Miriam Allred (00:00)
Hey everyone, welcome back to the Home Care Strategy Lab. I'm your host, Miriam Mulred. It's great to be back in the lab with you. Today I am joined by Domenic Colovito, the co-founder and COO of Our Care Health based in Tampa, Florida. Domenic, thanks for joining me in the lab.

Domenic Colavito (00:16)
Thank you for having me.

Miriam Allred (00:18)
We were just reminiscing on when we met and how we met and all of the connections and industry peers that we have. but super excited to have this conversation and for you to join me in the the formal podcast setting. How are you feeling?

Domenic Colavito (00:28)
Yeah, thank you. I'm happy to be here. I'm good. I'm

good. I'm excited to be here. I've been a a follower, since, you know, you got this started. It's been incredible to see how far you've come with it. So I'm happy to be happy to be on. It's also my first ever podcast, so a little nervous.

Miriam Allred (00:42)
Yeah, don't don't be nervous. You're a natural speaker

and we've got great chemistry. So this is gonna be lot of fun. for those that don't know you, talk a little bit about yourself, your background in home care, and then also a little bit of background on OurCare

Domenic Colavito (00:52)
Sure, sure. So I I am a co founder and COO of OurCare Health we operate in New York, Florida, and Connecticut. we have been around for we just hit the ten year mark a few weeks ago actually. before that we were working together

the group of us were working together, working to acquire a small company in Westchester, New York and get going. But, you know, the last ten years has been quite the ride. just bootstrapping, growing a business and home care specifically. I don't have to to go into those details. Your audience knows how crazy it can be through COVID and everything else. so we've seen, you know, really great success with the home care. We've kinda gotten over the hump. and and now we're really focusing on, you know, scaling, getting into new states.

and to new to new areas. in and part of the success that we had with OurCare was developing our own kind of private financing product which evolved over years into what is now Greeley Capital So what started as a little bit of a just necessity we created for ourselves kind of took the path of a business of its own. and we're excited to be, growing that business now alongside of OurCare, helping other agency owners grow and and get some stable cash flow.

Miriam Allred (02:06)
Yeah, that's a good teaser into what we're gonna talk about around like financing options and the path that

Domenic Colavito (02:09)
Yeah.

Miriam Allred (02:10)
you've taken because I would say it's slightly less common, but we wanna kinda like educate people on different financing options and the route that you took and why. two other contextual questions. what's kind of like the size of OurCare today footprint wise, like hours or revenue or census?

Domenic Colavito (02:26)
Sure, I'm comfortable sharing. OurCare is a little over fifteen million in annual revenue spread across three states. we work with I mean, we're Elixa in New York, so we work with, you know, Medicaid, some of the waivers, MCOs, MLTCs the VA, private pay, really good mix of business in

in New York. Connecticut we're fairly new. so we've been around for just about a year. We're about to start doing Medicaid. You need to be operating for one calendar year according to our license in order to start working with Medicaid. But we're excited to have that on the horizon. As well as the GUIDE program we're doing a lot of in Connecticut, which I'm sure a lot of people

are have just been jumping into that program. I think it's a great program. and it's specially for a newer agency or for us a new state to get some business in the door. and Florida is we are a registry in Florida. we've considered making the change to a license agency. There's pros and cons to it. but we work with Medicaid, private pay, a a good mix of payers in Florida as well.

Miriam Allred (03:27)
And started in Florida, why the jump up to New York and Connecticut? I think people would ask, like, wow, that's like a pretty big jump. So what what was the reasoning there?

Domenic Colavito (03:32)
Yeah.

Well, interestingly enough, we actually started in New York. and we we acquired a small agency out of New York and

decided at that time we were gonna form a new company in order to do the acquisition and it made the most sense for the company to be headquartered in Florida. We also had plans to expand into Florida when we were going through that acquisition, so we were like, let's just make the move now. I very reluctantly agreed to let one of my business partners, Andrew, move down to Florida to kinda stick a flag in the ground. And 'cause I was just afraid of change. I was young. I was, you know, just

started this venture with these guys and it ended up being the best thing we could have ever done. it was just one of those moments where we had to kinda put our foot on the gas. but it just made sense for Florida. and we're happy to have Tampa as our as our headquarters now moving forward.

Miriam Allred (04:25)
Got it.

And a second ago you said you like you feel like you've made it over the hump. When was that hump? You know, for everybody it's a little bit different. For you personally and in the business, when do you feel like was that like hump and that turning point?

Domenic Colavito (04:38)
Yeah. it's a good question. I think that w over the hump I think is profitability. You know, so it's just a couple years ago that we've really started to see some profitability. We were conscious in

investing in growth the whole time. so we knew we were hiring ahead of the curve. We knew that we were spending money to help scale. I mean you have to scale in this business. There's I don't believe that there's much room for the mom and pop home healthcare agencies anymore. Unfortunately, it's just a really hard business. and with thin margins you need to scale in order to in order to survive. So I think, you know, just a couple of years ago I'll say getting to the point of profitability and getting to the point of just really shaking all the kind of

debt and you know things that we had to do in the past like loans and those little sorts of things to piece things together. Just clean books, profitability, sleeping at night, know that knowing that, everything's paid. you know, not a massive profit, but just not a loss either. That's where I've that's what I would call the hump.

Miriam Allred (05:41)
Okay. This is kind of transitioning into the financing stuff. Do you feel like it took you maybe longer than other businesses because of your payer mix and maybe because the reliance on Medicaid, or why do you think it took you a good of time to to be profitable?

Domenic Colavito (05:55)
Sure.

Yeah, I think it took us longer because of two things. One, we didn't want to give up equity in the company. We didn't want to raise money and give up equity. and we didn't. and then the other part of that is we were constantly investing in growth and like trying new ideas, trying new roles. and some of didn't work. You know, we we tried doing

staffing. we tried opening up a staffing arm out out right out after COVID because you know the reimbursement rates were high and we were like this will be a great way to bring some money in the door and and help fuel our growth and it it it crashed and burned, quite honestly. It it just it it went up really fast, but it went down even faster and we we lost a lot of money with that business line and that was a turning point where we were like, let's focus on our core competency, which is private duty nursing, personal care services, stick to what we know. and

get as lean as we can and and just push the growth. That was a that was a big turning point too, where we I think we realized we had to focus on our core competency 'cause you know, as entrepreneurs, you're a dreamer. You you get an idea, you see an opportunity, you want to go for it, but sometimes it's not always the best thing.

Miriam Allred (07:02)
Yeah, I'm actually really glad you mentioned that because I I'm all for diversification, you know, and like differentiation. But I have seen so many new owners in that same exact position. They get into home care and they're like, my gosh, there's all these adjacent businesses and which one

Domenic Colavito (07:16)
Yeah.

Miriam Allred (07:16)
should we start and when and how and why not? And it's like those all can become, yes, sources to fuel your home care company, but in in a lot of ways they can become a distraction and a time suck and a money suck. And so you just have to be like super careful. So that's

That's cool that actually cited that because I think a lot of people go through that early stage.

Domenic Colavito (07:35)
Yeah,

yeah, we know we learned the hard way. We lost a lot of money and time. and it was a a painful but valuable lesson for sure.

Miriam Allred (07:42)
Yeah. So let's talk a little bit about the financing path here. I'll we'll kind of start like macro, like bigger than OurCare, and then we'll like get into your specific journey. there's all these different like financing paths that home care companies can take when they start up, also when they start hitting growth and then like you said, like

Domenic Colavito (07:59)
Yeah.

Miriam Allred (08:00)
bringing on equity partners down the road. What are some of I guess, you know, again it's different at each stage, so you can address the different stages, but what are some of the primary reasons that home care companies seek out financing options?

Domenic Colavito (08:11)
Sure. I mean speaking from experience and I'll preface it all with saying, you know, my background's home care. I am a home care guy through and through. we have been very fortunate in the our opportunity with Greeley Capital and and our path on the financing world to develop this product and to bring it to market. We have a great team behind us with a ton of financial experience. but I just want the listeners to know that I don't come from a finance background, I come from an operational background.

within the home care space. that being said, I mean, I think the biggest reason why agencies go out for any type of financing is obviously cash flow problems, but I think it stems from billing problems. I think a lot I know that a lot of the people that we're speaking to, that are looking for financing, it's because their payments taking too long to come in, their billing is you know, their billing team's not on top of it, or the billing company that they're using is not so great, but whatever it is,

there's just a delay in payments that totally creates this bottleneck and and just inefficiency in like their just their weekly operations. I mean trying to figure out how you're gonna make payroll or or how you're gonna pay which bills or how you're shuffling those expenses around is not only it's just a a time killer, but it's just it really drains from your energy and ability to focus on the business and grow the business. So I think that would be the the biggest one. And then a another big one is is growth. You know, just the ability to

have access to capital quickly so that you can take on new business, new contracts, or w an agency maybe is closing down and you you happen to know that there's a bunch of cases that are up for grabs. you know, if you want to take on thirty cases at once and you gotta make payroll the following week, you need to be able to fund that payroll for thirty, sixty, ninety days. so agencies are intimidated by going after new contracts or new opportunities.

'Cause they can't finance it. I've speak I've spoken to also a lot of smaller agencies, relatively smaller agencies that are doing strictly private pay and they won't even think about Medicaid 'cause they can't get their brain around how they can manage the cash flow for it and it's a shame because with the right product they could be, you know, taking on as much business of that as they want.

Miriam Allred (10:25)
Yeah, when you guys started hour care, did you start right into Medicaid and VA and all the the government payers? Was that

Domenic Colavito (10:31)
So the

yeah, the the agency that we acquired in Westchester was working with the VA and was working with God, this was like the beginning of managed care in New York. I'm dating myself a little bit. there was one of the it was GuildNet. They're not in business anymore. It was MLTC in New York. good mix of payers. So it was a little bit of everything, but primarily government payers.

Miriam Allred (10:59)
Okay. And the reason I ask is like, did you going into it have a good sense of the complexity of the billing life cycle and managing receivables? Like, do you know that going into this or do you learn all of that the hard way, like, pretty quickly?

Domenic Colavito (11:13)
I had no idea I learned it all the hard way. It was horrible. If I'm being

Miriam Allred (11:16)
Okay.

Domenic Colavito (11:16)
perfectly honest. I mean my story was I I was a recruiter at Maxim, before I went on this journey to kind of become an owner. but from there I was just fresh out of college. So I was really young when I was in that position and I had to learn the hard way because we were piecing our financing together at that point fr with like

same there's cash at merchant cash advances and and just really high interest loans because you were just think you were just trying to get through the next week. You were just trying to get through Friday. And and our billing was a mess too. And rem mind you, this was timesheets and like pre HHA exchange or or AlayaCare or any of those companies. This was just before all of that. So it was it was it was really hard to kinda

get a grip on. But as time went on, I mean we you know, we are w OurCare is with HHA Exchange that obviously helps clean things up tremendously. We realized right away that we needed to improve upon our billing and everything else. So all these different levers you kind of need to pull in order to do that business. But most of all was appropriate financing.

Miriam Allred (12:27)
Okay. So when

you come in, you know, there's already like kind of the relationships in the base payer mix

Domenic Colavito (12:32)
Yep.

Miriam Allred (12:32)
established. You mentioned it sounds like maybe out of the gate you took on like financial support via like SBA loans or credit, et cetera, just to

Domenic Colavito (12:41)
Yeah.

Miriam Allred (12:42)
get by. Explain, yeah, I guess

Domenic Colavito (12:43)
Yeah.

Miriam Allred (12:44)
what you came you bought the business, but when you came in, like what what financing did you need in order to make payroll and be self sustaining?

Domenic Colavito (12:51)
Sure.

Sh sure. It it was it was a unique situation. but we walked into just a lot of debt that was already in place that we agreed as part of the deal.

to just make sure that we took care of and grow and grow the business. and I should say the the owner of that agency is now still our partner. So that's why it's very much a unique deal. I he he's our partner. He's he's been along for the ride the whole time and really gave us an incredible opportunity. But there was just debt. So we had to manage that debt. And that's you know, after the first like year or so we realized it was totally unsustainable to just continue to pile on these like band-aids of short term loans. We were introduced to

Janelle Glidewell of Lightstar Financial Services. She's an incredible woman. I s we still work with her. I've learned a tremendous amount from her over the years. but she did healthcare factoring. And what we realized from that point was let's find a way to kind of shake all these different items, like all these we had, you know, we pieced together a lot of different loans to just stay afloat and go to factoring. While we knew that factoring might in the long run be a little bit more expensive.

We just needed to know how much money was gonna be in the bank every single week. And that's w f at that time, that was worth any kind of interest rate to us. It didn't really matter. We just needed to know next week, you know, we did I think at that time if we did forty thousand in revenue, we were gonna get, you know, thirty seven thousand in the bank account that week and and we were gonna have that much to work with. So that's how we used factoring at that time to start just paying down some debts, paying down some of these loans, shaking everything.

to eventually be just factoring solely. That was our only we got to a point where that was our only our only financing tool that we were using.

Miriam Allred (14:38)
Okay. Before we get into factoring specifically, I'd like

Domenic Colavito (14:42)
Mm-hmm.

Miriam Allred (14:42)
to lay out kind of like all of the capital options. you and

Domenic Colavito (14:46)
Yeah.

Miriam Allred (14:46)
I both have this list up in front of us. Can you just kinda like punch through that list what the options are, what's more common, what's less common, maybe a couple of comments on like why people choose different things. I think some of these things people will be very familiar with and some of these things people will be less familiar with. And so I want you to just kinda like you know, just kinda like run through it and talk through it a little bit.

Domenic Colavito (15:06)
Yeah, and it's intimidating too, because there is there's so many different options and they're called different things and some of them feel kind of predatory too, so it's it's it's definitely a good point. I mean, starting from the top is a traditional line of credit from a bank, which is you need to have collateral and your business needs to be, you know, really well established in order to get your, standard line of credit from a bank.

OurCare, I'll use OurCare as an example. OurCare has been factor using a factoring product, but it's just within the last year that we've finally gotten to a point where a bank is willing to give us a line of credit. Banks don't traditionally want to give a line of credit against an invoice. They would rather an asset, a depreciable asset, but an asset nonetheless that they can collateralize against.

The whole reason why factoring exists, and other type of lending exists is because banks won't lend against that. So that's that's a bit of the the tricky point. which is why, you know, early on we couldn't go to a bank and and get any kind of line of credit. But an agency gets fifteen, twenty million, you know, years of experience, no bad debt, they become attractive to banks and that's that's the ultimate, you know, aside from self funding, that's the best kind of product that you that you can go after.

I'll jump to payroll funding. So payroll funding is is again, we don't do payroll funding, but my understanding is payroll funding is very similar to what we do, but it's only an advance for the amount that your payroll is, not the amount that your total invoices are. so we'll advance based on the a hundred percent of what the we don't advance a hundred percent, but we'll take what your top line number is for your batch of invoices and we'll provide a line against that. Payroll is same concept, but just against

the payroll amount that's due. So that's not something, you know, maybe that's something that works for certain agencies that, you know, have some savings but just want to parse out the the the payroll for financing, but doesn't work to cover kind of any other expenses that might come up. asset based lending is a line of credit, you'll probably see a little bit higher of an you're gonna see a higher interest rate than you would at a traditional bank, but a line of credit based off of your AR.

so if you have a million dollars in AR, and you go to an A B L, which we work with some, that we could certainly refer to if it's a better fit for clients, but they'll give you a percentage of your AR as a line of credit, as a revolving line of credit. that could be good for some companies. You know, if they're in a situation where they're not looking for explosive growth or they don't really have too much debt but they're not quite ready for a line of credit, I mean that could be a good product for somebody. You're gonna be limited to

I don't know what the exact percentages are, but maybe sixty or seventy percent of what your AR is. but if that's all you need, that could be a good avenue for good avenue for agencies. SBA loans, I mean, I think that those are great for growth or acquisitions. terms are really good. There's

You know, along like ABL and SBA loans both are gonna they're gonna underrate by looking at your entire business. So you you know, they're gonna really open up the books and make sure that, you know, everything's in order and that you're running a clean business. That's a that's a high you know, there's gonna be a high standard for that. But that's a really good tool in my opinion for like strategic acquisitions and bringing on taking on a smaller agency or even just paying down some debt if you know, if you have just yeah, a little bit of debt but the SBA loans are

are better, the rates are better, which they probably are. Not that the rates aren't bad. it could be a good product too. equity financing, I'm with that specific term a little bit unfamiliar with, but you know, when you get into the equity world and if you're if you're willing to put up some equity in your company in exchange for, you know, whether it be like a convertible note or even just raising money and giving up equity, that's almost like

I almost want to say that's beyond like financing. That's just kind of making a deal with a partner that's got much bigger ap implications. which is something that we never really wanted to entertain, but it's something that also could be a really good tool for people that are just at the point where they're ready to take on partners and and want to hit the gas on growth. you know, those are and there's no shortage of people looking for to buy agencies or to partner with agencies. I'm sure again, a lot of your listeners probably like I do get

cons of emails and calls saying, we're with a firm that's interested in your space. We've read so much about you, which is probably not true, but just looking to to purchase agencies. so that would probably fall under that category. I mean then you we have gr grants and state programs down there. I mean everybody should be taking advantage of any of those that are available through the years. Home care agencies should have and most of them did.

take advantage of the, you know, PPP loans, the ERTC, like these programs that come up, and those are obviously some of the bigger ones. you know, we're putting our blood, sweat and tears into this business. Take advantage of whatever's out there. But then there's obviously smaller local ones that are just, dependent upon where you are geographically that should be taken advantage of too.

Miriam Allred (20:18)
Awesome. Yeah, that was great. I just want to kind of like get all of those options on the table. And again, like different

Domenic Colavito (20:22)
Yeah.

Miriam Allred (20:23)
people have different familiarity with with each of those. but there's a lot of options out there. And you kind of mentioned this before, but the the next question is around like what factors into deciding which of these financing paths to take? And, you know, you and I

Domenic Colavito (20:36)
Yeah.

Miriam Allred (20:36)
both kind of came to this conclusion of like size and payer mix and profitability and then like goals. It's like essentially

Businesses at different stages are analyzing all of those factors simultaneously and then deciding like what makes sense and when. And going into this conversation, just transparently, I was thinking of like, you know, starting the business and kind of like early stage growth and the and the need for financial support then. But as I work with more mid and large size businesses, they're thinking a lot about these capital options as well. As they want to open up new locations, enter new markets, take their business out of state, start franchising. It's like I actually think.

There's a lot more at stake and a lot more people are thinking about this in in the latter stages so that they can grow and build, what what their business can become.

Domenic Colavito (21:23)
Right. Yeah, that's you know, I think size is size is obviously a big one because if you were gonna go the ABL route and you have a million dollars of AR and you get sixty percent of that, you know, you go through your underwriting, you get approved, you get your line of credit and that's your evolving line of credit. But if you have an opportunity to, you know, take on, like I said, a lot of businesses once or an acquisition, you might have to go through underwriting again, you might have to get a new line. The advantage of what we do when we

providing factoring is on a weekly basis or however bi weekly, however often somebody's billing, we can grow alongside of the agency to help them t that line essentially increases on a weekly basis, however much business that the agency's doing. Size is important. I do think though when for an agency owner and determining what's best for them is you know looking inward at the goals of the agency.

like what they're really trying to accomplish and then the inefficiencies within your operations. I mean, when I first started, my back was against the wall. We needed money right away. So that's how we fell into these MCAs and these these these high interest loans. We just needed to survive. We didn't have time to think about you know, that our billing could have been better or this and that, whatever it was. but an agency

You know, we charge factoring our factoring rate is one percent every ten days that fees that funds are outstanding. And I tell some of our clients, I'm like, look, get your money in as fast as possible. It's fine if it's coming in faster. That means you're paying us less, it's cheaper financing. That's one of the biggest things that we see is we've I've run into a couple of agencies that they're paying multiple people internally to be their billers and their money's not coming in anywhere near as fast. And if you took away

those billers, there's nothing against them as people obviously, but if you replace those billers with somebody like that Voltaire at A Z billing, who does a great job, his percentage in combination with how much faster the money's coming in almost covers our percentage. So it's really looking inward to see what your goals are and then what kind of changes you can make internally to support a different option. You know, that's an illustration of how somebody could support our fee.

But there's probably several other ways that they can look at their own operations, speak with their finance team and say, Well, if we tweak this and this, we actually may be able to go the ABL route because we don't need that big of a line. Factoring is a little bit too much for us. We only need a little bit. But let's look internally first. It's just I don't like personally making decisions anything with either business when your back's against the wall. And when you're under this financial pressure as a home care agency, especially, there's no feeling I mean that's

Total backs against the wall. That's the pressure that it's the probably the most pressure I've ever felt in my life professionally is just dealing with those finances. So it's hard to do it when you're in it, but to really take a step back and see what your business needs and what changes you can make first before you go signing with anyone at any interest rate. what's the best for you?

Miriam Allred (24:35)
Let's talk about the payers specifically. Again, you're working

Domenic Colavito (24:38)
Mm-hmm.

Miriam Allred (24:39)
with a variety of payers. And so can we talk about like VA specifically and then also like Medicaid specifically? And it granted these are in your states and there's all the variants, but like the

Domenic Colavito (24:48)
Yeah.

Miriam Allred (24:50)
the turnaround time on your billing for these sources. And the reason I want you to, I guess, just explain what that looks like in your mind back then and now, did you do you wanna become

In my mind, everyone like wants to become self sufficient and wants to like avoid funding if you can. Is that feasible? Like with the way that VA and Medicaid are structured in your state, like is the ultimate dream to become self-sufficient from a funding perspective, or is

it almost impossible?

Domenic Colavito (25:21)
Yeah.

I don't think it's impossible. I think it's I think it's certainly possible. I mean look if we raised money and gave up, you know, half of the equity in our company just to park a ton of money and use that as a free line of credit to fund our weekly operations, or to be self funded, really is the right way to say it. that would be it. You know, we would give up equity. Or if we just were really

slow in our growth and saving up money and getting to that point, we could get there too. But I think those are the options. You either give up equity or you give up a ton of time. So that I think is the route to being to being self funded. I think financing or using a f a financial tool, a lender to to f help facilitate growth, you know, it's a line item. It's an expense item that if you can if it makes sense and you're i you look at your books and if you're okay with X percent, that's just

allowing you to take on new business and grow and that works for your bottom line, then that works too. It's it's the same thing like like anything else. I mean I have an example I use when I speak to people too is I've I've met a lot of people and I won't call the name out of the subscription specifically, but it's a it's a referral subscription. It's a it's a company that we all know that it's a lot of money and you're paying for referrals. And more times than not when I speak to people they haven't really seen a good return from it but they have

a three or four thousand dollar a month expense for that referral service. And I've actually come across a couple clients that our fee was less than that based on what their revenue was. So what I'm trying to what I had said to them was like, why you pause that for six months? Let's get your cash flow stabilized so you can stop worrying every week and get a little bit more organized. It's your net is going to be a savings because you were spending more on these referrals that you weren't really even getting. and see how it goes. So

The reason why I say that is because agen we all as agency owners just have these expense line items that we know are just part of growing our business. And if you're comfortable or you want to grow at a certain pace and that line item of financing, whether it be an ABL or a standard line of credit or or factoring is are you alright with then it's good. Then it fits you. If it doesn't, that's fine too. You know, that's the beauty of being a business owner is like you you could run your business however you want, whatever makes the most sense for you.

Miriam Allred (27:41)
And you mentioned earlier in the conversation, like trying to run as lean as possible. When you go the self-funded

Domenic Colavito (27:45)
Yeah.

Miriam Allred (27:46)
route, like out of necessity, you have to run as lean as possible, which is stressful. Talk about sleepless nights, but there's

Domenic Colavito (27:53)
Yeah.

Miriam Allred (27:53)
like no breathing room, you know, like the Medicaid businesses that I know that are self funded, it's like there is no breathing room and everyone

Domenic Colavito (28:00)
Yeah.

Miriam Allred (28:01)
is stressed and everyone is overworked and underpaid. And it's like, you can run that business. You know, you just said everyone can run the business how they want. You can run that business, but having the capital

partner and availability just like gives everyone that breathing room and reduces the stress.

Domenic Colavito (28:18)
Yeah, and that's the thing and we've talked separately about this. It's like that's the thing that I'm having honestly a hard time quantifying. I mean, when I speak to business owners, they get what I'm saying, but just quantifying getting those hours and sometimes days back a week of just panic and like disarray, trying to figure out who you're gonna borrow from or where you're gonna go or what bill to pay, what bill to not pay, like all that energy,

that a lot of business owners, a lot of home care owners have to deal with. It's just it's a distraction from growing the business. So finding a product, whatever financial product is right for them to to get rid of that so they can focus back on the business, I think is again, it's hard to quantify in dollars and cents, but that's really a tremendous value in finding the right financing partner. Just

be able to get back to business.

Miriam Allred (29:06)
And what's

what's the root of that? So a lot of people listening to this will that resonates with them. They're like, I'm

Domenic Colavito (29:12)
Yeah.

Miriam Allred (29:13)
doing my best, operations are good, but like managing the finances and getting ahead is just like feels impossible. Like a lot of home care

Domenic Colavito (29:18)
Yeah.

Miriam Allred (29:18)
companies, even successful ones, you know, you s you know, even your own hump, it's like you can be doing eight million, you know, ten million, and to a lot of people that's like, you've made it in home care. But to like those

Domenic Colavito (29:28)
Yeah.

Miriam Allred (29:28)
businesses, oftentimes they're still floundering and the finances are a

Domenic Colavito (29:31)
Yeah.

Miriam Allred (29:32)
big part of that. What what's the root of their

Fear is that there's a negative stigma around getting financial help. Like what do you think is the root of that?

Domenic Colavito (29:46)
I think that there's a lot of unknowns. I think that agency owners and I was one of them just didn't understand a lot of these products and didn't have the patience or energy to really dig in because you're just trying to survive. So I guess it's like a lack of education. It's not the necessarily the right way to put it, but just a lack of understanding of of how some of these things work.

but again, you know, like when the house is on fire, and and you just have a million other things to worry about, it's it just falls down the list. But that's the kind of vicious cycle of it is because, you know, I might be selling you a fire hose while your house is on fire, but you can't even see it because you you're just still trying to bail out, you know, whatever room you're putting out. trying to think of an analogy. But I think it's just a lack of Yeah, it's just

Miriam Allred (30:32)
No, that's a that's a really good analogy. Yeah, I like that.

Domenic Colavito (30:34)
it's hard. It it it's hard to it's hard to take any kind of sales call or talk and look I I'm

It's so funny. When we started Greeley, late last year, I instantly started getting flooded with emails of like, we have a line of credit we can offer you and it's it's it's overwhelming. I get spam calls and emails and everything else, and I'm like I'm trying to fine tune my own sales pitch 'cause I don't want to come across as that at all. I want somebody needs us, we're here. But I don't want to pressure anybody, especially knowing what it's like to be in the hot seat as an agency owner. It's like I have I have

so much kind of compassion for that role because I've been there. I am still there. I don't want to push. But there is a need for, I think, a better understanding of how these products all work and how they stack up against each other as it relates specifically to home care. So

Miriam Allred (31:23)
Yeah, but in

the moment it feels like one more thing. It's like there's the necessity for day to day operations to run and to function smoothly.

Domenic Colavito (31:29)
yeah.

Miriam Allred (31:30)
Anything outside of that is just like

Domenic Colavito (31:32)
Yeah.

Miriam Allred (31:32)
one more thing. And a lot of people don't have time. And, you know, everybody hates the overuse phrase of like working in the business versus on the business. But it's like things like this, you literally have to step out of the burning house to find the hose to then put out the fire. But

Domenic Colavito (31:43)
Yeah. Yeah.

Miriam Allred (31:45)
it's easier to stay in the burning building because, you know, out of necessity, you're just you're just stuck there.

Domenic Colavito (31:49)
Yeah, and it's not even just one more thing, it's also what's one more expense. So you try telling a business owner that like there's a cost to this too, and you're like, my god, I can't handle another c I can't handle a another penny of an expense. And like I know that over time it'll help clean things up and bring, you know, the business to a better place, but it's it's hard. It's hard to consider any any more expenses for a business that's just d unforgiving and and just has such terrible margins to begin with.

Miriam Allred (32:17)
But I like what you mentioned a minute ago of like kind of putting it up against like agencies throwing money at like online leads, paid leads. It's like they're doing all of these, oftentimes like throwing money in different directions

Domenic Colavito (32:28)
Yeah.

Miriam Allred (32:28)
and not seeing a big return on it. And working with a financial partner, even just like the perspective and the insight that comes with just talking to like an outside voice of reason of like, let's audit your finances and see where you're throwing money and take a step back and like

Domenic Colavito (32:42)
Right.

Miriam Allred (32:42)
what are the you said, like let's stabilize cash flow. Let's like

get down to like the foundation of the business and

Domenic Colavito (32:48)
Yeah.

Miriam Allred (32:49)
and that can just be like really helpful for any stage to just have like an outside voice and partner doing some of that auditing.

Domenic Colavito (32:55)
Yeah, no, a hundred percent. And I've seen I think because I'm a home care person backing into the finance world rather than a finance person backing into the home care world, I have this ability to kind of see those things when I'm talking to potential clients and just share my own experience that like, yeah, I've spent five thousand dollars a month for leads that went nowhere. I've spent a ton of money on and I w I don't mind calling Google out, but I've spent on Google ads

that didn't amount to really anything where if I am looking back, you know, hindsight's twenty twenty, but if looking back, I could have carved out that amount for a budget for something else or paid a bill down that I knew I needed to. I was just chasing this, you know, this need for growth. And at that time it just didn't work out. So, you know, that's the the marketing side of things. There's a million other like kind of nooks and crannies within the business that I think agency owners can find efficiencies yeah efficiencies with

in order to support a financial partner and again any type of financial partner, ABL, factoring, whatever it is. but I think that there's way more value in that sustainable cash flow predictability than than Google ads or whatever else it may be.

Miriam Allred (34:12)
Yeah. So let's talk about factoring specifically. And again, you kind of introduced

Domenic Colavito (34:16)
Mm-hmm.

Miriam Allred (34:17)
me to this. I did not know a whole lot about this. So I want you to explain it to me right now on the podcast. Like I'm an idiot. Like people have never heard that word before, knowing no have no idea what factoring is. Like explain it in

Domenic Colavito (34:26)
Sure.

Miriam Allred (34:26)
like really simple terms.

Domenic Colavito (34:28)
Yeah, so I'll I'll the example that I've been using to try to just and there's a really good video we had made on our website, greeleycapital.com. So if anybody wants to look at that video, it's duh it's gonna do a better job than I am right now explaining it. But the example that I'll use is an agency that's doing a hundred thousand dollars a week and has a 30-day payer. And for the example we're gonna just

assume that the conditions are perfect, that they're paying every thirty days and that revenue's staying exactly at a hundred thousand. so we charge one percent every ten days that funds are outstanding. So that hundred thousand dollar group of invoices will ultimately end up costing three percent. the way that it works is if you hand us the the invoices

And we say, okay, there's a hundred thousand. And these some of these numbers are negotiable, so we can have one-on-one conversations with any potential clients to negotiate, but they hand us a hundred thousand dollars of invoices, we advance eighty-five percent of that. So immediately eighty-five thousand dollars would hit the bank account of the client. They have that money to do whatever they want with, to pay payroll, to pay bills, do whatever. That's fine. The following week, the same thing happens. 100,000, we advance 85%. Now, fast forward to

Once we're beyond thirty days and we're still factoring them. Once the payments start coming in, that remaining fifteen percent has been allocated to a reserve account. So as payments come in, we will put the that week's eighty-five thousand to the client. We'll also release the fifteen thousand that's coming from that reserve account, and we'll take our fees from the reserve. So in that scenario, once we've gone through the cycle for thirty days or however many paym or weeks of billing that is.

they would actually be getting ninety-seven thousand dollars a week for them to use. they're just an advance on their own receivables. So in the beginning it takes a it'll take a little bit of time. and there's some ways we can work around that too, but traditionally in the beginning it'll take a little bit of time to get to that point where you're getting your 85% advance plus your reserve release. but again in those perfect conditions after the f by the fifth week

you would be seeing ninety-seven thousand dollars deposited into your bank account on whatever we dictate to be the funding day. So if you send invoices on a Tuesday, money hits on a Wednesday, and you would have that ninety-seven thousand. The only side is the other side that it's important to note too, because it's the it's it's not a downside, but it's the reality of it is let's say, and this is a little negotiable too, but let's say that our agreement says we're financing them for a hundred and five days.

Let's go all the way to 105 days and we realize that $10,000 of that hundred thousand didn't pay for whatever reason. It wasn't billed right. The the people the the the MLTC went out of business, which has happened before, whatever the reason is, it didn't pay. What happens to that money? So on that week's funding, you'll have the same equation, you get your eighty-five thousand advance, but from the reserves, we will withhold the ten that never came in as what we call a chargeback.

From there, once that money does come in, it goes directly to the agency. So it's not that the money's lost. It's just you it's been borrowed against for the limit that we've put in place. and then from there it's still up to the agency to collect it. So that's that's a a full cycle of how it would work.

Miriam Allred (37:53)
Okay, lots of questions.

Domenic Colavito (37:55)
Sure.

Miriam Allred (37:55)
what's the reasoning of the eighty five percent advance? Why eighty five?

Domenic Colavito (38:00)
I mean that's negotiable, you know, sometimes it's eighty, sometimes it's ninety, but we do need to keep a reserve, to keep a healthy reserve ongoing in case, you know, you do have a if we were let's say we were advancing the whole ninety seven percent up front and that payer went out of business or that ten thousand dollars disappeared, then it would be up to us to chase the agency to pay the ten thousand dollars back to us, which would be fine, but there's more risk in that. so there's a reserve in case anything happens.

Payments don't come in or just any issues throughout the week or throughout the arrangement.

Miriam Allred (38:34)
Okay.

I guess I the part of the reason I asked that is like operating costs. Are you kinda like calculating like how much cash the agency needs or could it technically be lower if the agency needs less like operating cash? And does that make sense?

Domenic Colavito (38:47)
If the if the agency

needed less operating cash, then it might be a case where we would refer them to a partner that does a different type of lending, like an ABL. So if if it was something that they only needed sixty or seventy percent, we might say, look, let's let's get you to one of our partners who has a different product. Like I don't want to take business just to take business. and it just might make more sense to put put them somewhere else. If they weren't a good fit for an ABL, because

Again, ABL or a traditional line of credit, they they are they're lending against your business, and your books and everything as a whole. We're really more concerned with the payers, and and the contracts and the type of business that you're doing. So our underwriting looks a little different. it might be the case that I I mean we could advance less for sure. It's just not how we operate. So we'd want to make sure we're the right fit for that client if that came up.

Miriam Allred (39:39)
Got it. Okay. And then you also mention room for negotiation around the timing, thirty days versus I think you said a hundred and five days, like s nine.

Domenic Colavito (39:48)
Well, ninety days, a hundred and five

days. Like so we'll we'll establish how long we're willing to kind of hold on to the the financing of a certain receivable. And that's

Miriam Allred (39:56)
And is that a conversation

based on the payers and their anticipated time to be paid back?

Domenic Colavito (40:02)
It's really good question. that's on a case by case basis will work out with a client. But I wanna give one example which is where factoring really helped us. The VA, I forget however many years ago it was, they changed to a national authorization system. I believe that's what it was. and authorizations were held up for months. So we just weren't getting paid for like six months, and we did a lot of VA work at that time. And

I believe that this time it was Janelle at Lightstar. I'm sorry for calling her out again, but we were we were like listen, Janelle, like you can't charge us back all this money. You know it's coming in. We see that it's coming in. We have all the communication in the world, but like we're just we'll be out of business. We can't just sustain all these chargebags. And on that, on a case by case basis, she worked with us and we she continued to factor them. and she capped the percentage on that too. She probably lost

money if I'm being honest, during that time. But she we were a long term client of hers. She knew it was coming in. She had another client that was dealing with the same thing too. So the reason why I say that is we have the flexibility and and industry experience that when those types of things come up, we can work with a client to make sure that it's not going to put them out of business. certainly that's a obvious example. but there's way more kind of subtle things that come up with payers and denials and

And everything else. Like right now we have a client in Florida and Sunshine Health is an MCO down in Florida and they just put all the information wrong into HHA Exchange for their clients. Everything's wrong. You're trying to call them to get it fixed, it's forget it. Like you're you know, it's it's gonna take time to work through that. but meanwhile the clock's ticking 'cause the money's not coming in because the authorizations aren't right and nothing's right. So those are instances where we see the E V V is good, we see that everything's working fine, but there's just this really technical home care specific problem.

And that's where we think we have a really strong competitive advantage because we understand that. If you try to tell that to Chase, they're gonna scratch their head and say, Sorry, we need you to get out of our branch. We I don't have anything for ya. So those

Miriam Allred (42:05)
Yeah.

Domenic Colavito (42:07)
are the those are the intricacies of home care that we are comfortable landing against and taking that risk on just because we've been there.

Miriam Allred (42:15)
Yeah, it's no secret that I haven't run one of these businesses, but when I hear of companies going six months, 10 months, 12 months without getting paid, I am just like, how is anyone doing this? How is any sane person doing this? Like literally a I'm thinking of like a hospice company here in Texas,

didn't

Domenic Colavito (42:32)
Mm-hmm.

Miriam Allred (42:33)
get paid for 12 months. And I am just like, how is anyone doing this? But that's the reality

Domenic Colavito (42:38)
Yeah.

Miriam Allred (42:39)
you're talking about.

Domenic Colavito (42:40)
Yeah, yeah, it's scary. And then not only is how anyone doing this like that's twelve months of just sheer kind of white knuckle survival, right? They're not thinking about growing their business when they're going through that. They're just thinking about like how when is this money gonna come in? I gotta pay my mortgage. Like I gotta survive. So that's where you consider the right financing partner for growth. It's a perfect example. That just

sucks all the life out of growth and business development and everything else and just turns it into survival.

Miriam Allred (43:09)
Yeah, so talk specifically, you've kind of like sprinkle this in, but why factoring for OurCare? Like you've been doing it for a long time, but it sounds like in like kind of different variations. But

Domenic Colavito (43:19)
Yeah.

Miriam Allred (43:19)
why did factoring make sense for you guys specifically?

Domenic Colavito (43:24)
Well, for us again, we were coming from a place of just debt and we needed to clean things up. So it w it's a really good I think factoring generally speaking is a really good bridge between and it this is exactly what it was for us, but a really good bridge between like a combination of SBA and you know, like all these other loans and high interest loans and just getting to a point where you're sitting with a banker at a for a traditional lender and getting a line of credit or even self funded. It's a it's a good bridge.

The reason why it worked for us is we just wanted to hit the gas on growth because we knew and we were primarily doing business in New York at that time. Home care is like it's like a sieve. You know, y if you're not growing business, you're you're you have to constantly be growing, otherwise you're you're gonna go out of business. So you have to focus on growth all the time. And we wanted to do that just without worrying about anything else. We wanted to see how fast we can grow, how strong we can grow.

and not have to figure out how we were gonna fund make payroll. So we were our f we were okay with, you know, shuffling around other expenses and and getting through the other parts of the business financially, but we just never wanted to worry about just payroll and our bare minimum expenses that we needed to make when we were hitting the gas on growth. and I I mean, it was a thing that we started doing to get away from these these high interest loans and this collection of other tools that we were using

And we just got really comfortable with it for a while. because we took the business from I wanna say like six million to close to ten or eleven pretty quickly. and we never once had to worry about, you know, where the money was coming from on a weekly basis. again, I I'll share, like we're at a point now or OurCare in the last year is at a point where it doesn't need that type of lending anymore just for the direction that we're going as a business and for the appeal that we now have to the banks.

But, you know, through the roller coaster of COVID and and everything else and and you know, getting on to the NHT D program in New York was just like a big flood of business and and now we're seeing it with even Guide too. It was just a really good way to have access, have stable cash flow while we were just constantly going after new opportunities and growing business.

Miriam Allred (45:41)
So what is the this is that was great because that helps like put this into context for people. In your own words, who is the like ideal customer profile for factoring? Like who's the primary beneficiary of this? And then there might be

Domenic Colavito (45:57)
Yeah.

Miriam Allred (45:57)
like secondary and tertiary tertiary, but like who is that was your experience, but like thinking a little bit more

Domenic Colavito (46:01)
Yeah.

Miriam Allred (46:02)
holistically, who is the primary fit for this?

Domenic Colavito (46:07)
I think the primary fit is an agency owner, a starting point I would say, right around thirty thousand a week. Again, this is my experience and maybe I'm off with the numbers, but there's this point where there's an agency owner that is and you said it before, is starting to think about working on the business rather than in the business. Or call it thirty thousand a week.

They're doing everything. And they want to make a couple hires. They want to go after this guide program or whatever other contract came up. And, you know, maybe they do have a loan on the books that they had from when they got started. And a traditional lender is just not going to give them enough. so that they can just hit the gas and grow. I think from that point, I think thirty thousand is probably about one point five a year. So maybe one point five, two million a year. I think it beginning at that point.

Focusing on growth is a really good spot for an agency owner. Now I see it that way in retrospect. I don't know, you know, it's hard when you're in like we just said, when you're in that moment as the agency owner and you're like, All right, I gotta hire a scheduler, I gotta hire, you know, a recruiter, I gotta do all these things to grow the business. My idea of growing the business, whatever that is, it might be really hard for them to see it at that point, but there really isn't

depending on how fast they want to grow, there's really not too many other options. I mean, there's only a handful of other factoring companies in the country that will touch home care. they're all good. We you know we have connections with all of them, but it's less than five, I believe. You know, factoring's alive and well in many other industries, but it's not really it's not popular in home care specifically. So that one point five two million and up point of an agency that wants to grow, I think is is the idea I think is ideal. For us

my mission with Greeley Capital right now is to just is you know, to be embedded in this h industry and this community of agency owners, to be a tool for them. So I'm you know, like our home care business, we have a good mix of Medicaid, private pay and everything else. we talked about this too. I I wanna have a good mix of clients.

for Greeley too.

But from an agency perspective,

Miriam Allred (48:19)
And you s

Domenic Colavito (48:20)
I would say that one and a half, two million and up.

Miriam Allred (48:23)
And that's citing size, what about payer mix? Is it most does it

Domenic Colavito (48:27)
Mm-hmm.

Miriam Allred (48:27)
make the most sense for government payers? Like does it make sense for a fully private pay business?

Domenic Colavito (48:33)
Yeah, so ironically, we don't love to factor private pay business because they're they're the most risky. It's the it's the most risky business to to finance. At the same time, a lot of I mean, in my opinion, with a private pay client, credit card on file, billing weekly, maybe even have a deposit, that should be the tightest cash flow, of any of the business that an agency's doing. So, you know

If you're if you're getting your money on a weekly basis 'cause you're running a credit card, you don't you don't need any type of financing for that. Like you're that's the best way to do it. So but other than that, sure, commercial insurance, government insurance, long term care insurance, you know, you can obviously you do an assignment of benefits and and send that directly to the agency rather than the client. so we're open to to financing any type of insurance at all.

Miriam Allred (49:24)
Okay. And the other thing that comes to mind, we talk a lot about these like plateaus, all different, you know, your own hump. Every

Domenic Colavito (49:28)
Hmm.

Miriam Allred (49:29)
company hits these plateaus or humps at different stages of their growth. But to me, that's also maybe like a secondary ICP is like someone to look at financing options when they're in that, in that slump or in that plateau

Domenic Colavito (49:42)
Yeah.

Miriam Allred (49:43)
because they need the audit. They need to take the hard look at the business of like where are we wasting money? You know, where do

Domenic Colavito (49:49)
Yeah.

Miriam Allred (49:50)
where do we need to lean out? And then also.

what is stunting our growth, oftentimes there's all different reasons, but financing can be one of those, of like,

Domenic Colavito (49:59)
Yeah.

Miriam Allred (50:00)
we're just getting by, therefore everyone is white knuckling and stressed out. Therefore we can't even like comprehend growth. And so taking off some of that stress and that burden, bringing in the financial partner can accelerate, like you said, going from six million to 10 million. There's a lot of businesses

Domenic Colavito (50:14)
Yeah.

Miriam Allred (50:15)
in that slump right now and they just like can't figure it out.

Domenic Colavito (50:17)
Yeah, yeah, it's hard. And again, we were we're I I'm giving her a lot of credit as I should. You know, Janelle, our partner earlier on, she was you know, she didn't have a home care background but she had worked with a lot of home care agencies and she's just she gave us really good advice operationally about things that we should be doing and she became she was way more than a a financing partner at that time and you know, we were luckily w able to make a lot of the changes that she had recommended and that we came to on our own.

to complement her as a finance partner and to grow the business. but like I said earlier, you gotta look inward because as tight as the margins are, it's surprising how much we do have I see a lot of agency owners ourselves included over the years. Like there's waste. It builds up. It's it's like my we try to do a quarterly kind of meeting to look through all expenses and evaluate everything that we're doing. But it's y you gotta really tighten up everything internally first before you decide

take on any type of financing. Otherwise you're kind of just piling on to you know, you could be scaling in the wrong direction, if you don't correct things internally first, in my opinion.

Miriam Allred (51:25)
When you decided to go the factoring route again, like early on, what it what impact did that have on you as the owner? You know, this is a bunch of CEOs primarily listening to this and it's like when you decided

Domenic Colavito (51:36)
Yeah.

Miriam Allred (51:36)
to go the factoring route, like what relief or what impact did that did that have on you and and your partners?

Domenic Colavito (51:42)
Sh

sure. Well, for the first sixty days it was like bliss. It was incredible. We knew exactly how much money we were getting and it was like this is great. Like we're just gonna keep growing business and we're not gonna worry about it. Then we hit ninety days, which was at the time our limit with Lightstar. and we were getting chargebacks. And those chargebacks started to pile up and we found ourselves again in a situation where

We were like, we don't have enough cash for the week. Like, what is going on? And what we found out internally, and this is why I'm stressing that everybody should look inward before figuring out what type of financing they need is our billing was a mess. It was an absolute mess. It wasn't being done right. It was, you know, our HHA exchange wasn't set up right. Like th there was so many things wrong internally. Things were over sixty days coming in on average. it was it was just a complete mess. So then

You go bliss and then you go panic again for another call it three, four, five months. and then you go back to, okay, things are things are good now. We have g you know, predictability again and our chargebacks are coming down because we've cleaned everything up. But that was you know, we had to we had to change our billing department and make inter big internal changes at that point. But it forced us to do so. So I mean, it was it you know, the billing was at the the root of the problem. We just

We didn't really see it until it was hitting us again directly as a chargeback. Why was something chargebacked? Well, 'cause we billed it ninety days ago and it actually never even got billed in some instances. So you know, that was just our own our own path to it. but it helped us it helped us change our operations to a point where, you know, we wanted to just make ever like I said lean earlier. We wanted to get as efficient and as lean as possible 'cause we were okay with the expense of factoring and financing, but

What else could we control? You know, the the financing interest rate was a a binary thing. We knew exactly what it was gonna be. But were we spending too much here? Do could we consolidate, you know, something on the other side of the business? and that's what while factoring was in place and we had that stability, we fine tuned everything else to the point where, you know, over the years we didn't we don't need it anymore 'cause

we can find

Miriam Allred (53:55)
Okay.

Domenic Colavito (53:56)
a cheaper option.

Miriam Allred (53:57)
You've sort of indirectly mentioned some of like the drawbacks and the risks with factoring. Can you state those

Domenic Colavito (54:01)
Mm-hmm.

Miriam Allred (54:02)
more explicitly? Like what are some of the risks and the drawbacks, just so people can see kind of both

Domenic Colavito (54:07)
Sure.

Miriam Allred (54:07)
sides of the coin?

Domenic Colavito (54:08)
Yeah, I mean quite simply, the longer it takes for your money to come in, the more expensive it's going to be. So if if your claims are taking sixty, ninety, a hundred plus days to come in,

we're gonna have a conversation before we even take you on as a client to say this is gonna be really expensive and messy in the beginning, but if we want this to work, you have to fix your billing department. You have to either go to A Z or make a change internally or whatever it is. you know, there's some other tools out there that I think a lot of people have heard of just that can help from a technological standpoint. But whatever that is, that's gotta get tightened up first. But that's the biggest risk is having

you know, slow billing, inefficient billing, 'cause it's just gonna get expensive. And again on the flip side of that is we tell our clients, y get your money in as fast as you can. It'll be cheaper for you. and it doesn't, you know, for us it doesn't affect us. That's capital that we could put to work somewhere else. just get as tight as possible.

Miriam Allred (55:13)
Mm. This reminds me, I just introduced you to Julio Berea, who's kind of like Medicaid billing specialist.

Domenic Colavito (55:16)
yeah, he was great. Yeah.

Miriam Allred (55:18)
I'm gonna have him on the show and that's gonna be another side conversation, which is like, how do you clean up your billing? Like how do you get

Domenic Colavito (55:23)
Yeah.

Miriam Allred (55:24)
in the weeds and where what are the mistakes and the pitfalls and the just all the little things that people are overlooking because you're citing that as like if you don't have your billing in order, like you have to get that in order regardless if you're self-funded or taking on a financing partner, like you

Domenic Colavito (55:36)
Yeah.

Miriam Allred (55:36)
have to clean that up.

Domenic Colavito (55:38)
Yeah, it doesn't matter what type of financing you're going for, that has to be cleaned up. So, you know, if you have somebody whose claims are just you know, they're writing off ten percent and stuff's just not coming in at all, then sure factoring's gonna be expensive, but that's still way cheaper than what you're actually losing. but make sure that that's the goal is to tighten that up before anything else. And I should

Miriam Allred (55:58)
So

Domenic Colavito (55:58)
say too, bad business. So it's it's hard and it's another thing that I struggled with, but

there's some business that's just not good business. And that's never gonna be solved. That you just have to let that go. Like we have a payer in New York. I won't call them out either, but they just don't pay everything. And they don't have a reason for it. Just one out of every ten invoices

Or whatever it is, will just not get paid and we'll work it and work it and work it and it won't get paid. And when you know, the rates seem great, but when you really look at the account as a whole and what you're profiting, when you factor in that one out of ten invoices not paying, it's just it's not good. And we know from the factoring side, we can say, Look, we'll finance these invoices, but we already know that one of those ten invoices is not gonna pay and it's gonna end up on a as a chargeback. So you can finance it but

It's i it's a known problem. So not all business is good business unfortunately two and it's really shouldn't be that way given the nature of the work that we do taking care of people. But we all know some of these companies are just, for whatever reason, not the best payers and you gotta be careful around.

Miriam Allred (57:07)
So think of all the people listening to this. Some of them may be thinking, like, wow, I think I should maybe consider this. Say they're, you know, obviously they can just come to you and ask these types of questions and you know, you can hash it out in the details. What should they think about or prepare to make that conversation more valuable? Like you we talk you said multiple times, like looking inward, like what are the two

Domenic Colavito (57:28)
Yeah.

Miriam Allred (57:29)
or three things that they should think about and come prepared to discuss, like going into that conversation?

Domenic Colavito (57:35)
Yeah, I think there's the obvious stuff, like just the financial information, right? You know, like the payer mix and the revenue and you know collection time and all that. Like that's that's the obvious stuff. But I think really importantly is the goal. You know, like what's the goal of the agency? Where are you trying to be in six months, twelve months, three years? You know, where are you trying to go? And let's see if we could fit if that if if we can help you get there. If again, if we're not the right fit, we don't wanna just force the business on you, but

figuring out really and honestly what the agency's goal is and then what their hurdles are. Why aren't why aren't they there yet? and if it's 'cause they don't have financing, sure, at the highest level that makes sense. You need more cash, but why don't you have the cash? What's happening internally that is slowing your money or costing you too much or whatever it is. So identifying, you know, the goal in those problems I think is is aside from the basic kind of, you know, financial information, I think that's probably the most important.

Miriam Allred (58:32)
Awesome. Domenic, this has been super fun. You know, this is one of those like, you know, mundane, finance topics, but it's like you've made this really engaging and really educational. I hope everyone has like learned something listening to this. And I also hope that if any of this resonated with anybody, Domenic is a great person to reach out to. There's a reason why I had you on the show of like you're really easy to talk to. You're very knowledgeable. You've been there and done that. And so anyone coming to you can relate on like your first hand home care experience and talking about these payers and the finances, like.

Especially if any of you are in Florida and New York, Connecticut, like the Northeast, like you are very knowledgeable on those those states and those areas, but also all of the payers people can just come to, not a shoulder to cry on, but someone that they can just kind of come and learn and listen and and ask questions and have just like a really honest conversation with. So thank you for coming prepared and sharing all of this. You mentioned greeleycapital.com. We'll have information there in the show notes and Dominic's email, and all of that good stuff. But Domenic, this has been great. Thank you so much for joining me.

Domenic Colavito (59:27)
Thank you. I really appreciate it. Thank you for all the kind words and I'm happy to speak to anybody. If they have any any further questions, I'm here.

Miriam Allred (59:33)
Awesome. Thanks everyone for tuning in and we'll look forward to seeing you back next week.