On today’s show, I am talking with David Tramontana. David started a healthcare business back in the ’90s. It has grown from 2 employees to nearly 2000 employees, from $0 in revenue to over $50 million in revenue. He’s done 14 acquisitions throughout his career so far. Today we’re talking about his challenges in growing and how growth consumes capital, his experiences with bringing on investors, and the dynamics of planning for distributions for the investors while you’re growing.
Life After Business has grown exponentially since it first started. We’ve covered so many topics about business, mergers & acquisitions, and what life can be like after you’ve sold the business. However, the vision of this podcast has shifted this past year. I’ve realized that--more than “life after business”--this podcast is about growing your business so you can have more options and more freedom in your journey. So my question is, if the name of the podcast changes from “Life After Business” to “Intentional Growth: Grow the Value of Your Business with an End in Mind”, would that throw you for a loop? The topics and content would still be the same, the only difference would be the title.
What you will learn:
David’s background and history in business and entrepreneurship
All about David’s insane growth and his process
The trials and tribulations involved in growing so quickly and so much
David’s challenges in growing and how growth consumes capital,
David’s experiences with bringing on investors
The dynamics of planning for distributions for the investors while you’re growing.
How David chose a strategic buyer
What is it like being on the selling side after acquiring so many different businesses?
How David is able to reconcile the financial from the emotional aspects of business
Quotes:
“Should you reinvest your EBITA to grow a value long term, or do you want to create a business that has good cash flow where you can take the distributions (but at some point, you’re going to be sacrificing value creation for annual distribution)? It’s always give or take because growth consumes capital.” - Ryan Tansom
“Everybody was either going for the private pay (in the personal care side cause it had higher margins) or they had a sales team going after the skilled cause they had good margins. And we took the low margin but steady cash flow, Medicaid business, and then coordinated their care with the skilled care and it was an area where we didn’t have a lot of competition so we were very successful in the [...] market and so we took it to Cincinnati and we just kept going with it.” - David Tramontana
Takeaway:
The big question is, do you reinvest your EBITA to grow a valuable business (long term) or do you create your company to create distributions for yourself so you can live your best life (however, at some point, you will be sacrificing value creation for annual distribution)?
Don’t just go grab an investor or a private equity firm because you can’t afford to grow. Instead, sit down and make a plan for your finances and understand your value. Everyone has different motives and you want to make sure that you intentionally get what you want.
Links and Resources:
David Tramontana, email: DTramontana@focuscfo.com
David Tramontana, LinkedIn
SOS, website
ARKONA Boot Camp
Reach out to me if you have questions about the boot camp!
You can also reach out to me via email at rtansom@arkona.io or on my LinkedIn
About David:
For the past 20 years, David has successfully led healthcare organizations to record growth and profitability. His success has gained the respect of his teams and accolades across the home healthcare industry. His passion for people and his entrepreneurial spirit has driven him to start a new venture – Strategic Operating Solutions, LLC.
His achievements have earned many awards and much recognition: Association for Corporate Growth – Deal Maker of the Year, E & Y Entrepreneur of the Year Finalist, Business Courier 40 Under 40, 2-Time Business Courier – Fast 55 Award, 2-Time Government Affairs Advocate of the Year, Ohio Council for Home Care and Hospice, Council on Aging of Southwest Ohio – Outstanding Professional in Aging, 3-Time Best Home Health Care Agency, and Venue Magazine’s Healthcare Leadership Award.
David is a graduate of Ball State University. He currently lives in Cincinnati, OH with his wife, son, and daughter. When he isn’t working on new ventures or advising other leadership teams, he enjoys volunteering for his children’s high school athletic teams.
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