Starting an O&P Practice: Compiling the Pieces

At some point in their careers, employees in every profession – from health care to fashion design to food service – consider starting their own businesses. Actually assembling the complex puzzle, however, takes a great deal of consideration and planning. Compiling the key components of a business, piece by piece, makes for a successful, intact practice in the future.

The overriding solution is that business owners should know as much about themselves and about their new business as is possible. There are as many tips and tricks as there are practitioners to offer them, but none of them can be certain of which will work for someone else.

For this extended series to be published throughout 2008, O&P Business News has compiled some of the best information from practitioners who have mastered their own puzzles.

Desire to help

The driving force for many practitioners who open their own offices is the ability to help people.

Jeff Quelet, VP, CPO, who was exposed to the world of O&P after an osteosarcoma left him a transfemoral amputee in 1984, found enjoyment in dealing with biomechanics and materials, but also wanted to care for patients.

“I was in the manufacturing arm of the world, and my 30-year burnout window was sooner than I had wanted it to be,” he said. “That is when I decided what I wanted to do for the rest of my life … I believe [O&P] is an underserviced market.”

Then Quelet, owner/practitioner of Ability Prosthetics & Orthotics Inc. in Hagerstown, Md., received some friendly nudging to push him into the world of small business. Approximately 15 years ago, he was working at a facility in Fairfax, Va. with Jeff Brandt, CPO, who is now Ability’s president.

“When he left [the company], I gave him a dollar bill,” Quelet said.

 To Brandt, he said, “‘This is your first dollar for when you start your own prosthetic facility.’ Jokingly [Brandt] said, ‘I’ll talk to you later.’ We both went on our ways.”

In April 2005 Brandt, who had opened the first Ability office in January 2004, reached out to Quelet to put that dollar to use at his new facility.

Dennis Clark, CPO, president of both Point Health Centers of America Inc. and Clark & Associates in Waterloo, Iowa, decided to start his own practice in 2002 to help the community and fellow practitioners.

“I made a decision to open up a private practice to serve the orthotic and prosthetic needs in our community,” Clark said. “That was my goal. Also to provide personal, professional development opportunities for the people that worked for me, and to bring a local face back to the therapy … creating relationships with physicians in the area to be sure that we were meeting their needs as well as the people they serve.”


Deciding to branch out

Other factors influencing the decision to branch out are flexibility, available monetary reserves and timing, to name a few.

For Lou Perrotta, CPO, owner of Perrotta Prosthetics and Orthotics, the opportunities provided by owning a small business were the deciding factor.

“I wanted the flexibility of having my options open, and control of my time,” Perrotta said. “At this point in my life I have a lot of other things going on, and having that flexibility where I can work nights or weekends was important to me.”

He also found that he was able to take on a part-time job as a wallpaper hanger while waiting for the money to come in from Perrotta P&O.

“I did that in high school, so I was able to do a few jobs here and there and help out some people I know to just supplement my income in those times,” he said.

Not every new business comes about with as much consideration, however.

Brian Monroe, CPO, owner/president of District Amputee Care Center in Washington, D.C. was “like every practitioner [who] thinks about opening a practice,” he said.

Most people develop their business idea over years while working at their present job, but the final decision to open his own practice in 2005 was an accident. After realizing that the business model of the company he was working for did not match his own ideas, he quit.

“When you get frustrated and simply quit, you [think], if there was ever a good time to take that leap and open your own practice, this is it,” Monroe said.

Another deciding factor for Monroe was the ability to control his workload and spend more time with patients, offering them immediate results.

“[By treating only one or two patients a week], you can literally scan a person one day, the next day they are standing up, walking,” he said.

“Honestly, I don’t want the practice to grow that much. That sounds weird, but … I want to make a comfortable living, get to go home and spend time with my kids,” Monroe said. “That pays my salary and keeps the doors open and it is fun again. It is nice to have a slower pace, spend time with the patient and not worry about taking over the world.”

Perrotta shares his sentiment.

“My goal is not to be rich,” Perrotta said. “It is just to make my living in peace and quiet. A lot of people go into business with the thought that they just want to make money and get bigger and bigger. I’m not like that. That is not my goal.”

Despite the amount of preparation and forethought that goes into opening a practice, the day-to-day operations sometimes overwhelms.

“The business side of O&P is harder than I thought it would be,” Perrotta said.

For this reason, it is necessary to create a comprehensive business plan.

Creating a plan

According to the U.S. Small Business Administration (SBA), market research is a vital first piece of the foundation of all business plans.

Clark agrees, and asserts that new business owners also should plan to evaluate themselves in the same way.

“Take a good strong look at your strengths and weaknesses, both personally and from a business perspective,” he said. “In assessing your business plan, you see where your weaknesses might be and create some type of affiliation – either network or business affiliations – that fill in the gaps. Very few companies that start out are able to fill all the needs in their market area, and so you decide.”

After considering the market and individual abilities, the next step is to create a solid plan, consisting of information about services, management, marketing and funding. Potential business owners can consult SBA’s Web site for more information.

With the help of his business partner, Perrotta developed a business plan and a budget, which they segmented based on expenses, such as equipment, marketing, rent and tools. His plan also factored in a period of time where he would receive no income.

“That took a long time, before the money came in, longer than I thought,” he said. “I thought in 6 months’ time I would be making some money, but that didn’t happen. [It was] 8 or 9 months, before I really started getting [reimbursed].”

Since Monroe made the decision to branch out on his own while unemployed, he abandoned the ability to prepare his business plan over the years.

“When you’ve already quit, then decide you’d rather work for yourself than others, you develop a business plan and implement things rather quickly, making a lot of mistakes along the way,” he said.

The process is slightly different for those without the luxury of time.

“I developed what I thought was a good business plan and presented it to a couple of banks that worked with the SBA thinking that they would finance the startup,” Monroe said. “But, as with many things in your initial business plan, they simply don’t go as you had planned.”

Making changes

Perrotta found his business plan easy to follow, with a few minor adjustments.

“It wasn’t too complicated,” he told O&P Business News. “We had to tweak it because I spent a little bit more than I thought on some stuff, a little bit less on others.”

Modifying things as time passed, Monroe learned to work through the planning stage. He offset any financial issues by keeping his expenses small and playing “catch up” for the first 6 months, completing paperwork and certification requirements.

After that, the flow of patients at District Amputee Care Center was enough that he was able to pay material expenses prior to receiving reimbursement.

“By the end of the year, [the goal is to] have enough in the business account to cover your expenses, while waiting for insurance to get paid,” Monroe said.

Ability Prosthetics & Orthotics went through some significant plan changes within the first year of business. The original plan included opening one office in Gettysburg, Pa., followed in the next year or two by a secondary office in Hagerstown, Md.

“About 6 months into it, [Brandt] found out that the business plan was sound enough where we could actually move onto the Hagerstown location, and that is when I opened this office,” Quelet said. “What we have found since we have these separate identities being full-time offices [is that we have] been able to become [part of] the community.”

To handle this type of expansion, Ability’s business plan also incorporated considerable patient education and information technology systems.

Choosing a location

The location of a business can mean the difference between success and failure.

Perrotta Prosthetics and Orthotics services the community of Canton, Conn., a suburb of Hartford that is dominated by larger O&P facilities.

“[There are] only a handful of small guys like me,” Perrotta said.

He suggests that new owners research their community and surrounding areas prior to opening a location.

“I think that if you found a location where [large companies] weren’t so prevalent, it would be easier,” Perrotta said. “But, there is still plenty of work for everybody. They can’t do it all. Just be prepared … to go out and fight for your work.”

Clark refers back to the market for another consideration when looking for an office location.

“What needs does that market have? The value of your company, to any market, is what it does to assess the needs in [that] market area.”

The market area also may include additional coverage distance.

“I live in Iowa, and so the radius of care that we provide really is a 100 to 150 mile radius,” Clark said. “Our medical draw creates critical mass by increasing the miles that we are willing to travel.”

Brandt and Quelet decided to open the first Ability Prosthetics & Orthotics office, and each subsequent office, outside of major cities like Washington D.C., Baltimore and Philadelphia.

“Not everybody wants to get their prosthetic and orthotic care an hour away, especially for a 10-minute adjustment,” Quelet said.

Additionally, each Ability office is located in proximity to hospitals and other medical facilities, which has increased the business’ referral base.

Monroe agrees that having a practice close to referral sources makes a difference.

“Most physicians feel that if the patient is coming to see them and your office is close, then it [will] be convenient for the patient as well,” he said.

Taking shape

To better serve patients in their market, Ability also breaks from the trend of O&P practices that keep one full-time facility, with patients visiting four or five outlying areas.

“We have always felt that we wanted to push the envelope in prosthetics and orthotics,” Quelet said. “We try to re-emphasize the model of working at your own facility, 5 days a week, full-time.”

Clark, whose practice currently has three satellite offices, subscribes to the newer model.

“You can have satellite offices that work at multiple levels, as long as you never sacrifice the level of care you provide,” he said. “That theory has never failed us.”

Monroe says that the bare minimum is never enough.

“Most patients [simply] expect you to do your job, which is to make the prosthesis comfortable and get them back to their normal lives,” he said. “But what sets you apart are the little things.”

Clark emphasizes the need to focus on patients’ needs above all else.

“Everybody gets in this business to do good for other people. Before you can do good, you have to do well,” he said. “And there is nothing wrong with doing well, as long as you are willing to do good.”– by Stephanie Z. Pavlou

For more information:

  • Part two of the “Starting an O&P Practice” series will be published in the January 15 issue of O&P Business News.

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