I am very pleased to present the next interview in the OT Entrepreneur Month Series- Paul Fontana. This is an exciting moment for me since Paul is the first "OT celebrity" that I ever met, so it's great to be able to share this story. Paul is the owner of both the Fontana Center, a fitness center that offers OT and massage therapy; and the Center for Work Rehabilitation, a multi-functional industrial rehabilitation and consultation business. Read on for some great insights on starting a very unique business.
What was your background before starting your business? How did you take your first steps to starting a business? Did you have a mentor?
I was very fortunate to have worked for a private practice contract company in northern Indiana. The company would contract to provide OT / PT services to hospitals, schools, outpatient clinics, home health agencies, etc. Our owner, Mr Jack Gamet, RPT understood that the OTs and PTs that he hired did not go into therapy to run a business. So if he did not train his key people on basic business principles then he knew that his business and how to manage both people and the business that we would soon become unmanageable. So Jack purposefully decided not to accept one new contract for a year while he hired expert in the field of management to teach his select group of therapists how to become managers - they taught us strategic planning, goal setting, budgeting and financial planning, supervision and leadership skills training, program development and marketing / selling technique training, etc. I was fortunate enough to be one of the therapists selected to participate in this training.
As I developed the programs at 2 sister hospitals that I was the chief OT for, my immediate supervisor, Mr Thomas Cole, OTR brought me up into an area supervisory position where I was then charged with assisting other facilities with program development and growth. Under Tom’s leadership and growth I learned how to analyze a business potential objectively looking at my strengths and weaknesses from a critical standpoint, develop a business plan then analyze that plan critically to see if it would be worthwhile. This process of leadership development was quite successful as we eventually grew to have facilities in 9 different states.
As I progressed in the company I eventually became Director of Operations for the OT / ST divisions. As such part of my job was to look to the future and develop strategic plans to ensure the growth of the OT and ST programs offered by the company. In the early 1980’s managed care was just beginning to appear on the horizon and from where I was it appeared the goal of managed care had little to do with quality improvement and all to do with cost containment. And this centered around reducing the payment to the providers. At the same time Medicare underwent some significant changes that had the potential to adversely impact our business. As part of my job of looking to the future and trying to ensure that our company was strategically aligned to meet the changes on the horizon, I heard about this "new" concept in care that was being performed out in California – work hardening and functional capacity evaluations.
I traveled out to California and spent a significant amount of time visiting Dr Leonard Matheson (clinical psychologist) and Linda Ogden, OTR who were running the program. I became convinced that this was the future for OT for our company. This was an area of practice that centered around occupation and in my opinion was a perfect fit for OT. And no one was doing it in the 9 states that we had facilities. I brought this concept back to my owners (jack had sold out and there were now 4 owners) but they said that the company was in the medical business and they were not interested in expanding out into this area of practice. I decided that this was an area that I was interested in so I gave the company a 1 year’s notice and made plans to open my own clinic in this area of practice.
My time with Restorative Services and through the mentoring of Mr Jack Gamet, RPT, Mr Tom Cole, OTR and Dr Leonard Matheson I believe that I had the skills and knowledge base to venture out on my own into this new area of practice. Using the strategic planning / program development skills that I learned I was able to do market analysis in the states that I was interested in working thereby helping me to narrow down the state that I would eventually move to. Furthermore the fiscal management and budgeting training helped me to plan for the future as well as help both myself and my wife to feel comfortable with my decision .
Prior to my moved to Louisiana in 1986, Dr Carolyn Baum was very helpful in allowing me to spend time observing in the work hardening program that she had at Washington University in St Louis. In addition to this I spent several weeks working in south Louisiana meeting with potential referral groups (physicians, rehab nurses and medical case managers, vocational counselors), insurance company personnel and claims adjuster as part of the environmental analysis to see if my idea of the industrial OT programs would a) be reimbursed, b) whether there was any competition, and c) whether or not I could get referrals.
To this day I am convinced that without the mentors that I had that I would never have been able to develop the industrial programs and sustained the business that has served the communities in south Louisiana and Houston Texas where I have clinics for the past 27 years. I did not get an MBA but feel that with the executive management training that was provided by my company and the mentoring I had from both Mr Gamet and Mr Cole that I had the necessary skills to move forward with my own practice.
Nobody likes talking about money, but how long did it take for you to turn a profit/hire additional help/be able to quit your other jobs?
When my wife and I decided to open up our own business I did not have another job, nor was she working outside the home. She felt comfortable that I had done the preliminary work and that I could make this work before I announced that I was leaving my job as Director of operations. We did the budget to see what was the absolute least amount of money we needed to bring in to keep the roof over our heads and the family fed for the first year and were confident that we had enough in savings to get us through until revenue started coming in. Also, being an Occupational Therapist where I knew that if I needed to I could always do home health in the evening and weekends if I needed some additional revenue to keep us going until the business took off was a very valuable help.
When I opened the Center for Work Rehabilitation in 1986 I was the only employee. I not only did all the marketing but evaluated the clients, typed my own reports and performed all the rehab on the clients. It did not take me long before I realized that I could not make money at this by typing my own reports. Within the first 6 months I was in the black, paying all my bills, including paying myself enough to keep the roof over our head and food on the table. By the end of the first year I hired additional professional help to allow me to get out of the clinic to meet new customers, stay in touch with current customers and perform work on site to ensure growth.
With the ups and down of the business I have had years where I made more money as an OT than I ever imagined I would and other years where I paid my OT Technicians more than I took home, just to keep the business open. At one point my wife and I had to liquidate all the kids’ college fund monies we had set aside just to keep the doors open until the industry turned around, which thankfully it did.
What were some lessons that you learned in the initial stages of your business (first year, first five years)? Were there challenges that were difficult to answer during this time?
Having worked in a private practice environment before opening my own business I already was used to working long hours and even 7 days a week if need be. Therefore this was not something that I had to get used to. Luckily the business growth was close to what I predicted and my wife was able to stay home with our growing family. This was an important aspect of the growth and financial wellbeing of the company because as I was making inroads with industrial customers I would be called to travel to job sites, including to offshore drilling rigs, salt mines, and manufacturing facilities out of state where I would be working for multiple weeks at a time. Some of these requests were spur of the moment where I did not have time to preplan but rather had to be at a heliport in 4 hours. Had I not had the advantage of a supportive family this would have been extremely difficult.
The business model that I was developing was something the insurance industry as well as the physicians were not exposed to so I was starting from scratch to get folks to understand what I was doing and why. At times this was difficult.
Having grown up with ethical training (where my word and a hand shake was sufficient for work) had some drawback as associates I worked with took my idea and opened their own programs to compete against me. That was a challenge that I did not anticipate having. I was also surprised to have physicians directly and indirectly seek compensation for referrals – “what’s in it for me” was asked of me by several important referral sources. Another important referrer wanted me to train LPN’s how to do therapy then give him space in my clinic where he would send all his clients and my professional staff would provide the supervision. When I told him that I would not do this as I felt it was both unethical and illegal his response was, "I have 300 – 400 clients that I can send you".
Developing "partnership" with my industrial customers was a huge asset to my business. By becoming a critical part of their "fit for duty" program I had customers provide me with equipment needed for simulations, access to their training to improve my knowledge of their business, etc. At one point when I was unable to access my equipment nor facilities until the courts intervened, the Vice President of Human Resources for a major drilling company told me “I cannot run my business if you are not in business.” In 2 days I had use of an 8,000 square foot warehouse to use as my clinic. During another time when the price of oil dropped to such a low that made drilling in the Gulf of Mexico too expensive that companies stopped all hiring, one of the claims manager for a major drilling company asked me how this was affecting my business. I told him that business was so slow that I may not be able to stay in business. A week later I had a contract to travel offshore and develop 31 physical job descriptions for this company. The claims manager told his boss that they needed to make sure that I stayed in business because when they needed me to rehab their employees, I needed to be there.
What is the best thing about owning your own business? The worst? What surprised you most?
It allows me to set my agenda professionally, to devote time and energy on giving back to the profession. I did not have to get approval from anyone to spend the time / energy to become actively involved with the Louisiana OT Association (President for 4 years), AOTA (Region III PAC Chair then AOTPAC Chair followed by a term as a Director on the Board then Secretary to the Board of Directors). I enjoy the opportunity to work with business and industrial customers who are generally only interested in results. Being able to go on site, help them with problem resolution and implementation is what I like best. That and this work allows me to do a fair amount of teaching which I really enjoy.
Worst can be the lost family time. Working with industrial customers as a private individual you have to be there when they call or they may go elsewhere. There were vacations that I missed because of a job request or because a therapist I had working for me quit so I now had to miss the vacation to cover in the clinic.
Also, having continual staff turnover. Many of the OTs that work with me stay 1 ½ - 2 years then leave to work in the hospital, out patient clinics or nursing home for fear that they are losing their “treatment” skills. That certainly is true. Having worked in this industry for 27 years I cannot imagine how to treat a stroke patient or a pediatric client. However I have skills that others do not have. But trying to find clinicians to work in a non-climate controlled environment doing industrial fit for duty programs and not having to retrain every 2 years has been tough.
What are some tips that you could give to OT practitioners considering starting a business?
- First and foremost have a mentor. Not only regarding business management but therapy skills management
- Be ready to devote the time and energy it takes to make it work
- Be sure to do a good objective market analysis and self analysis of your skills and abilities before hand
- When planning financial areas, although you need to be realistic, be extremely conservative regarding revenue generation and high on cost expectations. If you can make it during the worst case predictions you will be ok. If not, you may need to re-evaluate. Things beyond your reach of influence will occur.
Thank you so much Paul for your detailed responses! Great wisdom regarding mentorship, needs assessment, and preparedness. You can learn more about the business at the Fontana Center Website - http://www.fontanacenter.com/