Category Archives: Business Advice

Vacation – Prescription for Getting Unstuck

view from room_jamaica_2014xmas

Magnificent Jamaica – Ocho RIos Jewel’s Dunn River Resort


Are you feeling stuck in your business or career? If you feel that your life is a never-ending ride in a Ferris Wheel, looking at the same scenery, then vacation maybe your perfect prescription. Even if you are happy and moving ahead in your work, a good vacation may help you reach the next level.

Think you are too busy to take time off? Think again. If our President of the USA can find some time to take off for couple of vacations in a year, surely you can too. It is just how you look at it. Think of vacation as not running away from work. But think of it as time for a tune-up and for recharging your batteries. You will come back with a fresh dose of enthusiasm, and ideas that will energize you.

And vacation does not have to be expensive. If you cannot afford an expensive trip, you can go to a soothing place nearby or even have a ‘staycation’. You may stay at home but do something different. If you can afford it, however, then perhaps go to a different country, experience a different culture. You will learn something new from that culture and gain a broader perspective. About a week or so maybe enough for you to get re-energized.
I truly feel that in order to develop the big ideas, you have to step out from your conventional settings and get away from the daily routine. This is why many companies have their meeting in retreats.

We have a tradition now of taking a family vacation in December during Christmas Break. It allows us to connect together as a family and talk to our twin sons (who are now in college) without distractions from their friends and our work and do things together as a family. It allows me to reflect on the year, see what excites me and my colleagues, and what new initiatives and projects we should be doing in the coming year, and what we can learn from our past mistakes.

More Importantly, it allows me time to read a lot of different books and learn from other people’s experiences.

This Christmas vacation, we spent a few days in Jamaica. Spending the time by the Ocean and enjoying company of my family and the hospitality of the resort and the Jamaican people was invigorating.

But I also spent quite a bit of time reading a number of books which were both inspirational and provided practical tips on how I can improve myself and my business.

I am happy with the progress we have achieved last year in our business, excited about new possibilities in the coming year and can hardly wait for implementing our new ideas this coming year. I wish all of you the very best for 2015 and urge all of you to make vacations and time off as important tools in your arsenal on how to take your business or career to the next level.

Build or Buy – That is the Question!

carpenter toosWhen you are looking to get into the laboratory business – should you go out and try and buy a lab or should you build it from scratch? Well it depends.

It depends a lot on the type of lab (whether it is in highly regulated industry, such as a clinical lab and where someone else, such as insurance companies decide on what you can charge), whether you can find the type of lab that you are looking for in your preferred geographic area, and last but not the least, your own personality, skill sets and knowledge.

Case for Buying a Lab

More buyers seem to prefer going this route as it seems like a safer route to take. Particularly, if you are not experienced in this industry. For a healthy laboratory, you avoid the steep learning curve, you get a business that is generating a positive cash flow from day one. You inherit a working system and a trained staff. You also are more likely to get a loan from the bank to fund your dreams. You can bring your own skills and capabilities to grow the company. As they say, it is much easier to make the second million than the first million.

And in some industries, it may be perhaps the only preferred choice. For clinical labs in certain states such as NY, it takes 12-18 months or longer to get CLIA-accreditation. and in certain states, small independent labs have a hard time getting accepted by the insurance companies. It would make sense than to buy an existing lab with CLIA-accreditation and existing insurance contracts if such  a lab was available.

But expect to pay a price for this – the labs are typically (but not always), valued by a multiple of EBITDA. EBITDA is a metric defined as Earnings before Interest, Taxes, Depreciation and Amortization. We’ll discuss lab valuation in an upcoming post, but expect to pay about 3-5x of EBITDA for a healthy lab. So if an EBITDA for a lab is say $300K, expect to pay on an average about $1.2 million.  Can you afford it? Is it worth the price? Are you better off building on your own? Exception to this maybe if you find a good lab which is doing poorly but you see great potential in it and are confident that you can turn it around. Such “turn-around” labs can sometimes be had at a bargain.

 Case for Building Your Lab

If you (or someone in your team) is great at sales and marketing, have rich contacts in your industry, and are confident that you can bring the business to your new lab, or you are buying a lab for internal research, perhaps you should build your own lab (as long as regulatory hurdles are not too high). The advantages include cost savings (you could save as much as 50-75% over buying a healthy lab), you can have it at a location you prefer, equip it as you want it, and build your own culture in your business. And if you are unsure about how to go about setting one up, there are companies and consultants who can help you set it up.


Buy a lab if:

a. You are looking for a “turn-key” lab with ready cash-flow and which may perhaps need only a few tweaks

b. Regulatory and insurance constraints makes this a much more practical solution

c. You are flexible as to the exact location

d. You are looking to grow your market share via acquisitions

 Build a lab if: 

a. You can bring in business or have captive internal business

b. Want to work on a shoestring budget without taking in a lot of debt

c. Want to have it on your terms – building your own culture, your preferred location, and choosing your own equipment

d. You enjoy creating business from scratch

e. You can survive for some time without an income or salary

Live Like There is no Tomorrow – Lessons of 9/11


twin tower lights

two light beams where twin towers were

It is a somber day today – 10th anniversary of 9/11 and my eyes are tearing up as I listen to family members reciting the names of loved ones they lost that fateful day and giving brief tributes to them. They lost fathers and sons and grandsons, grand-daughters, daughters and mothers, uncles and aunts, brothers and sisters, friends and colleagues.

I still remember that day vividly. I was on my way to work in Brooklyn and as our subway train A passed by the World Trade Center stop just after 8:45 am on its way to Brooklyn, me and my fellow passengers were blissfully ignorant that at around the same time, a plane had just hit the North Tower. I was still day-dreaming about the Sunday evening two days ago, where our family and our relatives had all gotten together to celebrate my wife’s birthday at one of our favorite vegeterian Chinese restaurants in Brooklyn Heights. Afterwards, we had spent a leisurely Sunday evening, strolling by the promenade on the waterfront there, enjoying the mimes, watching a shooting going on for a film, and mostly soaking in the breath-taking views of the Manhattan skyline against the setting sun, with the two WTC towers defining the NY skyline. Little did we realize that this is the last time that we will be able to see these towers from this spot.

Life seemed perfect then!

As our train came to our Brooklyn MetroTech station, I sanpped out of my day-dream, and hurriedly made my way to our building. I was surprised to see a crowd of people staring at a bank of TV monitors that were in the lobby. They were showing smoke coming out of one of the WTC towers, with the report that a small plane had crashed into it. I made my way to the office on 11th floor where we had a clear view of the WTC towers and NY skyline. We were alternating between watching the TV and looking at the WTC towers when some of my colleagues came running after they saw a second plane plow through the second tower.

Suddenly everything changed.

And as we watched the events unfold throught the day, everybody seemed shell-shocked. The Brooklyn-bridge was chock-full of people walking towards Brooklyn from Manhattan with a dazed look on their faces. Late in the evening, after train services resumed and I could take the train back to NJ, I remember how quiet the train-ride was. We were blankly staring outside – as our train passed by the area from where we should have been seeing the WTC buildings, we only saw lot of smoldering smoke. There was an eerie silence in the train as we were absorbing the enormity of what had happened. We were all crying silently inside, thinking of friends or relatives we might never see.

Luckily, we were spared from loss amongst our immediate family, friends or relatives. But you always knew someone who lost someone dear, and although you did not know them, you felt a heavy heart and got teary eyed as you heard or read about their stories. For the next month or two, during commuting to work, I would read NY Times’s special feature, Portrait of Grief, where they had briefly chronicled short biographies of the victims (see This series, beautifully chronicled, gave you much better understanding of the victims and their families. It provided me with a way to grieve, knowing a littlle bit more about the background and lives of some of these people. They had so much life, so much talent, so much to give to the society, so much love for their family and community.

 Lessons From Survivors

The stories of survivors was also gripping. Recently NPR radio had a show, talking to some of the survivors about the experience. And it was just as moving and inspiring.
And so today, on the 10th anniversary of 9/11 as we pause for a few minutes to remember those who perished, and salute the sacrifices made and the heroism shown by our first responders and many other heroes of the day, let us make a few pledges:

  • Let us make sure that we urge Congress to give full health benefits to our first responders, many of whom have contracted cancers which are not covered currently by health insurances. Our first responders do not have to fight to get the health benefits.
  • Let us salute the sacrifices made by our troops fighting for our freedom in Afghanistan and Iraq, and if we have businesses where we are hiring, let us see if we can help returning troops a chance to make a decent living.
  • Let us also learn the lesson from survivors. One of the messages resonating through this is that life is precious. It is a gift. You do not know whether you will have tomorrow. So make the most of the present. Sieze the Moment. Live it to the fullest as if there may not be tomorrow.  Give it your best – in your work, towards for your family and friends, and to your employees and co-workers
  • Let us also work together to make America strong again. It is still the country where most people want to come to – a melting pot of cultures and religions, tolerant to contrasting view and ideas. But we cannot rely just on Government to turn around the economy. We all have to do our part. In JFK’s words – “Ask not what the country can do for you but what you can do for the country”. If you are an employer, put emphasis more on hiring people and expanding business rather than firing people and cutting cost. 
  • Let us manufacture / outsource services in the US when we can, buy American when we can, and have an optimistic attitude that tomorrow will be better. Beleive in that, take some chances, and hire for tomorrow’s growth. If everyone starts believing that tomorrow will be better, it will be better.

God Bless America.

Thank you and so long till later!

Yatin Thakore

Exit Strategy – Right Time to Think About It is Now

exit strategy on door

There are risks and costs to a program of action. But they are far less than the long-range risks and costs of comfortable inaction. – John F. Kennedy

They say that every business should be started with an exit strategy in mind. It applies to any kind of business, not just the laboratory businesses.

There may come a day when you may want to retire, or running the lab become very stressful, or your health isn’t what it used to be. Do you have an exit strategy for such a day?

Exit strategy could be having a succession plan – turning over your lab to a family member whom you have been mentoring, or selling the lab to an outside company, or selling within to your employees.

It is never too early or too late to start thinking about your exit strategy. After-all, you never know when you think you will need it. Kind of like a Will or an Insurance Policy. You never know when you will need it.

Real Life Stories

Recently, in the span of a few months, we were unfortunately involved in emergency sale / liquidation of two labs that had to be sold off at a significant discount.

Sometime ago, I received an email from a lab-owner that we should talk. We set up a time to talk and he described his situation, which was really sad. He told me that his young, two-year old lab was doing well, he had found some unique niches, and the business was growing by 25-30% a year and future looked great. He was thinking of hiring more people. And then he got shocking news from his doctor about a terminal disease. But he said he was still feeling good and he had at least some time – perhaps couple of years- to plan for the future.

We tossed around a few options. Since he was feeling well at the time, and the lab was still growing well, it seemed like it might be a good idea for him to take in a minority partner, train him or her, grow the business and when the time came, the partner would buy him out. This way, the business will grow in size and value, the partner would be ready to run it and he would get much better value for his lab. We decided to talk again in a few weeks. Next month I sent him an email and received a shock when I learnt from his wife that he was no more. I can never forget that email and the shock and disbelief that someone whom you spoke to was suddenly no more.

Well, life throws you such curve balls, and in these kinds of cases, there is not much we can do. I must say, that his wife, somewhat involved in the business, was very brave under the circumstances, and was fortunate that the lab did get bought by one of its customers. I still at times think of my conversation with the lab owner and what could have been.

Another incident happened more recently. A lab-owner became too sick to carry on and his business. His business was once spread across continents, with offices in Europe. But it had to be liquidated to salvage whatever little value one could get out of it. I am sure it must have broken his heart to see something that was so dear to his him, and his pride and joy, had to be almost given away – and even then, it was not that easy.

Time to Act is Now

So what can you do starting Today, so that when the time comes, you can hand over the baton to the next captain?

I think the number one thing that every one of the business owners should be thinking about is to increase the valuation of the business. Something you should be thinking about everyday you are at work. But how can you do that?

Well, I will leave that to the another post.

Thank you and so long till later!