Case Study : Joseph Wilson

Nadkarni

Prof Bharat

The business plan, although often criticized for being dreams

of glory, is probably the single most important document to the
entrepreneur at the start-up stage. Potential investors are not likely to
consider investing in a new venture until the business plan has been
completed. In addition, the business plan helps maintain a perspective for
the entrepreneur of what needs to be accomplished. No one knows this
better than Joe Wilson, founder of Ecomed, Inc., a medical waste
equipment manufacturer.
After 13 years as an innovator and cofounder of Medical Safe Tec, a
developer of mechanical and chemical infectious waste treatment for
hospitals and laboratories, Joe Wilson decided he wanted a company of his
own. A hard-working and success driven man, Wilson came across an
untapped market opportunity in the bio-safety market. He recognized the
growing fear of AIDS and the increasing problem of toxic waste washing
ashore and causing the closing of many East Coast beaches. Safe disposal
of such wastes had become an important priority for the medical profession,
and Joe Wilson was determined to find a solution.
In 1990 Wilson designed a stand-alone 150 pound waste pulverizer that
destroyed and decontaminated needles, syringes, glassware, tubes, vials,
specimens, and bandages. The machine, the size of a dishwasher, retailed
for about $ 4000. With this innovative product, Wilson then launched
Ecomed, Inc., in 1990. Trying not to compete with large companies that
manufactured large, expensive machines that targeted hospitals and health
institutions, Wilson focused on the small user, such as doctors, biomedical
research facilities, small laboratories, and penitentiaries. These potential
customers had the same need as the hospitals but to a smaller extent, and
did not want to spend a large sum of money or have a bulky machine that
took up too much space.
Wilson felt he was an engineer who could design and build new products
but did not have a very strong business background, and thus needed
support in the planning and management of the operation. He felt he needed
to step back and let someone with business experience assess the company

and its opportunities, and then together they could program the companys
future direction. Wilson brought in David Haeberle to assist in the writing
of the business plan and operation plan. Wilson and Haeberle spent months
preparing the business plan, which provided the direction for the new
venture, as well as an operation plan, which provided the venture with a
statement of how the business plan was to be accomplished. The business
plan became an important factor in the venture finally receiving enough
capital to begin manufacturing the new product.
In 1990, Ecomed was launched with a $ 45,000 bank loan, $ 7,000 of
Wilsons savings, and $ 255,000 in seed money obtained from an
investment group of 12 people. The funds were used to build nine prototype
machines, to obtain patents, and to support marketing, promotion, and
salaries. The business plan not only helped obtain the necessary
capitalization but served management as an important guide in the early
days of the start-up. By staying within the parameters of the plan, the
entrepreneurs were able to remain focused on their strengths and were able
to avoid the temptation of deviating from their goals and target market. The
business plan thus served as an important control in management decision
making.
In 1992, the company produced 567 units, which provided revenue of $ 1.4
million but also losses of about $ 250,000. Although this has been
anticipated in the business plan, it was apparent that the company needed
more resources to reach a larger potential market. In 1993 Ecomed entered
into a joint venture with Steris Corporation to develop a new product that
would combine the proprietary grinding technology of Ecomed with
Steriss antimicrobial chemistry technology. From this venture the Ecocycle
10 evolved. This product allows the waste to not only be pulverized but to
render the material it produces harmless for disposal. The new plan gave
Steris exclusive North American distribution and regulatory registration
rights.
By 1995, this product won approval from the EPA and was cleared for sale
in 40 states. In 1996, Wilson took one more step and sold the company to
Steris. This was felt to be necessary in order to reach the potential market
with the appropriate resources. Joe Wilson believed that this decision
allowed Ecomed to retain its autonomy and provided him with needed

resources so that he could continue his expansion goals and explore new
entrepreneurial endeavors with this technology.
From this example, we can see how the business plan was utilized to get the
company launched and entrenched in its market. When the need for more
resources was recognized, it was necessary to revise the plan and identify
alternative strategies for successfully launching the Ecocycle 10 into a
potentially very large market. These opportunities to expand domestically
and globally could have only occurred with the additional support of Steris.
It also gave Joe Wilson the opportunity to employ his entrepreneurial skills
to continue the development of new products in a very competitive but
profitable business.