Case Study : Joseph Wilson Prof Bharat Nadkarni

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 company’s 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 Wilson’s 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 Steris’s 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.