Rx Merger & Acquisition Business | Jared, Justin, & Joel Rhoads

This transcript was generated automatically. Its accuracy may vary.

[00:00:12] Mike Koelzer, Host: Hello guys. Hello, Mike, Mike, Mike people are hearing voices from all over. We've got three brothers sitting here, introduce yourself to our listeners and let's do it in order. So you guys can fight it out. Youngest to oldest or oldest to youngest. Well, Mike, 

[00:00:27] Jared Rhoads: Hey, it's great to spend some time with you here.

And, uh, my name's Jared Rhodes and, uh, I'm a pharmacist by trade. Uh, I've been in the pharmacy business for, for over 20 years actually, uh, started, you know, went through a residency and then joined, uh, a large chain, uh, close to 20 years ago and, and worked my way up and worked in the corporate environment for, uh, for many years and, and in various operations, uh, positions.

And then, you know, um, joined my brothers here. So that's, uh, that's, what's brought us here today is working with my brothers and, and, uh, really excited to, to one be with you today and also, um, uh, to be here with my, with my brothers as we work together on a daily basis. And 

[00:01:08] Mike Koelzer, Host: Jared, before we go to Justin and Joel sure.

Tell the listeners who you guys are, what, what is your company and what do you do in a nutshell? And we'll obviously go deeper into that. 

[00:01:23] Jared Rhoads: Sure. So we are tri AVO health and TRIA health is made up of, of the three, three brothers here, Jared, Justin, and Joel. And what we do, uh, is healthcare. M and a consultancy.

So we work with independent, um, pharmacy owners across the United States, as well as, uh, you know, large, uh, chains and, and private equity firms. Um, and we help, uh, consult on the transaction side, uh, whether it's a buy, sell, buy a side transaction, or a sell side transaction. So a lot of, uh, complexities today with, uh, in pharmacy and in these larger transactions and, and we're there to help make it a smooth process and, and work with, uh, like I said, sellers and buyers, and that's what we do.

We also do, um, just general operations consulting as well, uh, to improve profitability. So, but, um, that's something we do as well. So, um, very cool. We've been through this for a while. Yeah. 

[00:02:18] Mike Koelzer, Host: All right. So who's next outta you guys. Who's who's the next step down? 

[00:02:21] Justin Rhoads: I, I am the next one in. Uh, my name is Justin Rhode.

I appreciate you having me on Mike. Um, I've been in pharmacy for about 20 years as well, started as a pharmacy technician at Walgreens, and, uh, went on to pharmacy school and, uh, worked retail for a little while then Joel and I bought our first pharmacy back in 2009. We end up owning four pharmacies. We sold off.

Most of them, uh, grew 'em up, sold them off and got into this business. 

[00:02:47] Mike Koelzer, Host: All right. So I left. Is Joel, is that all we've got for the 

[00:02:51] Joel Rhoads: family then? Yeah, we've got two more brothers, uh, that we have there's five boys and Jared is the oldest of the youngest. Uh, the two that are not with us today are actually their business partners as well in a software development company here in, uh, in Tucson.

Um, so to give you kind of a B brief background, I, I am, I'm the, one of the few that has not historically been in pharmacy. I started, uh, in real estate back, uh, about, I don't know, 17 years ago or so I started in sales for a, a home builder and. As Justin mentioned, we bought our first, we had an opportunity to, to buy one of our friends' pharmacies.

He was looking to retire and, and it was, uh, kind of at the cusp of, you know, the, kind of the real estate market in 2008. And so we, uh, had an opportunity to, to, to buy his pharmacy. And we, we took that opportunity and 2009, I think January 9th, 2009 was the day we closed from that point previous, I had never really stepped foot in a pharmacy before.

And then, uh, after January 9th, it was kind of, we ate, slept and, uh, breathed pharmacy and it's kinda been that way ever since. So it's kind, it's been awesome. Awesome, awesome process. 

[00:04:02] Mike Koelzer, Host: Well, nice to meet you guys. Thanks for being on the program here. Is it a coincidence that two of you, at least two, I take it.

The other two are not in pharmacy at all by trade. No, 

[00:04:11] Joel Rhoads: they're not. Although, uh, One of our brothers is married to a pharmacist. Oh, is that right? Who actually used to be one of our employees. So it's really, it's really, uh, wow. 

[00:04:21] Mike Koelzer, Host: And so, so, so where, where did the pharmacy get started in the family? Was it because of older brother Jared, going to school that Justin goes to, or that, that was not a father or anything?

No, 

[00:04:32] Justin Rhoads: no fathers, no family members. I think that, uh, you know, my mom was a nurse. Our mom was a nurse. Our great grandma was in healthcare. She worked in the red cross and so healthcare has always been in our blood. Um, but pharmacy was something Jared went into and I just followed in his shoes. 

[00:04:47] Mike Koelzer, Host: Some lady asked me, she said, why'd you go into the pharmacy?

And I said, well, because my dad was in it. And it's like, and he never forced me into it. Cause I was gonna do other things too. But she said, well, really, I think she was trying to get at like, what good did I have in my heart for the world that I was gonna conquer with pharmacy? And I'm like, nothing, you know?

Sure. I saw my dad do it. So I know he could do it. I saw the income he made and I'm like, I can do it, if my own man can do it, I can do it. . But, uh, but quite often, you know, we just end up in things that, um, that the road seems a little bit more clear. Are you guys all together in the same area now or are you spread out across the country as we speak.

[00:05:22] Jared Rhoads: So we're spread out. So Justin and Joel are based out of Tucson, Arizona. Okay. And I am based out of lake forest, Illinois. So just north of Chicago, about 30 miles. Yeah. Um, which works out pretty well. Cuz we do work and we have, uh, uh, extended team that that works lives in, uh, Wisconsin and also more in Arizona.

And it works out well because we work with pharmacists all over the United States. So we have, yeah. Right. Good Midwest Eastern coverage with myself and then Western coverage with uh, Justin and Joel and it logistically it works out 

[00:05:54] Mike Koelzer, Host: really well. You guys can probably get more done with the three of you.

Talking on the phone instead of being together. Cause when you're together, you're you say, let's go out for lunch. Let's , you know, let's fix this or something. You know what I mean? It's generous. Yeah. It's like when I gotta get stuff done in the pharmacy, I get it all done from home, like three miles away.

Exactly. And I'll go, I'll go in strictly to say hello and, and kiss babies and you know, shake hands and that kind of stuff flex. Yep. Yeah. But so when you guys went from 2009 to 2014, was that, and Jared, you weren't part of that. No. Did you guys have this goal of around 2014 or was there an impetus to sell right sell earlier, and then you were gonna do this or it, it seems like a pretty quick turnaround.

Was that your plan from the start? 

[00:06:47] Joel Rhoads: No, it was not at all. Um, when we first, um, bought our pharmacy in 2008, then they passed Obamacare shortly after that. And as you know, obviously you're a pharmacy owner yourself. You kind of saw what that did to the market. Uh, you know, we saw reimbursement constrict and, and just the entire consolidation of, of the pharmacy field.

So 2000 and I, we went in and, and we, our first pharmacy that we bought at that time, we didn't know better, but it specialized in, in pain management, infertility and long term care assisted living. And so when Justin and I bought the pharmacy and, you know, after about six months, eight months, we knew that.

Pain management wasn't a, a, an area we did not wanna be in at all. Yeah. Right. Um, because it's just, at that time, it just, I, we just didn't like it. I mean, it wasn't, it wasn't, yeah, it wasn't safe. It wasn't good. We didn't like it. We just, yeah. It wasn't our, our deal. So, um, we had an opportunity in late 2010 to sell off that aspect and our specialty infertility aspect of our pharmacy.

And during that time, we were actually in expansion mode. We went and bought some. We just, we, we went and, and secured a lease for a new building out into a, a, a, uh, active adult community of about 10,000 people, uh, called Saddlebrook. And we built Saddlebrook drugs. And, and so we were expanding at the time.

And, when Walgreens came to us and said, Hey, we're interested in looking at this aspect of your business, your pain management and your infertility. We, uh, quickly obliged to, uh, sell it to 'em. Um, and that was what year? That was 2010. So we closed 2009 when we bought our pharmacy. We were in that current location for about 18, ah, no, 22 months.

And it was October 30th, 2010 is when we sold our retail portion off Walgreens. And in that time we had built up quite a bit of, uh, long-term care business as well knew that, that, that was kind of a, a, a, a CR a business we did wanna be in because it was a little more predictive and, and we enjoyed it.

Justin, Justin's a very, very, very good operations guy. So we would love to kind of try to make something a little bit more, um, efficient than when we bought it. And so that, that, that happened. We built up that business. And so when we closed, we sold off our retail portion of Walgreens. We moved our entire operation up to our new pharmacy.

That we were gonna be opening up to the public that January, 

[00:09:18] Mike Koelzer, Host: how many retail operations did you condense then, and sell off basically. 

[00:09:23] Joel Rhoads: So we, at that time in 2010, we just sold off the retail portion of our single pharmacy. Because we only owned one pharmacy at that time and we were building another.

Gotcha. And our plan was to open up our new pharmacy in January of 2011. And so it was kind of funny because the day we closed with Walgreens, we got our certificate of occupancy to move into our new pharmacy and run everything out of our new pharmacy. So we literally, I'll never forget it. It was, uh, Friday, we closed with Walgreens and we've sold all of our inventory.

Cleaned out. Our pharmacy cleaned out. Everything went up to our new building, had to order all new inventory and we started up fresh on Monday. Really. Wow. And, and that was, uh, that was an interesting process because we, yeah, we didn't even 

[00:10:13] Justin Rhoads: have phone service. We were running the whole phone off of a phone card.

Everything, all of our switching was going out through a phone card. It was classic. 

[00:10:20] Mike Koelzer, Host: It was fun though. Jar is just like sitting back thousands of miles away kind of laughing at you guys or why wasn't well, now, Jared, I know you were a big wig in your operation at the chain, but did you ever contemplate like.

Maybe these guys never asked you, but , but did you ever contemplate joining these two 

[00:10:40] Jared Rhoads: or, you know, not back then? Um, you know, I was, I was very, I was very happy with my, you know, my career path and, and what I was doing. And, um, back then, not so much, uh, uh, but, but, you know, we, we talked like we've always been close and we would talk on a daily basis.

And just in terms of, you know, how things are going, I was very connected, I would say yeah, uh, to both of them, but, uh, but it never really crossed my mind that it would require me to move. I'd moved all over with right with Walgreens and, and I was not living in Tucson the time I was actually living in Southern California and then Chicago goes, so, so that was part 

[00:11:16] Mike Koelzer, Host: of it as well.

Gotcha. So then you guys sell the retail, you go and you open up on Monday, but is it retail again? Yeah, so, 

[00:11:23] Joel Rhoads: So no. So we opened up inside our retail pharmacy that was going to be opening up to the public in January of the next year. Right? So this was October end of October, 2010. We were opening up, uh, January 4th, 2011.

So we, at that time basically took all of our assisted living and LTC business up there at, we probably had, I don't five, 600 beds that we were servicing. 

[00:11:47] Mike Koelzer, Host: And you brought that into a retail operation cuz I had enough room and stuff. Correct. 

[00:11:51] Joel Rhoads: We brought it into a retail operation and then, um, so that business continued to grow.

Uh, when we opened up our actual retail pharmacy, it just so happened. There was another suite right next to us because they built that building for us. If we were to sign a five year lease, they would build a building for us. Two suites. One was for our retail pharmacy, and one was a next door, blank shell.

And so we negotiated a deal where we would, you know, have the entire building. So we kind of shifted off our workflow. Cause as you know, retail, pharmacy and long term care, it's, uh, they're totally different workflows if, if you've done 'em before. And so we kind of had to shift, we almost had two different pharmacies going on under the same, uh, operation and Justin.

Yeah. I imagine Justin had to wear a bunch of hats because he was one pharmacist doing two completely different businesses in almost two different buildings with a connecting door. And he was the only pharmacist that we had at the time. So it was, uh, kind of an incredible process 

[00:12:55] Mike Koelzer, Host: And yeah, I've always wanted more than one pharmacy so that I could hide between the two of 'em and nobody would know where the hell I was.

Absolutely. But Justin, if that, if that was your goal, that was a bad move. No, but I'm next door. 

[00:13:09] Justin Rhoads: Yeah. I could hide in about an eight inch section between the two 

[00:13:12] Mike Koelzer, Host: places everybody was at so, so, alright, so you're doing the double duty and, and you got this going, where's that going then? So we 

[00:13:25] Joel Rhoads: be continued to build out.

We almost set up at that point, we knew we kind of had two different operations going on under the same roof. And so we, we really, um, you know, kind of pointed our focus. We hired a pharmacist to run the retail portion. Great guy. We hired him back into the retail portion and then, uh, Justin focused solely on assisted living in LTC.

Um, so we ate, you know, we just so happened. It's kind of crazy how things work. Just so happens. We met a gentleman who was a computer programmer, a software developer who was absolutely incredible, and one of the most brilliant human beings on earth. So we did some really, really cool stuff. And Justin can kind of, I'm sure delved a little bit deeper into it, but we did a lot of stuff that was cutting edge at that time from 20 11, 20 12, doing our own, you know, delivery software, um, you know, connecting our faxes to be able to do digital faxing and, and bar coding the faxes.

They're just a lot of different stuff that we did 

[00:14:25] Mike Koelzer, Host: for people listening. Now, they think, oh, that stuff's been around forever, but you, you look back at yeah. Amazon or whatever, and you say, geez, I only bought like. Two packages that year from Amazon. And now it's like six, you know, 600 or something. And you just, for you forget that things haven't been 

[00:14:39] Joel Rhoads: around forever.

if, if your wife is anything like mine, you'll get three packages a day every day. 

[00:14:47] Jared Rhoads: I know, I know we're all the same boat on that one, I think. 

[00:14:50] Joel Rhoads: Yeah. Yeah. So, yeah, so we, we, we, we expanded at that point and then we realized, um, that our assisted living was getting too big to be in that one, that, that, uh, area that we were in.

So we, we negotiated, uh, we, we signed a lease on a much larger space, moved the assisted living over, and then we decided to open up another retail pharmacy. And, um, so from basically 2011 to 2000 late, 2012, it was full speed ahead. We were growing very leaps and bounds on both the retail side and the assisted living and LTC side.

And then back, um, Late two thou actually, was it early 2013? Uh, our computer programmer mm-hmm who was really an integral part of our business. I mean, he wasn't just, he wasn't just a programmer. He was somebody who strategized with us globally on our business, not just on that aspect of it. And he was, he was a, he, he was an incredible guy and he was very wise.

And so he got diagnosed with, uh, pancreatic cancer in February of 2013 and, and passed away in April, April, may. I'm sorry to hear that. So he was very quick. And then once that happened, it was just kinda, it, it, it took, it took the zeal out of it at some level for us, right on the assisted living side. So we continued to grow.

Um, but out of the blue, we got a call from the guardian pharmacy. Probably July, July of 2013, it's just, again, kind of crazy how things work. But in July of 2013, we got a call from guardian pharmacy and they wanted to join us in purchasing us and September, September on that store, uh, on our, on our long term care business.

So we sold that. And then we went basically from three stores to one store, uh, very quickly. Geez. Um, so yeah, that, that's what happened. And then 2014, to be very honest with you, we had a person come in with a letter from OptumRx. Yeah. Which is that time prescription solutions. And they said, Hey, we need to force your, uh, they're forcing us to mail the order.

I can only fill my scripts from you for 90 days. Justin and I talked about it, we just said, you know what? Let's just hold off for a bit until the pharmacy market kind of shakes itself out and. We ended up selling our Saddleback drug location and sold ourselves out of a job. 

[00:17:28] Mike Koelzer, Host: So a customer came in with the letter and that was kind of a, a instigator to kind of be thinking about what's happening.

Yep. 

[00:17:38] Justin Rhoads: It was eye opening because we thought, you know, up until about 10 years ago, having a 65, an older population with 10,000 people was considered a gold mine in pharmacy. Yeah. Yeah. And, that gold mine turned into a, you know, giant noose around our neck because the next thing you know, you've got 80% of the people all on one insurance and they're being forced to mail order.

There wasn't a whole lot we 

[00:17:59] Mike Koelzer, Host: could do then. Yeah. Yeah. You're talking to the masses here about that. Cause everybody's in the same, you know, the same position, boy, I'm sorry to hear about your, your, uh, your partner, um, passing. That was, that was really, 

[00:18:12] Joel Rhoads: yeah, I appreciate that. Yeah, it was, I mean, he wasn't young.

Um, he wasn't old, but he wasn't young either. It was just, it was tough because he was like a family member to us very quickly, actually. I mean, we didn't meet the guy until 2011. Right. And so we met him in 2011 and he passed away early 2013. But in that time we did just some awesome, awesome stuff. And it was, it was a very exciting 

[00:18:36] Mike Koelzer, Host: time.

Did that shake you up if, if, if he would have, instead of passing away, if he were to have, you know, moved or been incapacitated in that regard, but still been a, a lively person and so on, would that have changed your direction at all or without was it, was it emotional and, and functional or without him, whether it was a happy ending or a sad ending, like it was, would that, would that have.

Changed anything. I'm not even sure of that question, but how much of 

[00:19:13] Joel Rhoads: it was. Yeah, no, I think I, you know, Justin, you can, I mean, 

[00:19:16] Justin Rhoads: yeah. I would say, you know, a huge part of it, cuz I was kind of back at the time and, and uh, a huge part of it was functional. A huge part of it was emotional. Um, like Joel said, we kinda lost the zeal for our P pharmacy.

We lost it. It wasn't as exciting going in. Um, I think had James stayed alive we'd uh, Joel and I had both been dead of a heart attack by now. So 

[00:19:40] Mike Koelzer, Host: because, because, because of all, because of the business, how it was moving and shaking, how stressful it's. Absolutely. 

[00:19:46] Joel Rhoads: Yeah, yeah, really. Yeah. We didn't, we didn't, we didn't sleep.

You're unhealthy. You, you know, you're, you're constantly thinking about how to grow your business. And as you know, pharmacy's really cash intensive. I mean, you grow your business on the LTC side. Yeah. You grow up by 20%. That's a lot of money. If you're a $5 million company, you grow by a million bucks, that means you got another 85,000 a month, that's going out and you're not getting paid for another 90 days.

Yeah. Right. And so, that process takes a toll on you when you're a small business and just, you know, a drastic amount of, and at that, that time, it was right after recession. So it's really difficult to get. Business line of credit at all at that time. I mean, it was impossible for Nyon to do that. 

[00:20:31] Mike Koelzer, Host: Yeah.

People forget about the, the capital intensiveness of it, because, you know, I mean, you might have, you might have something that costs $500 and you're making, you know, five, $5 on a sale of something that means you gotta make a hundred of those sales just to, you know, just to get that on the shelf and so on.

So it's really, yeah, you're right. It's really, it's really intensive. You guys finally sold this letter. You, you see the writing on the wall and you finally sell out, was it, uh, Hey Justin, nice, nice working with you. Goodbye and Joel, nice working. I mean, what did you do? I'm joking, but what did you think your next step was?

Were you already planning 

[00:21:12] Joel Rhoads: that? No. Uh, what happened was we, we sold and we took the guy who bought us from Walgreens out to dinner. In Chicago, actually with Jared, Jared means me, Jared, Sean, and Justin. Right. And we went out in November, early December, maybe late November, early December of 2014.

And we were having dinner and he said, you know what? You guys should, uh, you should look at starting a consulting company and that's where it all started. Hmm. So, you know, and we, we, we came back after that and I, you know, I, I was, I had an offer to go back and work for site sales, which I thought about taking.

Um, but we just wa it wasn't, I didn't want to go and work for somebody else at all. Yeah. Right. And neither to Justin. So we just said, Hey, let's give it a whirl. And so we literally January, uh, the January 3rd or something of 2015, we started making calls and we just started cold calling. 

[00:22:17] Mike Koelzer, Host: And, and you knew your customer base was already going to be.

The merger, acquisitions, sales kind of thing. 

[00:22:25] Joel Rhoads: Oh yeah, absolutely. Yeah. I mean, our call was very pointed at, at, Hey, are you interested in selling? If you're interested in selling, look, I can help you out. Because at that time we've gone through multiple acquisitions by ourselves. And to be Frank, I wish I would've used somebody like us.

Right. Uh, because there's so much, we didn't know. However, given the fact that we didn't, we learned a lot. Yeah. You learned it quicker. You learned it more quickly. I am a ton. Yeah. We learned a ton about it. Um, but, and, and, and we had done it from the. You know, from the corporate side with Walgreens to, at that time, guardians weren't nearly as big.

I mean, they were big, but they weren't nearly as big as what they're now. And so it's, it was, uh, it was a two very, 

[00:23:10] Mike Koelzer, Host: very different process. And your final sale was to Walgreens. I have your final 

[00:23:13] Joel Rhoads: store, correct? Yeah. So we sold two to Walgreens, um, one to guardian and then one, we, we had to shut down because we had a non-compete, it was just a kinda complicated lease situation that was in our pharmacy that we sold to guardian.

So, you 

[00:23:29] Mike Koelzer, Host: Now, it's amazing. Years ago, I would flip Flo between wanting to, you know, always pricing myself in the market and wanting to for some weeks I'd wake up and say I was gonna sell. And some weeks I'd wake up and say I was gonna buy, but I remember someone told me mm-hmm they said, just go to like, go to people in town and, and just tell 'em that you'd be interested in buying.

And I'm like, no, I'm not gonna do that. It can be, you know, that they might take it wrong or this or that, but then like, within. Three or four years ago, the four people that somebody said they went to had sold. So you, you never, you never know what's on people's minds regardless of their age or income or how much they invest.

You just don't have a clue what's on their mind. All right. So then you guys start this going, then you bring along this other dude at some point 

[00:24:19] Jared Rhoads: ran random dudes random dude. 

[00:24:22] Mike Koelzer, Host: So how does, so what happens there with you start going, you start making the calls. I'm always excited about the first dollar, you know, what was your first collection that you made from when you started the phone call?

When did you say, oh, this could 

[00:24:35] Joel Rhoads: work. Yeah. So we, Justin and I always talk about this because it's interesting as your business, as our business has grown and the size of our deals have grown, um, It's kind of easy to forget where you came from. Right. I'll never forget. The first deal I had was a gentleman out in, um, New Mexico in Albuquerque.

And, uh, I worked on this guy tirelessly and he ended up, you know, listing the pharmacy with us and we sold it. And, uh, Justin and I drove because at that time we just were like, we started this new business. We're like, all right, we're gonna be frugal. And we drove from here to Albuquerque and, uh, you know, we, we, we went and collected, I think it was $7,100 or something.

Right. Justin, $7,100, $7,100. And I was beaming from ear to ear because at that point it was, it wasn't the money. Yeah. Because we had just sold our pharmacies. It wasn't the money. It was the caught proof of concept. Yeah. Right. Exactly. Hmm. And when it worked, it was a pretty incredible feeling, man. Yeah, 

[00:25:43] Mike Koelzer, Host: exactly.

It was awesome. Once in a while I get on, um, YouTube and for some reason I watch, I don't do any sales really, you know, I mean, in the pharmacy, it's all like passive sales sort of, as people come in. Sure. Last week I got on this kick of watching, uh, these two sales guys, one is, uh, grant. Cardone. And then the other guy was like, um, this Jared, you know, the Wolf of wall street and uh, oh yeah.

And they're having this argument about who's a better salesperson or something like that. So I started watching some of that and they were, they were doing some stuff on cold calls. And again, I don't, I don't do cold calls, but I found it interesting that that can be so depressing. I guess that every morning they start off role playing, like getting slammed in their face for like 20 minutes before the day starts so that they get their jitters out with each other.

And I imagine with pharmacies cold calling them has gotta be one of the worst things because they've got, first of all, they don't have time. And secondly, they've got a million excuses that are probably valid excuses, why they say, I can't talk now. And this and that. Mm-hmm . So being that you started calling, how do you now and how then did you get past that?

I 

[00:26:56] Joel Rhoads: think especially with pharmacists, um, They, they, they like a knowledge base. Right. So if you can talk to somebody, I, I did exactly what you, what you were talking about. I went on to YouTube because at that point I'd been in sales for a long time, but I'd never cold called. That's not something. Yeah.

Right. There's a difference. And so I, I went on, I went on YouTube and I found out, I said, you know, I literally YouTubed cold call techniques. And, I found a couple that were good. But what I found was when you start talking to people about the industry, like we are to you right now, I mean, we can sit here and talk all day long about DIR fees.

We can talk about reimbursement, decreasing. We can talk about the consolidation of healthcare and what's gonna happen. If it goes single payer, we can talk about a lot of different things. And we could probably chunk up hours and hours and hours talking about the business that we've all been in for a long time.

And so what I found was just talking to people. And having them understand that. Number one, we're not brokers selling ice cream shops. We're pharmacy professionals. And this is what we do. And our goal is to help you through a very difficult process. If it's on your mind, mm-hmm , if it's not, if you don't wanna sell not a problem, it's great having a conversation with you, you know, it's good.

It's good. Having a conversation with you. If you do wanna sell you, you really need to take a look at, at, at U utilizing us because again, I've been, I've sat where they have sat, right. You know, I know what the difficulties are with cash flow. When all of that, I, we, we understand it where, you know, if that's why a typical business broker, they don't know what a DIR fee is.

Sure. They don't know what PBMs are and why it's an issue when express scripts cut off compounding in 2016, they don't get, there's not. That's, that's not a huge 

[00:28:49] Mike Koelzer, Host: issue to them. I imagine that there's a lot of emotions stored up. Do you guys ever get people that are just, just get pissed off at you because you even mentioned, you know, like number one, selling and number two, possibly selling to a chain, you guys must get earful and people like kind of the kick, the dog syndrome where they're taking out their frustration.

They've felt the last 12 years onto you guys. 

[00:29:16] Joel Rhoads: Yeah, it happens. I would say it 

[00:29:17] Justin Rhoads: happens, but I'd also say, um, What we do see is we, we have a group of buyers. I mean, we've got hundreds of buyers and we don't just pitch. We're not like this one trick pony who says, Hey, I know Walgreens, and therefore I'm gonna pitch you to Walgreens.

Or I know CVS, therefore can pitch you to CVS. You know, our goal is to say, we want this to go, how you want it to go. So if you want to go only independent, we can do that, but we're gonna bring you offers from the chains, independence, and let you make the decision as a, as a seller. Um, and that usually diffuses it quite a bit, but you do get people who are pissed off and people want to kick in and , and, but at the end of the day, you know, you can't take it personal, cuz I've been there and I've been pissed off and I've wanted to kick somebody when I was a pharmacist.

And yeah, you got an insurance company on one phone, a doctor on the other and your technician just called in six so I can. Yeah. Right. 

[00:30:07] Mike Koelzer, Host: Yeah. All right. So then you guys, so then in 2015, you're doing this and now it's. 2019. Were there any, was it kind of a, just a growth, any real setbacks? And then how did we still haven't admitted to getting Jared involved here.

So we still, even though it might be a painful story, guys, we gotta talk about it. 

[00:30:29] Jared Rhoads: It's painful. 

[00:30:30] Joel Rhoads: We gotta, we gotta hit it. Yeah, no, it was, you know, it was what, what happened was we used to have a different name. Um, we, we basically carried over our corporate name from when we owned our pharmacies and yeah, I mean to where there were setbacks.

Sure. There, there definitely were setbacks, but as a whole, we grew every year, uh, a decent amount. The first year we hardly did any deals. Uh, and the deals we did do were fairly small, but it was again, proof of concept. So over the last three and a half years, we grew the business. Um, and, and I think.

You know, at that time, whenever you grow a business, like, and whether it's pharmacy or this or anything else, it's kind of taking it from the, you know, in the trenches, you're just pressing as hard as you can to, to being able to get to a position where you can actually strategize. And I think that's kind of where Jared, you know, he came in, the conversation started 2018, probably June, July of 2018.

Mm-hmm is when the conversation started, you know, cuz we, we, again, we were pressing really hard, Justin and I were pressing really hard. I, I always tell people, I called so many people, my tongue fell off, you know, and it's just that, it's just it. And so once we were getting up to the plane of having some systems or, or at least needing some systems and, and, and having that growth, uh, we started talking to Jared.

Jared was, you know, interested in, in potentially coming on and, and then, uh, What the December, December of 2018 is when you made the decision. We flew out. We, we happened to be going out to, um, Florida for a closing, and we did a stay over in Chicago and met with Jared and he said, Hey guys, let's, uh, let's talk about doing this.

Would you want him to join forces? And so given the fact he had his, um, you know, corporate experience with the systems that he's done and kind of building out a team, he's got a lot. You know, a lot of that experience that we, that he brings to the table that we never, we don't have. Um, so we said, Hey, let's, let's do it.

So we made the decision in December and came on January 15th and then January 17th, my name changed. I got demoted and it was, you know, everything's

[00:32:52] Jared Rhoads: good. It happened quickly. It happened quickly, right? Yeah. That was awesome. 

[00:32:56] Mike Koelzer, Host: Your title changed from what? To what then? Joel, officially. 

[00:33:00] Joel Rhoads: I, I was the president and CEO and now I'm Jan tur. 

[00:33:05] Mike Koelzer, Host: Congratulations, joking. Now I'm just joking. I'm assuming the payment's pretty equal. And so you might as well take the one with the lower, the lowest responsibility.

[00:33:15] Joel Rhoads: Yeah, no, no, we're we, no, we, we in all seriously, so we just made a decision we're we're partners. Everybody brings something different to the table. Um, and so we, we. We just said, Hey, this is not, it's not something where we're gonna have a CEO. So, so we're, we're taking more of the kind of private equity space, um, approach and we're we're we're partners and that's, 

[00:33:37] Mike Koelzer, Host: you know, kinda yeah.

How we do it. Jared Uhhuh was that the only impetus for you leaving your time at the chain at that point, if these guys weren't doing their thing, would you still be where you were or, or was there something that was shaking up that, that you wanted to change and so on, whether it was corporate or personal or whatever.

[00:33:58] Jared Rhoads: Sure. Uh, no, that's a great question. Um, I think there were a variety of things going on, but it really came down to, you know, I was at a point, um, in my career where I needed to make a decision to stay. I've been with Walgreens for 19 years. So it was a long time and I either need to say, Hey, I'm gonna stay and, and, uh, retire with Walgreens or if I'm gonna make a move, I need to do it now.

So I was looking at different opportunities. Uh, you know, I. Love my work at Walgreens. A lot of great people, uh, really enjoyed my time there. But I think I came to the point where, you know, it's, I'm, I'm, I'm interested in exploring other options. And then, you know, when we had that discussion and one being able to work with these guys are both very talented guys.

A lot of, a lot of experience, uh, to get to work with your brothers is a huge blessing and two to get to make decisions. I mean, so we make a decision. So we changed when, when we joined, when I joined the organization in January, it was a different brand. Um, it was diversified pharmacy solutions and literally within a week or two, we rebranded, uh, we built a new website.

We, I mean, there were a lot of things that we did in a very short period of time. And you can really do that when you have your own company and you work with individuals like, uh, Justin and Joel that are able to make things, uh, happen very quickly. Yeah. 

[00:35:17] Mike Koelzer, Host: Jared, for our listeners, Just internally, I'm aware of some of the things that you mean when you say you had to make a choice, but for the listeners, what did that mean for you of saying you had to stay or you had to move?

I've got a brother in, he runs a consulting business and his thing is like, I got a. Try to look as good as some of these young guys do, you know, with me, with keeping in shape. Sure. Wanting to maybe start over and have enough longevity. So your new customers trust that you're gonna be around and all that kind of stuff.

What were things on your mind when you said that I needed to start sooner than later? Sure. 

[00:35:54] Jared Rhoads: Well, you know, I think it comes down to, I mean, a lot of that is I think where you're at in your career. So you think about when you're going to retire and where you're at. So I'm the El you know, the oldest of five boys.

So I'm older than both of Justin and Joel and, um, and I, I, I wanted to make sure I had a long, uh, runway in a different organization that I'd be joining. So if I, if I waited another 10 years, you're kind of, you're, you're approaching that time when you would be probably retiring or another 15 years, I'd definitely be approaching that time.

So I wanted to have enough time to really make an impact on whatever organization I joined. 

[00:36:32] Mike Koelzer, Host: You may not be as attractive to a company anymore. If you, if they know they only have three or four years left of, of you 

[00:36:38] Jared Rhoads: or something. Exactly. Exactly. Yeah, you don't. Exactly. So that's what definitely played into it.

So there comes that sweet point where you're like, Hey, uh, this, this is the time to, to make a change. And, and the fact, you know, and there were a lot of. Pluses to working with, uh, Justin, Dr. I wish just wouldn't have taken anything. It took something special and I believe, you know, getting to work with my brothers was, was something, uh, very special.

And, uh, I definitely, uh, have not looked back at all. It's been a great, great decision. Yeah, that's really cool. And, you know, I know they've mentioned before just joining forces, you know, you, the story and you look at the experience that we have. We have individual pharmacies, you know, independent owners, uh, that Justin Joel had.

We had the buy, you know, I worked in the corporate side and, and I was on the buying side of those transactions and, and understanding the, the strategy and structure, you know, when you combine the forces, not just three brothers that work well together. Three brothers that have very different skills, but together we bring, uh, you know, a differentiated experience, uh, that anybody has out there.

So I think that's what was compelling to me and exciting. Like, boy, nobody else has this. Nobody else has a team with corporate experience with independent pharmacy owners, with multiple pharmacists that understands the business inside and out that can really sympathize and understand work with, uh, independent pharmacy owners.

And going back to your early point, it is an emotional decision. You know, when we reach out to these guys, they may not be wanting to, but even going through the whole process, we understand the emotions involved. And, and, uh, so I think that's, we're able to connect with our, with our sellers, unlike, uh, unlike anybody else.

What 

[00:38:16] Mike Koelzer, Host: words of wisdom would you give to a pharmacy or a pharmacist that's going to mm-hmm, sell, in other words, like all the technical stuff takes place and you know, all the. Signatures. And what do the people finally say? You know, what wisdom do you give to them if they need it? I think 

[00:38:36] Jared Rhoads: part of it is, you know, it is going back to, it is an emotional decision.

This is something. And Mike, you know, this, you've been in the pharmacy business, your family's, you know, your, your father and grandfather has. So when we are working with a seller, it's emotional. Maybe they've been open for a hundred years or 50 years, and it may not necessarily be another independent that's buying them and continuing yeah.

Uh, the brand. Right. So, but it comes down to, it's a business decision at, at the end of the day, you've gotta do what's best for you and your family moving forward. And when you look at it from that standpoint, you know, you know, and, and they're, they're selling and they're, at that point, they wanna retire.

They've gotta make the decision that's best for them. Um, or if it's earlier on, they wanna try something different. And I think that's it. You've gotta, you've gotta think about yourself, your family, uh, as you, as you. You know, uh, consider this transaction and selling, cuz it is like I said, a deeply emotional decision in many 

[00:39:33] Mike Koelzer, Host: cases.

Yeah. That's good. You've gotta think about, you do have to think about yourself because I know mm-hmm, , you know, so many employees and I've done the same thing where you're, you're gone and, and you think you might stay in contact or something, but you don't, you know, the only the big contact people have is, is money, you know, and, and uh, and they have to, there's just too much to focus on in the world.

And so sure people get, um, they get over it, you know, quickly enough you have to do what's good for yourself and that's not always selfish, really. Cuz if you, the good book will say, well don't be selfish and all that stuff, but sometimes you've gotta be selfish enough to enjoy what you're doing and make good decisions for yourself.

And then you, you blossom and then everybody else sees you blossoming and so on. And, the world doesn't really need more. Martys there's plenty of natural. Pain and malevolence out there. It doesn't need right. You don't need to, you don't need to go to that. Don't need to search for it, you 

[00:40:31] Jared Rhoads: know? Right.

Exactly. 

[00:40:34] Justin Rhoads: No, and one thing I would say, if someone's interested in selling their pharmacies is to get to know your business. Now you wouldn't believe how many pharmacists we talk to and they don't realize they're losing 50 or a hundred thousand a year. And they're wondering why they're back on their payments.

And yeah. And I would say, get to know your business now, figure out kinda where you're profitable, where you're not profitable and, and start thinking about the decisions you're gonna have to make, whether you're going to be selling it or keeping it. Yeah. Because like, like you say, there's enough pain in this world that you shouldn't be, uh, selling a $10,000 prescription for a thousand dollars loss.

Yeah. Right. And feeling, feeling that obligated to that patient. Yeah. Because that, you know, we, we feel as pharmacists, we feel very obligated to our patients. Right. Um, But it, it, I always say it's kind of funny those, the same patients that you feel so guilty about when you go to close your pharmacy are the first ones are gonna bring you the letter saying, Hey, I can get it for 50 cents cheaper down the road.

[00:41:29] Jared Rhoads: I know. 

[00:41:30] Mike Koelzer, Host: Yeah. You know, that's, that's so true out of the hundred that say it, you know, there still is the one employee that brings you cookies on your birthday or something. But the 99, you know, good intentions. But I don't blame anybody. Yeah. Right. But you're right. They're gonna come. They're the first one that comes, you know, with the letter or, or whatever, human nature, I guess.

How about you, Joel? Any, what wisdom would you give? Everybody's 

[00:41:54] Joel Rhoads: gonna have the same comment and that is, I'm not looking to sell. And that's what everybody says, but if somebody is ready to sell, um, having, you know, having realistic expectations about with guys, if somebody's coming in telling you. That is your standard retail pharmacy that has gross profit of, you know, between 18 and 20% and net profitability between three and 5%.

If they're coming in here and saying that an independent's willing to pay 6, 7, 8 time multiples, they're not. Yeah. Right. So just, just, just, just understand that there's realism involved with what's going on right now, where the market is with, uh, independent versus where chains are. And that's something that we do.

Uh, we do valuations for pharmacy so that they can get a good realistic look at where their pharmacy is. 

[00:42:48] Mike Koelzer, Host: Yeah. That's gotta be one of the, um, on a, on a scale, if you look at a hundred things in life that people would be selling, pharmacies have to be at the top of that list of what people think the worth is versus the.

Actual. Oh my gosh, because you've got mm-hmm and I mean, you know, all the reasons everybody knows about who's listening. I mean, you just got all kinds of emotions tied up in it and, and, uh, mm-hmm, all kinds of stuff. 

[00:43:13] Joel Rhoads: Yeah. And there, and there are cases like a good example. I mean, there's, you know, with a couple different ways that you do valuations, there are situations where if a pharmacy's doing 50,000 prescriptions a year, the all three valuation methodologies will come out with something very, very similar.

Sure. But there are instances where if a pharmacy's doing 25,000 scripts a year, they're not making money. Their revenue's not that much, but maybe their pharmacy's worth a decent amount to a chain. That's a quarter mile down the road. Yeah. So, you know, there, everything is not always based on EBITDA.

Everything's not always based on price per prescription. And everything's not always based on a, a, you know, percentage of revenue. It really depends on what your pharmacy is. So if it's something that you do have a question about. Feel free to give us a, give us a call and we'd be happy to, to talk with you and kind of go through that process with you.

Yeah. Once 

[00:44:08] Mike Koelzer, Host: in a while, there's some once in a great while there's some potential that would throw the price up, but, but most of those come out in the, in the mix, but once in a great while there's maybe something that, you know, the, the town's taking off or something like that, but they're not, they're not as frequent as people wanna, as people wanna think they are, you know, the, the typical thought is, all right, someone wants to buy or sell and you sell it and they buy it.

Do you have any times where things get kind of funky with, uh, have you had any horror stories of family trust wanting to do something or, or do they go smooth enough? I was afraid to ask you, cause I wasn't sure you'd. I wasn't sure you'd have a story, but I thought there's gotta be some real crap that you guys have had to go through with that.

I mean, you get paid for it, but. 

[00:44:56] Joel Rhoads: not, unless it closes. Yeah. and those may not. That's the thing, the ones that go south, you don't get paid for. Yeah. Uh, but, but you know, it's a, you know, here's the thing, and this is one of the things that, um, I I'll tell, I'll tell this to our sales, to our, our, our team members, our sales people is it, you mentioned cold calls can be very disheartening.

Mm-hmm what also can be very disheartening is when you take somebody through a process, you hold their hand, you, you get a, get a deal together, and that deal falls out for some reason. But Justin and I, I got a deal at a very large specialty pharmacy out in Southern Cal. And we did, we went through the ringer on this guy, went through the ringer and, uh, we got a deal together and, and every, you know, everything was going well.

But then, the seller got a little squirrely and then the buyer got a little squirrely and, and. I emailed, I sent an email. That's why you gotta watch when you email to watch what your cadence is in your email and really read it before you send it. Because I sent an email that in my mind didn't seem like a bad thing.

Uh, but I quickly got a response from my seller that said, please do not ever speak to me again. Oh yeah. So I said, okay. But then, uh, so I obliged and uh, he said, cancel the deal and never speak to him again. So I said, okay, that's fine. Um, and a year later I got a phone call. It was on Thanksgiving day, I got a phone call and he said, Hey Joel, this is so and.

Do you wanna list my pharmacy again? I'm like really? And it was funny, and so I went from not speaking to me ever again to do you wanna list my pharmacy to us selling to the same purchaser that was on the docket 18 months early. Isn't that something? It was unbelievable. And so, and, and, and everybody's happy and that the buyer has just exploded the business and the seller's happy.

And, and now it's like, you know, he sends me Christmas cards and, uh, so that, that kind of stuff happens. And it's good to be able to tell your staff, Hey, don't, don't get disheartened cause that, 

[00:47:17] Mike Koelzer, Host: yeah, you get that with customers too. They're never gonna be back. And this and that. It's like all of a sudden, all of the time, all of a sudden they're back with smiles on their faces.

And it's like, yep. Maybe they were triggered. They're not in their reality. And, and they're, they're saying stuff they don't even recall. They said they probably never brought up the past of that. You know, you never found out why he didn't wanna talk to you. 

[00:47:35] Joel Rhoads: No, I, I, I mean, I think he, he, he, he didn't like my email.

It was direct. It didn't mean it was direct and yeah, sometimes you gotta do that, but, uh, He, uh, you know, it, it was frankly, the email was warranted. It ended up working. It did, it did work. I mean, the thing again, what happens is you have a lot of these, our goal is to, again, set people's expectations and exceed people's expectations, right?

Yeah. And you, you have a lot of others, you have a lot of other entities out there that will say a lot of things. Yeah. They'll say, Hey, I'll get you this, I'll get you. This I'll get you. This. That was exactly what happened. I mean, he had a lot of people that were saying, oh, I'll, I'll sell your pharmacy for this.

I'll sell it for this. I'll sell it for this. And guess what? 18 months later, nobody had sold their pharmacy. A lot of people had come and looked and low balled and done this and done that. And he didn't get a sale. So he comes back to me. We end up making a deal 

[00:48:33] Mike Koelzer, Host: and selling a store about everything you say can be all the listeners can put into their daily life.

It's the customers that come in and say, well, I can get this. Hundred dollar item that you have. I can get it for $80 down the road. And you're like, all right, well, why didn't you get it? It's like, well, they don't, they don't have it. It's like, you can get it, you can't get it for $80 then. I assume you're enjoying life.

You're enjoying what you're doing. Does this then carry on then for 10 years growing this, do you have any other, not that you should, do you have any other urges in you to say after so long, we're gonna do this and I'm not saying you should change course if the course is going well. Yeah. But do you have any of those ideas 

[00:49:15] Joel Rhoads: or thoughts?

Jar has always wanted to open up a pet zoo.

[00:49:23] Jared Rhoads: Joel, that was pretty classic. These Joel, what are these years here? That. No, no, it's just not, there's nothing wrong with a pet zoo by the way. But, so Mike, regarding your question, so Y uh, trio health will continue to grow in other ways. So right now we are focused on pharmacy, but, um, I can tell you that we're working on a variety of other things that will continue to be part of the tri brand.

And that's part of the reason why we did some branding changes. Mm-hmm because we wanna make sure we have that flexibility right. To expand in other areas and do other things. So I can tell you, we always have great ideas. Justin has great ideas, and we have several things in the docket that we'd like to, um, to pursue in the future.

So, yeah. So yeah, definitely wanna do this to the best of our ability, better than anybody else. We wanna build that brand. But in the meantime, setting our sites to make sure we're diversified and working in a variety of other areas. So, so you'll, you'll see that in the future. 

[00:50:29] Mike Koelzer, Host: and you're learning the ropes now of the procedures you put together.

And you could absolutely put that over into other industries too. Mm-hmm what do you guys personally, what do you least like about your Workday? Like you gotta do the paperwork or the travel or the dealing with whatever. Is there, is there, is there anything that you, that, that you don't enjoy? I get 

[00:50:53] Justin Rhoads: tired of staring at spreadsheets all day.

You know, it starts going sideways after a little while. yeah. 

[00:50:58] Mike Koelzer, Host: Right. 

[00:51:00] Justin Rhoads: Looking, getting, getting ugly data is, uh, rough thing to do, trying to. Unwind something that's been given to you poorly, 

[00:51:08] Mike Koelzer, Host: and you might get that like in any different way, right. It could even be like paper and pencil, but sometimes it's a bad QuickBook file or something like that.

Well, 

[00:51:16] Justin Rhoads: bad QuickBook file or someone, you know, every time we go to the pharmacy, we have a questionnaire. We say how many prescriptions you do in a week? And they fill that out. And then finally you get the reports and nothing matches up. And you say, is this the same pharmacy that we have a questionnaire for?

Because nothing looks right. And so trying to get that 

[00:51:33] Mike Koelzer, Host: rectified, you think they're guessing or are they picking their best week in history or what? No, I don't think 

[00:51:38] Justin Rhoads: there's nothing, um, malicious about it. I think what it comes down to, you know, you've worked as a pharmacist, Mike. If someone asks you how many prescriptions it fills?

A lot of times it's like, well, I filled 500 on a Monday after a holiday. Yeah. Right. So you say, I filled 500 a day. Yeah. Well that's not 500 a day. It's not 3,500 a week. No, that's 500 a day. One time after a 

[00:51:59] Mike Koelzer, Host: major holiday. But that's what you tell your wife, at least when you come home. 

[00:52:02] Jared Rhoads: Exactly. Exactly. We all have gotta impress the wife.

Yeah. All the 

[00:52:06] Mike Koelzer, Host: tricks. We have all the tricks. So not, not just impress 'em Jared. I mean, it's impressive, but it's also feet up after dinner, not helping with the dishes and those kinds of things. Exactly. Not that I would do that. No, no. 

[00:52:20] Jared Rhoads: See my wife, my wife's also a pharmacist, so I can only get so far on some of this, you know, so she knows.

She knows. Yeah, exactly. 

[00:52:27] Mike Koelzer, Host: She knows. How about you, Joel, and anything that, that you'd prefer not to do during the 

[00:52:32] Joel Rhoads: week? You mentioned paperwork. I'm not a paperwork person. I, I, I, it's not something I like, I like to, I like to work with people. Oh, you're with people more. Yeah. I work with people. I, I, you know, I like to be at the kind of front end of working with people, you know, that emotionally working with them, making sure, talking them through deals, that kind of stuff.

So that's what I like. Most of all, I don't like having to collect documents. I don't like any of that stuff. And what that's, what's been pretty awesome is the new systems that we have in place now are making that easier for everybody involved, both the, from our side and. The, uh, and from our, our sellers side as well, uh, trying to make things as automated as possible, electronic as possible things.

You're not having to sit there and fax yeah. You know, 500 pages. And, and we're trying to get that to where it's a lot 

[00:53:20] Mike Koelzer, Host: easier for everybody. It's almost like the, uh, college admissions process that finally after hundreds of years is maybe trying to narrow down a little bit. Yeah. 

[00:53:28] Joel Rhoads: And, and, and sitting, being in an office for, you know, eight hours is not, if you know, it's not, uh, it's not fun.

And that's, what's cool about this job for us is we can, we do travel a decent amount. Yeah. When we're talking to people, we can take our business home with us on the flip side, we can go home and spend time with our families. Right. If, if we're not at a closing and it's, it's 

[00:53:52] Mike Koelzer, Host: awesome on your very nice website.

I know you've got a great team there besides yourself with, with a few of your sales and support and things like that. And I'm sure they keep you guys outta, outta mischief. Outta trouble. They do. It's a full time job. I'm sure. . How about you, Jared? What things do you, uh, kind of like you wake up and say, I gotta do that today.

Well, 

[00:54:12] Jared Rhoads: So I, I think I'm, I'm similar to Joel in that and, and just, we're all kind. Uh, we, we, we like interacting with people. I like talking to people. Yeah. I like the relationship aspect of it. I've always been a leader, you know, at Walgreens, and this has been something that I've enjoyed. Um, and in going back to the challenges is, you know, when you are painting a picture to a buyer in a pharmacy, it does require a lot of details.

It requires a lot of reports. Um, it requires a lot and you have to put it together and then paint that picture and, and, uh, and sell that to, to a buyer. So, uh, I think collecting it's more of the paperwork, but, like Joel mentioned, um, we do have processes in place. We recognize this. We said, Hey, this is something.

You know, we can do it, but we're better at, um, working directly with the buyers and sellers and, and negotiating and, and building those relationships. So we've, we've acknowledged that, and we've put processes in place. We've hired a team, you've done a variety of things to make sure it is as easy as possible to both the buyer and the seller, uh, when they go through this process.

Um, so we have all, all these things in place. So, that's it, you know, going back to, to, I know you said traveling, I do enjoy traveling, but sometimes, you know, I've got four kids, Justin's got six kids and Joel's got four kids. Oh, good for you guys. So we, uh, they're all, you know, Biden's 13 and younger, so we're.

We're uh, of course want to have that family time. Yeah. And, um, but on the other side, I do like getting out and working with clients and we do that quite a bit. So just making sure we have balance there is yeah. Is important. 

[00:55:47] Mike Koelzer, Host: The listeners may not be able to tell, but I know that I'm older than the three of you.

And I can tell by my hair color, , I've been talking more about selling as I approach my TWO years and so on. And I, once in a while, I still get the buying, uh, bug. But yeah, the same as we talked about the wisdom words to the, um, sellers, what advice would you give to a, a buyer, you know, wisdom, not necessarily, um, 

[00:56:15] Joel Rhoads: function.

When you look at financials, you need to take a look at a co you know, take a look at the entire picture. One of the things we see all the time are sellers because for tax purposes, obviously where, you know, you'll have, um, uh, you'll have your financials that show a. Salaries and wages at, you know, $80,000.

Yeah. Well, you and I both know the average pharmacist salary is $120,000 a year in the United States. OK. So if you look at those salaries and wages, unless it's wrapped up in the compensation of officers or something like that, um, there are a lot of ways for people to hide their, what they're paying so that it looks like their books are a lot better.

So really, really, really, if you're buying a pharmacy, you need to look at, you know, where the raw data don't just look at financial, look at the raw data, look at what, what those drug reports say. If those drug reports are saying that you have a 7% gross profitability and. Your financials say that you have a 10% net profitability.

Well, then what's going on here? Why is it? Is it because you have heavy rebates on specialty meds from, from wholesalers and, and, uh, manufacturers? What is that pur? What is that reasoning, right? Yeah. So a buyer, you've got to know what you're looking for and what you're looking at. Look for a few 

[00:57:36] Mike Koelzer, Host: legs of the stool, make sure it's all balanced with what you're seeing.

Absolutely. 

[00:57:40] Joel Rhoads: Right. Absolutely. Make, make sure you're looking at controlled substances. If your controlled substances are over 20%, there needs to be a pretty good explanation on why. Yeah. Right, right. I mean, if you have controls over 20%, why do you have controls? Is, are you, are you in an area, a Suboxone clinic?

Are you whatever, I mean, is there, is there a, a reason 

[00:57:58] Mike Koelzer, Host: for that? And like you said earlier, sometimes it might be all on the up and up, but it's just something that you might not wanna deal with as a buyer. 

[00:58:05] Joel Rhoads: Correct? Mm-hmm yeah. Mm-hmm because it's, it, it paints a picture on your back. It's just what it comes down to.

Yeah. You have a target on it. Yeah. Um, with, with the DEA, with wholesalers. But, but financially sellers, they're not one, they're not lying is not the right word. It's not lying. It's uh, because you have your accountants that, you know, they, they paint a financial picture. A lot of times those financials aren't as clear and concise as you and I would like them to be, uh, on, on a buy side.

So just make sure that, you know what you're looking at when you go out and buy a store, 

[00:58:41] Mike Koelzer, Host: my dad, God rest his soul, but he used to always get, he used to always get really upset with. I'm just gonna call her Mrs. A right now, cuz she would always come in and talk about her marvelous son who was a doctor.

Well, first of all, he was a doctor, but he was a podiatrist. So he wasn't an MD and she always seemed to make him out to be. And then my dad would always lean over to me and say, you never hear about the other son that's in prison now. I don't know if he was. I don't know if he was joking or if she really did have one in prison, but people wanna talk about their good children, and not their, the prison, the prisoners.

And so, uh, and, and they do the same with their books. I'm sure. And like, like you say, it's not always intentional. It's just natural. Rises to the top. 

[00:59:30] Joel Rhoads: Yep. Yep. But sometimes it is intentional. Sometimes it is. You gotta and yeah. And you know, I, we, we tell this to people all the time, putting a buyer and a seller together, at some point they've gotta trust one another.

And if you are a buyer and you don't trust your seller, Don't buy the pharmacy. Right. Right. If there's not a, if there's not a, a semblance of trust there that you guys are both working in good faith. Yeah. I would highly encourage you to, to, to really think twice before you do something. Yeah. Right.

Because sometimes that feeling is right. 

[01:00:00] Mike Koelzer, Host: You know, that feeling is right. A lot of times 

[01:00:03] Joel Rhoads: It is. And so just, you know, again, just know what you're looking at and, uh, if you have, we, we do buyer consulting. So I encourage you. If you have a question, if you're, if you're, you know, if you, if you don't know what you're looking at, call us and we'll be happy to help you through that process.

[01:00:25] Mike Koelzer, Host: Is it ever like real estate where both buyer and seller kind of have a helper or, or are you guys usually kind of representing the deal? We have 

[01:00:32] Joel Rhoads: one right now that's happening. I mean, you do, you do have it at some level, but, um, But it's, it's not typically not typical. It's not typical. 

[01:00:43] Mike Koelzer, Host: No. Yeah.

Yeah. What advice would you guys give someone listening to this now? Who's has some questions, at least I'm assuming they could reach out to you and that'd be the first 

[01:00:55] Jared Rhoads: step. Absolutely. So I would say, um, so we're, you know, we're, we have our website, uh, www.triavohealth.com. All of our information is there.

And, um, we are there to answer those questions and, uh, whether they're thinking of selling or buying, we're also on LinkedIn, uh, TRIA health on LinkedIn, and we're all on LinkedIn as well. And, um, so, so I would really recommend that they reach out to us and, and, um, just, uh, and we can answer those questions as they come up.

So whether they're, like I said, buying or selling, we're there for, for 

[01:01:29] Mike Koelzer, Host: both. I, I imagine you you'd welcome somebody who wants to sell in a month or in 10 years, just, uh, if they want just, uh, someone to, uh, connect 

[01:01:37] Joel Rhoads: with. Yeah. I've had somebody who wanted to sell in 10 years, but ended up selling in a month and a half.

So it happens. Let's 

[01:01:44] Mike Koelzer, Host: say that each of you have to take a year sabbatical and you can't do anything with the business and you can't improve your business life. What are each of you doing for a year? I'm rebuilding old cars. You are Justin. That's what I'm gonna do. Yeah. If I'm taking a year off, you have 'em already.

[01:02:04] Justin Rhoads: I do. I've got an old truck. My first, my first car is a 53 Chevy pickup. I'm working on that 

[01:02:09] Mike Koelzer, Host: right now. I know there's three levels. There's someone that wants to, they don't care. What's inside. They want it to be the best car. So it's all new inside. Then there's some that need to be like exactly. Perfect.

Then there's some that put a bunch of old crap on it. Just cuz it looks cool. I'm kind 

[01:02:26] Justin Rhoads: of try to go quasi original, but uh, make it run good. So if my kids drive it, they're not gonna 

[01:02:31] Mike Koelzer, Host: end up killing the so you could put new brakes in. Yeah. Yeah. I 

[01:02:33] Justin Rhoads: put new disc brakes in that's yeah, yeah, 

[01:02:36] Jared Rhoads: absolutely. Make sure the engine's running well.

[01:02:39] Justin Rhoads: Um, gonna try to keep it original, but not, uh, not, not be crazy about it. I'm not gonna care about the type of bolt that you put in. Make sure it 

[01:02:47] Mike Koelzer, Host: matches exactly what stops. Yeah. We used to always learn to put a pencil or something in the butterfly thing of the carburetor or something. They don't, they don't do that anymore.

Do they? No. 

[01:02:55] Jared Rhoads: That's old school. That's old school. Yeah. I mean on my truck you 

[01:02:59] Mike Koelzer, Host: Could that's cool? How about you guys? So, 

you 

[01:03:02] Jared Rhoads: know, I, I think, um, if I was gonna take a year off, I would probably travel, um, just do some traveling and I don't, I don't know if I have, I don't, I don't really work on cars, uh, but, but travel and maybe do some remodeling on the house.

I like to, you know, do different projects around the house. So, so I think probably with those two things, I, 

[01:03:23] Mike Koelzer, Host: I was talking to a friend years ago, we both did very minor remodeling of our basements. We both had rec rooms in the basement and I told him how much I enjoyed that. And he said, it's probably because, you know, the pharmacy, you go to, and, and it looks the same every day.

You go in the morning, you help people, you leave, it looks exactly the same. And it's neat kind of in life sometimes to have something that you can actually show progress on and not reverse progress, like with the DIR fees and things like that. Right. Right. 

[01:03:50] Joel Rhoads: How about you, Joel? You know what, I, I, I play music a lot.

I play guitar. I would probably do that, but I'll be honest with you. I think I would go insane. I think it would be tough for me to take a year off. 

[01:04:02] Mike Koelzer, Host: Yeah. Right. Well, Hey, you guys, it's really fun meeting you. 

[01:04:06] Jared Rhoads: You too, Mike, Mike, it's been a pleasure meeting you as well. Thank 

[01:04:09] Mike Koelzer, Host: you. I hope the listeners will realize that even though they might be going through a lot of the emotions selling or buying, that there's real humans out there to help 'em and, uh, that have been through it before.

And, and I hope that they've enjoyed, you know, listening to us talk as much as I've enjoyed talking to you. 

[01:04:27] Joel Rhoads: Absolutely appreciate the opportunity. 

[01:04:29] Mike Koelzer, Host: All right, you guys, I look forward to being in touch and, uh, continued best wishes to you. Thank you, my you as well. All right. Thanks guys. Take.