What does it take to build a thriving, scalable functional medicine practice in today’s healthcare landscape?
In this episode of the Evolution of Medicine podcast, we’re joined by Seth Conger, a seasoned entrepreneur and innovator in the functional medicine space who’s helped practices grow from startup to seven-figure exits. Seth shares his own journey, from event marketing into transforming his father-in-law’s clinic with cutting-edge technology and a shift to a membership-based model.
The episode explores three distinct stages of practice growth—startup, growth and scale—and the critical mindset and business shifts required at each level.
Tune in to learn:
- Why the startup phase is all about finding product-market fit and acquiring patients
- How the growth phase requires systems, hiring and stepping back from direct care
- What the scale phase looks like when your vision leads and your practice grows independently
- Why choosing the right business model (and ditching fee-for-service) is non-negotiable for long-term success
- Common mistakes that keep practitioners stuck and the high opportunity cost of not evolving
Whether you’re just getting started or looking to scale beyond yourself, this episode offers a roadmap for sustainable growth in functional medicine. Download today to learn how to build a profitable practice that doesn’t burn you out.
Seth Conger:
Hey James. I’m good. This is fun. This is like the fourth different podcast. We’ve had our podcast platform we’ve gotten to go on together over the years.
James Maskell:
Well, I’m really excited to do this and I think there’s a lot of wisdom to come here. So just for everyone who’s listening who maybe this is their first interaction with you, maybe share a little bit of background. The journey mentioned in the intro there, you have sold a seven-figure practice, which not a lot of practitioners have done. So give us the background and how you got here.
Seth Conger:
Yeah, thanks. So we’re in 2025 now. So I’ve been in the functional and integrated medicine field for now a dozen years. Before that, I spent about a decade in really, really large-scale event marketing. Worked with US Army marketing, designed marketing programs and events and entire tours for them, Coca-Cola, American Express, Verizon Wireless. We had huge clients, single weekend activations that were in the seven figures, and it was a very tiring lifestyle. It wasn’t actually what I chose to do. I had always wanted to be a doctor, but a series of head injuries my senior year in high school, in downhill ski racing actually, changed that path and I ended up going into this crazy world of event marketing. Towards the end of that, I met my wife Margaret, and her dad was a lifestyle medicine doctor. He had a clinic in Charlotte, North Carolina. They had been around for about nine years to that point doing hormone replacement therapy, supplements, lifestyle education.
And he said to me, he’s like, “Hey, you know all about marketing. I need help bringing in patients. Why don’t you come help me?” I was like, “With all due respect, Ronnie, I do single-day events that are more expensive than your entire annual revenue,” but I really wanted to impress him. And so he took me on this weekend trip to Las Vegas to an A4M conference, and this opened up the world for me. I had never been a part of anything like this, seeing people actually reversing chronic disease and all the amazing technology that was in there. Arnold Schwarzenegger was the speaker that year at the A4M and I was just absolutely blown away. And at the end of the conference, I was sitting down with my now father-in-law having a drink at a bar, and he said, “You know what? Really where I want to go is I want to understand brain function and I want to be able to treat what’s called cognitive decline in early stages of Alzheimer’s disease, but I don’t know how to understand it. And if we only had a way to understand functional brain health, that would be an incredible tool and it would propel my entire practice to the next future.”
We look over to the guys to our left, and they had a foreign badges and said, “What do you guys do?” And they said, “Well, we have a tool to measure brain function. It’s called AQEEG machine, and we have it actually right here in this briefcase.”
And it was just mind-blowing this serendipity of that moment. So of course we bought a $25,000 briefcase off these guys at the bar. Every good story starts, every good career story starts, right?
And we end up bringing it back to the office opening this thing, and I say, well, what are we going to do? And my father-in-law’s like, well, I don’t know how to use this. Can you figure it out? So we do the first brain scan on me and we send it off to this neurologist, Dr. David Hagadorn, who had sold us the device, and he calls me on the phone and he goes, how many head injuries have you had? I was speechless. I was like, I didn’t write that in my paperwork. I didn’t turn in any paperwork. What do you mean? He goes, I can see the signature in your brain. How many head injuries have you had? And I broke down crying, so I’d never told anyone. You see, when I had those head injuries in high school, it changed my whole life. I went from having a scholarship to go to Division I, skiing, ski racing, to all of a sudden being scared of ski racing, depression and anxiety kicked in, but my parents were getting divorced at the same time, so everybody just blamed it on that, right?
Then there was the senior slide that everybody has in senior year of high school, but not me. And I get to college and finally after the first semester, the dean of students just told me I wasn’t smart enough for the pre-med track and if I was going to stay in school, I needed to change my focus to something easier like business. So this was a big moment, and I decided at that moment I was going to help my father-in-law build his practice. We were going to incorporate brain function into that and we were going to grow that thing and that was going to be the rest of my career. And a dozen years later, I spent about five years at that practice. We helped build it up, grow and sell it, and I’ll share a little bit more about that story and the journey with that today during this interview if that works. But we were able to sell that practice. I had a really cool couple-year ride in the startup world with venture capital backing in the Alzheimer’s space. And then about five years ago, I joined forces with Freedom Practice Coaching as their COO to help build out the ecosystem that we have today.
James Maskell:
Well, I know obviously you’ve had your own experience being on the front lines and now helping hundreds of practices get to scale. This idea of the business as a living system, where did it come from? How’d you come up with it, and what was it that triggered you to think of it in this context?
Seth Conger:
When I was the COO of the practice in Charlotte, North Carolina, we understood very well that not one thing could make a substantial health change. And also not one thing got our patients to us. They were dealing with a, what I like to call a multi-car pileup over a dozen years before they ever came to us, especially when we were talking about cognitive decline, right? 10 to 15 different things over 20 years that we’re all piling up to all of a sudden now having symptoms. But it’s across the board. We see this with pediatrics in autism, ADHD, dyslexia, any neurodevelopmental or behavioral disorder. We also see this at the very tail end with Alzheimer’s and all sorts of different dementia and everywhere in between. So it’s easy for functional and integrative medicine practitioners to understand that the body’s a living system. We think of this in systems biology and we know that they’re interconnected parts, but what’s not natural is to think about that same practitioner’s business as a living system.
And to me, the interconnected parts between your vision and your strategy, your marketing and your sales, your operations, your hiring, your financials, they’re all interconnected parts where pulling one lever is going to have an associated impact on the other. So we’ll talk about the three stages of business growth, but as a business grows over time, it becomes more and more critical that you are looking at this as a living system of interconnected parts. We can call your team and your culture, your gut. We can call your operations, your immune system. We could call your vision and strategy, your nervous system. We can make all sorts of analogies here, but I think it just makes sense when we think about these business systems as interconnected parts and therefore attention needs to be paid to different areas in different priority based on where you are and where you want to go with your business.
James Maskell:
Well look, the journey from conventional medicine, which is sort of single cause, single effect focus to the way that we think about in functional integrated medicine of systems biology is by itself more complex, but I think it’s a great analogy for helping to understand what it takes to build a business. Do you feel like the complex nature of it is what maybe has held a lot of clinicians back from reaching their potential?
Seth Conger:
Yeah, I think so. I think they don’t know where to start. It’s kind of scary. But in the same way that looking at a stool test and an organic acids test is really scary for me. And it’s like music to the functional medicine practitioner’s ears. They can see those really complex reports and they can look at patterns through those. For me, that’s your profit and loss statement and your marketing and sales revenue tracker, which usually freaks practitioners out. And I’m like, oh, give me that data. I can see through this. So I think what’s happening is practitioners don’t know where to start. They have a dream that I cannot practice medicine the way I want to, so therefore I’m going to leave the conventional system and patients were delivered to me hand over fist in the conventional system. So because I am great at what I do, I will hang my shingle and they will come, right?
And it’s not naivete. A lot of practitioners understand it’ll be hard to start a business, but there’s this thing in the back of their mind of I’m bringing a solution, people will find me and they will come and then they realize, wait a second, this is actually pretty hard. Now I have to start thinking about things like how do I acquire a patient in the first place? And so you put your attention there and you don’t think about the business model that you’ve developed your offering on and what impact a lot of new patients will have down the road on your business if that model is not the right one for your business. So I just believe that practitioners don’t know what next step to take. No one has told them they never had any business courses in medical school outside of medical school when they went to start their practice.
Maybe they have a mentor or somebody who’s really good at business, but likely not in the same industry as them. And what I can say is there’s a blueprint, there’s a map just like there is when you’re bringing in somebody with chronic Lyme or mold or bringing in somebody with mild cognitive impairment or gut dysbiosis or Crohn’s disease, there’s a blueprint and you have to be flexible with that blueprint, right? There are stages where you say, I have to choose path A or path B based on my circumstances and based on my reactions. And so that’s what I would love to actually go through today is that blueprint that I’m calling the Scaling Health Practice Theory.
James Maskell:
Let’s do it. You mentioned a minute ago, there’s these three stages. I would just say one thing I want to reflect on is that the vast, vast mark, because so many practitioners are coming to functional medicine, they’re starting from scratch. They’re basically starting a single practice, even if there is business coaching, it’s always been for sort of that zero to one gap getting started with your own practice. But now that the industry has matured, you see a lot of practices that have had a certain amount of success and have been able to get good results and have a decent foundation for their business. But what I saw a few years ago was that there wasn’t really any support for those next stages. And I think for the next part of the journey of transformational growth for this industry, it’s about getting into these other, and so this is a topic that you and I have spoken about for a number of years, and I’m excited for you to share these three phrases because I think for most practitioners, if you’re listening to this, if you’ve got yourself up and running, some of the things that you’ve observed about these phases will be mission-critical to practitioners reaching that potential.
Seth Conger:
If you don’t know which stage you’re in, then you’re not going to know how to fix what is slowing you down and you’re going to stay stuck. I was literally just on the phone with a friend who happens to be a phenomenal practitioner and is not in our freedom practice coaching community, but called and asked for help. And I was just talking with her a few hours ago, and as she walked through it, I just said, listen, you actually did all the right things, but then you missed your inflection point and now you’re doing the same things as you were before in a different circumstance in your business, and that’s caused this unintended consequence. So even though your revenue is twice as high as it was three years ago, your profit is twice as low and you’re working twice as hard because you didn’t understand what you needed to focus on in your business at that next stage.
So I think it’s so clear to me, and you’re right, no one’s talking about this. So I’m excited that we are talking about this today and I hope people will find this helpful. So the stages are really just three stages. It’s startup, it’s growth, it’s scale inside of Freedom Practice Coaching. We call that Foundations Freedom and Legacy. We’re just going to go with the terminology of startup growth and scale here. I know a lot of people who are listening to this are not necessarily members of our community in startup. It’s really you’re in survival mode. You’ve just started your business. You are very focused on patient acquisition. How can I bring in new patients to pay the bills? And you’re thinking about things like, what is my offer and how do I charge for this, right? The number one thing that you have to really focus on in that startup phase is called product market fit.
So product market fit is actually a term that comes from the technology world, which is I have a product in this case service, I have a product or service that the market wants that they will pay for at a reasonable price that I have set and I can acquire customers at a regular rate through different sources. And those different sources could be, you could be on a speaking circuit, you could be running webinars, you could be doing Google paid ads, whatever that is, as long as it’s not referrals. If it’s just referrals, you don’t have product market fit because everybody’s coming to you as a warm lead. You need to be able to acquire medium or moderate or cold leads to be able to prove that you have product market fit. Once you have product market fit, it’s no longer about putting all of your energy and just growing revenue.
So the next stage is growth. Growth is about hiring. It’s about systems, and it’s about focusing on profitability. In startup mode, you’re focusing on revenue. You should always be focusing on profit, but you’re really just trying to grow your revenue and your numbers. In the growth stage, it’s really focused on profit because if you’re not focused on profit, what’s going to happen? Profit’s going to go down as revenue goes up because you’re trying to keep ahead of the capacity that you need to serve all these people who are coming in. So we need to look at a different metric as our new North Star at this point. And I think a lot of practitioners skip this. They keep selling, they don’t hire the right people, they don’t put in the systems or the people that they hire don’t put in the systems and they don’t focus on profitability.
So they go back down into that startup mode. I call this the messy middle. It’s like between $40,000 a month and $80,000 a month, and you’re stuck there because you don’t have enough time. You have so many patients you have to take care of. You don’t have the right team members in place. You haven’t been managing them because you don’t have enough time to manage them, and you’re stuck and you have no way to leverage to shift out of this. Right? And we’ll talk about different ways to leverage to shift out of that, but you’ve missed that inflection point. If you didn’t miss the inflection point, you would’ve had enough time and money to solve that problem ahead of time, which is why it’s so key to have somebody pointing out to you when you’re at that inflection point after growth, you go into scale.
Scale is about leadership. This is about pulling yourself back where you get to be really truly the leader and you’re the leader from the beginning, but now you get to act as a CEO. This is about vision for the future. It’s about pulling other people, other talent into your vision who wants to actually grow the company without your direct input. So then it’s business independence, and we try to scale and scale forever until we exit. The next stage would be exit after scale, but I think it’s pretty critical to just understand and know those stages and what to focus on. I’m happy to go into deeper depth with you on any of those if you’d like.
James Maskell:
Well, I think that’s really critical, and I know what we’ll get into along the way here is the different characteristics of it. I would just say from my point of view, having come into the community and now being in community with 30 doctors and practitioners at the growth and scale phases, it was new for me actually to meet doctors who are like, I’m doing $275,000 a month of revenue this month. By the next quarter I’m going to be at $300,000 a month. That’s going to lead me to hiring this person. And those conversations are just not really happening in the rest of functional medicine because I think everyone’s stuck in that startup phase, and I think you’ve really nailed where most practitioners are. So I mean, one of the things you mentioned there, which obviously a big deal, it’s quite hard to change your business model once you’ve started, and obviously at the beginning you can hustle forward on insurance. Obviously there’s benefits to insurance, cash programs, memberships, I think after 10 years really of the sophistication of the industry coming together. I think there are some best practices emerging, but what are your thoughts on the different business models and what’s optimal for delivering functional medicine?
Seth Conger:
The first is fee for service, and let’s go with insurance fee for service first. So insurance fee for service is really good for insurance companies and pharmaceutical companies, and that’s it. So we can stop there. Cash fee for service is a low barrier of entry, and it’s very familiar to both the practitioner and the incoming patient. This is how insurance is charged now. They just have to pay cash. So it feels familiar, but it’s actually extremely challenging for scale. The number one metric you have to look at for fee for service to work is appointment utilization, right? Because all of a sudden if people are canceling and your schedule is not filled, you’re not making the money. And that is a brutal metric to be tracking literally on a daily basis that you have to be optimizing for that metric. Time freedom’s not great because you’re constantly trading time for money.
Literally, that’s how your business makes money is you giving your time to patients in their appointments. And most fee for service businesses have to have a cash component anyway to survive because the appointment time for dollar exchange is not going to be enough. So they have to sell supplements, they have to upcharge on labs. So all of a sudden incentives start changing in the same way that we hated the incentives of the insurance model. We start doing that to ourselves in the fee for service model. At the practice I was at in Charlotte, North Carolina, we had a fee for service model before we joined Freedom Practice Coaching as a client. And that model lasted nine years, but my father-in-law was in it. The business was about him. He was trading time for money. Sure, he went to go get golfing and he went on vacations, but every time he did that, he was losing thousands of dollars.
So there was no way of building that up other than hiring more people who were doing fee for service, and if they took vacations, there is a mis incentive for them to even have time off for the business. So it’s a really challenging model. At Freedom Practice Coaching, I think the first thing we do is we attempt to help practices move from fee for service, whether it’s insurance or cash into a membership or a program model that is right for them and their goals for the future. So let’s talk about those. So programs, some people call these high ticket or signature programs, right? Programs are great for cash injection and great for patient outcomes. You’re saying to the patient when they come in, listen, I’ve got a program for you. It’s X number of dollars. It includes everything that you need in order to meet the health outcomes that you want.
And if you do the work, we’re going to get there together. It’s a great promise, and I love that. And collecting that money upfront is a great cash injection for the business and immediately can take somebody from zero to $20, $30, $40,000 a month in a matter of months. So for a lot of practitioners just starting out, this is a recommended model that we go with. This is the path because they can’t afford to build a recurring membership right out of the gates unless they have a large herd or a large group of patients who are willing to come in and start working with them immediately. The challenge on the program side is it’s challenging for lifetime value, right after they’re done with six months, they’re done, especially if they were on financing. You can’t just roll them into something else because they’re already still paying that bill from the beginning, and it kind of becomes a monster at scale.
If you think about it, you get yourself up to a point where you’ve hired people, now you are looking at, I’ve got three people on my staff. I’ve got a bunch of costs. I rented a building or not a building, maybe a room in a building. I have all of these embedded costs that I have to pay every single month, which means in order to meet those costs, I have to sell this many patients every single month. And every month you start at zero and you have to meet that need before you start dipping into profit. So it’s totally attainable, but over time, if you don’t add some other things in, it just becomes a little bit of a monster, right? Membership is recurring revenue and recurring revenue in my mind is North Star, right? It provides the ultimate freedom for you as a business owner because if you get, say your memberships up to the same amount of your overhead for your entire business, your general administrative costs, and all of your employees, you basically have covered yourself.
So if you want to go take a month vacation, that money is not going to stop coming in. So I love, actually the challenging part of that, I should say before I jump into what I really like is it’s hard to go from zero to cashflow positive with memberships if you don’t have a way to acquire patients. So if you don’t have a way to acquire patients, it’s just a long road to get up there, but it’s also not great for super complex chronic disease reversal, right? Because just the expectation is there and you still have to say, you’re in this membership, but I also need you to pay for these labs and I also need you to pay for these supplements, and I also need you to pay for all these other things that would actually fit better in a program capacity. So I really like the combination of those two. You do programs for complex episodes of care or new patients. If you want to start everybody out with that, and then you roll into a membership for people after they’re done with programs, or if they’re not at that super complex chronic disease state and they just want to have a health journey with you, you can roll ’em right into that. Memberships the best practices I see actually have both that work together to get the outcomes that they want for their patients and the outcomes they want for the business owner.
James Maskell:
I mean, obviously in our space, direct primary care has become a thing. There’s maybe thousands of practices that have gone the membership route for primary care. There are some hazards in doing that in functional medicine, but I guess I just want to share one of the things that happened having helped a thousand clinics go on this journey before covid, it was wild the range of experiences that doctors were having when Covid hit because those people who were in fee for service or even in programs were concerned, very concerned. And the membership people were very happy because it meant they didn’t have to do any appointments. And it was like it actually incentivized them to do a lot more cool group visits or things on Zoom where they could do sort of a one to many experience and still deliver value. And some of the clinics that I spoke to at that time were just extremely happy because the money still kept coming in, even the churn was low, and they just went sort of balls to the wall to deliver as much value as they could virtually and ended up with a really good situation.
So it’s good in the good times, and it also can be good in the scary times. And there was such a stark contrast, I thought it’d be worth mentioning.
Seth Conger:
When I joined the practice in Charlotte, they had been going on for about nine years, and about three years into that nine year journey, they had basically plateaued at revenue. So about 90 grand in revenue a month, which is great. Many, many, many practices would love to have over a million dollars in annual revenue. There was a team of seven, my father-in-law wife, my mother-in-law was the practice manager, and it was fee for service business. They had a list of 10,000 patients they had seen over those nine years, which again is incredible, but only 3,000 of ’em were active, which were coming and active was defined as coming back once per year. Their symptoms that they were experiencing was my father-in-law was bored, obviously. Remember the conversation at the bar, if I could only do this other thing that would be so amazing, I’m bored with what I’m doing.
The relationship between him and my mother-in-law was strictly about business because they worked together all the time. There was low patient outcome. They never knew when the patients were going to come back. Obviously people were happy. 3000 of them were actively coming back and doing great, but it was pretty regular that people would come for their first visit and then not come back for their follow-up because they got what they needed and there was nothing holding them in that there was no recurring revenues, nothing. And so their solution for that was, well, let’s add more exciting services and let’s add a second location because if one is getting us $90K, then a second location will definitely get us another $90K at least. And all that did was actually dramatically reduce the profit in the business, and we made it all the way up to a whopping $130K in three years of doing that from $90, that’s not significant growth.
And now all of a sudden the symptoms were different. It wasn’t boredom any longer. It was, oh my God, we’re cash-strapped, we’re working more, we’re making less. Now we have a second location now we hired another doctor. What are we doing? And now I’m involved. Now my wife is involved as well. I have now since we’ve, we’ve moved my mother-in-law from the practice manager and move my wife into the practice manager. So now we don’t just have spousal distress, we have whole family distress going on, and we still have low patient outcomes, but now we have this juggernaut of a team and we don’t know what to do, but we missed the inflection point. We didn’t work on the one thing that we should have worked on as a startup, which is choose a better business model. If we had chosen a better business model at that point, we wouldn’t have had all the headaches for those three years. And luckily we found Freedom Practice Coaching at that point, and they said, you need to choose a better business model. And within literally three months, things dramatically changed.
James Maskell:
Yeah. Well talk us through that change, because ultimately, I think this is what you’re describing is the average practice experience, the stress with the wife and the family. That’s happening a lot. But yeah, talk us through this transformation and what happens when you make that switch
Seth Conger:
In that story and where we got at the next phase. I wish somebody asked me these questions when we were stuck in this messy middle. So am I worried about consistently getting new patients and weren’t, but we were a hundred percent coming from referral. So I knew of something happened to my father-in-law, we were out of business, we’re gone. Number two, is everything in your practice dependent on you, the owner, and three, do you feel like you’re trading time for money? If you’re answering yes to those questions, you’re stuck in startup mode that that’s where you are. So to shift over to growth mode, the questions there that I would’ve loved to be asked are things like, do you feel bored or restless?
Are you thinking about things like exit strategies or partnerships or expansion? Can your business grow without your direct involvement in patient care? Those are some questions that I would ask somebody about growth mode. We wanted to be able to answer those questions with yes, but they seemed like a far off reach. We were just dealing with the chaos that we had at the moment. So what happened? Well, we found Freedom Practice Coaching. We joined Freedom Practice Coaching, and within three months, we decided to take this group of 10,000 fee for service patients and send them an announcement that we were now only going to be seeing people if they were in memberships. And we said, you’ve got three months to come in and join a membership or we’re not going to sue you anymore. It was pretty harsh. A lot of people are very scared of this transition, but what happened was we took 10,000 people, and again, only 3,000 were active, but it reduced it down to at the end of the day, we ended up with 1,500 people in our membership, 1,500 people ended up immediately moving our revenue up to $180,000 a month.
Remember we were at $120 going into this overnight better. From there, we decided to add on programs. All new patients came through programs that were designed specifically for the episode of care of what they needed. So we were doing hormone replacement therapy programs. We were now doing cognitive decline programs. We were doing functional medicine programs over time. So we started building these things. I shifted into a director of operations role instead of more of this random consultant to neurofeedback technician role that I was in. And now all of a sudden we were in a much better place, but we still had problems because you have problems at every stage of growth, but if you know the right questions to ask and the right solutions, it makes that shift so much easier. So what were our symptoms at that point? Well, our EMR sucked. We were doing no patient data collection.
New patients were still only coming from referrals, which was now scary. We were in membership instead of fee for service, and we knew the patient outcomes could get better. So what were the solutions? Well, now we had a guide. We had a guide who had been there and done that before. So the solutions weren’t build an extra location and chase squirrels. The solutions were learn how to acquire customers through paid acquisition, rebuild your technology stack so that it is simple and works for you and start collecting data, right, because it’s going to be really, really important in the future.
James Maskell:
When you started your acquisition, were you focused on anyone or were you really focused on the cognitive decline at that point?
Seth Conger:
We were focused on three different groups. So we were focused on people who would be likely candidates for hormone replacement therapy. We were focused on people who would be likely candidates for cognitive decline and mild old cognitive impairment. But that was really kind of new for us. And then we were also focused on just generalized middle age. I’ve got one or two chronic diseases and I need to go through some lifestyle coaching.
James Maskell:
So now you are running the show, basically, right? COO, and you are starting to take action towards these different areas. What were some of the shifts in that next phase?
Seth Conger:
So that growth phase for us, I think because of the baseline that we had, which was really fortunate, right? I understand how fortunate I am after now coaching about a thousand practitioners. What I started with, not many people get to start with a patient base of 10,000 that they get to turn into 1500 in a membership. That changes the economics of the business overnight. So I want to be very aware of the fortune that I had in that it gave us an incredible kickstart to be able to move fast through the other things. The building blocks work for everyone, but really it’s the speed at which we were able to move because we had that baseline. So I want to acknowledge that in this. So we started really having fun, and about a year into that journey, we were well framed with these memberships and programs that allowed some pretty exponential growth.
Along with that, we were collecting data, especially on the cognitive decline side. So we got a call from Dale Breen who had written the end of Alzheimer’s and was putting together a paper, and we were lucky enough to be chosen to be published in that paper because we are collecting data, significant data on all of the cases that were seen with cognitive decline. We had a number of ex-NFL players come to us because they had cognitive decline. A couple of them were Hall of Famers who I ended up taking around on a speaking circuit and doing some really, really cool things with, I’ll tell you at a different time, the story of ending up in the office of the head of NFL safety with a former Hall of Fame NFL player. But at that point, my father-in-law was looking for an exit, and we had an opportunity to really start thinking about what it would look like to restructure the company to move towards that exit.
And so the questions that our mentors asked us at that point were, do you have a leadership team that can drive growth without you? Can your business grow without your direct involvement? Do you feel restless and you are ready for the next thing? And then really also to the owner specifically, are you spending time on vision, leadership and strategy at this point? And if you’re answering yes to those questions, you’re squarely in the scale phase. And that’s where we were. And when you’re in the scale phase, you can get the highest multiple for your business. It’s attractive to buyers, and it was the right time. So we ended up selling the practice back in 2019, and it was a great run and taught me so much. And only now do I realize how we followed those steps through startup, through growth and through scale and to exit.
James Maskell:
There’s nothing like an exit to give you a number and then probably for you to ruminate on that number and think, wow, what could have been, and I know we’ve had some conversations about the opportunity cost, I guess, of not doing this right and not following those steps and just sort of staying stuck in the first mode. Now that you’ve been through that process and coached all these other practitioners, how do you think about opportunity costs?
Seth Conger:
Looking back on that time, I think there was a lot of opportunity costs, right? So revenue alone, we were doing $90K. Once I joined onboard, we were growing at a rapid rate of 10% year over year, all the way up to $120K. So if we played that out over the next three years, that’d be what, $160? We were at $350,000 a year. That opportunity cost would be about $5 million left on the table if we had not made that switch when we did, and much more if we had done it earlier. My father-in-law got to go from four days a week down to two days a week. So that opportunity cost is 150 days, a hundred over three years. Yeah, 150 days of not having to see patients, but being able to work on the business or go play golf or do whatever we want while the business grows.
So that would’ve been a big opportunity cost. We wouldn’t have been published because we weren’t collecting data. I wouldn’t have become really good friends with NFL Hall of Famers. I wouldn’t have had the opportunity to save their lives. I think ballpark, probably 500 patients that saw life-changing results, literally because we switched to this model. And at the end of the day, it wouldn’t have been worth anything. So there was no exit at a referral only fee for service business, even if it was cash, because it’s based off of the value of the owner. And if the owner doesn’t want to take a job afterwards, then there’s no value in buying that business. And so I think that’s probably the opportunity cost of, if we had not made the decision to join Freedom Practice Coaching when we did.
James Maskell:
Yeah, when you make a purchase or when you sell a business, you’re really selling predictable future cash flows, and they’re nothing like a membership or a proven model to acquire patients that allows you to do that. What are some of the wrong questions? What do you hear practitioners who are asking? What do you hear them ask that makes straight away that they’re thinking about it in the wrong way?
Seth Conger:
It’s so funny because they’re never the wrong questions. They’re just placed wrong. So if someone says, “I need more patients” and they’re in startup phase, they’re probably right. They do need more patients. But if they’re saying, I need more patients in growth phase, the first thing I look at is what is your retention? Do you have any way of retaining these patients? Do you have a recurring revenue model built out on the backend to increase your lifetime value? If not more patients isn’t going to help. All it’s going to do is create a larger leaks in your bucket, right? Another one would be, I need better marketing. Well, if your systems aren’t scalable, and if you are not delivering the highest level of care, more marketing if it works, and it doesn’t always work, but if marketing does work, it’s going to lead to overwhelm because you don’t have systems and you don’t have the right people in place.
So when you turn the marketing engine on, all it does is actually collapse your system. Some people say, I need to hire better help, but if leadership is not in place, it’s okay when you’re dealing with a front desk or medical assistant or somebody like that. But if you say, I want to hire really, really good help, I’m going to hire a director of marketing, but you don’t have leadership in place and there’s no I, there’s no process around management or reviews, that person isn’t going to know really what to do that’s in line with your vision and is either going to do a great job that’s not in line with you or is going to do a poor job. And you’re going to say, man, hiring sucks. I can never hire anybody. This is terrible. People aren’t as good as they used to be. And then you may get lucky, but really, if you don’t have that process in place, it’s just going to be really hard. So put management in place first before you go out and hire a whole bunch of good. So I think it’s the right questions. Just maybe the wrong timing, James.
James Maskell:
Beautiful. Well, look, I am convinced that this is the most important conversation that we could be having in the functional medicine world right now. I think that there are literally thousands of clinics that are in, should be in the growth stage, but it’s still in the startup phase. And if we look at the desires and goals of those people and those practitioners, they want to be in the scale phase. They want to have freedom, they want to be able to take the business to the next level, but they really don’t know how to get there. And I think that you going through this process and having it sort of forced upon you by the exit and now being able to be in a position to help other practitioners is a real gift that I, I’m excited to share on this podcast. And I think this is a great episode of the Evolution of Medicine podcast.
I’m really grateful for you to be here and be part of it, and really grateful for you to share your wisdom with the community. If you want to find out more about how to, you can get in touch with us here at Freedom Practice Coaching, set a time with one of our team and to connect to understand a little bit more about your practice situation. We can very quickly tell you which part of that journey you’re on and ultimately support you in going forward on the journey. And thanks so much for being part of the Evolution of Medicine podcast, Seth.
Seth Conger:
Thanks, James. This was really fun.
James Maskell:
Thanks for listening to the Evolution of Medicine podcast. Please share this with colleagues who need to hear it. Thanks so much to our sponsors, the Lifestyle Matrix Resource Center. This podcast is really possible because of them. Please visit goevomed.com/lmrc to find out more about their clinical tools, like the Group Visit Toolkit. That’s goevomed.com/lmrc. Thanks so much for listening, and we’ll see you next time.
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