From house calls to a $2M facility: A veterinarian’s leap into entrepreneurship

Read the transcript: ’For the Love of Dogs: Cleveland Veterinary Rehabilitation’ on The Unshakeables

Ben Walter:

Laura Surovi and Michael Sivo love dogs. In fact, that might be a bit of an understatement actually, because Laura is a veterinarian and she and her husband were inspired to start their business because of one dog in particular.

Michael Sivo:

He wasn't in the greatest of shape. He smelled terrible. He had a UTI and he was dragging himself around all over the place and his feet were bleeding and everything else.

Ben Walter:

This was a dog named Chauncy. He'd been rescued and Laura and Michael were at an event to raise money for his care. As they mixed and mingled, Laura saw a few folks she knew from her practice in the the animal care community in Cleveland. They all took a photo together with Chauncy.

Dr. Laura Surovi:

I think it was in a minute of that interaction with the dog that he drug himself through the crowd, and he stopped right in front of me and looked up.

Michael Sivo:

And I think we both knew at that time, there's more to this. And sorry, it's a very emotional... You know why I think it's emotional is because the dog changed our life, both of our lives.

Ben Walter:

It was that resolve that Chauncy had to survive even with all his complex medical issues and Laura and

Michael's commitment to his wellness that's now helping pets all over Ohio. Welcome to the Unshakeables. From Chase for Business and Ruby Studio from iHeartMedia, I'm Ben Walter, CEO of Chase for business. There's nothing small about the impact small businesses have on America. They don't just drive our economy, they define our communities, create opportunities and inspire the next generation of dreamers and builders. On the Unshakeables, we are sharing the daring moments of business owners facing their crisis points and telling the stories of how they got through it. Hey, Kathleen, nice to see you again as always.

Kathleen Griffith:

Yeah, you too. I've been so excited about this episode. Who doesn't love a heartwarming story about pets?

Ben Walter:

And they’re vets. So this is going to be fun. Let's go. On today's episode, Cleveland Veterinary Rehabilitation from Cleveland, Ohio. Laura and Michael, it's great to have you here. I'm so excited for this.

Michael Sivo:

Thank you.

Dr. Laura Surovi:

Thank you.

Ben Walter:

And it's real privilege to be live at our corporate center in Columbus. I spend a lot of time here. I have hundreds of employees here. We collectively as JPMorgan Chase have thousands of employees here, so it's great to be able to bring the show in-house and let people see how we make the magic.

Michael Sivo:

It's a beautiful place.

Ben Walter:

Thank you. Thank you for being here. So I want to start with you, Laura. Talk to me a little bit about being a veterinarian.

Dr. Laura Surovi:

I always wanted to be a veterinarian. From the age of five, I remember going around saying that I wanted to be a veterinarian. I had a love for animals. Both of my parents loved animals. We had all sorts of animals growing up. It seemed like a reasonable choice for a career. I graduated from vet school in 2000 and I immediately went into private practice. I was very happy working in general practice. My 15th year in general practice is when I just started to feel, I always use the word stale. I wasn't seeing a lot of new things.

Ben Walter:

Until she encountered several lectures on acupuncture for injury rehab for animals during a professional development conference.

Dr. Laura Surovi:

Right around the same time, I received a mailing for the Chi Institute, a place devoted to learning Chinese medicine, and with acupuncture being one of those modalities.

Ben Walter:

The chance to learn new skills piqued Laura's interest and sparked something new for her career. As she researched the Chi Institute, she asked her boss if he would be open to her studying Chinese medicine.

Dr. Laura Surovi:

This is a way to recreate myself, learn a new skill, offer something beyond the prescription pad. He said, "Yes, we would support it," but I distinctly recall him saying, "I think if you want to do it, you're doing it for yourself. I don't think you're going to see a return on your investment." But I like a good challenge.

Ben Walter:

Even still, she wasn't sure it was the right choice. It was her husband Michael, who encouraged her to go.

Michael Sivo:

When she started to talk about, "Hey, might be something I want to add, it sounded interesting." And I said, "Just do it." She said, "Well, it's like $40,000." I said, "Just do it."

Ben Walter:

Michael was not a vet and at that time wasn't involved in veterinary medicine at all.

Michael Sivo:

I'm running a real estate business. I'm selling, but I'm also managing a bunch of realtors. I'm a seven- day-a-week, whenever I have to work. It's real estate, so you have to work at three o'clock in the morning signing something on the hood of somebody's car, or you have to leave Christmas dinner. I did whatever it took, and I normally didn't complain too much about it either because I just wanted to keep building that business. So as I was doing that, she was learning to get certified in chiropractic, and I just kept telling her to keep moving. It's funny, Chauncy kind of brought it together, I think.

Ben Walter:

Now it's time. We reintroduce you to the star of the show and the star of Cleveland Veterinary Rehabilitation's practice, Chauncy. Chauncy is a pit bull who Laura first saw on Facebook.

Dr. Laura Surovi:

Somebody that I used to work with had tagged me in a post regarding this dog who had kind of a sad and difficult backstory involving abuse and abandonment and said, "Don't you think acupuncture could work for this dog?"

Ben Walter:

Laura did some more research and saw that Chauncy had been taken into rescue. A fundraiser to help cover his medical expenses was coming up, and Laura and Michael decided to go, which was unusual for them.

Dr. Laura Surovi:

My husband and I don't necessarily attend things like this.

Michael Sivo:

Because we're usually working or something. Our lives are so crazy.

Dr. Laura Surovi:

We had three other dogs at the time, all pit bulls, and this dog was also a pit bull.

Michael Sivo:

We said, "What the heck? It's a Sunday. Let's go out there and meet this dog."

Ben Walter:

The fundraiser was at a local boarding facility.

Dr. Laura Surovi:

We walked in and the lobby was just full of people. The rescue was selling t-shirts. They had a little backdrop set up and you could get your picture taken. It was interesting that there were so many people that had turned out for it, and one of the things that I noticed is just that the dog, I mean, he appeared very stressed for one thing.

Michael Sivo:

He was a mess.

Ben Walter:

In a lot of pain, I assume.

Michael Sivo:

He was in a lot of pain and he had a UTI.

Dr. Laura Surovi:

And he couldn't use his back end, so he's dragging himself around on this tile flooring and he was drinking water like crazy and urinating at the same time. I could see his needs weren't totally being met.

Michael Sivo:

At some point, we decided to take our turn and go get a picture with Chauncy.

Dr. Laura Surovi:

I was very early in my acupuncture training, but I knew enough that I knew that there were some calming points on the back of the head, and obviously I didn't have needles with me, but you can do acupressure. We bent down and I just sort of grabbed the back of his head and squeezed it really hard and he didn't fight. He seemed rather relaxed for that moment.

Ben Walter:

They had their photo taken and then they went back out into the event to chat with another veterinarian that Laura knew.

Michael Sivo:

All of a sudden, hear all this clamoring and here comes Chauncy.

Dr. Laura Surovi:

My recollection is that it was in a minute of that interaction with the dog that he drug himself through

the crowd.

Michael Sivo:

And he stops right in front of Laura.

Dr. Laura Surovi:

So I always say that I've had this dog for almost 10 years, and it's like I can never tell that part of the story without crying, and I don't know why. I mean, it was certainly a monumental moment, but it was truly the moment that changed everything.

Michael Sivo:

I think it's emotional because that dog changed our life, both of our lives.

Dr. Laura Surovi:

We quickly recognized like this dog needs somebody, needs an advocate, needs somebody to care for him. He needed more care than he was getting, and it would be easier for me to do acupuncture on him pretty regularly without someone having to bring him to me.

Ben Walter:

Michael and Laura adopted Chauncy.

Dr. Laura Surovi:

We brought him in and the first month we had him was really, really difficult. He's a 50 pound dog and he was young. We estimated him to be maybe a year to 18 months. He couldn't walk, he couldn't manage his eliminations. I mean, it was a lot of work.

Ben Walter:

But work that let Laura put her new rehab skills to the test. She was working with Chauncy at home on things she could do herself, some massage, some mobility, acupuncture and acupressure, but for more advanced care, he needed a specialized facility. They found one on the other side of town.

Michael Sivo:

Laura started traipsing across town to get him into an underwater treadmill and do some land exercises with him, and that's when she was like hey, "My God, this is crazy that there's nothing closer."

Ben Walter:

The clinic was an hour away from where they lived and based on their schedules, they'd have to drop Chauncy off and leave him at the facility for a few days, which was stressful for all three of them.

Dr. Laura Surovi:

That was my light bulb moment where I said, "Why is there nothing in our own neighborhood like this?"

Michael Sivo:

That's where it really started to snowball with she was going to maybe take this idea mobile.

Dr. Laura Surovi:

I just felt like animals needed this type of care and maybe we could be the ones to provide it. I was going to start this mobile rehab practice where I would be going to people's houses and providing what services I could.

Ben Walter:

She approached her boss in January of 2020 asking to go part-time at the general practice. He still wasn't sold on the rehab services and she wasn't completely sure of herself either at this point.

Dr. Laura Surovi:

They didn't fully know what the success rate would be. Our area was lacking for those services, but it's hard to know what the demand is if you don't really have a comparison.

Ben Walter:

But Laura knew she had to try and Michael was all in with her.

Michael Sivo:

Laura has... Something she will never admit to, but she has some kind of magic about her that whatever she does, she's able to make it reality. She's just a special person and I said, "Just do it."

Ben Walter:

She worked out an arrangement with her boss where she'd work at the general practice clinic two days a week and run her mobile practice the rest of the time.

Dr. Laura Surovi:

My plan was to launch the mobile practice April 1st, 2020, so if you recall-

Ben Walter:

I remember April 1st, 2020-

Dr. Laura Surovi:

... there's a lot-

Ben Walter:

... there's a lot going on.

Dr. Laura Surovi:

There was a lot going on. As March hit, and then we had the shutdowns and I thought, oh my God, what have I done? I'm launching this practice, this business. I can't think of a worse time to build a business, but-

Ben Walter:

I bet people actually loved it.

Dr. Laura Surovi:

Yeah, well, in the end, it was actually a perfect time to start a new business and particularly one where I was going to people's houses because people didn't want to go out anyway.

Ben Walter:

And because everyone was home all the time, they were also spending a lot more time with their pets and noticing their conditions, like difficulty jumping on the bed or using the stairs. Word spread and pet parents were referring Laura to other pet parents to the point where she was booking four to six weeks out.

Dr. Laura Surovi:

I was quickly learning that there is a need for this.

Ben Walter:

And was this a cash business? People were paying out of pocket. There's no insurance, so everybody's just paying for it?

Dr. Laura Surovi:

Everyone's just paying for it. Yes, correct.

Ben Walter:

And when did you decide, "Well, this is bigger than my car."?

Dr. Laura Surovi:

So really it was my husband's idea that maybe we should consider building a facility.

Ben Walter:

At this point, Michael was getting more and more involved with the mobile practice, thanks in no small part to the urging of his business partner at his real estate company.

Michael Sivo:

My business partner was diagnosed with leukemia just into the first year of COVID. His name was Alan, and I talked to him on the phone because I couldn't go see him at the hospital because they weren't letting anybody in with COVID. He would say, "Get out of this crazy real estate stuff and support your wife, help her work on that." And he just loved the idea of the business. So I literally think about him saying that every day, "Work on that business, it's a great idea, it's a great plan, just keep working on it." And four months later he passed away, so that's when I started to transition my focus from real estate to veterinary medicine.

Ben Walter:

As COVID continued on, Michael was less enthused about the idea of Laura going in and out of strangers’ homes.

Michael Sivo:

So at one point I started to think we should have bricks and mortar.

Ben Walter:

That's a big jump.

Dr. Laura Surovi:

That's huge.

Ben Walter:

From my car going to people's homes to building a facility.

Dr. Laura Surovi:

Oh, my gosh.

Ben Walter:

Not even renting something, building something.

Dr. Laura Surovi:

Correct.

Michael Sivo:

Right.

Ben Walter:

That is...

Dr. Laura Surovi:

Correct.

Ben Walter:

I mean, yes, you're in real estate, but...

Michael Sivo:

It's a big jump.

Ben Walter:

... it's a big jump.

Dr. Laura Surovi:

Most definitely in our relationship, he is the risk-taker way more than I am, but he had the foresight for it maybe more than I did.

Ben Walter:

Michael was so certain Laura could make the business work with a brick and mortar facility that he'd already been scoping out the perfect location for them to build.

Dr. Laura Surovi:

There was a piece of land, not even a mile down the street from where we live, and it used to be an old putt-putt course, but for the last 20 years just been a vacant lot and kind of an eyesore in our city.

Michael Sivo:

And it was in poor shape. It was overgrown and always looking terrible, and the real estate sign was literally rotted out of the ground. It was a wood sign and fallen over.

Ben Walter:

Michael pried the sign out of the ground and recognized the name of the seller.

Michael Sivo:

So I gave him a call. They were asking $300,000 for the lot, and I said, "Well, keep me in mind if you ever get the price with in reality." And not too long after that, he called me and he said, "Just throw a number at me." I ended up offering him $75,000.

Dr. Laura Surovi:

He's pretty matter of fact. It wasn't like he eased into that conversation. It was more of a like, "We should just do this."

Ben Walter:

Laura wasn't so sure about it and not because of the business, her mobile business was thriving, but turning a small mobile practice into a facility on the scale that Michael imagined, that was huge.

Dr. Laura Surovi:

I thought, this seems really big and out of my realm. It seems like a huge risk, like we're going to bet everything we have and then we'll be living in a van down by the river when it doesn't work out.

Michael Sivo:

I run a thousand miles an hour into anything I do. She was very hesitant, I think with, "Hey, we're going to buy this lot or we're going to spend millions of dollars on a building and we don't have any people to come to us yet." I knew there was going to be success.

Ben Walter:

Michael kept pushing, fully confident in Laura at every step, but it was Laura's love for animals that finally convinced her.

Dr. Laura Surovi:

I got to a point where I had to stop taking new clients, and not only can we service so many more animals than I was able to mobile, there are a lot more services that I can offer that I would've never been able to mobily.

Ben Walter:

They bought the lot. Now it was time to build the facility of Laura's dreams or maybe more Chauncy's dreams because every little detail was designed and chosen specifically for animals and their owners.

Dr. Laura Surovi:

I think the biggest thing is just the appearance of it. We didn't want a clinical environment. We wanted something that was going to be very comfortable for pets and for pet owners. People walk in, they think it looks like a ski lodge, they think it might be a winery.

Ben Walter:

Let's just say that the clinic wouldn't look out of place in Colorado. The front of the building has giant timber trusses and extensive stonework. A large covered drive-through zone keeps people and their pets out of the rain during drop-off, and automatic doors mean they open if you happen to be carrying a large dog or a very unhappy cat. And the inside carries on the look from the outside.

Michael Sivo:

In the reception area, we have a stone fireplace and a stone feature wall. We have all mahogany trim, mahogany doors. Everybody thought that was crazy.

Ben Walter:

The most important thing though, may surprise you, rubber flooring. I learned that rubber flooring is a whole adventure because we put a gym in my basement. There's like 79,000 different kinds of rubber you can put on a floor.

Dr. Laura Surovi:

Yes.

Ben Walter:

And I did not understand that.

Dr. Laura Surovi:

Yes.

Ben Walter:

I'm like, "It's some rubber for the floor." "What kind?" "Oh, my God."

Michael Sivo:

Right.

Dr. Laura Surovi:

Yes. Yeah, and this is the kind of flooring you would find in a gym. It's just...

Ben Walter:

It's durable.

Dr. Laura Surovi:

It's durable, it's aesthetic, but it had to be functional of course, as well. Whether these dogs are senior dogs or they're recovering from surgery or they're injured, slick flooring is just very difficult for them. So rubber flooring was what we needed to do and it's certainly more expensive, but it just made more sense.

Ben Walter:

If it sounds luxurious, it's because it is. Laura and Michael worked with an architect to design the building, and by the time they got started building, material and labor costs had ballooned. By the time the facility officially opened in April 2022, Laura and Michael went from Laura's paid off 2010 SUV to a $2 million 6,000 square foot facility.

Michael Sivo:

We probably could have saved an awful lot of money, but at the end of the day, I think what we ended up with is part of our success.

Kathleen Griffith:

Do you want to know a fun fact about dogs?

Ben Walter:

I don't know. Do I?

Kathleen Griffith:

You do. So if you can believe it, there are more dogs than there are kids in this country right now.

Ben Walter:

Yeah, I kind of believe it.

Kathleen Griffith:

It does speak to something interesting, which is the humanization of pets, which this business could only exist in so much as people love their animals this much, that they're willing to go to great lengths with rehabilitation.

Ben Walter:

I mean, the first thing I thought when I heard this business was like, oh, she can charge anything she wants.

Kathleen Griffith:

Anything. A million dollars? You got it.

Ben Walter:

I remember when I was living in San Francisco the first time I saw a sign for a pet day spa because it probably started in San Francisco, and I remember thinking like, wait, that's a thing? And then I found out that not only is it a thing, but people pay crazy top dollar for it.

Kathleen Griffith:

This space has just exploded, and if I think of one area where I would be interested in investing, it would be functional pet care. I mean, it's just massive.

Ben Walter:

And I give her a lot of credit. I mean, I give both of them credit, but she saw a trend and she learned early.

Kathleen Griffith:

As you're talking to her, she felt like a sleeper agent to me, a little quiet and soft-spoken.

Ben Walter:

She was very understated. Yeah.

Kathleen Griffith:

Yeah, very understated. And you hear her talk about going from this mobile pet clinic and she's going to people's homes, and then she makes this quantum leap into a 6,000 square foot $2 million spot. I mean, can we talk about those sorts of inflection points in a business?

Ben Walter:

I mean, 6,000 square feet in Cleveland is not the same as 6,000 square feet in L.A., but still.

Kathleen Griffith:

Okay, fair, but still-

Ben Walter:

But still.

Kathleen Griffith:

... $2 million? I mean, they put it all on the line, and how do you do that? How do you just get the chutzpah to say, "All right, all chips are on the table."?

Ben Walter:

I would say two things. One is the fact that they were both in on it helps. If one person in the marriage wants to spend all the money on one big bet, that's pretty hard versus if both do, and I think on the one hand it sounds huge, Kathleen, I would argue that it was actually a pretty thoughtful calculated bet because they actually proved the model pretty well. When you think about a new startup, what is the most important thing? There's really two things that matter. Product market fit and a business model that will support that product market fit. If you have product market fit, you're going to generate demand, and if you can deliver on that demand for an acceptable cost structure, you're going to win. I'm going to scale this. That all comes later. If you have product market fit, you will be able to scale as long as you can deliver that product at an acceptable cost. That's it. And I think her mobile pet business proved that she had product market fit. She was selling her product, there was tons of demand and she could deliver it, and what she found actually, she could deliver it super efficiently but not scale, and she needed physical space in order to be able to scale it, but she could see how that would work. So for me, it was actually a pretty thoughtful way to do it. Right? She could have not tested it with the mobile thing first and just opened a place. She didn't.

Kathleen Griffith:

Yeah. Yeah. That's a good way to think about it. It was testing product market fit, and that's where when he said build it and they will come was the strategy, I think part of the problem is a lot of people build it assuming they'll come before they have product market fit.

Ben Walter:

Right. They knew. I think it's a great test and learn strategy. Yeah, it's a lot of money. I don't want to make light of the fact that they put up $2 million and they mortgaged their house and they took a big bet, but I would argue they took a pretty calculated bet because they had already proven the product market fit.

Okay, Kathleen, let's get back to Laura and Michael. Remember how I said the facility was 6,000 square feet? Well, Michael and Laura just wrapped another expansion.

Michael Sivo:

We're just at the tail end of adding another 2000 square feet. We're adding five more exam rooms. We're adding a room that's dedicated just to gait analysis so that we have a specialized piece of equipment that goes in that room to test footfall to see where lameness might be, and then we're adding some other office space.

Ben Walter:

And the people you employ, are they veterinarians, all of them? Is it a mix? You can't really go to vet school for this, right? Or can you?

Dr. Laura Surovi:

Veterinary programs might be teaching some rehab now, but I definitely had to pursue education outside of that. So we have one other veterinarian in the practice. Interestingly enough, she was the one who was taking care of Chauncy when I was driving him across town, so she now works for us. We're so happy about that. And then our staff, we have a rather eclectic group of individuals, but we have a great group of people and we train them and we teach them, and we spend a lot of time educating them, and our clients really love them.

Ben Walter:

So far, the business model sounds like sunshine and rainbows, and I want to stress that Laura and Michael are doing well, but every small business has challenges, including them. Finding staff is always an issue for businesses of all sizes.

Have they been tough to attract and retain?

Michael Sivo:

Not hard to retain, but hard to find.

Dr. Laura Surovi:

It's tough because to get good people, you have to have good benefits. Coming out of the gates, we wanted to offer paid time off after 90 days. We wanted to offer paid vacations. The 401k was something that we added somewhat more recently, and we allow them to have a voice in our practice. We always want there to be open communication and we have dialogue about things we can do better.

Ben Walter:

The one thing they still can't offer is health insurance, but not for lack of trying.

Dr. Laura Surovi:

As a small business owner, the rates have become astronomical and just so difficult.

Michael Sivo:

Certainly it's more lucrative for the insurance companies to work with larger businesses, but for the little guy, it's really difficult and we want to offer our people everything we can.

Ben Walter:

Yeah, it's really tough. We do hear that a lot from people, and we actually have some initiatives in our firm to try to influence policy to lower healthcare costs for small businesses because we know it's in the way.

I'm hopeful that over the next few years as their business continues to grow, Michael and Laura will be able to offer more benefits to their employees and continue adding more services to their clients. They recently purchased an ultrasound machine and they're hoping to add musculoskeletal ultrasounds to their menu of services soon. I have to ask, what does a machine like that cost? Just give me a ballpark.

Michael Sivo:

It was-

Dr. Laura Surovi:

It was 40?

Michael Sivo:

... 45,000.

Dr. Laura Surovi:

45,000.

Ben Walter:

Okay. It's not cheap,

Dr. Laura Surovi:

Not cheap, not cheap at all. Be a bit to get a return on that.

Ben Walter:

I'll tell you the biggest question I have is how do you set your prices? Because it's not like there's this giant market where you can be like, "Well, they charge this and they charge that and I'll charge,"... You're kind of making it up as you go along, right?

Dr. Laura Surovi:

I did an internship in my training and I did it at a practice down in Georgia, which was very successful. It was a three-doctor practice there. I could see what she was charging and how she structured it, and I chose to follow my mentor that I had, and I do more like an à la carte, so I charge by the service. When I was mobile, I had a few things. I certainly didn't have the level of services that I have with the facility, so I started there and then every year we look at it and we bump it up a little bit just so we stay in line.

Ben Walter:

Have you gotten any pressure to franchise this thing?

Michael Sivo:

Not to this point, but that's an interesting thought.

Ben Walter:

I always wonder-

Michael Sivo:

Thank you for floating that by us.

Ben Walter:

Well, if somebody called me and said, "You need to take your dog to the vet rehab," I wouldn't know where to go.

Michael Sivo:

Well, we do have a blueprint, so to speak, for both the facility and the business, and it's always getting perfected and tweaked and changed, but we feel like we do have a pretty good plan.

Ben Walter:

Well, I can hear that you're as passionate about the quality of the product as you are running a business

and making money.

Michael Sivo:

Absolutely.

Ben Walter:

Which typically wins in the end, in my experience.

Kathleen, I love this business. I mean, the way they talk about it, their approach, I think they tapped on something that was in high demand and growing demand, and they had a way to deliver a product in a way that resonated with the consumer, and that's gold dust if you get it.

Kathleen Griffith:

Ah, so good. And they deserve it.

Ben Walter:

They totally deserve it. Now, what's amazing to me is they've taken this big bet, it's working great, they're expanding, they're doing all this stuff, and they still don't have health insurance, not just for their employees, but for themselves.

Kathleen Griffith:

I know. Well, it's so darn expensive. Even with 80% of cost sharing, you're looking at 10 grand an employee, that sort of thing. But what I think is really interesting there is gone are the days where you can say, "Well, you've got a great ping pong table and we've got free snacks, and we operate like a family." Most employees do expect more. They expect some form of benefit and trying to figure that out.

Ben Walter:

I'll tell you what, I can't remember where I read it, but if you look at the economy over the last 35 years, this is a little bit of why we have grievance politics today from an understandable perspective is goods by and large have gotten cheaper, maybe not in absolute dollars, but as percent of income. So if you think about flat screen TVs, it's like 200 bucks now or 300 bucks. You can have this giant screen and it used to be $3,000, and so technology has reduced the price of goods writ large. I mean even food. But for the inflation of the last couple of years, food is a percentage of people's expenses and as a percent of their income has continued to drop. But there are three big ones that haven't. The three Hs, housing, higher education and healthcare, those are the three that have outpaced income growth over the last generation.

And so when you talk about why people are frustrated with their student debt, that's why when you talk about why people are frustrated, they can't get into a house. That's why. And when you talk about particularly to small businesses, but also to individuals about healthcare, it's why they're frustrated because the pace of price increases is outpaced income growth, and that's really hard and it's been particularly tough on small businesses. So we're at a stage where we really need technology to step up and figure out ways to innovate and deliver care cheaper. Because I say this just like I would say about housing, if we don't build more houses, it sort of doesn't matter what you do with finance, it doesn't matter what you do with mortgages, it doesn't matter what... We have more people, we need more houses, supply and demand. It's that simple.

And with health insurance, health insurance isn't expensive because health insurance companies are making a lot of money. Their margins are actually pretty thin. I'm not saying that they're everyone's favorite company, but it's not like they're walking around with 50% margins. Their margins are single digit. Healthcare is expensive because delivery is expensive.

Kathleen Griffith:

And there has to be a better solution than just ChatGPT-ing what ailment that you have at three in the morning when you can't sleep or I can't sleep and uploading test results. I read a statistic that only one in five small businesses provide health insurance to their employees anymore. So it's pretty lean, but companies are looking for alternatives, and I know Morgan Health is one.

Ben Walter:

We've invested some money into some startups that offer alternative kinds of plans that we think can move the needle, but again, most of those innovations, while they may be helpful, they'll be at the margins. I mean, when the Affordable Care Act was passed, whether you love it or hate it, there had been some hope early on that it would detach your health insurance from your employment. That clearly hasn't happened and something that's entrenched is hard to get rid of, but healthcare through your employer was kind of an accident of history.

It happened during the Nixon administration when they passed the fact that healthcare premiums were not taxable as income, like other benefits, and that shoved the whole market into the employer space. The fact that healthcare is tied to your employer and that your employer has those responsibilities, I think is quite difficult because A, it puts smaller firms at a disadvantage and B, there's less employee mobility because people are worried about their health benefits, and so the more people we can have who are willing to take risks in their career, that's good for the economy, but one of the things that holds people back is healthcare.

So I'm hopeful that in the end that more of that control can be put back into the hands of employees, plus most employers, they don't want to be in the healthcare business. It's not what they do.

Kathleen Griffith:

No, no, no. And I'm hearing more and more too, that sometimes small businesses will give a stipend and then someone can use that or deploy that as they see fit in terms of either health insurance or dental or 401k, contributing to their own 401k. Obviously flexibility and time management is important. Unlimited PTO, everyone wants to be fair and do the right thing by their employees, but it's just not financially accessible for a lot of companies right now.

Ben Walter:

Yeah. The last thing I wanted to say is, and this is a bit selfish because I'm the one who mentioned it, but all I could think of when she was describing her model is, boy, could you franchise the hell out of that thing.

Kathleen Griffith:

I know you suggested that to her. It gave her this glint in her eyes-

Ben Walter:

I saw her husband's eyes just kind of lit up.

Kathleen Griffith:

Yeah, yeah, yeah. But it seems so dependent on them. How could it be franchisable? They didn't really seem like they had very replicatable systems or-

Ben Walter:

I'm not so sure.

Kathleen Griffith:

... processes.

Ben Walter:

My guess is running the place would be, I think the brand could be. Because if you think about it like a new doctor, they're probably still not big enough to be able to do it. She would need to have a network of locations with different veterinarians running each location to prove out that model and how it works. She's talking about that. She's got a second doctor now. She's a long way off from it, don't get me wrong, but I just started thinking that's the kind of thing that you could franchise. We have a lot of franchise clients and I spend a lot of time with them, in our case, with the franchisees more than the franchisors, and it's a really interesting business. They're great businesses if you know how to do it. Increasingly, you have to be experienced and have scale from the get-go, so they're quite capital-intensive to start, but they do scale quickly.

Kathleen Griffith:

And if nothing else, to just think about it and maybe imagine it is a good exercise. It forces you to also get a bit tighter in the business that you're creating, but we'll see what happens. Fast-forward 10 years from now, we can check in on them and see whatever comes of it.

Ben Walter:

I think she's going to be pretty successful.

Kathleen Griffith:

Yeah.

Ben Walter:

All right, Kathleen, have a great weekend.

Kathleen Griffith:

Thanks for having me. You too.

Ben Walter:

I want to ask you both independently, if you had one piece of advice as they think about starting or growing their business, what would it be?

Dr. Laura Surovi:

Have faith in yourself. I think if you believe in yourself and have a lot of faith in yourself, you'll persevere.

Ben Walter:

Terrific. Michael, anything from you?

Michael Sivo:

Yeah. I think you need to build a good solid base for your business and a good business plan, and once you have those pieces together, the best plans if they're left on the piece of paper, are never realized. I think people that put a good business plan together and have a roadmap to follow with a lot of hard work, they will succeed.

Ben Walter:

Terrific. Laura, Michael, thank you for being here. Thank you for being trusted clients. We appreciate your business. We appreciate you being here today. It's been terrific learning your story.

Michael Sivo:

Thank you for having us.

Dr. Laura Surovi:

Thank you so much.

Ben Walter:

Before we go, I just want to give you a little update on Chauncy. He's hard at work with Laura and Michael as the branch manager of Cleveland Veterinary Rehab, and they told us recently, and I'm actually quite serious, he was also recently promoted to Quality Control Manager for all the toys on site. Thanks so much for listening to this episode of The Unshakeables. If you liked this episode, please rate and review it. In our next episode, we'll hear from a woman who was desperate not to run the family business until a movie inspired a change of heart.

Speaker 5:

It literally was an epiphany. As I'm sitting on my couch, it became very apparent that there was no one else who was meant for this role than me.

Ben Walter:

I'm Ben Walter, and this is The Unshakeables from Chase for Business and Ruby Studio from iHeartMedia. We'll see you back here soon.