Faithful reminders - Compumed Inc. medicine dispensers - company profile

Faithful Reminders

For some years I've been a teacher and a building contractor in northwest Wyoming. When I began exploring the medical-devices industry a few years ago, I wasn't intending to start another business. I was only trying to find a device to help my mother-in-law take her medicine at the prescribed times.

Grandma, as we called her, was of strong Mormon pioneer stock, a self-reliant woman who, as a child, had moved from Idaho to Wyoming's Big Horn Basin in a covered wagon in 1893. But 90 years later, she was ill and sometimes forgetful, and she had trouble remebering her medication. Twice she ended up in the emergency room after she had risen from a nap, thought it was the next day, and had taken her pills a second time. My wife, Gayle, and I feared that unless we could find a way for Grandma to keep to her prescription schedule, we would have to put her into a nursing home.

I began searching for a pill dispenser that would hold Grandma's weekly supply of medication and dispense it according to a fixed schedule. Although I had never seen such a device, I believed there had to be one out there somewhere that just hadn't made its way here to Meeteetse (population 359). I thought it would cost a few hundred dollars.

I called medical-equipment suppliers all over the country. None knew of any such machine, yet most said they had received requests similar to mine. I concluded that no such device existed but there was an untapped market for one.

A slowdown in construction left me with time on my hands, so in 1987 I set out to make my own pill dispenser. I had the help of two of my five sons, Rob and Philip, both electrical-engineering students at DeVry Institute of Technology in Phoenix.

My first effort looked something like a carousel slide projector. It operated with a timer from a Kenmore dryer, causing pills to fall into a cuplike drawer at set times. But it was cumbersome, and we soon improved on it. Our big breakthrough, which I had patented, was its dispensing belt--the first belt designed to mete out substances through a hole. The belt is now controlled with a microcomputer.

We called the device "CompuMed," short for computerized medication. There was no other product available for home or institutional use that automatically dispensed the proper vitamins or medication at the correct times and in the proper doses. There were plenty of good reminders, organizers, and timers on the market, but there was nothing that dispensed multiple pills from a locked device and sounded an alarm.

Every step in the process of setting CompuMed is displayed on a screen on the device. At alarm times, the prescribed quantities of medication are dispensed into the cuplike drawer. Instructions such as "take with plenty of liquid" or "take with food" appear on the screen. The pulsating audio alarm or, for patients who prefer it, the flashing light can be turned off only by opening the drawer and closing it again.

Some months after I developed the dispenser, a company offered to buy my patent for $175,000. I had $12,000 of my own money invested in it, so the offer was tempting, but I declined. I heard Wyoming's Gov. Mike Sullivan speak of the need to diversify businesses in the state. His address convinced me to stick with my business.

The governor set up a program to help fund new enterpreneurs, and that gave us our first financial break. Wyoming's Economic Development and Stabilization Board gave our company, CompuMed, $25,000 for a marketing-feasibility study by a top independent consultant. The report was staggering; it said that by the fourth year, sales could top $500 million.

According to the study, 40 percent of all admissions to longterm-care centers such as nursing homes come about because elderly people have trouble taking their medicine on time. Clearly, we were on to something. The market was huge.

I should have been elated, but instead I was overwhelmed. I'm a schoolteacher and a bricklayer. To suddenly face this type of business challenge was difficult, to say the least.

About this time, my nephew Steve Christiansen came for a visit from Southern California. Steve has degrees in business and law and was interested enough in my venture to start working with me.

Steve helped me formulate a business plan and prospectus for investors. We raised $365,000 in seed money and obtained $892,000 in low-interest economic-development loans. We're now selling our second private stock offering. Steve has become executive vice president of our company.

CompuMed is now hiring sales representatives. The biggest hurdle before us is obtaining exposure. We've shown the dispenser at pharmaceutical and health-care trade shows, and we have advertised in magazines. Our theme is, "Never forget your medication again."

Our sales are promising. We've sold 200 units at $369 each, which is more than we had projected for the first two months of sales.

We're definitely stoked up for the challenge of building our company. We have only seven employees now, but we are planning for up to 100. And I plan to keep CompuMed in Meeteetse.

PLANNING

Bringing A New Town

To the Company

A major expense in moving a business operation to another town is travel for employees to see the new location and decide if they want to follow their jobs. One way to cut such costs is to bring the new town to the employees--on videotape. That's the suggestion of Nancy McCormick, president of a relocation-services association based in Chicago. Her organization, RELO, offers clients the videotape service for their employees.

Salmon Bay Steel Corp. took advantage of videotape tours when it moved about 100 employees from San Francisco to Seattle. Rather than send employees to Seattle right away, Salmon Bay Steel first asked Shirley Hoag, a broker with Benton's Realty Inc., in Seattle, to provide the relocating workers with videotapes. Employees took the tapes home to preview the new town with family members. Hoag says the steel firm is saving thousands of dollars of travel costs as a result.

A firm may use videotapes to replace employee scouting trips altogether. Or it may use tapes to give employees a preliminary look at the new site; some might then decide whether to make the move, while others might defer a decision until after a personal visit to the new location.

The potential for the tape approach could be substantial. Runzheimer International, a Rochester, Wis., travel and relocation consulting firm, finds that just over three-fifths of firms that relocate their workers send the employees on exploration trips to the new city.

Real-estate broker Sylvia Ehrlich of Chappaqua, N.Y., says video previews also can help make employees' house-hunting trips "very productive."

RETAILING

Supplier And Retailer:

A Working Combination

Competitive pressures from mass marketers are forcing smaller, independent retailers to adopt more advanced sales techniques. "The rules are changing" in supplier-retailer relationships, says supplier Bert Dorazio, Midwest business manager for Purina Mills Inc., in Pittsburgh. Suppliers like retailers who offer "the perception of a high variety of low-margin products," he says, emphasizing "perception." The pet-supply stores he cites don't sell pet food much more cheaply than grocery stores, he says, but their added variety and expertise give the feeling of greater value.

Part of this "added value" is customer involvement, says Dorazio. The more prosperous retailers, he says, stage "events the consumer can participate in" such as pet photo contests, on-the-spot grooming, in-store obedience training, and visits by veterinarians who help customers with questions.

Also, for a good partnership, retailers should be good customers, says George Whalin, president of Retail Management Consultants Inc., in Chicago. This means paying bills on time and respecting time limits on returned merchandise.

OWNERSHIP

How To Build Value

In Service Companies

If you're selling a service-based company

mind that buyers prefer a firm that shows a signature on its service, a "well recognized name" in its markets, and exclusive market tools such as proprietary accounting systems or client networks, says Joseph Furlong, with the investment firm Robertson Stephens & Co., in San Francisco.

Ronald Speyer, president of Geneva Capital Markets, in Irvine, Calif., says those who buy a company for strategic purposes want service firms with solid employee-training systems.

Top service requires consistent training at all company levels, Speyer says. Customer-support and quality-support systems add a lot of value to a business, he adds.

A firm's service need not be unique for the firm to sell at a good price, says Richard Tadler of TA Associates, an investment firm in Boston.

Even an ordinary service firm can command an appealing price when it is sold, Tadler says, if it has an especially efficient means of satisfying its customers.

PROFITS

Track Costs To See

Where Profits Lie

If you sell several products, you should try to determine how each affects earnings. Failing to allocate overhead costs to individual products, for example, can mask inefficiency, pricing errors, or excessive overhead, according to David Wolfe and Shirley Cheramy, consultants at the accounting firm of Price Water-house.

Many smaller firms base profit/loss calculations on the combined performance of all their products. Wolfe and Cheramy suggest that you set up accounting methods that "isolate" costs and revenues for specific products, time spans, and sales regions.

Cheramy adds that if you stop selling an unprofitable product, for example, you should allocate operating costs evenly back to the products that you still have on your shelves.

Simply dropping one of five products doesn't cut overhead 20 percent, she says, because such costs as heating the warehouse remain the same.

JOB DESCRIMINATION

Proposals Differ

On Quotas, Damages

Another heated debate over proposed rules to curb job discrimination, an issue of major concern to business in the last Congress, is expected soon.

Business waged a major lobbying drive last year against such bills in the House and the Senate, but it took a presidential veto, sustained by only one vote in the Senate, to stop the legislation.

President Bush and business objected to the measure because it would have resulted in hiring quotas and excessive litigation, they said.

Rep. Jack Brooks, D-Texas, has introduced similar legislation this year in the House, and Sen. Edward M. Kennedy, D-Mass., is expected to introduce a comparable bill soon in the Senate.

Meanwhile, Sen. Alan K. Simpson, R-Wyo., has introduced a job-discrimination bill that addresses most of the concerns that business had with the earlier bills. Simpson's bill would limit damages in cases of job discrimination, while the earlier bills permitted unlimited punitive and compensatory damages.

The Simpson measure would also avoid any mandates that would encourage quotas in hiring.

President Bush is expected to push hard for legislation he can sign this year to keep job discrimination from becoming a presidential-election issue in 1992. He has said he wants to sign a bill but is dead set against legislation that would result in quotas.

At issue in the debate are several Supreme Court rulings handed down in recent years on job discrimination.

LABOR

Strike-Bill Veto Threat

Encourages Business

Business received encouraging words from the administration on legislation that would eliminate the right of employers to replace workers who walk off the job for economic reasons, such as differences over wages and benefits.

Labor Secretary Lynn Martin said senior administration officials would urge President Bush to veto the bill if Congress passes it.

That statement was particularly significant because the Democratic-controlled Congress has been unable to override any of the 21 vetoes that the president has issued since taking office.

Business and labor organizations are locked in a major confrontation over the measure, which is moving quickly in the House. The legislation's future is more uncertain in the Senate.

Business says the bill threatens the delicate balance between employer and employee rights.

THE PERSIAN GULF

Information Available

On Rebuilding Kuwait

With Kuwait having been liberated--largely through the efforts of the U.S. military--it is expected that U.S. businesses will prove vital to the efforts to rebuild and resupply the war-ravaged emirate. Revitalizing Kuwait will cost more than $100 billion over five years, according to some estimates.

Information on how U.S. businesses can participate in the rebuilding is available from the U.S. Small Business Administration, 800-827-5722; the U.S. Army Corps of Engineers, (703) 665-3683; and the U.S. Department of Commerce, (202) 377-5767.

BENEFITS

Congressional Drive

On Parental Leave

The House is moving quickly on a bill to require employers to provide their workers with up to 12 weeks of job-protected family and medical leave each year.

Workers could use the leave for their own illnesses or for the birth, adoption, or serious illness of a child, parent, or spouse.

Democratic leaders in the House and the Senate have made the legislation a top priority. Proponents are pushing for votes by the full House and Senate before Mother's Day, May 12.

The congressional drive for a leave bill is continuing despite surveys showing broad public opposition to government mandates on worker benefits.

A new survey by Penn and Schoen Associates, Inc., a consulting firm, found that 89 percent of the public believes employee benefits should be determined by employers and employees, not mandated by the federal government.

TRADE

Conference To Focus

On Asia-Pacific Trade

A one-day conference on doing business in the Asia-Pacific region is scheduled for June 19 in Washington. Sponsored by the U.S. Chamber of Commerce and the Asia-Pacific Council of American Chambers of Commerce, the program will feature American business executives representing the American chambers in Hong Kong, Indonesia, Japan, Korea, Malaysia, New Zealand, the Philippines, China, Singapore, and Thailand.

The executives will share their experiences in the region and offer practical tips on pursuing market opportunities, locating prime investment possibilities, and assessing the political and economic realities in each country.

For more information, call Marnie J. Merovitz at (202) 463-5471.

COPYRIGHT 1991 U.S. Chamber of Commerce
COPYRIGHT 2004 Gale Group