[In the Media] Jason Smith Interview with Alan Kohler, Qantas Talking Business
Listen to Jason Smith's Interview with Alan Kohler for Qantas' in flight radio Talking Business
Interview transcript
Alan Kohler: My next guest is Jason Smith, who runs a business called Back In Motion, franchised group of… Well mostly franchised group of physiotherapy centers. Back In Motion being an excellent play on words.
Jason Smith: It is, yeah.
Alan Kohler: I like the name.
Jason Smith: It came about from a late night of pizzas about 15 years ago.
Alan Kohler: Right. 'Cause I've got this back here, Jason. Probably everyone says that to you.
Jason Smith: That's right.
Alan Kohler: So tell us about the start of the business. Did you just… You're a physiotherapist yourself, you started a center, decided to open another one, took it from there. Tell us about how that unfolded.
Jason Smith: Right. Probably the easiest place to start is to describe that I'm a bit of a reluctant businessman and accidental franchisor because although I was a physiotherapist at the age of 21, I certainly had no intention of running my own practice, let alone building a network. So I think I promised my wife on our wedding day I wouldn't bring that stress into our house but one thing led to another, a number of early experiences…
Alan Kohler: You should be a politician with your promises.
Jason Smith: That's right. [chuckle] Well look, a number of early experiences as a young graduate revealed to me that most of our health care model was very reactive. And it took a few people to challenge me to put my money where my mouth was and build a more innovative approach to physiotherapy, and that became the beginnings of what we now know as the Back In Motion Health Group.
Alan Kohler: So you did start your own practice?
Jason Smith: I did. I started it from the garage at home, Alan, and…
Alan Kohler: To bring a different philosophy?
Jason Smith: Correct.
Alan Kohler: So what was that philosophy? What is the foundation of your business?
Jason Smith: Fundamentally it was empowering patients to perform at their physical best rather than be a break/fix consultant that just fixes their pain or helps to recover them from their injury. And if you think about the hundreds of years of health care that's gone before us, it's been a very reactive approach. And the evidence to me as a young graduate seemed to suggest that we could do much better than that.
Alan Kohler: So tell us about how it unfolded. So you opened your own one in the garage?
Jason Smith: Yes.
Alan Kohler: Presumably it didn't last too long there.
Jason Smith: That's right. So within about six months my wife gave me the ultimatum: Move this growing business out or shut it down. And we had patients from 5 o'clock in the morning through to 11 o'clock at night who were just getting much greater results through this unique approach, and so we moved it into commercial medical facilities from there and very quickly became one of the largest practices in Australia. So at the age of 25, I had to make a decision as to whether to take on partners or to just keep it as it was.
Alan Kohler: And you still had one practice?
Jason Smith: One practice at that stage. And really wrestled with that for five years. Got the prototype right, made sure clients were getting the results that we were promising. And…
Alan Kohler: So what were you doing apart from massaging them?
Jason Smith: Well, physiotherapists by definition are experts in human movement. And we were taking a zoomed-out approach on that and looking at the integration of not just their exercise and physical posture, but looking at sleep patterns, nutrition, looking at lifestyle factors. And tailoring for them a set of solutions that would uniquely give them an optimal result. So it was building what we call a 'Results for Life' plan as opposed to a quick fix. And that would typically happen over just a number of sessions. And then, of course, it was about empowering them to manage themself, which I think is one of the most important aspects of the modern day health care environment.
Alan Kohler: So you spent some years thinking about, “What am I gonna do now?”
Jason Smith: Correct.
Alan Kohler: This is a practice that's basically bursting at the seams, I presume.
Jason Smith: Agreed.
Alan Kohler: And then so what did you do?
Jason Smith: Well franchising was my last option but very quickly became the best one because it allowed other practitioners to own their own practices, the model would suggest, but stay very much aligned with the philosophy. So I took one of my senior clinicians who wanted to become a partner and offered him the opportunity to run his own. And very quickly within two years we had 15 centers operating and…
Alan Kohler: So was your second center a franchise one?
Jason Smith: It was. It was a pseudo-franchise.
Alan Kohler: So you went straight into franchising.
Jason Smith: It was a pseudo-franchise. I owned a portion of it, and it was a test case to see whether this could operate at arms length. We did another five just like it, so I had a vested interest in all six of those early ones before we truly pressed the go button on the bona fide franchise model.
Alan Kohler: Right. And what franchise model did you settle on in terms of the cost of getting in and the fee that you charge? How does it operate?
Jason Smith: So we opted for a hybrid of what you would consider pretty standard in the retail and hospitality market, and found the sweet spot between professional services and that typical approach where we did charge an initial fee to join. But for any practice who was already existing in the market and was converting in, we would preserve the royalty on all of those fees that they would have previously generated, so it was…
Alan Kohler: What do you mean, preserve the royalty on…
Jason Smith: So if they were a million dollar practice before they actually joined us, we would never charge them a royalty on that existing good will. We would only charge it on the growth of the business that our philosophy attracted.
Alan Kohler: Oh, I see. So do you charge them… If they have an existing practice, do you charge them a fee to enter?
Jason Smith: A very modest one.
Alan Kohler: How modest? What is it?
Jason Smith: It's most… Oh about 30,000 or 40,000. There's always a little bit of cost to fit out the practice to suit our requirements. But mostly it's a very competitive proposition in that our philosophy will add new clients and greater growth to their business after the fact.
Alan Kohler: So what's the typical uplift in turnover once you put your label on it?
Jason Smith: Within the first 12 months, typically 30% to 100%. And certainly over a five-year term…
Alan Kohler: Gosh. So where does that come from?
Jason Smith: It really comes from engaging a client base who have not been offered an innovative approach to their personal health. And if you look at the statistics, typically only about 3% of the population initiate contact with a physiotherapist in any one year. And so we are tapping into a market who are aspirational about their health and truly think that they could be given a better service and so we're going direct to the health consumer with that opportunity.
Alan Kohler: So, to what extent is what you do for other physiotherapist practices whether they are pre-existing or somebody who's joined your group, to what extent is what you're doing marketing and to what extent is it actual a different way of approaching things?
Jason Smith: I think fundamentally this service we provide is different. We are not treating just pain; of course, that's part of the process. But we navigate with our clients six stages of both pain relief and recovery through to optimising their lifestyle factors. So, fundamentally that's different. Definitely, a big part of it is telling that story so a consumer can make an informed decision about the value to them, so, it's a double-edged approach.
Alan Kohler: And how many centers do you have now?
Jason Smith: We have about 50 franchises. We have about 70-something locations, and technically we now have signed licenses in every state and territory in Australia.
Alan Kohler: So, there's 50 franchises, what another 20 that you own yourself?
Jason Smith: Yeah, or some franchisees own multiple locations or serve as triage centers as satellites as their primary flagship.
Alan Kohler: Right. I see. And what's the… How far do you think you can take this?
Jason Smith: Well, I think we've barely scratched the surface. As I said, there's a large majority of Australians who are yet to experience the benefit of a progressive physiotherapy approach. I think the first next objective would be to have 100 flagships around the country really improving access for Australians to the service. And certainly there are opportunities off shore as well as we think about all the expat communities who could benefit from this.
Alan Kohler: And how are you gonna get the percentage of people who go to a physiotherapist up from 3%, what's the plan?
Jason Smith: Well, I think the progressive model for us is to continuously engage local communities. So it's less about national messaging and trying to get headlines in mainstream media, it's more about engaging local communities and being involved in schools and work places. We do a lot of charitable work as well in a pro bono context. I think we more engage at the consumer level, the more effective our growth prospects become.
Alan Kohler: And do you get a lot of clients from doctors?
Jason Smith: About 20% of our referral base would come through primary healthcare, so, general medical practitioners and the like. And that's a positive part of our base but certainly the more exciting future is in reaching the consumer with the message so they are empowered to make their own decisions.
Alan Kohler: Right. And are you interested in getting more and more people who haven't got a crook back already. Who are simply interested in improving their health?
Jason Smith: Correct. I think that's where a lot of our growth has been. So, traditionally, we would wait for the phone to ring when somebody's in pain or has symptoms and then it's that reactive model. More and more we're starting to see our clients who are either for themselves or personal referrals they're sending along are coming to take the proactive approach. And that is, “Help me build a lifestyle with better sleep, better nutrition, better posture, better exercise routine that prevents the injury and helps me perform at my best”.
Alan Kohler: I've been talking to Jason Smith who runs a business called, Back In Motion Health Group, which is a franchised network of physiotherapy clinics.