Doing it Right

By Laura Thill

With an eye on the future, OrthoEssentials has built its business one client at a time.

When Ron and Brenda Baron lost their jobs at Masel Orthodontics in 2008, they knew they faced some challenging days ahead. After the company was sold, the office was closed and most operations were dropped. What remained was moved to California. A number of factors – including the stipulations of their employment contract, non-competes laid out in their separation package and a crumbling economy – left them with few options, Ron recalls. “I called everyone I ever met, both inside and outside our industry, and the story was always the same: ‘Call us in a few months.’ Companies were put off by the non-competes in the Barons’ separation package, and they were concerned about taking on additional employees during such uncertain economical times, he notes.

Although the prospects looked bleak, the couple was far from ready to look for employment outside of an industry they had called home for many years. Brenda had been in the orthodontics industry for over 30 years, 25 of which were spent chairside as a dental assistant. Ron’s background was in sales and marketing, having joined Masel Orthodontics in 1990. In 2002, he was promoted to general manager, and remained in that position 2008, when the company merged with Henry Schein. “I’m not one to sit around,” says Ron. Nor did he appreciate “the sting of unemployment.” From their vantage point, the answer was clear: Start their own distributorship. “In the fall of 2008, we incorporated OrthoEssentials, officially opening our doors for business in January 2009.

“For the first several months, we were on the road daily, trying to build our business throughout our region – Delaware, Maryland, New Jersey, Pennsylvania, Virginia and Washington D.C.,” he says. “We had nothing but our desks, our phones and the internet. Our product line was limited at best. When we’d return home after a long day of traveling, we would sit down and focus on our paperwork, such as ordering goods, packing and shipping orders and sending correspondence, while seeking ways to duplicate our efforts.”

In hindsight, the Barons probably should not have rented office and warehouse space, notes Ron. “We burnt through some very important and much needed financial resources in the first two years, which could have been better utilized,” he points out. “It is hard to measure how much faster we could have grown if we had started out in our home.”

Indeed, the company’s early mission was to survive, Ron continues. Familiar with the statistics on the number of businesses that fail soon after starting up, they were adamant that “this would not be us,” he points out. “We worked harder than ever, sometimes going days without leaving our office. We were determined to turn this opportunity into a success. Our mantra was – and continues to be – building a company, one client at a time.” To make this happen, OrthoEssentials stuck to the basics: Help customers reduce both their inventory and their cost per patient, something the company has stayed focused on ever since. “We still are not about making a sale,” he says. “We strive to build relationships and partnerships with our clients.”

Growing the business
That OrthoEssentials survived its early years is an understatement. Within a couple of months, it became necessary to add a couple of part-time employees, Ron recalls. Today, the Barons employ nine full-time people and one part-time staffer.

The company sells direct to orthodontic practices – including solo, mid-size groups and DSOs – both nationwide and internationally. “Our business model is simple,” says Ron. “We reach out to customers via phone, fax blasts and email blasts, and we visit our top clients whenever possible to touch base and conduct lunch-and-learns. Over the past nine years, we have established an ownership position with a U.S.-based plier manufacturer, invested in molds and tooling, and now offer several key products to other companies at very affordable prices.

“Whether we are working with a solo practice, a group practice or a DSO, our goal is to offer value,” says Ron. “Because we are a small company – and aren’t muddled in red tape – we can do quite a bit for our clients and add a very personal touch. By offering value-added, high-end solutions at a very affordable price, we’ve been able to establish some very solid relationships. This is the heart of our business.”

That said, the Barons have faced a few industry challenges these past nine years. “Orthodontic and dental practitioners are creatures of habit,” says Ron. “When we present new ideas and opportunities, we must be convincing enough to make them want to change. Purchasing habits are emotional, not logical. When we ask our customers, ‘Why are you doing this?’ the answer invariably is, ‘Because we always have done it this way.’ That is a hard pattern to break, but when we do so, the rewards are substantial – both for us and our clients.”

Another challenge – increased industry regulations – has impacted OrthoEssentials, as it has many distributors. “There seem to be new regulations and increased fees yearly, which can be daunting,” says Ron. “We have not raised our prices in eight years, with the exception of when product cost surpasses selling price. Couple the new regulations with the overwhelming increases in business and health insurances, and I imagine 2018 will bring new challenges – not just for us, but for all dental companies.”

Looking back, looking ahead
Their combined 50+ years of industry experience has given the Barons a perspective with which to negotiate an ever-changing industry and shape their plans to expand their business. Compared to 20 or more years ago, it’s become much more difficult for distributors to gain access to decision makers at orthodontic practices, Ron points out. “From the early 1990s until 2008, decision makers had vendor days,” he says. “The offices would set aside specific times on these days to speak to vendors and place orders. Today, however, it just isn’t possible for an office decision maker to speak to every sales rep that calls on them.”

Other sales channels, such as direct mail, have also changed, Ron continues. “Direct mail is still used, but today it must be supported by a strong web presence,” he says. In addition, admission to trade shows has become very costly, and given how many are held each year, it’s not realistic to attend all of them, he notes. “Our advertising and marketing dollars are better utilized in other ways.” Today, it makes better business sense to focus on marketing efforts, a web presence and email correspondence, he explains. “An outbound phone call to any given client will likely reach the decision maker less than 6 percent of the time.”

But, one thing that hasn’t changed is the value of face-to-face contact. “This is a great way to make an impression on our customers,” says Ron. “We often drop off samples and a catalog, along with a box of goodies. Sometimes we’re able to meet the decision makers, but even when that’s not possible, we can still make a lunch-and-learn appointment. These have been very effective for us, and we look forward to finding ways to maximize this opportunity.”

Getting creative with the day-to-day business dealings is just a start for OrthoEssentials. The company anticipates making some substantial changes, leading to major growth. “Rut Reynolds, the former owner of Class One Orthodontics and OrthoQuest who joined us about three years ago, is working on expanding our international presence by establishing OE dealers around the world,” Ron explains.  “Rut’s 30+ years of industry experience has added great credibility to our company and we expect huge growth in this market over the next five years. In fact, at press time, OrthoEssentials was expecting to have “an active shopping cart on our website by October,” he adds. “This is an absolute necessity in today’s marketplace.”

In addition, the Barons foresee an opportunity to become a premier manufacturer and distributor of orthodontic instruments. “By establishing a real and tangible manufacturing presence, we have not only enhanced our reputation, but also have opened an opportunity to impact the market place by selling high quality, private-labeled items to other companies.”

That said, “Our largest opportunity for growth lies in our credibility with our top clients,” Ron points out. “We have practices that have been using our products for much longer than the nine years OrthoEssentials has been in business. We also are working with a long-term client to establish a lecture course on various topics, which we can present to the ADA/CERP in order to issue CE credits. We believe this will increase our credibility and market presence, and lead to revenue growth. Our goal is to offer courses by the third quarter of 2018.”

Indeed, for the Barons, keeping their eye on the future has – and will continue to – be key to their company’s success. “My single biggest piece of advice for others starting out is to be aware of the next level of disruptors and look beyond today.” From digital x-ray to Invisalign, it’s essential to “look 5-10 years down the road and be ready for it now,” Ron says. “And be 100 percent committed.”

Being an entrepreneur can be challenging, but also rewarding and life changing, he continues. “Reach out to those who can help you – including friendly competitors – and always remember to do it the right way.”

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