moving forward.

I want to make sure we shared an experience that you have that you shared with me. I thought I want to share your experience with the audience here because you were having some issues at the front desk and you wanted to get a handle on it with your front desk personnel. You did one thing, in particular, using a secret shopper. I wanted to get to your story on that.

Early on, we had focused so much of our attention constantly on what was occurring clinically, what was happening in the clinical area. It somewhat ignored the most important aspect of your business and that’s that first impression where people are being greeted, met, and drawing their first impression. We started to look more and more into this from some communication I’ve had with other practice owners, etc. I started to look and I came up with the idea of identifying how good are our front desk people at greeting people at the front door, answering phones, and identifying potential patients. How are they at capturing that?

Everybody who is in practice and every facility has people that call in. They’re calling in with curiosity, shopping, thinking and searing. There are so many of those people who get called in. Those are what we call missed opportunities. Every time somebody escapes with getting signed up. I always thought that our practice was pretty good at this. I thought we do a pretty good job teaching people their requirements, what they need to do. I had a company that I was talking to that offered to play a shopper for us. She called while myself and two of my partners sat and listened to the phone call. We ended up calling eight different clinics. The results clinic after clinic were simply abysmal and every call occurred and the worse it got, the more anxious I developed. I found myself walking around. I was having a difficult time listening to it.

It reached the pinnacle when one of the clinics was called and the actual partner owner, who was the director at the clinic answered that phone and how he answered the phone and how he handled that phone call was disappointing and shocking, let’s say. We realized at that point we have a bigger problem at the front desk than we ever believed and knew that we need to do something about fixing this moving forward. I would recommend that everybody take a real good look at what’s occurring at your front desk. How much are you respecting what they’re doing at that front desk and who they are and how trained are they. Statistically, are you tracking what they’re doing at the front? Are you being brutally honest in not letting people get reasonable with you? Are you providing the training necessary as needed?

The biggest question is what are your training procedures like? Are they trained or did you hand them the keys after sitting with them for a couple of days?

Initially what we have been doing in the past is we have a central administrative building where everybody essentially handles all the HR, the billing, and the finance. People would come here. They would do all their paperwork in their onboarding. We do a small orientation training process. We’d send them out to the clinics and expect the clinics to train them where they’re running short staffed. That’s what they were put out were these people who are insufficiently trained. The first thing we did was develop a task force of other front office managers from all the clinics and we started to identify all the different areas where work needs to be done. From there, we developed a certified training program. Everybody has to go through the training and they have to get certified, which means they have to pass written exams and practical exams. They have to be able to perform in front of us to show that they understand how to do that. We have several different areas where we do different things.

The last thing that we did at the front desk that’s made a huge difference for us was recognized the number of people that call in or come in that is simply shopping. The fact that their front desk is expected to do a lot to essentially hook those people and get them in so that they’re a patient. They’re a big part of the sales process and we never recognize that and did anything to assist them. We’ve developed a program that essentially says, “You hook and bring people on, you’ll get a significant incentive.” We pay the incentive out quarterly, but it’s pretty significant. The front desk staff all understand and know when someone’s calling, they’re looking for shoppers and those people that they can flip because they know each time they flip, there’s another additional $50 or $100 that goes to their bonus that gets paid out quarterly. It’s been a big difference.

I like the terms that you use because number one you’re calling these patients shoppers and they are. If they’ve gotten to the point where they’re calling you, they’ve already looked at your webpage more than likely. They might have looked on social media. They looked on Yelp, the Google reviews and at the comments. They’re calling you and they’re not just asking when you’re open.

People nowadays are so much more knowledgeable than they ever were and that is because they explore a lot more. Everybody is looking for Google reviews, testimonials. Everybody is looking at do you have a sophisticated, well-developed, informative and creative so that it’s an interesting website. If you don’t have those two things, you’re going to miss out on a good chunk of people because they’re a good move on to the next one they find. That’s phase one. Phase two on getting them is when they contact you, they’re now asking informed questions. They know a lot more about physical therapy than ever before. You need a front desk staff member that is trained and can answer those questions, sound intelligent and interested in caring that can draw them in.

That might be the most important part. Are they interested in caring because if these people are calling and saying, “What times are you guys open and how many therapists do you have on staff and do you guys treat this malady?” If they simply answer those questions and hang up then that’s a failed opportunity. They need to be interested in caring and say, “Tell me about what’s going on. This is our experience and this is what we provide here.” That gets into the salesman part of it. That’s training that many clinicians bypass when they are considering their front office staff.

If you’re a great clinician and you’re thinking you want to go into private practice, it’s everything at this point is second nature. Back then it wasn’t. It was overwhelming. There was so much to know and understand. What you need to do is have some plan to understand how do I start to get the infrastructure in place? I highly recommend that you understand the value of that front desk especially early on because every call could potentially be a patient and you need to see it as such. You have someone that you have confidence that they’re going to draw those people in for you. That’s where it all starts.

Thanks for letting me pick your brain, Bill. You’ve got a ton of experience and you’re successful. Things that you’ve done have turned into gold.

The last thing I would say is we’ve made tremendous mistakes along the way. We’ve wasted a lot of money. The heart of what an entrepreneur is somebody who’s willing to take risks and understands that you’re taking a risk now so that the outcome can be multiplied significantly later on. Understand that moving forward so don’t be afraid to make mistakes and to lose a little bit here or there because you’re going to learn on the way. Later on down the line, the more mistakes you make early on, the better things are going to be for you later on. Develop that infrastructure and that plan and then take the jump. It’s well worth it.

You could definitely consider it tuition. You didn’t get an MBA. You might as well invest in some of the programs that you need to whether it’s a consultant or your infrastructure or the training that you do and consider that your tuition.

There’s no question that comes back so much greater than you will ever expect. I know it did for us.

Thanks for your time, Bill. I appreciate it.

Nathan, no problem. I appreciate you giving me the opportunity to share with everybody.

If anybody wanted to check out HealthQuest Physical Therapy, what’s your website? How do they get in touch?

They can go to HQPT.com and check out our website. If they have any questions, feel free to contact us.

Thanks, Bill.

Thanks, Nathan.

Important Links:

• https://HQPT.com/
• HealthQuest Physical Therapy
• Stuart Siegner

About Bill Knight

I grew up in an active, health-conscious family environment and I have spent my adult life passionately believing, living and attempting to exemplify the value of healthy lifestyle choices.  It is my belief that optimal quality of life is found thru conscious choices that nurture our physical, emotional, and spiritual self.

Shortly after high school, I was introduced to the profession of Physical Therapy and quickly realized this was how I wanted to leave my mark …assisting others.  I practiced honing my craft for ten years and then with the help and support of my family and founding partner, I came to see the opportunity to assist others beyond those that I could personally care for.  HealthQuest started from this realization and continues to grow and evolve today.  It started and continues with personalized hands-on care based on cutting-edge, evidence-based science and continues thru education, support and ongoing personal reactions with everyone we are privileged to assist.  Along the way, we have built an elite team that shares in this passion and philosophy of caregiving.

I am grateful for the opportunities I have been given, to develop and lead this organization and assist in its expansion as it seeks to touch and influence even more individuals along the way.  Thank you for taking the time to learn more about us and myself personally.  It is my hope and belief that the passion that this company was founded on, continues today and will always be as we expand into the future.

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