When holding on means losing ground, get help

SMALL BUSINESS MAKEOVER A local counselor offers advice

In a sluggish economy, holding market share means sales andprofits are decreasing. To maintain or increase sales, entrepreneursmust maximize sales and develop new strategies or niches. GerryDetty owns Pro Orthopedic, a manufacturer of neoprene limb and bodysupports. Sales are affected by foreign and other low-costcompetitors. To get advice on expanding sales opportunities, Dettyhired business consultant Joe Donato.

The story

Gerry Detty's father, Moose Detty, started experiments withneoprene sleeves in the 1960s when he was head athletic trainer forthe NFL's Philadelphia Eagles. He started selling knee and elbowsleeves and, in 1975, incorporated Pro Orthopedic.

Gerry Detty graduated from high school in 1970, earned abachelor's degree in experimental psychology from the University ofSouth Florida and earned a master's degree in sports administrationfrom Ohio University. While seeking stadium facility work, he helpedhis father set up business systems for Pro Orthopedic. Each time hereceived an offer, Moose Detty matched salaries.

In the 1980s, most customers were university athleticdepartments. Gradually, the company expanded into the medical field.Its products were stocked by orthopedic surgeons. Gerry Detty set upmanufacturing processes so the company would not have to pay othersto make company products.

Pro Orthopedics, with a work force of 20, was recruited to Tucsonin 1986. In the 1990s, the company started a retail product line fordrugstores and sporting goods stores. Equine products were added tothe mix.

In 2000, the company had 45 employees and $5 million in sales.Gerry Detty bought the company from his father in 2001. As theeconomy softened, sales dropped. Last year there were 35 employeesand $4.2 million in sales. Price pressure from overseasmanufacturers is the main reason, Detty says.

He wants to use competitive advantages to regain sales. Thecompany's management worked hard to build efficiencies into themanufacturing processes. Pro Orthopedics can fabricate custom ordersin three days and produce small quantities, including private-labelproducts, cost-effectively.

Detty seeks Government Service Administration approval so he canbid for government contracts of up to $100,000 per month percontract. The company recently submitted a 140-page application.Approval is imminent, he says.

The advice

Gerry Detty built a manufacturing facility with capacity thatexceeded demand. He is ready for growth, Joe Donato says.

To maximize sales, the company needs to maintain constant contactwith customers. Conversations with customers will help ProOrthopedic evaluate sales potential and remain at the top of theminds of customers who may be making purchasing decisions.

"Customer relations are an important component of sales in ahighly competitive environment," Donato says.

The company is calling on customers, asking about business trendsand inquiring about the possibility for more business or resumptionof sales. A few large customers expressed a desire to market theirown brands, so Detty is putting together private-label packages.

Recently, the company received requests from the U.S. Navy.Federal procurement officers called about getting Pro Orthopedicregistered as a government vendor. With registration, order size cango up to $100,000 per month. Research indicates the U.S. military isbuying millions of dollars of products from Detty's competitors,Donato says.

Detty contacted the Department of Veterans Affairs and was sent acomplex, 140-page application. Over several months, Donato helpedthe company complete the application.

The government prefers electronic transaction processing. Whilethe application was being prepared, the company used the time tochange business systems, allowing the federal government and othercustomers to make purchases via the Internet and other electronictransaction methods. Shipping, receiving and package tracking weremade available by linking these processes with FedEx and UnitedParcel Service systems.

Electronic processing benefits the company. Cash flow related togovernment purchases is improved by use of procurement credit cards.

After initial receipt of the application, the government assigneda procurement officer to the company. Donato and Detty were asked tomake several more submissions before a negotiation stage.

In the negotiation stage, the company will become an approvedvendor and receive a list of procurement officers who may beinterested in buying company products. With the list in hand, Dettyshould implement a marketing campaign. There are about 30,000procurement officers. Telemarketing campaigns, print advertising ande-mail solicitations should be designed to capture their attention.

Profile

The business: Pro Orthopedic; 2884 E. Ganley Road; 294-4401.

Founded: 1975.

The owner: Gerry Detty.

The products: neoprene limb, joint and body supports for athleticand health-care needs.

Annual revenue: $4.2 million.

The challenge: find new customers and maximize sales to currentcustomers.

The consultant

Joe Donato specializes in grant writing and implementation ofseveral federal and state development programs. He assistsbusinesses with federal procurement opportunities, as well asmarketing, management and operations issues. He can be reached at731-8154 ordonato_consulting@hotmail.com.

If you would like your business to be featured in an upcomingmakeover, contact Star small-business reporter Alan D. Fischer at573-4175 or afischer@azstarnet.com.