Move Your Home Care Agency Toward 20% Profit Margins

Move Your Home Care Agency Toward 20% Profit Margins

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Ruby Mehta: Welcome to CareSmartz360 On Air, a Home Care Podcast, and I am Ruby Mehta, V.P of Sales at Caresmartz. So, hold on to your headphones, folks, because today we have a marketing storm on the horizon. Joining us is none other than Steve “The Hurricane” ™ Weiss, President, and CEO of Hurricane Marketing Enterprises. Since 2012, Steve and his team have been empowering private duty, home care, home, health, and hospice providers to blow past.

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Ruby Mehta: revenue goals with a client impact topping a billion dollars. Yes, 1 billion with a B, but Steve’s not just about numbers. He’s here to show us how a powerful reliable marketing strategy can be the bedrock of compassionate care from developing referral sources to designing knockout sales campaigns. Steve, as in team. Take the reins, so your agency can focus on what matters.

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Ruby Mehta: providing top notch care. So, whether you’re looking to grow your client base or scale your business to new heights strap in Hurricane. Steve is about to share the secrets to mustering the marketing whirlwind.

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Ruby Mehta: Welcome to the podcast Steve. How are you.

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Steve Hurricane: I am doing great. Thank you so much for that beautiful introduction.

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Ruby Mehta: Thank you. Thank you for joining us today, and I am sure that our audience is going to love this conversation.

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Steve Hurricane: We’re gonna have fun. And that 1 billion with a BI love that you used the way you emphasize that because it is true. And it’s 1 of those things for the last 12 years. When you work with as many people as I have, and you help them get more patients, you collectively add that up. It even blows me away when I when I when I when I put it all together, and I start adding it up. So, thank you for that.

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Ruby Mehta: Awesome, awesome. That’s the beauty, right?

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Steve Hurricane: Sure, is.

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Ruby Mehta: Even realize what you’re doing, you, when you really take a break and really go through things that’s when you realize. But that’s that’s a beautiful thing.

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Steve Hurricane: Amen!

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Ruby Mehta: Yeah, all right, Steve. So what are the 1st steps a home care agency should take to evaluate and improve their profit margins, especially if they’re currently below 10%.

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Steve Hurricane: So this is one of the things I’ve been speaking a lot about lately, because so many agencies are below 10%. And and it’s a very difficult place to be, you know, when you think about your business, and a lot of folks

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Steve Hurricane: fall into this position where they’re using their business as a cornerstone piece for their retirement someday, and they want to sell that business someday. But if the business is operating below 10% profit, that business is not worth anywhere what people think it is.

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Steve Hurricane: and that could lead to an issue. So you have to run the business

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Steve Hurricane: closer to a 20% profit margin, so that when the day comes when they do want to exit, you can do so and get the true value of what your business is worth. Now, in order to be able to get those margins up, there’s several factors that people can do. The 1st one

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Steve Hurricane: really comes from identifying your target customer. When I think about the nature of the home care business. So many folks think that any patient coming out of a hospital is their potential patient, or any elderly person who is slowly declining is their potential customer.

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Steve Hurricane: And that’s not true. When you look at that number that makes it.

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Steve Hurricane: you’re going after every single senior citizen in your territory. That’s way too much for you to try and target. That’s way too much for you to try and capture, and you couldn’t handle all of that. So instead, we really have to hone in and focus on what I call a nerd client

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Steve Hurricane: and a nerd client is somebody with a great need who is elderly, who has resources financially, and they are disabled and or have dementia when you go after that customer. Now it breaks down all the seniors into a very refined specific segment of the senior population. And then, as you’re bringing those folks on, these are folks that need a lot of hours of care.

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Steve Hurricane: They need it every week, and they need it for a long period of time, which allows you to stack patients and grow the census quickly, and because they need a lot of help in a short period of time every single week we’re talking 40 h, 56 h, 84 HA week, and beyond

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Steve Hurricane: it doesn’t take a lot of staff to manage it.

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Steve Hurricane: which will mean greater profit margins without changing your price. So it all comes back to? What am I doing to drive, bringing in this type of customer, and then serving those patients long? Term.

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Ruby Mehta: Yeah, no, that’s that’s a really great advice.

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Ruby Mehta: People really focus that.

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Ruby Mehta: That’s 1 thing in sales that we do it really carefully, that you identify who your target

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Ruby Mehta: and it’s you don’t have to go broad, you just find that niche. You just find that specialized.

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Ruby Mehta: target audience.

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Steve Hurricane: Correct.

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Ruby Mehta: 100%. Yes, I agree. And which marketing strategies do you find most effective for generating targeted high-quality leads that convert into long term clients as we just just discussed, and the second part is how agencies should really prioritize

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Ruby Mehta: their marketing budget to maximize ROI. So, 1st piece is marketing strategies. And the second piece people really want to learn, I guess, is, how do they prioritize the budget?

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Steve Hurricane: So, I love this question so much because it’s 1 of those things where everybody is trying to compete with everybody else.

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Steve Hurricane: And they are all trying to do essentially the same thing. Social media

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Steve Hurricane: pay per click ads SEO.

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Steve Hurricane: pay a place for mom all the digital software out there. And we have to have a digital presence. So I’m not taking away from it. But

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Steve Hurricane: don’t rely 100% on the digital presence. The digital presence should be 50% of the marketing effort. And the other 50% must be direct referral in person relationships.

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Steve Hurricane: That’s the only way you’re gonna get the one I call it the 1, 2 punch of remarketing. When you have the digital presence, the digital presence makes it easy for people to find you

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Steve Hurricane: when you have the relationships. The people who are working with the patients who need the help will recommend you. Then they find you online, and then they come to you for services. We need that 1, 2 punch. Now to the second part of what you were saying, how much of a budget should we put into this type of marketing. Well, the 1st thing is we have to have a full time business development professional.

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Steve Hurricane: I don’t like part-time people. It’s not that part-time people aren’t good, but part time people don’t get the results that you’re looking for. So if you can’t afford a full time person, you, the owner, must go out and make the relationships. Get the revenue higher, so that you can afford a full time person, and then you bring in the full time person.

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Steve Hurricane: Once you have that full time person, you should dedicate just 1%, just 1% of the total revenue goal that you’re shooting for to give to this person for all things direct, referral marketing. So if I want this person to bring in a million dollars of revenue, I have to give that person $10,000,

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Steve Hurricane: which is about 800 $850 per month, which is a nice, modest budget, so that they can do lunches, take people out for coffee sponsor events, collaborate on activities and do all of the things relationship development that leads to getting those professional referrals.

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Ruby Mehta: How beautiful! I have never heard someone simplify it in such a way. Just 1% out of your revenue goal is what you need

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Ruby Mehta: absolutely great advice. Thank you.

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Steve Hurricane: It’s something that too many people like you said they get. They get so caught up in it, and they just start throwing money everywhere. And the next thing you know, at the end of the year you spent 5%, 6%. That’s too much 1% for the person. Now, you got to have the salary, too, so that that goes on top of it. But but 1% dedicated towards everything direct referral marketing, that’s all it takes.

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Ruby Mehta: Beautiful on that referral marketing.

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Ruby Mehta: Now, one of the things that people, I think, struggle with finding the most effective ways to establish and strengthen relationships with referral sources to drive that consistent referrals. What are your suggestions for marketing people out there, or the owners? Small business owners to build and strengthen that relationship with their referral sources.

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Steve Hurricane: So I love this question so much, and and it’s interesting because I will throw out an added bonus right now, anybody who’s listening to this.

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Steve Hurricane: This is how the business was prior to 2020.

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Steve Hurricane: So before 2020 there were events. There were networking opportunities. There were continuing education events. There were people sponsoring activities in communities, and there were health fairs and vendor fairs. All this stuff existed before 2020.

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Steve Hurricane: Then now we have 4 years

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Steve Hurricane: where people didn’t do it because of the pandemic we had to social distance. Everybody went to technology. And now here we are. People are trying to get back into it. Now, why am I bringing this up? I’m bringing this back up because this is a golden opportunity

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Steve Hurricane: for the listener, because people are trying to get back into it. This gives you a chance to get yourself established because the people who were established before the pandemic are no longer established there. So you get the opportunity to be the one, the pioneer, to lead the charge and bring it back out.

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Steve Hurricane: Now, I’d say professional networking events is one of the best ways to go about it. When you go to the networking events, find the ones that are in your area. You can easily go onto Linkedin, you could go on to Facebook and find different healthcare segments, different healthcare groups that already exist. Find out who’s having events, and then Rsvp. And show up at the event

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Steve Hurricane: something I teach my clients when they go to the event. A goal at one of these events in person is to speak to 5 people for 5 min

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Steve Hurricane: and then do what I call book a meeting from a meeting meaning I’m here right now. I’m meeting with you, Ruby. I want to continue the conversation. But there’s a lot of people here, so I want to make my way around the room. I want to book a meeting from this meeting to follow up with you, Ruby, next week at Starbucks, and have a cup of coffee, and continue the conversation. Do that with 2 out of the 5 people.

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Steve Hurricane: So if I’m going to go to networking events, if I’m going to go to continuing education events, if I’m going to go to vendor fairs and health fairs. I want to speak to at least 5 people for 5 min, and from those 5 people schedule follow up right there on the spot with at least 2 to continue the conversation later on. You do that, you’re gonna start to get your foot in the door in places where you’re currently not getting referrals, and then that will allow you to open up your referral network.

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Ruby Mehta: Oh, how how beautiful!

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Ruby Mehta: I’m loving it! How you are simplifying things! So much for our audience, be it a marketing professional, or somebody who is an owner, small business owners. They are out and about trying to really build those relationships. So that’s a very good idea. Very good advice.

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Ruby Mehta: 5 min. 5 people, 2 follow up meetings.

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Ruby Mehta: That’s that’s beautiful.

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Steve Hurricane: If you go to 3 meetings a week this way, I always view it. If you go to 3 meetings in a week, and this is why I have such success with my clients. What do you say at the meetings? All that we could talk for hours about that right? And how do you get the next steps? And what are the goals, and how to create the long term relationship? We don’t have enough time to go over that here, and if people want help with that they can contact me. But the meat and potatoes the core concept is, I can go to 3 places a week.

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Steve Hurricane: Speak to 15 people, 5 at each one, and schedule a follow up with 2 out of those 5 which gives me 6 appointments next week. Those 6 appointments. Now, I’m going to start making headway and making progress, and next steps out of those 6, 3 of them aren’t going to be worth doing anything with but 3 will. And I continue the relationship. And if I’m doing this every single week.

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Steve Hurricane: it’s going to make it where every week I have appointments. These appointments are leading to building relationships which lead to getting referrals and just continue the process over and over again. It really isn’t that difficult? I like to break it down to the ridiculous, so that when people get so overwhelmed like I can’t market, and I’m like I’m only asking you to go to 3 meetings a week.

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Steve Hurricane: I’m only asking you to schedule some. Follow up, and remember you’re not going to get business from the meeting. The meeting is just the 1st step you get business. What you do after the meeting in that follow up one on one and building the relationships.

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Ruby Mehta: Exactly. Exactly. Now, we can, we can do

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Ruby Mehta: a new podcast another podcast about networking and how you follow through because many people and I’m I know I’m derailing from from the topic right now, but many people they attend events, proactive network, but

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Ruby Mehta: fail to follow through. And that’s where everything here that you have done will not give you results.

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Steve Hurricane: You, you hit the nail on the head. It’s actually funny, because when I when I train, when I speak at conferences, or when people come to my boot camps, and I train them on what we’re saying here. But then, how to do all the next steps? Because I’m spending 3 days with them right at the boot camps. And when I go through it people are like, Wow! This may I can. I can do this. So it goes from this is impossible. I can’t do this to wow. That makes so much sense. I can follow those steps. And that’s why

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Steve Hurricane: we’re talking a billion dollars in revenue growth over the last 12 years, because I have so many people doing these next steps, and when you simplify it and break it down to the ridiculous. It’s it makes it attainable.

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Steve Hurricane: And once it’s attainable, and then people start to see it. And yeah, you’re gonna strike out more than you’re gonna get a home run, but you have to be consistent with it. If you hit one home, run a week. That’s new business. That’s new clients that you didn’t have. And if they’re these target nerd customers we’re discussing here

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Steve Hurricane: it it that could be a game changer for your business. You know. You could take a company that’s doing a thousand hours a week, and in 12 months they’re doing 2,000 h or a 2,000 h business. They’re doing 3,500 h in one year. That’s tremendous growth, doubling the business or growing by 75% in one year. That’s unheard of. Yet people are doing it year after year, when they bring this direct referral marketing on top of the digital that they’re already doing.

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Ruby Mehta: Yeah, yeah, no. That’s that’s the power of networking and following

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Ruby Mehta: like, break it down to the simplest steps, and then follow through those steps. That’s the power of good marketing.

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Ruby Mehta: Hey, man?

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Ruby Mehta: Now, I’m I’m because the the profitability, the care quality, and it all connects with obviously getting quality clients. Good marketing, good good process but it also is dependent on caregiver, recruitment and retention.

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Ruby Mehta: So do you have any strategies, or do you provide any advice to your clients on how to effectively manage and optimize their caregiver recruitment and retention, because in some way I think that’s also

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Ruby Mehta: not really directly connected to marketing, but that’s also a skill to recruit and retail, and that involves some marketing and sales skill as well.

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Steve Hurricane: Amen to that, sister, and it’s so funny that you mentioned that, because when I look at my biggest clients, the clients I have that are having the most successes. It really is the perfect balance of the direct referral marketing and the digital marketing, bringing in the patients the right type of patient with a full time, sometimes multiple, full time, recruitment, effort.

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Steve Hurricane: And I and this is where I’ve seen a company go from, you know, 2.5 million to 5 million or 5 million to 10 million in one year.

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Steve Hurricane: because they bring it together. So you you hit the nail on the head. It does require some selling now, recruiting. There’s 2 schools of thought on recruiting

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Steve Hurricane: digital

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Steve Hurricane: career. Plug, indeed! All the different companies out there to help you placing ads. Yes, yes, yes, yes, we have to do that, and it’s got to be a full time effort.

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Steve Hurricane: something that has also been working paired with. Because you cannot. You cannot grow without that. You have to have that

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Steve Hurricane: pairing with it.

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Steve Hurricane: Truly a direct referral marketing effort to bring in caregivers, meeting the caregivers where they’re at.

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Steve Hurricane: I’ve had clients successfully go out and go work with universities and colleges and schools to bring in students. I’ve had clients successfully go out and flyer and put out almost like the political ads. You know the ads that people put on lawns. The lawn signs do the same thing in development, and in areas

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Steve Hurricane: where caregivers live and putting out work. I’ve had clients go out with their recruiter, and the recruiter goes out, and she is doing job fairs and working with the unemployment offices in their towns, in their counties, in their communities, and finding people who are between work and between jobs to bring them in. I’ve even had some of my bigger clients. My biggest client I’m working with is a hundred 1 million dollars company. So they’re

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Steve Hurricane: 100 million in revenue a year. They have a team of people doing direct referral marketing and direct referral recruiting. Right?

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Steve Hurricane: I’ve had people go out and they’re doing things at Mega churches, and they’re doing community events, and they’re doing the township day or the county day, where they have a table and a booth. People are wearing shirts that have all types of advertisers all over the shirts, and they’re doing this on company time. Use your company, shrink, wrap car

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Steve Hurricane: to be able to to do things. I’ve had clients go out and buy a old transportation bus

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Steve Hurricane: and turn the bus into a on the spot.

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Steve Hurricane: Interview, recruitment type list where you could do a job fair, and you could do it in a parking lot.

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Steve Hurricane: It’s the things that people are doing, and this is all I call it recruit, like the military right. And the reason why I say recruit like the military is, I always tell people to think back to when they were in high school, and every time you go to the cafeteria at lunch it’d always be somebody from the military there, right? It’ll always be, you know, today. It’s the Navy. Then the next day it’s the Army and the Air Force is there. And now it’s the Space Force, and they’re trying to recruit talent, and they’re there

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Steve Hurricane: every single day, and then they finally get students to give them some information. Then they start calling them and texting them and sending them stuff in the mail and emailing them and everything else.

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Steve Hurricane: But that’s why we have the largest volunteer military in the world, right? We don’t force people to go into the military. Everybody chooses to do so well. Part of that is the effort that they do to bring in troops. We have to do the same exact thing. We have to do everything in our power, everything digitally, because it’s necessary using companies like,

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Steve Hurricane: what’s the the text company that that will text message with AI. I forget what it’s called. I think it’s pre-intendent companies like pre intent to keep the dialogue going and and communicate with the text. You have to have all of that.

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Steve Hurricane: But don’t forget the direct out there, bringing people into your organization. When you pair that together, you’re going to have an abundance of caregivers. And then, when you have the direct referral marketing, working with your digital marketing, you’ll have work to give those caregivers which makes your company skyrocket.

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Ruby Mehta: Absolutely. I mean so many advices in this one recruitment retention. I mean, people can do a lot

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Ruby Mehta: and group these digital. And in person.

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Ruby Mehta: It is marketing. It is a sale selling happening while you are recruiting, and you’re retaining talent so absolutely great advice. There.

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Steve Hurricane: Can I add something.

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Ruby Mehta: Yes.

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Steve Hurricane: So to the recruiting side of it. If you’re gonna go with the direct referral type in person, that is usually a different skill set from your traditional recruiter. So start with the digital. Get the digital master, get your digital online and the person who’s mainly focused on recruiting. Get her schedule maxed out where she can’t do any more than what she’s doing. She’s working 40 h, and we need to add a second person. Then hire somebody

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Steve Hurricane: who has the external skill set to go out and do it. So this way you have that 1, 2 team. In addition to that, I’ll also throw out there when it comes to interviewing. There’s so many different ways that we can interview. We have to have our recruiters stop giving the position away because we’re desperate. I understand we need more caregivers, right? So you oh, you could start working right away, and

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Steve Hurricane: anything we can to get you instead

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Steve Hurricane: sell. Why, your company is the right company to work for on the interview, whether it’s in person or digitally either way.

00:23:17.510 –> 00:23:37.649
Steve Hurricane: sell? Why, your company is the greatest we have this. We do this for our caregivers, benefits, and and pizza Fridays, and all the things that we do for our caregivers, so that that person that you’re interviewing is like, Wow, Ruby. I really want to work here. And and then when can I start? And then you say, Well, hold on.

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Steve Hurricane: You gotta get the job first, st

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Steve Hurricane: and then all of a sudden. Oh, yes, yes, and then all of a sudden, like like, so so sell! Why, your company is the cat’s meow. Why, your company is the best of the best to work for, and then flip it and remind them that they’re on an interview, and they got to get the job first.st Once you do that.

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Steve Hurricane: Now you have a army of volunteers that want to work for your company.

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Ruby Mehta: Beautiful.

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Ruby Mehta: Yes, I was actually. And my next question is kind of correlated to

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Ruby Mehta: how you explain that focus on digital 1st and then come to that in person marketing and recruitment and referral efforts. So my last question for today’s podcast is

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Ruby Mehta: in your experience, what are the most common financial mistakes. Agencies make that impact their profitability. And I know you address this a little bit in your last answer, that focus on one thing and not everything. Then you drain your budget entirely, and then you know no results, maybe. And how can they avoid these pitfalls?

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Steve Hurricane: So that’s a great, great question. And I’m guilty of this, too, like I’m not. I don’t want anybody to sit here and think. Okay, Steve, you’re just. You’re the expert, you know everything. I’m guilty of this stuff, too. But this is where the difference between what I’m what I do. And and and this is what I’m telling you to do as well. I’m telling you to do what I do with it versus people who aren’t doing it.

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Steve Hurricane: I have scheduled

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Steve Hurricane: every quarter of the year to do a self internal audit.

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Steve Hurricane: and with that self internal audit that’s where and it may take me a week, and that, and that’s a lot for a business owner. Right? But this is this is working on your business versus working in your business. You might have to do it for a weekend. You might have to get your executive team together and go through it together.

00:25:36.740 –> 00:26:02.419
Steve Hurricane: but every quarter of the year we have to sit down. We have to take time to look at our business. We have to look at where we’re spending money, and then look at our return on our investment. If I’m spending all this money in this area here, and 3 months passes, and I’m not getting the return. Well, I have a decision to make. Is it going in the right direction? Then I’ll give it another 3 months if it’s not going in the right direction. Stop it! Stop doing it.

00:26:02.460 –> 00:26:31.329
Steve Hurricane: Cut the plug. Cancel it right? Because when you do that, if you continue to spend money on things that that’s not producing a return, we’re wasteful, and I can tell you so many people are very wasteful with it. And I know, for example, I have an advertising thing that I’m doing. And it was this exact situation. I gave it to 90 days at 90 days. It was too soon for me to be able to determine if this is the right thing for me to continue to do so. I continue to do it.

00:26:31.330 –> 00:26:59.850
Steve Hurricane: and instead of me continuing to do it for a year, I committed to 90 more days at the end of this 6 month period. I will know if I’m going to continue to do it or not. Right now today. If I had to make the decision today, I would say, No, I’m not going to continue it. I have a month and a half left, but as of right now. I’m probably going to cancel doing it, which is going to save me a lot of money. I tried it, gave it its good, honest effort. It’s not doing what it’s supposed to. Don’t continue to pay for it. I see too many people

00:27:00.020 –> 00:27:26.480
Steve Hurricane: just throwing money at everything. We’re not tracking our analytics. So we’re not tracking where our caregivers are coming from. We’re not tracking where our patients are coming from, because we don’t have good management of those Kpis. That’s where Caresmart and all the other different companies out there. Come in. They have it. Make sure you’re putting the accurate data in. So you know where everything is coming from, and then you can adjust and look at it and be like, all right.

00:27:26.480 –> 00:27:32.409
Steve Hurricane: I’m not going to do this anymore. I’m not going to do that anymore from a direct referral marketing standpoint.

00:27:32.610 –> 00:27:37.590
Steve Hurricane: tracking my referrals, coming in from referral sources. If I can go into an account

00:27:37.590 –> 00:27:45.660
Steve Hurricane: over 6 months time, and I’ve been there at least a dozen times in 6 months, and I’m not getting referrals from them. Something’s got to give.

00:27:45.660 –> 00:28:09.790
Steve Hurricane: either. I didn’t qualify it properly, and they actually don’t have referrals to give me, which means I stopped going, or I need to have a conversation with the management and ask for the business, and if they’re not going to refer me, then it’s okay to walk away and start working somewhere else. Having this every quarter self audit helps you to keep yourself fiscally responsible.

00:28:11.020 –> 00:28:38.259
Ruby Mehta: Such a good advice. I’m so big on numbers, analytics, kpis. And that’s what I talk about all the time with the agencies that we work with the Kpis are the best thing that you can get from. I know the technology platform like care smarts. The core is scheduling and finding caregivers and record management and all that good stuff. But at the end, what it gives you is your kpis.

00:28:38.260 –> 00:28:51.830
Ruby Mehta: that you should not ignore. You track your performance. You analyze your situation and then make good decisions based on those Kpis. So that’s such a great advice. I can’t think.

00:28:51.830 –> 00:29:11.539
Steve Hurricane: And that you know this. You know this ruby. When somebody does this regularly and they’re tracking, you can add 4% 5% revenue to the business like it sounds crazy. But on a million dollars there could be 2030, $40,000 in negligent spending.

00:29:11.600 –> 00:29:24.170
Steve Hurricane: Because we’re not tracking the KPIS, and we’re just throwing money at to try and solve a problem instead of really taking a look at what is the problem identifying it, fixing it and stop the hemorrhaging of finances.

00:29:24.510 –> 00:29:43.789
Ruby Mehta: Yeah, yeah, no, thank you so much for bringing this up, bringing KPIS and analytics, because that’s so important for every business owner, for every management, whether it’s small size, big, large enterprise to really address and focus what’s working and what’s not working for them.

00:29:44.450 –> 00:29:45.740
Steve Hurricane: Thank you. I love it.

00:29:45.740 –> 00:30:11.469
Ruby Mehta: Great, great, all right. So that brings us to the end of this podcast Steve, and I want to thank you for sharing your expert advice on every topic that I was bringing on the fly. And I am sure that our audience had a great time here listening to this podcast and thank you for tuning in everyone. Thank you, Steve.

00:30:12.130 –> 00:30:16.449
Steve Hurricane: You’re very welcome. I hope to see everybody at Home Care Evolution boot camp soon.