Happy 25th Anniversary to Kaki Pope, Owner of Audio Rehab Lab. Kaki bought this business when her son was just 6 months old. Can you believe that several banks would not meet with her to lend her money because she was a young mother?! Today we’re celebrating Kaki’s success. Congratulations!
We asked Kaki about her 25 years in business and what tips she has for private practice owners just starting out.
Why did you decide to buy Audio Rehab Lab?
I had been working at Audio Rehab Lab for 5 years when I made the decision to buy it. I had been talking to the previous owner about eventually buying the business when she was ready to retire. Unfortunately, she had an accident and was unable to keep running it. I was 29 and my son was 6 months old, but I decided I had to go for it. I come from a family of business owners, so it seemed quite natural for me to have my own business too.
What was the hardest part of becoming a business owner?
Finding the money to pay for the business and buy the equipment. I was wise enough to know that I needed to have working capital, that I couldn’t stretch myself too thin. I set up meetings with 6 banks: 2 banks stood me up, 2 were interested and 2 were very excited and treated me well. Yes, they wanted proof that I was going to make it, but that wasn’t hard to do. Back then, there wasn’t a lot of competition. We worked with a lot of ENT physicians and they had guaranteed that they would continue to send referrals my way. From the bank’s perspective, there wasn’t much of a risk. I chose to go with the bank that treated me the best and I still bank with them to this day. $850K in annual revenue later, the bank made a good decision.
What is the biggest piece of advice you can offer someone just starting out?
You can’t do this on a shoestring budget. You’ve got to be able to win people’s confidence. They need to believe in the longevity of your practice. If a big recession rolls in, they want to know that you’re going to stick around. So many business owners are cutting themselves too tight and it’s risky.
Also, I’ve always believed in taking a salary and I took it from month 1. I earned it, I deserved it and it was good for my family. I believe that the more I can empower myself, the more confidence I will have and the more trust I will instill in my patients. Believing in your ability to be successful is half of the battle.
How did you determine how much working capital you would need?
It’s not a tried and true formula, but I simply multiplied my salary by 6 months and my rent by 6 months and used that figure. Granted, that was 25 years ago, not a recession formula by any means.
How did you deal with the recent recession?
It’s been a challenge. The world changed in 16 months and I had to be creative. I worked with ReSound on some price adjusting and offered discounts to my customers. I did trade-outs for people with hearing aids over 5 years old and gave them a $500 trade-in value. When hard times hit, you need to think outside of the box. If you can’t adapt to tough economic conditions, business will be much harder.
Do you do any charity work?
I recycle hearing aids via the trade-in program. I take the decent hearing aids that are 5 years old or more and re-distribute them to needy patients. I take care of my patients first. They just pay for the batteries and repairs. I do about one of these per month.
How do you build trust?
I’m a straight shooter. I talk money clearly and cleanly and it comes across very honest and trustworthy. It’s not price that prevents people from buying. They don’t buy because of how they perceive your pause when you start talking about money. I have a 75% patient return rate and a lot of my business comes from referrals.
Don’t get me wrong, it’s a hard business. It’s hard to work with people in the last years of their life (whether that’s the last 5 or 15 years). They expect me to take them with my energy places where they can’t take themselves.
Is there anything you would have done differently?
Yes, I wish I had implemented a checks and balances system. I had 2 employees steal money from the business. They were great employees in many ways and very trusted, but both had family issues that caused them to steal. One of them in particular was very sneaky in the way he did it and even my CPA couldn’t find it. If I’d had a better checks and balances system, this situation would never have occurred.
Any final pieces of advice?
Know your stuff. Follow the industry and find the business model that matches your personality. Competitors can match your prices tomorrow, but they can’t match your service model. Focus on quality and customer experience and have confidence in your pricing. Finally, structure your work ownership to enhance your life and you will have more energy for your business success.