Dr. Michele Wilkerson Raithel is the co-owner and CEO of Revolutions Naturopathic and Justin Raithel is the co-owner and Operations Manager. Together, they have built Revolutions Naturopathic from scratch into one of the largest naturopathic businesses in the west coast. When nobody really understood what naturopathic practice was all about, Dr. Michele went about educating the community and patients and collaborated extensively with other businesses and local Chamber of Commerce to build her business.
Dr. Michele Raithel explains what naturopathic practice is all about and how her local community did not have a clue about this method of healing patients in a natural way when she started out.
To overcome the lack of knowledge, Michele collaborated with other businesses such as physical therapists, chiropractors, and also local Chamber Of Commerce to network and educate patients as well as other businesses. To help her with operations and business aspects, her husband Justin joined her full-time as well.Justin and Michele talk about the ups and downs of building 2 facilities, hiring the staff to grow in 2 different areas, and the challenges of building a business. They also talk about the decisions they had to make to scale as opposed to staying as a one doctor practice.
The Raithels talk about pricing, decisions on accepting insurance or not, and the process of building pipeline of potential patients starting with one member of the household. They also talk about social media and how they used it effectively to grow along with their extensive community activities.
Episode Transcript (Click to expand)
Ramesh: Hi everybody. Welcome to the agile entrepreneur podcast. This is your host Ramesh Dontha. This podcast is for aspiring entrepreneurs who want to start and build their own business with purpose, passion, perseverance, and possibilities. Today I'm very excited to have couple of, very interesting and important guests and who happened to be friends of mine, Dr. Michele Wilkinson Rachel CEO of revolutions naturopathic and Justin Ravo, his the operations manager of revolution naturopathic. So, let's get to it. Welcome.
Michele: Thank you. Thanks for having us.
Ramesh: So, Michele if you could explain what revolution naturopathic is about.
Michele: So naturopathic medicine is a system of medicine where we take the approach of trying to get the body to heal itself before we move towards the medication side of things and the invasive therapies side of things. A lot of people that are already on medications that need a doctor that can also help coordinate any sort of supplementation or botanicals they might want to take or they're interested in some of the more advanced regenerative therapies will want somebody who's an expert that can not only do the kind of extensive lab testing that someone with a medical degree can not only order but interpret but they also need someone who can deal with the delicate nuances of the combination of pharmaceuticals surgical procedures, referrals to specialists, botanicals, intravenous infusion therapies and everything from regenerative injection therapies like STEM cells to exosomes and all kinds of other things like that.
Ramesh: Okay. So, when did you actually start your revolution naturopathic?
Michele: We started in 2008 in a teeny tiny little room in Cameron park. Realized very quickly that that was not going to be adequate space. So, we started building out 2500 square feet here in Folsom. We quickly outgrew that within five years, and we're stepping on each other's toes and ended up building the space that you see behind us, which is 4500 square feet. And then two years after that we opened a second facility that is actually the mirror image of this facility in Roseville, California.
Ramesh: So, 10 years. Phenomenal growth. But I’ll be very honest with you, I did not know until I met you what naturopathic medicine was.
Michele: Very common.
Ramesh: Okay. So, if it's a common in 2009 when you started, did people knew about naturopathic medicine?
Michele: So, two things were done right. One of them was a complete accident. So, we opened up a space in a retail center that was a very high traffic center right next to a coffee shop. So, people were coming in and out of the coffee shop and would stop in and say, what is this place? Which gave us an opportunity to start a conversation. The second thing that we did is that we moved to an area that doesn't have a lot of naturopathic doctors, but has a high level of education, high level of expendable income and a desperate need for some kind of resource that could help them manage things like taking herbal supplement, the supplement industry is a multibillion-dollar industry. And without the naturopathic doctor in the mix people are relying on pharmacists and there, unless they do extensive training postgraduate, they're not educated to know is it safe to take Hawthorne solid extract with my blood pressure medication. So, people were mixing these things and playing around with them on their own and there were no experts in the area able to help them with it. So, a lot of transplants from Arizona, a lot of transplants from Oregon have a good knowledge of what naturopathic doctors can offer and the word spread extremely quickly.
Ramesh: But how difficult was it or how easy was it for you to actually educate the people about naturopathic medicine?
Michele: So, one of the things that we did that we still do is what we call a free 15-minute coordination meeting. Okay. And that was the opportunity for us to sit down with a person and have a conversation about their health care within a limited timeframe. Decide whether or not what we had to offer could actually help them. Get any labs or testing ordered that we needed to help with additional information in order to help them of coordinating these things and explained to them what to expect, what the costs were going to be and what was going to be involved. Once we started, when we started doing that, a lot of times the conversations surrounded what is a naturopathic doctor. Now, 10 years later, I very rarely have to answer that question. Most of the time all I'm answering is this is what labs are going to cost. This is what we need to get from you. I need to get, you know, x-ray imaging or whatever I need from this referral source. Let's gather all your data and you're going to come in and this is, we're going to start treating you.
Ramesh: Wow. It's a 10 years difference. Justin, you're very much involved in founding the company. So, what was your role?
Justin: Wow. So, in the early days, I think it was a bit of everything. I remember designing the first office on Excel, you know, using the borders of cells and you kind of laying out the first office and looking at different options.
Michele: Not recommended
Justin: But it worked at the time. And it allowed us to grow the company for the first five years. So, but really it was everything from developing some software that we used in house you know, IT management, operational procedures, supporting the doctors in you know, learning about the most efficient way to deliver the care to the patients. Cause a lot of us were, you know, the doctors were learning at the same time the staff was learning because it's not something that's really taught in medical school. And that was the early days was really trying to just figure out how to, how to deliver care in a way that patients were happy with and willing to pay for.
Michele: I remember just little things like, Oh, if you don't do a patient reminder, call the day before, no one shows up the next day. You know.
Ramesh: operational aspects of the business.
Michele: Things like that, you know, and a lot of things that we did have to learn on her own. I remember there was one time when we were trying to figure out how big a 10 by 10 room would be, and we taped it out on our living room floor using masking tape. You remember that did not work out, it was not recommended, definitely use AutoCAD. But yeah, there were a lot of kind of funny ways that we tried to work around things that I wish we had.
Justin: We had the money to hire an architect for the second building. [07:03 inaudible].
Ramesh: Actually, when I visited your facility. It's fascinating in terms of how you design is, I’ll get to that in a second. How long did it actually take for you to feel comfortable that you're on the right path? That this business is there for long-term?
Michele: Well we didn't start paying me a salary for three and a half years, I think. Two and a half? I thought it was longer than that. It felt like longer than that. There was one time and then in about year four you know, it was a lot on our marriage for Justin to be gone for an entire month, every other month and then be back and be working at the business full time. And I missed him, and he missed me. So, at about year four, we looked at the books and we said, you know, I think you can afford to quit your job and come work full time for the clinic. So that would be what I was doing
Ramesh: What were you doing at that time. What was your job?
Justin: So, I was a petroleum engineer and I was doing rotational work in Algeria. So, I'd work a 28-day shift and then come home for 28 days and have 28 days off. But I remember many nights when I was over there when I would, I'd work from 7:00 AM to 7:00 PM there and then I would go back to my little dorm room that was there after I had dinner. There wasn't a whole lot to do. Other than play soccer or go to the bar. And so literally, you know, a lot of times I'd go back and work on my computer on, you know, operational procedures or other things that were going on or software back in my dorm room in Algeria.
Ramesh: Wow, that's, must be pretty difficult. So, were you the only doctor in the beginning time or did you have other doctors as well?
Michele: So very, very early on, part of why we chose this area is I had a classmate that really wanted to start a practice with me. We figured out before that even got off the ground that our visions were completely different. And then I opened up here next to the coffee shop and I was, I was talking to a friend, another friend of mine from school and I was just slammed, and she was twiddling her thumbs and couldn't get anyone to come see her. So, I was just like, you know, please can you just come for three days a week and help me out and share some of the patient load. And then together, after a few years, we start sort of said, you know, Hey, it's really, really hard for most naturopathic doctors to get off the ground. So maybe we can take some of our profit and help support a new doctor, a third doctor. And then when that third doctor was finally supporting themselves and contributing to the profits of the clinic, we had the three of us got together and said, Hey, do you want to bring on another doctor and help give them the opportunity to you know, not have to struggle through this whole operational thing. And we're now, I think at nine doctors right now. So, and there've been some that have stayed and some that have stuck with us for a lot longer. But it's, yeah, we're growing steadily.
Ramesh: Excellent. So, one of the reasons actually we are doing this interview is because of my book, the 60 minutes startup. So, what I wanted to do was share the experiences of entrepreneurs like you, right along with how to start a business in the shortest time possible. Like 30 days or something like that. Right. So, and then one of the chapters is dedicated to your practice and then I wanted to title the chapter. It takes a village to build a business. And the reason I did that is because when I heard your story right, when your building people did not know the patients did not know what naturopathic medicine was and you are trying to establish, I think there are stories that I heard. If you could tell us like you worked with the chiropractor's, you worked with entrepreneurs, you work with different stake holders to actually establish a business. Can you go through the process? If somebody wants to start a business, there are different ways of doing it. One of the ways is connecting with the community in different ways to build a business. Can you talk about it?
Michele: Absolutely. Yeah. We've both found that community service, you get back what you give. We were very involved with the chamber of commerce in this area is very supportive and got very involved in the chamber of commerce, very involved in rotary. Justin as is now. It used to be me that would go to all of these things because he would be in Africa and he's now completely taken over that whole role of, of doing community outreach and community service. And now people just know who we are and if they have a problem or their friends or family has a problem and they're not getting what they need from the normal medical model, they trust us, and they know us. So, they recommend, recommended their family and friends come here.
Ramesh: So, the other aspects of building a business is a customer acquisition, the pipeline. In your case, it's a patience, right? So, what
Are the different strategies that you implement to build your practice from a patient perspective?
Justin: So, most of our patients and majority of our patients come through word of mouth. And that's, you know, our reputation. So, the traditional medical model or conventional medical model is, you know, if you put somebody on a pharmaceutical that they need to get renewed every six months and you're going to see that patient every six months. We don't go with that approach. We try to educate patients and we try to enable them to handle their own acute illnesses. We try to also help solve their more, their chronic issues. And so, when we solve their issues, hopefully they don't have to be on a pharmaceutical for the rest of their life. But that does create a business issue for us as, as we don't have these recurring patients. So oftentimes when somebody resolves their issues, we won't see them for two to three years. The patient, we won't see them until something else comes up for them and then they'll go, Oh, you know, those doctors solved my problem last time. I'll give them a call and I’ll tell them about my new issue and come in and see them and we'll figure this next issue out together. But that's why word of mouth is so important to us as that person that we solve their problem. What they do is they send us their friends, their family. Oftentimes we see mom come in as the first patient. Women are typically much better at taking care of their health than men. Men, we wait for things to fall apart before we go to the doctor. And so often times we see mom, she doesn't want to put the kids at risk with something new. And the husband may not want to come see us, but mom has the first good experience and then we either see one of the kids or all the kids or the spouse and then we kind of end up seeing the whole family and maybe not the same doctor. Oftentimes our doctors focus on different areas, but that's kind of how we use the friends and family model, you know, the referral model to bring patients into the clinic.
Ramesh: Okay. So, then the other aspect is the pricing aspect of it. Building. And how did you come up with the pricing? Is it iterative? Are you fixing something? And that's it.
Michele: Well, so we kind of used several different contributing factors. So, most people don't know that in general MDs, bill Medicare for I think it's like $350 per 15 or 20 minutes.
Justin: No private insurance. So it was, you know, if you, we looked at statistics in Sacramento early on, it was like $350 an hour was what they were billing.
Michele: But that's, you know, people are coming in, they're paying their, you know, $25 copay or their $40 copay and they're not seeing those costs. So, when we first started doctors with less experience, we basically looked at that number and kind of cut it in half and said, let's give people a deal. Let's give people something reasonable. And we started right, the beginning of the recession. So expendable income just crashed. So, we wanted to make it affordable for people. We wanted to start off making it reasonable, and reachable as we've gained experience and grown. Those rates have gone up for the doctors with more experience. And then we bring in newer doctors that are still in a mentorship status that are residents and things like that, that we slowly will, as they get trained, they'll slowly increase their rates. But we always have someone that's kind of at a lower cost availability so that, you know, people can have access to this medicine.
Ramesh: More affordable.
Michele: Yeah. And oftentimes things like labs are covered by insurance or they're so cheap that, you know, it's people, it's just they don't even want the hassle. They just pay out of pocket.
Ramesh: Okay. So, the other aspect is the traditional healthcare, right. So, what I hear is that doctors are getting out of the business, the practices because of the insurance, because of other aspects of the managed care. Right. Is that a factor in naturopathic medicine or how is that?
Michele: They're trying to shadow our model?
Justin: So, they call our model the direct pay. Primary care. And there's actually, there's I think the first direct pay hospital was established in Oklahoma just a couple of years ago because there are so many middlemen in health care to take a cut. And that's why the costs are so high, and the American healthcare system is, your insurance company, somebody has to pay those salaries of all those people and the, and you know, that are working for the insurance company. They also have to pay for the insurance billers that are in every single medical office. So, we get rid of those couple of layers of people that are in the middle of the doctors and the patients. So really, we answer to the person that's paying the bill, that person, the patient, our patient can then go ahead and send that bill into their insurance company for reimbursement. But it means that their insurance company has to negotiate with the patient instead of negotiating with the doctor. So, the insurance company knows they're smart, right? They're running a business, they know that they can push the doctor off, they can pay them late, they can offer to pay them less, to pay them early. They can do all these techniques to get the doctor to spend less time with the patient.
Ramesh: I see. Okay.
Justin: We don't have to follow those incentives that they give them, the incentives that they give them to spend less time with patients. Sol all our doctors have to answer to, and our staff has to answer to is this, how much time would the patient like, how much care would you like?
Michele: And that can be everything from, you know, I want to spend two hours with you and go through my entire regimen through my entire day and exercise and nutrition and all of that stuff to I really can only afford 15 minutes, just tell me what to do. Or I can only afford 15 minutes. Teach me what I need to know to interpret my labs and to help identify, you know, how I'm feeling, what I'm feeling and things like that.
Ramesh: It's a very flexible model. Okay. So, the other aspect actually it's mind boggling is you're one of the largest naturopathic practitioners in the Western part of US from what I hear. Right? And then the typical professional services practice that I know is like a one person, right? So, a doctor building their own practice and they have that. Right. But here you have built a business which is nine doctors, two facilities in less than 10 years or maybe around 10 years. So, what are the main factors that really drove the growth for you, not just become one doctor professional practice and multi doctor practice. It's a real business.
Michele: Yeah. So, the biggest thing is that we work as a team. So, the doctors that are brand new and don't have full schedules, we'll oftentimes cover the IV suite, or they'll oftentimes help with doing IM shots and blood draws. So, they'll actually do some of them more procedural medicine. So, you know, if my schedule is completely stacked with just patient after patient where we're doing, this is going to be your recommendation. This is going to be your regimen. This is what you need to do. This is when you need to come in and these are the procedures that you need to do. I have someone doing those procedures on my behalf so I can keep seeing the next person. So those, as those doctors’ schedules fill up, then we bring on someone new or train them in the procedural stuff. And then when you get really good into understanding how the more experienced doctors are prescribing procedures and you're getting the feedback from the patients in the chair getting the IVs or whatever it happens to be, you start to be able to prescribe those better too. And then that practice ends up building up and you move out of the IV suite a little bit more in, into more of the practice care model.
Ramesh: Wow. It's actually, it's a multiple discipline that you're building. One of the different stepping stone. So, the other aspect just, I got asked you, operations has to be a key part of it, right? To build a business, right. As an operations manager, what are the decisions that you took to really to scale the growth the way you wanted?
Justin: I think it all comes down to having good systems. So, you have to have a system for answering phone, a system for booking patients, a system for making sure the patient is paying, covering the costs, you know, and, and I'm paying for not only the time but also the materials, you know, that are used for the procedure. So, we spend a lot of time on systems for sure. And we've traditionally used an in-house system. So, I coded a lot of things myself in the early days. And we're kind of going back to that now, but we coded a lot of things early days to make them very specific to our practice in our industry and our business. Cause there's, it's not a huge industry. So, there wasn't a whole lot of commercial software that was out there. We have now moved to a commercial EMR, medical, electronic medical records provider. So, we have the patient portal and we have the ability to integrate with labs and book things online and order things online. So, we have moved to that commercial system. But we're also still finding there's some things that that system lacks that we need that are specific to our industry. So, I'm actually back in front of a computer a lot of days now working on kind of the next phase of, of the revolutions intranet to grow to make sure that we have what we need so the doctors and the staff can do things consistently. So, the patient gets a consistent experience.
Ramesh: So, Dr Michele [21:20 inaudible], so your credibility is very important for you in this business and from your practice, one thing that you have also done is consult with other practices. Right? So, if you could talk about a, I mean like how you manage time for your practice on top of the other things that conferences and things like that. I mean, is that time management an issue for you or how do you manage that?
Michele: I'm very much a get it done now type of person. It actually, it sometimes causes some conflicts because he wants to like talk through how we do it. And when I'm motivated, I just need to get it done. I needed to get it out into my brain in one ear, out the other on paper, dump it out, get it started and rolling. So, I mean, I’ve always had a lot of energy even as a little kid. And I just make sure that I'm doing things that are replicable. So, a lot of times when I go to, when I teach at conferences or I lecture, I'm using modified versions of the same lecture materials. When I'm teaching my residents, when I'm teaching the staff, I use standard operating procedures that have, again, it's just like his side, on the operations side, there's a go to form and if you have a question and you don't remember what I told you, it's on that form. So, it's there. And now I'm even doing less of the training of the doctors here because the doctors that I’ve trained are using my standard operating procedures to train the next generation. So, I’ve been able to remove myself a little bit from that and go out even more into the lecture circuit and that type of thing.
Ramesh: I see. So, let me ask, this goes with the downsides. So, what were the moments, where you said, oh my God, what are we going to do? Are we going to do it? What are the aspects of it? Like you had multiple facilities, multiple doctors. There's a people management, facility management like talk through the downsides of you know, things that you had to overcome.
Michele: I think we're both big believers in people. So, it took us a long time to let people go when we should have. I would say that was probably one of the biggest downsides is the first time I ever had to fire somebody. It was just, Ugh, it was awful. And it's awful every time. But for the most part when it has to happen, the entire office breathe a sigh of relief. So, getting rid of those people that are dragging the team down is difficult, but it is absolutely essential for the rest of your team to stay healthy and function effectively.
Ramesh: Very good point. Anything else in the facilities?
Justin: Yeah, other downsides I'd say so we decided to double overnight. When we opened up Roseville, we went from 4,000 square feet to 8,000 square feet. And the idea behind that was, we spent a lot of time in the first few years juggling facilities expanding, right? And so, we thought, we know this layout is, you know, 98% correct. And we'll make a few tweaks and it's going to last for the long term. And so, we started up down that road of, of basically building the exact same facility cause then we were set, we knew what our lease rate was going to be for the next 20 years. Pretty much, you know, within reason and we can make that very predictable going forward the business. But it was tough on us and it was tough on our staff, they had to go overnight with the significant increase in overhead. And I think if we talked about it a lot, you know, after it was finally done and we talked about abandon a few times throughout the process because we ended up doing ground up construction, took a long time, took a year longer to put a shovel in the ground than we thought. Took longer and construction than we thought.
Michele: We could have opened three with leases in the time it took to open one more.
Justin: Yeah. So, I think that would've been our, you know, maybe doing it very similar to how we did Folsom and just start with a smaller facility and have the cashflow from the smaller facility and then expand into your own custom, big, beautiful facility that you're, you know, you've already got the patient flow to handle it. Because we largely ended up meeting our bank predictions, you know. But it felt like it was a huge struggle. Right. It was like on the paper and saying, Oh, you're doing exactly what you said you're going to do and what you're supposed to do. But it felt very, it was very stressful.
Michele: We're typically overachievers too. We usually under estimate what our budget is going to be and then reaching way above it, it feels good. But in this particular instance we hit, we're hitting our margins almost exactly.
Justin: So, we're through that end of the tunnel now, you know, we were looking at the light for a long time at the end of the tunnel. We're through that now. But I think if we did it again just from the stress it caused because it wasn't, we thought it would just be on us and that was okay. We were okay with being stressed for a while. But it also, it was, it was a lot of stress on our managers and our docs too because they were looking at it going well, we're going to get a lot bigger, really quick.
Michele: Yeah. And I would say one other really important thing is we actually at one point had to Institute a dollar jar because, because we would bring issues from work home and taught, basically it would be a word dinner and then you would go to bed and your head would hit the pole and you'd go, Oh, I forgot to tell you this. And now we're both weighing, staring at the ceiling going, well now I can't sleep because I'm stressed out about that tomorrow. So, we decided that we were going to make a jar and I had cash, like dollar bills and he had coins, or maybe it was the other way around. It was, it was just for long enough to, for us to be like, okay, who's the really bad one here? So, if it was worth putting a dollar in the jar, you can say it.
Ramesh: That's one way to overcome this.
Michele: It reminded us to just leave it at work.
Justin: It was the challenge of being married and going home together at the end of the day. And they just basically ended up working 24 seven.
Ramesh: That's probably as a separate episode by itself. How can you together husband and wife build a business?
Justin: Four or five episodes probably. So, the 60 minutes startup, the key principles are like many times people wait for the perfect everything, perfect time, perfect days to start a business, right? And by the time the perfect number comes, they give up. Right? So, it's all about make an integrative start now. Right. Make it later. So based on your experience, like what kind of advice could you give to the 60 minutes start up breeders that about to starting businesses?
Michele: I would say my biggest thing is make sure it's something you're passionate about. Because there's going to be days that you're irritated with it. There's going to be days that you're sick of it, there's going to be days that you're bored with it. But those days can't, it has to be something that you're passionate enough about that that's only a minute or an hour or a day because the next day, if you're feeling the same way and the next day and the next day and the next day, then it wasn't the right thing.
Speaker 4: Can we cut? Let's because they're in the book. I would love to have her do that thought, what I liked about your book was what you said you don't have to wait for the perfect time. Because they're in the book. Right now, it doesn't feel like they're in the book. You know what I mean like.
Michele: I can do that.
Speaker 4: Yeah. So, whatever you just say, yeah, I Lead and then just start with what you said. Okay. Whenever you're ready.
Michele: So, what I like about what you say in the book is that it really doesn't have to be the perfect time. What is important though, is that you're passionate about whatever you're doing. Because even if somehow the perfect time manifests, which it never does, there are going to be bumps in the road. And if you let those bumps stop you because you're not passionate enough, then don't even bother. But if you care about what you're doing and it means something to you, that bump may slow you down a little bit and you may take a day to just you know, huh you know or a vacation or whatever. But you love it enough to come back to it. And that is what will keep things moving the way that you want it to.
Justin: Maybe you could segue or two about the book or something, a topic that you hit on. What was the another one?
Ramesh: Make it iterative.
Speaker 4: Maybe you could mention the title like...